EX-99.1 2 cdxc_ex991.htm PRESS RELEASE cdxc_ex991
  Exhibit 99.1
 
ChromaDex Corporation Reports Third Quarter 2020 Financial Results
 
Revenue for the Three-Month Period Ended September 30, 2020 Totals $14.2 Million, up 18% Year-over-Year, with Gross Margin of 59.6%, and Lower Operating Expenses
 
LOS ANGELES, November 4, 2020 (BUSINESS WIRE) - ChromaDex Corp. (Nasdaq:CDXC) today reported third quarter financial results.
 
2020 Third Quarter and Recent Highlights
 
●
Total net sales of $14.2 million, up 18% from $12.1 million from the year ago quarter.
●
Tru Niagen® net sales of $11.9 million, a 22% increase from the year ago quarter.
●
Net loss was ($4.2) million or ($0.07) per share, an improvement of $0.05 per share year-over-year.
●
Adjusted EBITDA excluding total legal expense, a non-GAAP measure, was a loss of ($0.1) million, a $1.7 million improvement year-over-year.
●
Announced Phase 2 results from study in Turkey showing nutritional protocol including nicotinamide riboside (“NR”) plus local standard of care reduced recovery time in COVID-19 patients by nearly 30%.
●
Growing body of clinical research suggests that nicotinamide riboside (Niagen®) may support areas of human health with broad addressable markets, including cardiovascular and immune health, with additional studies underway.
●
Nestlé Health Science’s new Celltrient™ Cellular Energy products featuring Tru Niagen® launched in the United States, following the launch of Tru Niagen® capsules on Persona, a Nestlé Health Science company and leading personalized vitamin subscription program, earlier this year.
 
“We delivered strong third quarter sales of Tru Niagen with sequential growth in our e-commerce business and with Watsons, and our partner Nestlé Health Science released their new product line Celltrient, featuring Tru Niagen,” says ChromaDex CEO Rob Fried. “Our scientists and research partners also published important new data furthering our understanding of increased NAD+ levels and immune health, including research on COVID-19.”
 
Results of operations for the three months ended September 30, 2020
 
For the three months ended September 30, 2020 (“Q3 2020”), ChromaDex reported net sales of $14.2 million, up 18% compared to $12.1 million in the third quarter of 2019 ("Q3 2019"). The increase in Q3 2020 revenues was driven by growth in sales of Tru Niagen.
 
Gross margin increased by 360 basis points to 59.6% in Q3 2020 compared to 56.0% in Q3 2019. The increase in gross margin was largely driven by the positive impact of increased Tru Niagen consumer product sales and product cost saving initiatives.
 
Operating expenses decreased by $1.0 million to $12.7 million in Q3 2020, compared to $13.6 million in Q3 2019. The decrease in operating expenses was driven by a decrease of $1.4 million in general and administrative expense, and a decrease of $0.2 million of research and development expense, partially offset by $0.6 million of higher selling and marketing expense. The decrease in general and administrative expense was driven by $1.0 million of lower legal expenses.
 
The net loss for Q3 2020 was ($4.2) million or ($0.07) per share compared to a net loss of ($7.2) million or ($0.12) per share for Q3 2019.
 
 
 
 
Adjusted EBITDA excluding total legal expense, a non-GAAP measure, was a loss of ($0.1) million for Q3 2020, compared to a loss of ($1.9) million for Q3 2019, a $1.7 million improvement.
 
ChromaDex defines Adjusted EBITDA excluding total legal expense as net income or (loss) which is adjusted for interest, income tax, depreciation, amortization, non-cash stock compensation costs, severance and restructuring expense, bad debt expense related to Elysium Health and total legal expense.
 
For Q3 2020, the net cash used in operating activities was ($3.8) million versus ($7.8) million in Q3 2019.
 
2020 Outlook
 
The Company’s full year financial outlook is unchanged from last quarter. Based on the Company’s current financial outlook, revenue growth will be driven by its U.S. ecommerce business, new international market launches with its partners and distributors, such as in the U.K. and Australia, new online platforms, including Persona Nutrition, a Nestlé Health Science company, and the Company’s new product, Tru Niagen® Beauty. The Company expects continued gross margin improvement driven by a higher mix of Tru Niagen® sales, product design changes implemented in late 2019, and additional supply chain cost savings initiatives in 2020. The Company expects lower selling, marketing and advertising as well as general and administrative expenses as a percentage of net sales driven by strong growth from returning customers and scale on our fixed overhead costs driven by organizational realignment initiatives, as well as new systems and processes. The Company does not expect any supply chain disruption related to the impact of COVID-19 at this time and, while the revenue impact is difficult to predict, the Company is managing expenses to mitigate the bottom-line impact.
 
