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8-K - CURRENT REPORT - ChromaDex Corp. | cdxc8k_mar082018.htm |
Exhibit 99.1
CHROMADEX CORPORATION REPORTS 2017 FINANCIAL RESULTS
-Fourth Quarter 2017 Net Revenues Increased by 69% to $7.5 Million
-
IRVINE, Calif., March 8, 2018 (GLOBE NEWSWIRE) - ChromaDex Corporation (NASDAQ: CDXC),
a
science-based, integrated nutraceutical company devoted to
improving the way people age, announced today fourth quarter and
full year 2017 financial results.
Results of operations for the three months ended Dec. 30,
2017
For the
three months ended Dec. 30, 2017 (“Q4 2017”), ChromaDex
reported net sales from continuing operations of $7.5 million, up
69% compared to $4.5 million from continuing operations in the
fourth quarter of 2016. The increase in fourth quarter revenues was
driven by growth in sales of TRU NIAGEN®.
Gross
profit improved in the fourth quarter of 2017 to 50.9% as compared
to 45.1% for the same period in 2016. We experienced better margins
due to the positive impact of TRU NIAGEN® consumer product
sales, which we anticipate will continue.
Operating
expenses were $12.6 million in the fourth quarter of 2017, compared
to $4.2 million from continuing operations in the same period for
2016. The increase in operating expenses for fourth quarter was the
result of our strategic decision to invest in marketing to build
out the TRU NIAGEN® brand, as well as legal costs associated
with ongoing litigation and higher stock-based compensation
expense.
The net
loss attributable to common stockholders for the fourth quarter of
2017 was $8.8 million or ($0.17) per share as compared to a net
loss of $2.1 million or ($0.06) per share for Q4 2016. The higher
losses in the fourth quarter were the result of the strategic
decision to invest ahead of growth, higher legal fees associated
with ongoing litigation and higher stock-based compensation
expense, partially offset by higher sales volume and gross
profits.
For the
fourth quarter of 2017, the reported loss from continuing
operations was negatively impacted by a non-cash charge of $3.4
million related to stock-based compensation.
Adjusted
EBITDA, a non-GAAP measure, was ($5.2) million for Q4 2017,
compared to adjusted EBITDA of ($1.7) million for Q4 2016.
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 Q4 2017 was ($0.10) versus ($0.05) for Q4 2016.
We also
ended the fourth quarter of 2017 with a solid balance sheet with
quarter-end cash of $45.4 million.
“We
continue to see validation from the research community, as evidence
builds through peer-reviewed publications,” said Frank
Jaksch, Jr., CEO and co-founder of ChromaDex. “Our undisputed
leadership in NAD research will be the foundation of continued
growth for TRU NIAGEN.”
Rob
Fried, President and Chief Operating Officer commented: “It
has been less than a year since we made the strategic decision to
focus on TRU NIAGEN and NAD. We are very pleased with the increase
in gross margin which reflects the growing value of the TRU NIAGEN
brand. Our strategy is thus far playing out ahead of
plan.”
Results of operations for the year ended Dec. 30, 2017
For
full year 2017, net revenues were $21.2 million from continuing
operations, down 2% compared to $21.7 million from continuing
operations for full year 2016 as the Company shifted to an
integrated global consumer product nutraceutical
company.
Gross
profit improved in the full year 2017 to 49.4% as compared to 48.0%
for the same period in 2016. We experienced slightly better margins
due to the positive impact of TRU NIAGEN® consumer
product.
For
full year 2017, operating expenses from continuing operations were
$26.9 million, compared to $13.3 million from continuing operations
for full year 2016 as we invested in marketing expenditures to
build out the TRU NIAGEN® brand. The increase in operating
expenses was also due to legal costs associated with ongoing
litigation and higher stock-based compensation
expense.
The net
loss attributable to common stockholders for full year 2017 was
$11.4 million or ($0.26) per share as compared to a net loss of
$2.9 million or ($0.08) per share for full year 2016.
Adjusted
EBITDA a non-GAAP measure, was ($5.9) million for 2017, compared to
adjusted EBITDA of ($0.9) million for 2016. The Basic and Diluted
Adjusted EBITDA per share for 2017 was ($0.13) versus ($0.03) for
2016.
