Harrow Health(US:HROW)2025-05-08 20:16Revenue and Growth - Total revenues for the three months ended March 31, 2025, were $47,831,000, an increase of $13,244,000 compared to $34,587,000 for the same period in 2024[122]. - Revenues from branded products totaled $27,780,000 for the three months ended March 31, 2025, compared to $13,869,000 during the same period in the prior year, reflecting strong growth in branded ophthalmology products[122]. Profitability and Expenses - Gross profit for branded products was $19,599,000 with a gross margin of 70.6% for the three months ended March 31, 2025, compared to a gross profit of $10,191,000 and a gross margin of 73.5% in 2024[124]. - Selling, general and administrative expenses increased to $40,513,000 for the three months ended March 31, 2025, up by $11,700,000 from $28,813,000 in 2024, primarily due to increased seasonal expenses and new hires[127][128]. - Research and development expenses rose to $3,026,000 for the three months ended March 31, 2025, an increase of $877,000 compared to $2,149,000 in 2024, driven by expanded product development efforts[130]. Cash Flow and Liquidity - Cash on hand as of March 31, 2025, was $66,726,000, an increase from $47,247,000 at December 31, 2024, indicating improved liquidity[133]. - Net cash provided by operating activities for the three months ended March 31, 2025, was $19,668,000, a significant increase from $(4,628,000) in the same period of 2024, primarily due to a decrease of $39,196,000 in accounts receivable[137]. - Net cash used in investing activities during the same period was $(212,000), compared to $(110,000) in 2024, mainly for equipment and software purchases[138]. - Net cash provided by financing activities was $23,000 in Q1 2025, contrasting with $(809,000) in Q1 2024, attributed to proceeds from the exercise of stock options[139]. Debt and Financing - As of March 31, 2025, the company had $107,500,000 outstanding under the Oaktree Loan and $75,000,000 in 2026 Notes, with maturity dates in January and April 2026, respectively[141]. - The company is in discussions to refinance the Oaktree Loan and 2026 Notes, with management believing it is probable to secure refinancing based on collateral strength and expected cash flows[141]. - The company plans to refinance its Oaktree Loan and 2026 Notes during 2025, with expectations of maintaining sufficient liquidity for operations and capital expenditures for at least the next 12 months[134][135]. - The company may need significant additional capital for future operations and could seek financing through various sources, including equity or debt financings, which may dilute existing stockholders[142]. Interest Expense and Risk - Interest expense, net increased to $6,548,000 for the three months ended March 31, 2025, compared to $5,415,000 for the same period in 2024, primarily due to a higher outstanding principal amount of debt[131]. - Interest rate risk related to the Oaktree Loan is based on SOFR plus a 6.5% spread, with a hypothetical 100 basis points increase in SOFR potentially increasing interest expense by $1,075,000 annually[147]. Strategic Initiatives - The company initiated Project Beagle to transition approximately 25,000 ImprimisRx patients from compounded formulations to FDA-approved products, aiming to streamline operations and reduce reliance on compounding[119]. - The VEVYE Access for All program was launched to enhance patient access to VEVYE at an out-of-pocket cost of $59 or below, aiming to alleviate treatment obstacles for dry eye patients[118].