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SEC Filings

8-K
CHROMADEX CORP. filed this Form 8-K on 03/07/2019
Entire Document
 
 
 
 
Operating expenses were $13.0 million in Q4 2018, compared to $12.6 million in the same period for 2017. The increase of $0.4 million in operating expenses was the result of the Company’s strategic decision to invest $2.3 million more in advertising and marketing to build out the TRU NIAGEN brand, offset by $1.8 million of lower general and administrative spending and $0.2 million lower R&D expenses. The lower general and administrative expenses was primarily due to lower equity-based compensation expenses, which decreased by $1.6 million, from $3.4 million to $1.8 million.
 
The net loss for the fourth quarter of 2018 was $8.2 million or ($0.15) per share as compared to a net loss of $8.8 million or ($0.17) per share for the fourth quarter of 2017. For Q4 2018, the reported loss was negatively impacted by a non-cash charge of $2.0 million related to equity-based compensation.
 
Results of operations for the year ended December 31, 2018
 
For full year 2018, net revenues were $31.6 million, up 49% compared to $21.2 million from continuing operations for full year 2017, fueled by the growth of TRU NIAGEN. TRU NIAGEN net revenues increased by 238%, from $5.5 million to $18.5 million and represented 58% of the total company’s revenues.
 
Gross margin as a percentage of net sales improved for full year 2018 by 150 basis points to 50.9% compared to 49.4% for the same period in 2017. We experienced better margins due to the positive impact of TRU NIAGEN consumer product sales.
 
Operating expenses were $49.2 million for full year 2018, compared to $26.9 million from continuing operations in the same period for 2017. The increase of $22.3 million in operating expenses for full year 2018 was the result of the Company’s strategic decision to invest $12.1 million more in advertising and marketing to build the TRU NIAGEN brand, as well as higher R&D expenses of $1.5 million, higher legal costs of $4.7 million, and higher equity-based compensation of $1.0 million in general and administrative expenses. Excluding legal and equity-based compensation expenses, general and administrative expenses were $11.7 million, up by $3.8 million as compared to the prior year.
 
The net loss for full year 2018 was $33.3 million or ($0.61) per share as compared to a loss from continuing operations of $16.5 million or ($0.37) per share for full year 2017. For full year 2018, the reported loss was negatively impacted by a non-cash charge of $6.4 million related to equity-based compensation.
 
For full year 2018, the net cash used in operating activities was $20.9 million versus $9.8 million in the prior year. The Company ended the year of 2018 with a solid balance sheet with cash of $22.6 million, which does not include the $4 million upfront payment from Nestlé since the payment was received in the first quarter of 2019.
 
2019 Outlook
 
Looking forward, the Company expects revenue growth to be driven primarily by its U.S. ecommerce and Watsons’ international business, as well as the launch of TRU NIAGEN® with other distributors in certain new international markets. The Company expects continued gross margin improvement and lower selling, marketing and advertising in absolute dollars as well as general and administrative expenses as a percentage of net sales.
 
Based on these drivers, we continue to expect the Company to be cash flow breakeven by the fourth quarter of 2019 or early 2020.
 
 
 
 
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