Outlook
For
2018, the Company expects to show significant growth in sales
driven by our U.S. ecommerce and Watsons business and the launch of
TRU NIAGEN® in new international markets. We expect the growth
to be skewed toward the second half of the year. We 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.,
March 8, 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:
|
9787028
|
Webcast
link:
|
https://edge.media-server.com/m6/p/8kcvfrii
|
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 interest, tax, depreciation,
amortization and share-based compensation. 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. A reconciliation of GAAP to non-GAAP measures
is attached to this press release.
About ChromaDex:
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®. To learn more
about ChromaDex, please visit www.ChromaDex.com.
Important Note on Forward Looking Statements and 2017 Financial
Results:
Statements
contained in this press release regarding matters that are not
historical facts are “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act.
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 Company’s fourth quarter and full
year 2017 financial results, continued growth in revenue and gross
profits and continued validation of our science. The financial
information included herein for the fourth quarter and full year
2017 are preliminary, unaudited results and may change materially,
including as a result of the finalization of financial statements
for the Company’s fourth quarter and full year ended December
30, 2017, completion of the Company’s audit by the
Company’s independent registered public accounting firm and
other factors and adjustments related to the Company’s
financial reporting process. 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. There
can be no assurance that our final results for the year will not
differ from these estimates and that such changes will not be
material; accordingly, these statements should not be viewed or
relied upon as a substitute for complete audited financial
statements to be prepared in accordance with GAAP (Generally
Accepted Accounting Principles) or as a measure of our actual
performance. The Company plans to file its 2017 Annual Report on
Form 10-K with the SEC on or around March 15, 2018. The 2017 Annual
Report on Form 10-K will include audited financial statements for
the year ended December 30, 2017.
ChromaDex Investor Relations Contact:
Andrew
Johnson, Director of Investor Relations
949-419-0288
andrewj@chromadex.com
ChromaDex Public Relations Contact:
Breah
Ostendorf, Director of Marketing
949-537-4103
breaho@chromadex.com
ChromaDex
Corporation and Subsidiaries
|
|
|
|
|
|
Consolidated
Statements of Operations
|
|
|
Three
Months Ended December 30, 2017 and December 31, 2016
|
|
|
|
|
|
|
Q4 2017
|
Q4 2016
|
|
|
|
Sales,
net
|
$7,530,836
|
$4,452,783
|
Cost of
sales
|
3,695,837
|
2,442,714
|
|
|
|
Gross
profit
|
3,834,999
|
2,010,069
|
|
|
|
Operating
expenses:
|
|
|
Sales and
marketing
|
2,401,046
|
368,200
|
Research and
development
|
1,452,668
|
534,171
|
General and
administrative
|
8,759,068
|
3,279,624
|
Operating
expenses
|
12,612,782
|
4,181,995
|
|
|
|
Operating
loss
|
(8,777,783)
|
(2,171,926)
|
|
|
|
Nonoperating income
(expense):
|
|
|
Interest expense,
net
|
(44,033)
|
(18,360)
|
Nonoperating
expenses
|
(44,033)
|
(18,360)
|
|
|
|
Loss before income
taxes
|
(8,821,816)
|
(2,190,286)
|
Provision for
income taxes
|
-
|
