ChromaDex(CDXC) - 2022 Q4 - Annual Report

Financial Performance - Total net sales for ChromaDex increased by 7% to $72.05 million in 2022, compared to $67.45 million in 2021[403] - Consumer Products segment sales rose by 6% to $60.11 million in 2022, up from $56.71 million in 2021[403] - Ingredients segment sales increased by 18% to $8.74 million in 2022, compared to $7.41 million in 2021[403] - Total gross profit increased from $16.1 million in 2018 to $42.8 million in 2022, representing a 22% compound annual growth rate[406] - Gross profit for fiscal year 2022 increased by $1.3 million, or 3%, compared to 2021, with a gross margin percentage of 59.4%, down 210 basis points from 2021[406] Costs and Expenses - Total cost of sales grew by 13% to $29.25 million in 2022, up from $25.96 million in 2021, with a total cost of sales as a percentage of net sales increasing from 38% to 41%[405] - General and administrative expenses decreased by 22% from $36.4 million in 2021 to $28.3 million in 2022[410] - Losses from operations for the year ended December 31, 2022, were approximately $16.5 million, primarily due to expenses related to operational expansion and legal expenditures[417] Cash Flow - Net cash used in operating activities was approximately $15.1 million in 2022, a decrease from $24.2 million in 2021, primarily due to an improvement in net loss[412] - Net cash provided by financing activities decreased to approximately $7.7 million in 2022 from $36.1 million in 2021, attributed to reduced proceeds from common stock issuance[413] Revenue and Income - The company recognized approximately $2.1 million in Other income from the Employee Retention Tax Credit (ERTC) during 2022[211] - Revenue from bill-and-hold arrangements was $1.7 million for the year ended December 31, 2022, with no revenue recorded for 2021[424] Inventory and Commitments - ChromaDex has a commitment to purchase approximately $18.0 million of inventory from W.R. Grace & Co. during fiscal year 2023[209] Regulatory and Market Challenges - The company faces challenges from inflation in labor, raw materials, and transportation costs, which may impact margins and production volumes[213] - The ongoing COVID-19 pandemic continues to create uncertainty and disruption, affecting workforce and operations[210] - ChromaDex is subject to various regulations regarding dietary supplements, which may impact product marketing and approvals[198] Balance Sheet Items - Deferred revenue balances were $4.0 million as of December 31, 2022, down from $4.3 million in 2021[423] - Accounts payable as of December 31, 2022, was $9.7 million, a decrease from approximately $10.4 million in 2021[416] Dividends - The company has not declared or paid any cash dividends on its common stock, intending to retain earnings for operational use[420]