Tailwinds’ Take: this is not a shocking number, but would have liked them to guide to growth resuming sooner. We had trimmed after the Colorado study and will likely buy it back on weakness.
IRVINE, Calif., May 10, 2018 (GLOBE NEWSWIRE) — ChromaDex Corporation (NASDAQ:CDXC), a science-based, integrated nutraceutical company devoted to improving the way people age, announced today first quarter 2018 financial results.
First Quarter 2018 Highlights vs. First Quarter 2017
- Net sales up 95%, fueled by growth of TRU NIAGEN®;
- Gross profit as a percentage of net sales flat at approximately 48%, which includes certain charges; Excluding charges, gross profit was 52.5%;
- NIAGEN®-related sales at 65% of total sales, up from 29%;
- TRU NIAGEN sales at 71% of NIAGEN-related sales, up from 1%;
- Appointed Nobel Laureate, Sir John Walker, Emeritus Director and Professor at the MRC Mitochondrial Biology Unit at Cambridge to the Scientific Advisory Board; and
- 18 human studies in various stages of completion.
“The growth of TRU NIAGEN continues to exceed our expectations,” said Rob Fried, President and Chief Operating Officer. “Sales are growing at very strong pace, and we are continuing to pursue strategic partnerships in several new markets.”
Frank Jaksch, Jr., CEO and co-founder of ChromaDex commented: “ChromaDex has been built on a foundation of solid science, and that foundation continues to strengthen. The total number of research collaborations signed with prestigious universities and research institutions for NIAGEN continues to grow. This, along with the work of our in-house team of scientists and PhDs, leaves us confident this research will expand the growing body of evidence demonstrating the importance of NIAGEN.”
Results of operations for the three months ended March 31, 2018
For the three months ended March 31, 2018 (“Q1 2018”), ChromaDex reported net sales of $6.6 million, up 95% compared to $3.4 million from continuing operations in the first quarter of 2017 (“Q1 2017”). The increase in first quarter revenues was driven by growth in sales of TRU NIAGEN.
Gross margin as a percentage of sales was roughly flat at 48% for both periods. Excluding a write-off related to the purchase of private label consumer products inventory from certain NIAGEN resellers which are no longer distributors of our product, adjusted gross profit, a non-GAAP measure, as a percentage of net sales, was 52.5% for Q1 2018 as compared to 48.0% for the same period in 2017. We experienced better margins due to the positive impact of TRU NIAGEN consumer product sales, which we anticipate will continue.
Operating expenses were $11.5 million in the first quarter of 2018, compared to $3.4 million from continuing operations in the same period for 2017. The increase of $8.1 million in operating expenses for first quarter was the result of the Company’s strategic decision to invest $2.6 million in advertising and marketing to build out the TRU NIAGEN brand, higher R&D expenses of $0.8 million as well as legal costs of $2.4 million, and higher stock-based compensation expense of $0.8 million. Excluding incremental legal expenses and equity-based compensation expenses, general and administrative expenses were $3.6 million, which were up by $1.3 million as compared to the prior year.
The net loss attributable to common stockholders for the first quarter of 2018 was $8.4 million or ($0.15) per share as compared to a net loss of $1.9 million or ($0.05) per share for Q1 2017. The higher losses in the first quarter were the result of the strategic decision to invest ahead of growth including higher stock-based compensation expense related to the hiring of senior executives, and higher legal fees, partially offset by higher sales volume and gross profits.
For the first quarter of 2018, the reported loss was negatively impacted by a non-cash charge of $1.3 millionrelated to stock-based compensation.
Adjusted EBITDA, a non-GAAP measure, was ($7.0) million for Q1 2018, compared to adjusted EBITDA of ($1.4) million for Q1 2017. ChromaDex defines Adjusted EBITDA as net income (loss) adjusted for income tax, interest, depreciation, amortization and non-cash stock compensation costs. The Basic and Diluted Adjusted EBITDA per share for Q1 2018 was ($0.13) versus ($0.04) for Q1 2017.
In the first quarter of 2018, the net cash used in operating activities was $4.0 million versus $51,000 in the prior year. We ended the first quarter of 2018 with a cash of $41.0 million.
For 2018, the Company expects to realize continued growth in TRU NIAGEN sales driven by our U.S. ecommerce and Watsons’ international business, as well as the launch of TRU NIAGEN in certain new international markets. The growth is expected to be concentrated in the second half of the year. The Company will continue to invest in marketing expenditures to build out the TRU NIAGEN brand, infrastructure, and new capabilities to support growth.
Investor Conference Call
ChromaDex management will host an investor conference call to discuss the year end results and provide a general business update on Thurs., May 10, at 4:30pm ET.
Participants should call in at least 10 minutes prior to the call. The dial-in information is as follows:
U.S. Toll-Free Number: (866) 327-8118
International Dial-In Number: (678) 509-7526
Conference ID: 5427849
Webcast link: https://edge.media-server.com/m6/p/9a46uwoq
The webcast replay will be available after the completion of the call on the Investor Relations section of the Company website, www.chromadex.com.
The earnings press release, and its accompanying financial exhibits, will be available on the Investor Relations section of the Company website, www.chromadex.com.
About Non-GAAP Financial Measures
ChromaDex’s non-GAAP financial measures exclude certain inventory write-off for adjusted gross margin and exclude interest, tax, depreciation, amortization and share-based compensation for adjusted EBITDA. ChromaDex used these non-GAAP measures when evaluating its financial results as well as for internal resource management, planning and forecasting purposes. 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.
ChromaDex Corp. is an integrated, global nutraceutical company devoted to improving the way people age. ChromaDex scientists partner with leading universities and research institutions worldwide to uncover the full potential of NAD and identify and develop novel, science-based ingredients. 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 statements regarding the future growth rate of sales on truniagen.com and for Watsons’ international business, pursuing strategic partnerships, launching TRU NIAGEN in certain new international markets, and whether the Company will continue to invest in marketing expenditures. Other risks that contribute to the uncertain nature of the forward-looking statements are reported in our most recent Forms 10-Q and 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:
Andrew Johnson, Director of Investor Relations
ChromaDex Media Contact:
Alex Worsham, Director of Strategic Partnerships
949-648-3775Tailwinds' Disclaimers & Disclosures: For a full list of disclaimers and disclosures, please visit http://