Synergy CHC Corp.(SNYR) - 2025 Q2 - Quarterly Results

Executive Summary & Business Highlights CEO Commentary CEO Jack Ross celebrated Synergy CHC Corp.'s tenth profitable quarter, highlighting year-over-year growth, global brand expansion, beverage business growth, and successful debt refinancing - Reported tenth consecutive quarter of profitability[4] - Revenue, gross profit, net income, and earnings per share all grew year-over-year[4] - Expanded the global footprint of the FOCUSfactor brand through a licensing agreement in Turkey[4] - Secured distribution partners across North America for the RTD beverage business[4] - Successfully completed a $20 million debt refinancing, extending maturity profile and enhancing financial flexibility[4] Second Quarter 2025 Financial Summary Synergy CHC Corp. reported strong Q2 2025 results: revenue up 1% to $8.1 million, gross margin at 76.7%, net income up 125% to $1.5 million, and EBITDA surging 136% to $3.80 million Q2 2025 Financial Performance vs. Q2 2024 | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :--------------------- | :---------- | :---------- | :----------- | | Revenue | $8.1 million | $8.0 million | +1% | | Gross Margin | 76.7% | 69.5% | +7.2 ppts | | Income from Operations | $1.62 million | $1.58 million | +2.5% | | Net Income | $1.5 million | $655.2 thousand | +125% | | Earnings Per Share | $0.17 | $0.09 | +86% | | EBITDA (non-GAAP) | $3.80 million | $1.61 million | +136% | Recent Business Highlights Recent highlights include major North American retail and distribution wins for FOCUSfactor and beverages, international expansion to Turkey, a $20 million term loan, key beverage hires, and significant liability reductions - Announced major North American retail and distribution wins across FOCUSfactor supplement and beverage lines, expected to yield significant results in the fourth quarter of 2025[7] - Expanded international licensing deal with Gravity Pharma, adding Turkey alongside the UAE for exclusive distribution of FOCUSfactor[7] - Entered into a $20 million term loan credit agreement, due May 2029, with $17.5 million drawn[7] - Added key individuals to drive the Company's beverage growth during the second quarter[7] - Reduced outstanding liabilities by $869 thousand during the second quarter and by an additional $1.8 million subsequent to quarter end[7] Detailed Financial Performance Second Quarter 2025 Income Statement Analysis Q2 2025 total revenue rose 1% to $8.1 million, driven by $1.4 million license revenue. Gross margin improved to 76.7%, net income surged 125% to $1.5 million, and diluted EPS grew 86% to $0.17 Q2 2025 Income Statement Highlights (YoY Comparison) | Metric | Q2 2025 ($) | Q2 2024 ($) | Change (YoY) | | :--------------------- | :---------- | :---------- | :----------- | | Total Revenue | $8.1 million | $8.0 million | +1% | | Product Sales | $6.73 million | $8.02 million | -16.1% | | License Revenue | $1.40 million | $0 | N/A | | Gross Margin | 76.7% | 69.5% | +7.2 ppts | | Operating Expenses | $4.6 million | $4.0 million | +16% | | Income from Operations | $1.62 million | $1.58 million | +2.5% | | Net Income | $1.5 million | $655.2 thousand | +125% | | Diluted EPS | $0.17 | $0.09 | +86% | - The increase in gross margin was largely driven by license revenue[8] - The increase in operating expenses was driven by incremental costs associated with being a public company[9] Balance Sheet and Cash Flow Overview As of June 30, 2025, cash increased to $1.5 million, working capital shifted to a $12.4 million surplus, and inventory rose to $2.4 million. Operating cash outflow decreased, with financing activities providing $1.63 million Balance Sheet Highlights (Period-end Comparison) | Metric | June 30, 2025 ($) | December 31, 2024 ($) | Change ($) | | :-------------------------- | :-------------- | :---------------- | :------- | | Cash and Cash Equivalents | $1.5 million | $687.9 thousand | +$770.6K | | Working Capital | $12.4 million surplus | $1.12 million deficit | Significant improvement | | Inventory | $2.4 million | $1.7 million | +$0.7M | Cash Flow from Operating Activities (Six Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change ($) | | :-------------------------------- | :----------- | :----------- | :------- | | Net cash used in operating activities | $(899.7) thousand | $(1.1) million | -$240.3K | - Net cash provided by financing activities for the six months ended June 30, 2025, was $1.63 million, primarily driven by proceeds from notes payable ($18.99 million) partially offset by repayments of notes payable ($15.38 million)[26] Non-GAAP Financial Measure Reconciliation: EBITDA Synergy CHC Corp. presents EBITDA as a non-GAAP measure to clarify core operating results, with Q2 2025 EBITDA significantly increasing to $3.80 million from $1.61 million in Q2 2024 - EBITDA is disclosed as a non-GAAP financial measure to enhance investors' overall understanding of financial performance by excluding certain items that may not be indicative of core operating results[14][15] EBITDA Reconciliation (Three Months Ended June 30) | Metric | Q2 2025 ($) | Q2 2024 ($) | | :-------------------------- | :---------- | :---------- | | Net