On October 31, 2024, ChromaDex Corp (CDXC, Financial) released its 8-K filing detailing the financial results for the third quarter of 2024. ChromaDex Corp, a bioscience company focused on healthy aging, reported total net sales of $25.6 million, marking a 31% increase year-over-year. The company achieved a gross margin of 63.5% and recorded net income of $1.9 million, or $0.02 per share, surpassing analyst estimates of $0.00 earnings per share and $23.64 million in revenue.
Company Overview
ChromaDex Corp is renowned for its research on nicotinamide adenine dinucleotide (NAD+), a coenzyme that declines with age. The company is the innovator behind the NAD+ precursor nicotinamide riboside (NR), marketed as Niagen. ChromaDex operates through three segments: Consumer Products, Ingredients, and Analytical Reference Standards and Services, with the majority of revenue generated from the Consumer Products segment.
Performance and Challenges
The company's performance in Q3 2024 was driven by a significant increase in Niagen ingredient sales, which rose by 368% year-over-year. This growth was complemented by a 4% increase in Tru Niagen sales. However, the company faces challenges such as increased operating expenses, which rose by 12% to $14.6 million, primarily due to higher sales and marketing expenses and legal costs associated with the Niagen+ launch.
Financial Achievements
ChromaDex's financial achievements are noteworthy, particularly in the Consumer Packaged Goods industry, where maintaining a strong gross margin is crucial. The company reported a gross margin improvement of 210 basis points to 63.5%, reflecting changes in product mix and improved labor and overhead utilization rates. Additionally, the company's Adjusted EBITDA reached a record $2.9 million, up from $0.5 million in the prior year quarter.
Key Financial Metrics
ChromaDex's income statement highlights a net income of $1.9 million, a significant turnaround from a net loss of $1.0 million in Q3 2023. The balance sheet shows total assets of $56.5 million, with cash and cash equivalents increasing to $32.4 million. The cash flow statement indicates a net cash inflow from operating activities of $3.5 million for the nine months ended September 30, 2024.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Sales | $25.6 million | $19.5 million |
| Gross Margin | 63.5% | 61.4% |
| Net Income | $1.9 million | $(1.0) million |
| Adjusted EBITDA | $2.9 million | $0.5 million |
Analysis and Commentary
The company's strategic focus on expanding its Niagen+ product line has contributed to its robust financial performance. The expansion into wellness clinics and the introduction of pharmaceutical-grade Niagen products have opened new revenue streams. However, the increase in operating expenses highlights the need for careful cost management as the company scales its operations.
We are proud to report our best quarter to date, achieving $25.6 million in revenue, an impressive 31% increase year-over-year, supported by a strong gross margin of 63.5%, record-setting net income of $1.9 million, and healthy cash flows that have grown our operating cash to $32.4 million," said ChromaDex CEO Rob Fried.
ChromaDex's performance in Q3 2024 underscores its growing financial strength and positions the company for continued success in the bioscience sector. The company's ability to innovate and expand its product offerings will be critical in maintaining its competitive edge and driving future growth.
Explore the complete 8-K earnings release (here) from ChromaDex Corp for further details.