Investor Conference Call
 
ChromaDex management will host an investor conference call to discuss the third quarter results and provide a general business update on Wednesday, November 4, at 4:30pm ET.
 
Participants should call in at least 10 minutes prior to the call. The dial-in information is as follows:
 
Date: Wednesday, November 4, 2020
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time) 
Toll-free dial-in number: (833) 979-2703
International dial-in number: (236) 714-2223
Conference ID: 4699759
Webcast link: ChromaDex Third Quarter 2020 Earnings Conference Call
 
The conference call will be broadcast live and available for replay here and via the investor relations section of the Company’s website at www.chromadex.com.
 
A replay of the conference call will be available after 7:30 p.m. ET.
Toll-free replay number: 800-585-8367
Replay ID: 4699759
 
 
 
 
 
About Non-GAAP Financial Measures:
 
Adjusted EBITDA excluding total legal expense excludes interest, income tax, depreciation, amortization, non-cash share-based compensation costs, severance and restructuring expense, bad debt expense related to Elysium Health, and total legal expense. ChromaDex used these non-GAAP measures when evaluating its financial results as well as for internal resource management, planning and forecasting purposes. ChromaDex believes the presentation of its non-GAAP financial measures enhances the overall understanding of the company’s historical financial performance. These non-GAAP measures should not be viewed in isolation from or as a substitute for ChromaDex’s financial results in accordance with GAAP. Reconciliation of GAAP to non-GAAP measures are attached to this press release.
 
About ChromaDex:
 
ChromaDex Corp. is a science-based integrated nutraceutical company devoted to improving the way people age. ChromaDex scientists partner with leading universities and research institutions worldwide to discover, develop and create solutions to deliver the full potential of NAD and its impact on human health. Its flagship ingredient, NIAGEN® nicotinamide riboside, sold directly to consumers as TRU NIAGEN®, is backed with clinical and scientific research, as well as extensive IP protection. TRU NIAGEN® is helping the world AGE BETTER®. ChromaDex maintains a website at www.chromadex.com to which ChromaDex regularly posts copies of its press releases as well as additional and financial information about the Company.
 
Important Note on Forward Looking Statements:
 
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Such statements include the quotation from ChromaDex’s Chief Executive Officer, and statements related to the impact of COVID-19 on revenues and supply chain and ChromaDex’s management of expenses to mitigate the bottom-line impact; future revenue growth being driven by ChromaDex’s U.S. ecommerce business, new international market launches with ChromaDex’s partners and distributors, such as in the U.K. and Australia, new online platforms, including Persona Nutrition, a Nestlé Health Science company, and the ChromaDex’s new product, Tru Niagen® Beauty; the expectations of gross margin improvement driven by a by a higher mix of Tru Niagen® sales, product design changes implemented in late 2019, and additional supply chain cost savings initiatives in 2020; and the expectations of lower selling, marketing and advertising expenses and lower general and administrative expenses as a percentage of net sales driven by strong growth from returning customers and scale on fixed overhead costs driven by organizational realignment initiatives, as well as new systems and processes. Other risks that contribute to the uncertain nature of the forward-looking statements are reported in our most recent Quarterly Report on Form 10-Q and Annual Report on Form 10-K as filed with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and actual results may differ materially from those suggested by these forward-looking statements. All forward-looking statements are qualified in their entirety by this cautionary statement and ChromaDex undertakes no obligation to revise or update this release to reflect events or circumstances after the date hereof.
 
 
 
 
ChromaDex Investor Relations Contact:
 
Brianna Gerber, Vice President of FP&A and Investor Relations
949-419-0288 ext. 127
briannag@chromadex.com
 
ChromaDex Media Contact:
 
Alex Worsham, Vice President of Global Marketing & Communications
310-388-6706 ext. 689
alexw@chromadex.com
 
 
ChromaDex Corporation
 
 
 
 
ChromaDex Corporation and Subsidiaries
 
Condensed Consolidated Statements of Operations
For the Three Month Periods Ended September 30, 2020 and September 30, 2019
(In thousands, except per share data)
 
 
 
Three Months Ended
 
 
 
Sep. 30, 2020
 
 
Sep. 30, 2019
 
 
 
 
 
 
 
 
Sales, net
 $14,180 
 $12,053 
Cost of sales
  5,726 
  5,304 
 
    
    
Gross profit
  8,454 
  6,749 
 
    
    
Operating expenses:
    
    
Sales and marketing
  5,223 
  4,626 
Research and development
  880 
  1,044 
General and administrative
  6,547 
  7,967 
Operating expenses
  12,650 
  13,637 
 
    
    
Operating loss
  (4,196)
  (6,888)
 
    
    
Nonoperating expense:
    
    
Interest expense, net
  (19)
  (314)
Nonoperating expense
  (19)
  (314)
 
    
    
Net loss
 $(4,215)
 $(7,202)
 
    
    
Basic and diluted loss per common share
 $(0.07)
 $(0.12)
 
    
    
Basic and diluted weighted average
    
    
    common shares outstanding
  61,695 
  57,658 
 
    
    
 
See Notes to Consolidated Financial Statements in Part I of ChromaDex's Quarterly Report on Form 10-Q filed with Securities and Exchange Commission on November 4, 2020.
 