3,500
|
|
|
|
Loss
from continuing operations
|
(8,821,816)
|
(2,186,786)
|
|
|
|
Income
from discontinued operations
|
-
|
40,033
|
|
|
|
Net
loss
|
$(8,821,816)
|
$(2,146,753)
|
|
|
|
Basic and diluted
earnings (loss) per common share:
|
|
|
Loss
from continuing operations
|
$(0.17)
|
$(0.06)
|
Earnings
from discontinued operations
|
$-
|
$0.00
|
|
|
|
Basic and diluted
loss per common share
|
$(0.17)
|
$(0.06)
|
|
|
|
Basic and diluted
weighted average common shares outstanding
|
51,178,664
|
37,904,534
|
ChromaDex
Corporation and Subsidiaries
|
|
|
|
|
|
Consolidated
Statements of Operations
|
|
|
Years
Ended December 30, 2017 and December 31, 2016
|
|
|
|
|
|
|
2017
|
2016
|
|
|
|
Sales,
net
|
$21,201,482
|
$21,664,648
|
Cost of
sales
|
10,724,177
|
11,274,114
|
|
|
|
Gross
profit
|
10,477,305
|
10,390,534
|
|
|
|
Operating
expenses:
|
|
|
Sales and
marketing
|
4,459,224
|
1,558,213
|
Research and
development
|
4,007,381
|
2,522,768
|
General and
administrative
|
17,641,889
|
9,214,763
|
Other
|
745,773
|
-
|
Operating
expenses
|
26,854,267
|
13,295,744
|
|
|
|
Operating
loss
|
(16,376,962)
|
(2,905,210)
|
|
|
|
Nonoperating income
(expense):
|
|
|
Interest expense,
net
|
(152,784)
|
(333,286)
|
Loss on debt
extinguishment
|
-
|
(313,099)
|
Nonoperating
expenses
|
(152,784)
|
(646,385)
|
|
|
|
Loss
from continuing operations
|
(16,529,746)
|
(3,551,595)
|
|
|
|
Income (loss) from
discontinued operations
|
(315,140)
|
623,410
|
Gain on sale of
discontinued operations
|
5,467,268
|
-
|
|
|
|
Income
from discontinued operations, net
|
5,152,128
|
623,410
|
|
|
|
Net
loss
|
$(11,377,618)
|
$(2,928,185)
|
|
|
|
Basic and diluted
earnings (loss) per common share:
|
|
|
Loss
from continuing operations
|
$(0.37)
|
$(0.10)
|
Earnings
from discontinued operations
|
$0.11
|
$0.02
|
|
|
|
Basic and diluted
loss per common share
|
$(0.26)
|
$(0.08)
|
|
|
|
Basic and diluted
weighted average common shares outstanding
|
44,598,879
|
37,294,321
|
Consolidated
Statements of Operations, Unaudited
|
Effects
of Charges associated with Interest, Tax,
Depreciation,
|
Consolidated
Statements of Operations, Adjusted EBITDA
|
||||||
(US
GAAP)
|
Amortization
and Share-based Compensation Expense
|
Excluding
Interest, Tax, Depreciation, Amortization and
|
||||||
|
|
Share-based
Compensation (Non-GAAP Presentation)
|
||||||
Three
Months Ended December 30, 2017 and December 31, 2016
|
Three
Months Ended December 30, 2017 and December 31, 2016
|
Three
Months Ended December 30, 2017 and December 31, 2016
|
||||||
|
|
|
|
|
|
|
|
|
|
Q4 2017
|
Q4 2016
|
|
Q4 2017
|
Q4 2016
|
|
Q4 2017
|
Q4 2016
|
|
|
|
|
|
|
|
|
|
Sales,
net
|
$7,530,836
|
$4,452,783
|
Sales,
net
|
$-
|
$-
|
Sales,
net
|
$7,530,836
|
$4,452,783
|
Cost of
sales
|
3,695,837
|
2,442,714
|
Cost of
sales
|
(58,546)
|
(18,405)
|
Cost of
sales
|
3,637,291
|
2,424,309
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
3,834,999
|
2,010,069
|
Gross
profit
|
58,546
|
18,405
|
Gross
profit
|
3,893,545
|
2,028,474
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
Operating
expenses:
|
|
|
Operating
expenses:
|
|
|
Sales and
marketing
|
2,401,046
|
368,200
|
Sales and
marketing
|
(1,857)
|
-
|
Sales and
marketing
|
2,399,189
|
368,200
|
Research and
development
|
1,452,668
|
534,171
|
Research and
development
|
(41,654)
|
(10,494)
|
Research and
development
|
1,411,014
|
523,677
|
General and
administrative
|
8,759,068
|
3,279,624
|
General and
administrative
|
(3,464,320)
