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ChromaDex Reports Third Quarter 2017 Financial Results

Company Reports Third Quarter 2017 Revenue of $6.1 Million, Up 55% Compared to Last Year -
- Continued Progress on Building a Consumer Products Platform Around TRU NIAGEN-

IRVINE, Calif., Nov. 09, 2017 (GLOBE NEWSWIRE) -- ChromaDex Corp. (NASDAQ:CDXC), a science-based, fully integrated nutraceutical company devoted to extending human healthspan, announced today the financial results for the quarter ended September 30, 2017.

Frank Jaksch, Jr., CEO and co-founder of ChromaDex commented, “The science continues to build and we are now well positioned with cash on our balance sheet to execute our growth strategy.”

“Six months into our strategic shift, we are doing better than expected,” said Rob Fried, President and Chief Strategy Officer of ChromaDex. “Our revenue growth in the quarter was led by sales of TRU NIAGEN."

Results of operations for the three months ended September 30, 2017

For the three months ended September 30, 2017, ChromaDex reported net sales of $6.1 million from continuing operations, which was up 55% as compared to $3.9 million for the third quarter of 2016. For the quarter, net sales of NIAGEN® related revenues were $4.5 million, which represented 73% of third quarter net sales.

Gross profit improved in the third quarter of 2017 to 47.9%, as compared to 47.3% for the same period in 2016. We experienced slightly better gross margins due to the positive impact of NIAGEN® related sales, which we anticipate continuing.

Operating expenses were $6.1 million, as compared to $2.8 million for the third quarter of 2016, as we made incremental investments of $3.3 million in sales and marketing, research and development, and general and administrative expense to support revenue growth.

The net loss from continuing operations attributable to common shareholders was $3.2 million, as compared to $2.3 million for the third quarter of 2016, as we also made investments in the third quarter of 2017 to accelerate our future growth trajectory. Loss per share from continuing operations for the third quarter of 2017 was ($0.07). Looking forward, we expect to continue to invest ahead of growth to capture the global opportunity for NIAGEN®

Adjusted EBITDA, a non-GAAP measure, was $2.9 million for the third quarter of 2017, compared to adjusted EBITDA of ($0.6) million for the third quarter of 2016. The Basic and Diluted Adjusted EBITDA per share for the third quarter of 2017 was $0.06 versus ($0.02) for the third quarter of 2016.

We also ended the quarter with a solid balance sheet with quarter-end cash of $24 million.  

In the third quarter of 2017, ChromaDex completed the sale of its operating assets that were related to ChromaDex’s quality verification program testing and analytical chemistry business for food and food related products. As result of the sale, ChromaDex posted income of $5.4 million from discontinued operations or $0.12 per share.

Recent Company highlights include:


Investor Conference Call

             
ChromaDex management will host an investor conference call to discuss the year end results and provide a general business update on Thursday, Nov. 9, at 4:30 p.m. 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:         2486749
Conference ID:         https://edge.media-server.com/m6/p/h4svziad
           

The earnings press release, accompanying financial exhibits and webcast replay will all 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 discovers, acquires, develops and commercializes patented and proprietary ingredient technologies that address the dietary supplement, food, beverage, skin care and pharmaceutical markets. In addition to our ingredient technologies unit, we also have business units focused on natural product fine chemicals (known as "phytochemicals"), and product regulatory and safety consulting. As a result of our relationships with leading universities and research institutions, we are able to discover and license early stage, IP-backed ingredient technologies. We then utilize our in-house research and development laboratory, regulatory and safety consulting teams to develop commercially viable ingredients. Our ingredient portfolio, including NIAGEN® nicotinamide riboside; pTeroPure® pterostilbene; PURENERGY®, a caffeine-pTeroPure® co-crystal; IMMULINA, a spirulina extract; and AnthOrigin®, anthocyanins derived from a domestically-produced, water-extracted purple corn husk, is backed with clinical and scientific research, as well as extensive IP protection.

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 including statements related to financial results, financial representations, the future performance of ChromaDex’s consumer product, whether ChromaDex has cash on its balance sheet to execute its growth strategy, whether gross profit will continue to improve, and whether ChromaDex will continue to invest to capture the global opportunity for NIAGEN®.  Statements that are not a description of historical facts constitute forward-looking statements and may often, but not always, be identified using such words as "expects", "anticipates", "intends", "estimates", "plans", "potential", "possible", "probable", "believes", "seeks", "may", "will", "should", "could" or the negative of such terms or other similar expressions. More detailed information about ChromaDex and the risk factors that may affect the realization of forward-looking statements is set forth in ChromaDex's Annual Report on Form 10-K for the fiscal year ended December 31, 2016, ChromaDex's Quarterly Reports on Form 10-Q and other filings submitted by ChromaDex to the SEC, copies of which may be obtained from the SEC's website at www.sec.gov. 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
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    
     