 
 
 
ChromaDex Corporation and Subsidiaries
 
Condensed Consolidated Balance Sheets
September 30, 2020 and December 31, 2019
(In thousands, except per share data)
 
 
 
Sep. 30, 2020
 
 
Dec. 31, 2019
 
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
Current Assets
 
 
 
 
 
 
Cash, including restricted cash of $0.2 million and $0.2 million, respectively
 $15,478 
 $18,812 
Trade receivables, net of allowances of $0.0 million and $2.8 million, respectively;
    
    
   Receivables from Related Party: $1.0 million and $0.8 million, respectively
  3,214 
  2,175 
Inventories
  11,031 
  11,535 
Prepaid expenses and other assets
  1,005 
  996 
Total current assets
  30,728 
  33,518 
 
    
    
Leasehold Improvements and Equipment, net
  3,307 
  3,765 
Intangible Assets, net
  1,147 
  1,311 
Right of Use Assets
  1,323 
  891 
Other Long-term Assets
  910 
  762 
 
    
    
Total assets
 $37,415 
 $40,247 
 
    
    
Liabilities and Stockholders' Equity
    
    
 
    
    
Current Liabilities
    
    
Accounts payable
 $6,881 
 $9,626 
Accrued expenses
  5,173 
  4,415 
Current maturities of operating lease obligations
  650 
  595 
Current maturities of finance lease obligations
  83 
  258 
Customer deposits
  228 
  169 
Total current liabilities
  13,015 
  15,063 
 
    
    
Deferred Revenue
  3,820 
  3,873 
Operating Lease Obligations, Less Current Maturities
  1,070 
  848 
Finance Lease Obligations, Less Current Maturities
  23 
  18 
 
    
    
Total liabilities
  17,928 
  19,802 
 
    
    
Commitments and Contingencies
    
    
 
    
    
Stockholders' Equity
    
    
Common stock, $.001 par value; authorized 150,000 shares;
    
    
   issued and outstanding September 30, 2020 61,587 shares and
    
    
   December 31, 2019 59,562 shares
  62 
  60 
Additional paid-in capital
  155,156 
  142,285 
Accumulated deficit
  (135,728)
  (121,900)
Cumulative translation adjustments
  (3)
  - 
Total stockholders' equity
  19,487 
  20,445 
 
    
    
Total liabilities and stockholders' equity
 $37,415 
 $40,247 
 
See Notes to Consolidated Financial Statements in Part I of ChromaDex's Quarterly Report on Form 10-Q filed with Securities and Exchange Commission on November 4, 2020.
 
 
 
 
ChromaDex Corporation and Subsidiaries
Reconciliation of Non-GAAP Financial Measures
 
Adjusted EBITDA
 
 
 
Q1 2019
 
 
Q2 2019
 
 
Q3 2019
 
 
Q4 2019
 
 
Q1 2020
 
 
Q2 2020
 
 
Q3 2020
 
(In thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net loss, as reported
 $(8,337)
 $(7,755)
 $(7,202)
 $(8,853)
 $(5,902)
 $(3,711)
 $(4,215)
   Adjustments:
    
    
    
    
    
    
    
     Interest (income) expense
  (35)
  575 
  314 
  (7)
  12 
  24 
  19 
     Depreciation
  173 
  190 
  196 
  203 
  214 
  218 
  220 
     Amortization of intangibles
  61 
  61 
  62 
  62 
  62 
  60 
  60 
     Amortization of right of use assets
  138 
  141 
  144 
  92 
  92 
  95 
  97 
     Share-based compensation
  2,029 
  1,759 
  1,687 
  1,697 
  1,873 
  1,711 
  1,574 
     Severance and restructuring
  - 
  - 
  - 
  200 
  953 
  284 
  224 
     Elysium-related bad debt expense
  - 
  - 
  - 
  2,233 
  - 
  - 
  - 
Adjusted EBITDA
 $(5,971)
 $(5,029)
 $(4,799)
 $(4,373)
 $(2,696)
 $(1,319)
 $(2,021)
 
    
    
    
    
    
    
    
     Total legal expense
  3,250 
  2,926 
  2,944 
  2,226 
  2,380 
  1,844 
  1,896 
 
    
    
    
    
    
    
    
Adjusted EBITDA excluding total legal expense
 $(2,721)
 $(2,103)
 $(1,855)
 $(2,147)
 $(316)
 $525 
 $(125)