|
(294,518)
|
General and
administrative
|
5,294,748
|
2,985,106
|
Operating
expenses
|
12,612,782
|
4,181,995
|
Operating
expenses
|
(3,507,831)
|
(305,012)
|
Operating
expenses
|
9,104,951
|
3,876,983
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
(8,777,783)
|
(2,171,926)
|
Operating
income
|
3,566,377
|
323,417
|
Operating
loss
|
(5,211,406)
|
(1,848,509)
|
|
|
|
|
|
|
|
|
|
Nonoperating income
(expense):
|
|
|
Nonoperating income
(expense):
|
|
|
Nonoperating income
(expense):
|
|
|
Interest expense,
net
|
(44,033)
|
(18,360)
|
Interest expense,
net
|
44,033
|
18,360
|
Interest expense,
net
|
-
|
-
|
Nonoperating
expenses
|
(44,033)
|
(18,360)
|
Nonoperating
income
|
44,033
|
18,360
|
Nonoperating
expenses
|
-
|
-
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
(8,821,816)
|
(2,190,286)
|
Income before
income taxes
|
3,610,410
|
341,777
|
Loss before income
taxes
|
(5,211,406)
|
(1,848,509)
|
Provision for
income taxes
|
-
|
3,500
|
Provision for
income taxes
|
-
|
(3,500)
|
Provision for
income taxes
|
-
|
-
|
|
|
|
|
|
|
|
|
|
Loss
from continuing operations
|
(8,821,816)
|
(2,186,786)
|
Income
from continuing operations
|
3,610,410
|
338,277
|
Loss
from continuing operations
|
(5,211,406)
|
(1,848,509)
|
|
|
|
|
|
|
|
|
|
Income
from discontinued operations
|
-
|
40,033
|
Income
from discontinued operations
|
-
|
70,352
|
Income
from discontinued operations
|
-
|
110,385
|
|
|
|
|
|
|
|
|
|
Net
loss
|
$(8,821,816)
|
$(2,146,753)
|
Effects
of adjusted EBITDA
|
$3,610,410
|
$408,629
|
Adjusted
EBITDA
|
$(5,211,406)
|
$(1,738,124)
|
|
|
|
|
|
|
|
|
|
Basic and diluted
earnings (loss) per common share:
|
|
|
Effects of adjusted
EBITDA per common share:
|
|
|
Basic and diluted
adjusted EBITDA per common share:
|
|
|
Loss
from continuing operations
|
$(0.17)
|
$(0.06)
|
From
continuing operations
|
$0.07
|
$0.01
|
From
continuing operations
|
$(0.10)
|
$(0.05)
|
Earnings
from discontinued operations
|
$-
|
$0.00
|
From
discontinued operations
|
$-
|
$0.00
|
From
discontinued operations
|
$-
|
$0.00
|
|
|
|
|
|
|
|
|
|
Basic and diluted
loss per common share
|
$(0.17)
|
$(0.06)
|
Effects of adjusted
EBITDA per common share
|
$0.07
|
$0.01
|
Basic and diluted
adjusted EBITDA per common share
|
$(0.10)
|
$(0.05)
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding
|
|
|
Weighted average
common shares outstanding
|
|
|
Weighted average
common shares outstanding
|
|
|
Basic
and diluted
|
51,178,664
|
37,904,534
|
Basic
and diluted
|
51,178,664
|
37,904,534
|
Basic
and diluted
|
51,178,664
|
37,904,534
|
Consolidated
Statements of Operations
|
Effects
of Charges associated with Interest, Tax, Depreciation,
|
Consolidated
Statements of Operations, Adjusted EBITDA
|
||||||
(US
GAAP)
|
Amortization
and Share-based Compensation Expense
|
Excluding
Interest, Tax, Depreciation, Amortization and
|
||||||
|
|
Share-based
Compensation (Non-GAAP Presentation)
|
||||||
Years
Ended December 30, 2017 and December 31, 2016
|
Years
Ended December 30, 2017 and December 31, 2016
|
Years
Ended December 30, 2017 and December 31, 2016
|
||||||
|
|
|
|
|
|
|
|
|
|
2017
|
2016
|
|
2017
|
2016
|
|
2017
|
2016
|
|
|
|
|
|
|
|
|
|
Sales,
net
|
$21,201,482
|
$21,664,648
|
Sales,
net
|
$-
|
$-
|
Sales,
net
|
$21,201,482
|
$21,664,648
|
Cost of
sales
|
10,724,177
|
11,274,114
|
Cost of
sales
|
(178,109)
|
(42,589)
|
Cost of
sales
|
10,546,068
|
11,231,525
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
10,477,305