Condensed Consolidated Statements of Operations    
For the Three Month Periods Ended September 30, 2017 and October 1, 2016
     
  Sep. 30, 2017 Oct. 1, 2016
     
Sales, net $    6,084,690   $ 3,937,286  
Cost of sales     3,169,321     2,074,325  
     
Gross profit     2,915,369     1,862,961  
     
Operating expenses:    
Sales and marketing     1,103,157     286,941  
Research and development     1,040,561     772,799  
General and administrative     3,948,435     1,727,383  
Operating expenses     6,092,153     2,787,123  
     
Operating loss     (3,176,784 )   (924,162 )
     
Nonoperating expense:    
Interest expense, net     (44,508 )   (2,260 )
Nonoperating expenses     (44,508 )   (2,260 )
     
Loss from continuing operations     (3,221,292 )   (926,422 )
     
Loss before taxes from discontinued operations     (108,899 )   (31,121 )
Gain on sale of discontinued operations     5,467,268     -  
Provision for taxes     -      3,153  
     
Income (loss) from discontinued operations, net     5,358,369     (27,968 )
     
Net income (loss) $    2,137,077   $ (954,390 )
     
Basic earnings (loss) per common share:    
Loss from continuing operations $    (0.07 ) $ (0.02 )
Earnings (loss) from discontinued operations $    0.12   $ (0.01 )
     
Basic earnings (loss) per common share $    0.05   $ (0.03 )
     
Diluted earnings (loss) per common share:    
Loss from continuing operations $    (0.07 ) $ (0.02 )
Earnings (loss) from discontinued operations $    0.11   $ (0.01 )
     
Diluted earnings (loss) per common share $    0.04   $ (0.03 )
     
Basic weighted average common shares outstanding     47,065,009     37,868,672  
     
Diluted weighted average common shares outstanding     47,556,697     37,868,672  
     
See Notes to Condensed Consolidated Financial Statements in Part I of ChromaDex's Quarterly Report
on Form 10-Q filed with Securities and Exchange Commission on November 9, 2017.  

 

ChromaDex Corporation and Subsidiaries    
     
Condensed Consolidated Balance Sheets    
September 30, 2017 and December 31, 2016    
     
  Sep. 30, 2017 Dec. 31, 2016
Assets    
     
Current Assets    
Cash $    23,999,633   $ 1,642,429  
Trade receivables, net of allowances of $0.5 million and $1.1 million, respectively;    
   Receivables from related party: $1.5 million and $0, respectively     4,919,768     5,852,030  
Inventories     6,615,245     7,912,630  
Prepaid expenses and other assets     724,388     311,539  
Current assets held for sale     -     18,315  
Total current assets     36,259,034     15,736,943  
     
Leasehold Improvements and Equipment, net     2,690,527     1,778,171  
Deposits     392,342     377,532  
Receivable held at escrow     750,000     -  
Intangible assets, net     1,709,609     486,226  
Longterm investment     -     20,318  
Noncurrent assets held for sale     -     1,352,878  
     
Total assets $    41,801,512   $ 19,752,068  
     
Liabilities and Stockholders' Equity    
     
Current Liabilities    
Accounts payable $    4,346,700   $ 5,978,288  
Accrued expenses     2,129,583     2,170,172  
Current maturities of capital lease obligations     190,892     255,461  
Customer deposits and other     321,119     389,010  
Deferred rent, current     120,894     76,219  
Due to officer     100,000     -  
Total current liabilities     7,209,188     8,869,150  
     
Capital lease obligations, less current maturities     360,748     343,589  
Deferred rent, less current     493,735     380,205  
Noncurrent liabilities held for sale     -      184,766  
     
Total liabilities     8,063,671     9,777,710  
     
Commitments and contingencies    
     
Stockholders' Equity    
Common stock, $.001 par value; authorized 150,000,000 shares;    
   issued and outstanding September 30, 2017 47,650,252 shares and    
   December 31, 2016 37,544,531 shares     47,650     37,545  
Additional paid-in capital     81,469,567     55,160,387  
Accumulated deficit     (47,779,376 )   (45,223,574 )
Total stockholders' equity     33,737,841     9,974,358  
     
Total liabilities and stockholders' equity $    41,801,512   $ 19,752,068  
     
See Notes to Condensed Consolidated Financial Statements in Part I of ChromaDex's Quarterly Report  
on Form 10-Q filed with Securities and Exchange Commission on November 9, 2017.  
     