income for the period | $1.47 million | $0.66 million | | Adjusted for: | | | | Interest expense, net | $2.11 million | $0.74 million | | Amortization of intangible assets | $0.03 million | $0.03 million | | Tax expense | $0.19 million | $0.18 million | | EBITDA | $3.80 million | $1.61 million | Company Information About Synergy CHC Corp. Synergy CHC Corp. is a consumer health and wellness company, offering FOCUSfactor brain supplements and Flat Tummy women's wellness and weight management products - Synergy CHC Corp. is a provider of consumer health and wellness products[18] - Its brand portfolio includes FOCUSfactor (brain health supplement) and Flat Tummy (women's wellness and weight management)[18] Forward Looking Statements This report contains forward-looking statements on future events, subject to risks and uncertainties outlined in SEC filings, and the company does not commit to updates unless legally required - Statements regarding expansion and growth initiatives, refinancing of indebtedness, and free cash flow constitute "forward-looking statements"[19] - These forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from the results discussed[19][20] - Synergy does not undertake any obligation to update or revise any forward-looking statement, except as required by law[20] Investor Relations Investor relations inquiries for Synergy CHC Corp. can be directed to Gateway Group, with contacts Cody Slach and Greg Robles, via phone or email - Investor Relations contact information is provided for Gateway Group (Cody Slach, Greg Robles) via phone and email[21] Condensed Consolidated Financial Statements Condensed Consolidated Balance Sheets As of June 30, 2025, total assets increased to $19.7 million, total liabilities decreased to $32.1 million, and the stockholders' deficit improved to $(12.4) million Condensed Consolidated Balance Sheets (Selected Items) | Item | June 30, 2025 ($) | December 31, 2024 ($) | | :------------------------------------------ | :-------------- | :---------------- | | Assets | | | | Cash and cash equivalents | $1,458,561 | $687,920 | | Accounts receivable, net | $7,069,889 | $5,321,037 | | Inventory, net | $2,364,158 | $1,716,552 | | Total Current Assets | $19,509,679 | $16,059,768 | | Total Assets | $19,726,346 | $16,343,101 | | Liabilities | | | | Total Current Liabilities | $7,126,547 | $17,184,369 | | Notes payable, net of debt discount (long-term) | $24,978,999 | $7,457,022 | | Total Liabilities | $32,105,546 | $32,974,444 | | Stockholders' Deficit | | | | Total stockholders' deficit | $(12,379,200) | $(16,631,343) | Unaudited Condensed Consolidated Statements of Income and Comprehensive Income The income statement shows Q2 2025 total revenue at $8.1 million with $1.5 million net income. For H1 2025, total revenue was $16.3 million, and net income reached $2.3 million, indicating improved profitability Condensed Consolidated Statements of Income (Three Months Ended June 30) | Metric | Q2 2025 ($) | Q2 2024 ($) | | :-------------------------------- | :---------- | :---------- | | Product Sales | $6,734,996 | $8,024,840 | | License Revenue | $1,400,000 | - | | Total Revenue | $8,134,996 | $8,024,840 | | Cost of sales | $1,896,391 | $2,448,890 | | Gross profit | $6,238,605 | $5,575,950 | | Operating expenses | $4,614,870 | $3,992,358 | | Income from operations | $1,623,735 | $1,583,592 | | Net income after tax | $1,473,237 | $655,186 | | Net income per share – basic | $0.17 | $0.09 | Condensed Consolidated Statements of Income (Six Months Ended June 30) | Metric | H1 2025 ($) | H1 2024 ($) | | :-------------------------------- | :---------- | :---------- | | Product Sales | $13,405,530 | $17,436,703 | | License Revenue | $2,900,000 | - | | Total Revenue | $16,305,530 | $17,436,703 | | Cost of sales | $3,902,904 | $5,086,029 | | Gross profit | $12,402,626 | $12,350,674 | | Operating expenses | $8,831,188 | $8,958,753 | | Income from operations | $3,571,438 | $3,391,921 | | Net income after tax | $2,349,501 | $1,235,716 | | Net income per share – basic | $0.27 | $0.17 | Unaudited Condensed Consolidated Statements of Cash Flows For H1 2025, operating cash outflow improved to $899.7 thousand, while financing activities provided $1.63 million, resulting in a net cash increase of $770.6 thousand Condensed Consolidated Statements of Cash Flows (Six Months Ended June 30) | Metric | H1 2025 ($) | H1 2024 ($) | | :------------------------------------------ | :-------------- | :-------------- | | Net income | $2,349,501 | $1,235,716 | | Amortization of debt discount and debt issuance cost | $892,435 | - | | Gain on settlement of debt | $(2,154,522) | - | | Net cash used in operating activities | $(899,731) | $(1,140,005) | | Net cash provided by financing activities | $1,632,433 | $407,391 | | Net increase (decrease) in cash, cash equivalents and restricted cash | $770,641 | $(545,241) | | Cash and restricted cash, end of period | $1,558,561 | $187,293 | - Significant financing activities included proceeds from notes payable of $18,996,250 and repayment of notes payable of $15,382,903 for the six months ended June 30, 2025[26]