|
10,390,534
|
Gross
profit
|
178,109
|
42,589
|
Gross
profit
|
10,655,414
|
10,433,123
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
Operating
expenses:
|
|
|
Operating
expenses:
|
|
|
Sales and
marketing
|
4,459,224
|
1,558,213
|
Sales and
marketing
|
(2,381)
|
-
|
Sales and
marketing
|
4,456,843
|
1,558,213
|
Research and
development
|
4,007,381
|
2,522,768
|
Research and
development
|
(132,285)
|
(10,493)
|
Research and
development
|
3,875,096
|
2,512,275
|
General and
administrative
|
17,641,889
|
9,214,763
|
General and
administrative
|
(4,838,865)
|
(1,305,505)
|
General and
administrative
|
12,803,024
|
7,909,258
|
Other
|
745,773
|
-
|
Other
|
-
|
-
|
Other
|
745,773
|
-
|
Operating
expenses
|
26,854,267
|
13,295,744
|
Operating
expenses
|
(4,973,531)
|
(1,315,998)
|
Operating
expenses
|
21,880,736
|
11,979,746
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
(16,376,962)
|
(2,905,210)
|
Operating
income
|
5,151,640
|
1,358,587
|
Operating
loss
|
(11,225,322)
|
(1,546,623)
|
|
|
|
|
|
|
|
|
|
Nonoperating income
(expense):
|
|
|
Nonoperating income
(expense):
|
|
|
Nonoperating income
(expense):
|
|
|
Interest expense,
net
|
(152,784)
|
(333,286)
|
Interest expense,
net
|
152,784
|
333,286
|
Interest expense,
net
|
-
|
-
|
Loss on debt
extinguishment
|
-
|
(313,099)
|
Loss on debt
extinguishment
|
-
|
-
|
Loss on debt
extinguishment
|
-
|
(313,099)
|
Nonoperating
expenses
|
(152,784)
|
(646,385)
|
Nonoperating
income
|
152,784
|
333,286
|
Nonoperating
expenses
|
-
|
(313,099)
|
|
|
|
|
|
|
|
|
|
Loss
from continuing operations
|
(16,529,746)
|
(3,551,595)
|
Loss
from continuing operations
|
5,304,424
|
1,691,873
|
Loss
from continuing operations
|
(11,225,322)
|
(1,859,722)
|
|
|
|
|
|
|
|
|
|
Income (loss) from
discontinued operations
|
(315,140)
|
623,410
|
Income from
discontinued operations
|
193,889
|
291,121
|
Income (loss) from
discontinued operations
|
(121,251)
|
914,531
|
Gain on sale of
discontinued operations
|
5,467,268
|
-
|
Gain on sale of
discontinued operations
|
-
|
-
|
Gain on sale of
discontinued operations
|
5,467,268
|
-
|
|
|
|
|
|
|
|
|
|
Income
from discontinued operations, net
|
5,152,128
|
623,410
|
Income
from discontinued operations, net
|
193,889
|
291,121
|
Income
from discontinued operations, net
|
5,346,017
|
914,531
|
|
|
|
|
|
|
|
|
|
Net
loss
|
$(11,377,618)
|
$(2,928,185)
|
Effects
of adjusted EBITDA
|
$5,498,313
|
$1,982,994
|
Adjusted
EBITDA
|
$(5,879,305)
|
$(945,191)
|
|
|
|
|
|
|
|
|
|
Basic and diluted
earnings (loss) per common share:
|
|
|
Effects of adjusted
EBITDA per common share:
|
|
|
Basic and diluted
adjusted EBITDA per common share:
|
|
|
Loss
from continuing operations
|
$(0.37)
|
$(0.10)
|
From
continuing operations
|
$0.12
|
$0.05
|
From
continuing operations
|
$(0.25)
|
$(0.05)
|
Earnings
from discontinued operations
|
$0.11
|
$0.02
|
From
discontinued operations
|
$0.00
|
$0.00
|
From
discontinued operations
|
$0.12
|
$0.02
|
|
|
|
|
|
|
|
|
|
Basic and diluted
loss per common share
|
$(0.26)
|
$(0.08)
|
Effects of adjusted
EBITDA per common share
|
$0.12
|
$0.05
|
Basic and diluted
adjusted EBITDA per common share
|
$(0.13)
|
$(0.03)
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding
|
|
|
Weighted average
common shares outstanding
|
|
|
Weighted average
common shares outstanding
|
|
|
Basic
and diluted
|
44,598,879
|
37,294,321
|
Basic
and diluted
|
44,598,879
|
37,294,321
|
Basic
and diluted
|
44,598,879
|
37,294,321
|