 

                     
Condensed Consolidated Statements of Operations (Unaudited)     Effects of Charges associated with Interest, Tax, Depreciation,      Condensed 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)   
For the Three Month Periods Ended September 30, 2017 and October 1, 2016   For the Three Month Periods Ended September 30, 2017 and October 1, 2016   For the Three Month Periods Ended September 30, 2017 and October 1, 2016
                     
  Q3 2017 Q3 2016     Q3 2017 Q3 2016     Q3 2017 Q3 2016
                     
Sales, net $ 6,084,690   $ 3,937,286     Sales $    -    $ -     Sales $ 6,084,690   $ 3,937,286  
Cost of sales   3,169,321     2,074,325     Cost of sales   (47,746 )   (8,066 )   Cost of sales   3,121,575     2,066,259  
                     
Gross profit   2,915,369     1,862,961     Gross profit   47,746     8,066     Gross profit   2,963,115     1,871,027  
                     
Operating expenses:       Operating expenses:       Operating expenses:    
Sales and marketing   1,103,157     286,941     Sales and marketing   -      -     Sales and marketing   1,103,157     286,941  
Research and development   1,040,561     772,799     Research and development   -      -     Research and development   1,040,561     772,799  
General and administrative   3,948,435     1,727,383     General and administrative   (589,747 )   (303,039 )   General and administrative   3,358,688     1,424,344  
Operating expenses   6,092,153     2,787,123     Operating expenses   (589,747 )   (303,039 )   Operating expenses   5,502,406     2,484,084  
                     
Operating loss   (3,176,784 )   (924,162 )   Operating income   637,493     311,105     Operating loss    (2,539,291 )   (613,057 )
                     
Nonoperating expense:       Nonoperating income:       Nonoperating expense:    
Interest expense, net   (44,508 )   (2,260 )   Interest expense, net   44,508     2,260     Interest expense, net   -     -  
Nonoperating expenses   (44,508 )   (2,260 )   Nonoperating income   44,508     2,260     Nonoperating expense   -     -  
                     
Loss from continuing operations   (3,221,292 )   (926,422 )   Income from continuing operations   682,001     313,365     Loss from continuing operations   (2,539,291 )   (613,057 )
                     
Loss before taxes from discontinued operations   (108,899 )   (31,121 )   Income before taxes from discontinued operations   48,978     69,590     Income (loss) before taxes from discontinued operations   (59,921 )   38,469  
Gain on sale of discontinued operations   5,467,268     -     Gain on sale of discontinued operations   -     -     Gain on sale of discontinued operations   5,467,268     -  
Provision for taxes   -     3,153     Provision for taxes   -     (3,153 )   Provision for taxes   -     -  
                     
Income (loss) from discontinued operations, net   5,358,369     (27,968 )   Income from discontinued operations, net   48,978     66,437     Income from discontinued operations, net   5,407,347     38,469  
                     
Net income (loss) $ 2,137,077    $ (954,390 )   Effects of adjusted EBITDA $ 730,979   $ 379,802     Adjusted EBITDA $ 2,868,056   $ (574,588 )
                     
Basic earnings (loss) per common share:       Basic earnings per common share:       Basic earnings (loss) per common share:    
Loss from continuing operations $ (0.07 ) $ (0.02 )   Earnings from continuing operations $ 0.01   $ 0.01     Loss from continuing operations $ (0.05 ) $ (0.02 )
Earnings (loss) from discontinued operations $ 0.12   $ (0.01 )   Earnings from discontinued operations $ 0.00   $ 0.00     Earnings from discontinued operations $ 0.11   $ 0.00  
                     
Basic earnings (loss) per common share $ 0.05   $ (0.03 )   Basic earnings per common share $ 0.02   $ 0.01     Basic earnings (loss) per common share $ 0.06   $ (0.02 )
                     
Diluted earnings (loss) per common share:       Diluted earnings per common share:       Diluted earnings (loss) per common share:    
Loss from continuing operations $ (0.07 ) $ (0.02 )   Earnings from continuing operations $ 0.01   $ 0.01     Loss from continuing operations $ (0.05 ) $ (0.02 )
Earnings (loss) from discontinued operations $ 0.11   $ (0.01 )   Earnings from discontinued operations $ 0.00   $ 0.00     Earnings from discontinued operations $ 0.11   $ 0.00  
                     
Diluted earnings (loss) per common share $ 0.04   $ (0.03 )   Diluted earnings per common share $ 0.02   $ 0.01     Diluted earnings (loss) per common share $ 0.06   $ (0.02 )
                     
Basic weighted average common shares outstanding   47,065,009     37,868,672     Basic weighted average common shares outstanding   47,065,009     37,868,672     Basic weighted average common shares outstanding   47,065,009     37,868,672  
                     
Diluted weighted average common shares outstanding    47,556,697     37,868,672     Diluted weighted average common shares outstanding   47,556,697     37,868,672     Diluted weighted average common shares outstanding   47,556,697     37,868,672  
                     

 

 

 

ChromaDex Corporation