Release Date: May 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- ChromaDex Corp (CDXC, Financial) reported a solid start to 2024 with $22.2 million in revenue and a positive adjusted EBITDA of $0.7 million, marking the fourth consecutive quarter of positive adjusted EBITDA.
- The company has maintained a strong balance sheet with $27.6 million in cash and no debt, demonstrating robust financial health.
- ChromaDex Corp (CDXC) has seen a 5% year-over-year increase in e-commerce sales, indicating successful online marketing strategies and campaigns.
- New partnerships with major specialty retail distributors like Sprouts Farmers Market and Vitamin Shoppe are expected to broaden consumer access and enhance the company's market presence.
- ChromaDex Corp (CDXC) continues to invest in scientific research and innovation, with several preclinical studies showing promising results for the therapeutic potential of their products.
Negative Points
- Despite overall growth, ChromaDex Corp (CDXC) experienced a 2% decline in total net sales compared to the first quarter of 2023, primarily due to a decrease in B2B sales.
- The company reported a net loss of $0.5 million for the quarter, indicating challenges in achieving profitability.
- ChromaDex Corp (CDXC)'s operating loss for Q1 2024 was $0.7 million, although this was an improvement from the previous year, it still reflects ongoing financial pressures.
- The anticipated launch of a new vertical has been delayed, which may affect revenue projections and growth expectations for 2024.
- Legal uncertainties and potential liabilities related to ongoing litigation could impact financial stability and distract from core business activities.
Q & A Highlights
Q: Can you discuss the evolution of gross margins and how they are influenced by product channel mix, particularly the role of e-commerce?
A: Brianna Gerber, CFO, explained that gross margins are higher when there is a greater mix of e-commerce sales, which generally have margins in the low 70s percent range, compared to the B2B side in the low to mid-50s percent range. She highlighted ongoing cost-saving initiatives that contribute to overall gross margin improvements.
Q: How is the initiative to move existing customers of Tru Niagen to higher dosage forms progressing, and what impact do you expect it to have on revenue growth?
A: CEO Robert Fried noted the initiative has been successful, with strong demand for the 1,000 mg dosage, which is appealing to both existing and new-to-brand customers. He emphasized its profitability and effectiveness, indicating a positive impact on future revenue.
Q: What are the anticipated value inflection points from existing partnerships like with Nestlé Health Sciences and Sinopharm for 2024?
A: Robert Fried mentioned no major announcements are expected with Sinopharm but discussed potential expansion with H&H. He also noted that Nestlé has launched products with Tru Niagen, and while no major announcements are expected, there is optimism for gradual growth in ingredient purchases from Nestlé.
Q: With the first quarter revenue, what are the expectations for revenue growth in the remaining quarters of the year?
A: CFO Brianna Gerber reiterated the full-year revenue growth outlook of at least 16%, emphasizing that significant revenue contributions are expected in the second half of the year from new product launches and partnerships.
Q: Can you elaborate on the new retail partnerships with Vitamin Shoppe and Sprouts Farmers Market?
A: CEO Robert Fried explained that these partnerships are targeted at specialty high-end retail, which aligns closely with Tru Niagen's core customer base. He highlighted that these partnerships would not require significant advertising spend to support, unlike previous mass retail efforts.
Q: What are the early indications about customer retention with the 1,000 mg dosage of Tru Niagen?
A: Robert Fried shared that early indications suggest higher retention rates with the 1,000 mg dosage compared to other dosages, although it is still early for definitive data. He hinted that the higher retention might be due to the more noticeable effects at this higher dosage.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
