ChromaDex(US:CDXC)2021-05-09 03:25Financial Data and Key Metrics Changes - Total company net sales for Q1 2021 were $14.7 million, a 2% increase year-over-year, despite supply chain disruptions [9][21][29] - Gross margins improved to approximately 62.9%, up from 61% in Q4 2020 [21][25] - Adjusted EBITDA, excluding legal expenses, was a loss of approximately $0.7 million, showing a $2.4 million improvement from the prior quarter [9][21] Business Line Data and Key Metrics Changes - E-commerce sales grew by 17% compared to Q1 2020, indicating strong demand for Tru Niagen [9][29] - Sales to Watson's were $1.6 million in Q1 2021, down from $2.1 million in the prior quarter due to supply chain issues [21][23] - Ingredient sales were $1.2 million, down from $2.2 million in the previous quarter, attributed to the loss of a customer [23][24] Market Data and Key Metrics Changes - The company signed over 230 research collaboration agreements, representing over $75 million in investments from external research institutions [10] - The demand for Tru Niagen remains strong, with expectations for increased sales in the upcoming quarters [15][29] Company Strategy and Development Direction - The company aims to expand its market presence through strategic partnerships with Walmart, H&H Group, and Row, focusing on product launches and brand awareness [8][12][34] - Management is optimistic about future growth, emphasizing the importance of protecting intellectual property and expanding scientific research [10][20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged supply chain disruptions but expressed confidence in resolving these issues and meeting future demand [9][62] - The company expects steady revenue growth and anticipates an acceleration in sales growth beginning in Q2 2021 [33][34] Other Important Information - The company ended Q1 2021 with $44.7 million in cash, including a $25 million capital raise in February [22][31] - Legal expenses increased significantly due to ongoing litigation, but management expects this to stabilize moving forward [27][30] Q&A Session Summary Question: What more can you tell us about the Walmart rollout? - Management indicated that marketing efforts will gradually increase, with a focus on brand awareness and in-store promotions [36][37] Question: Will Tru Niagen be available globally through the H&H Group agreement? - The agreement is initially limited to specific regions, with plans for unique formulations and a launch expected in Q4 2021 [38] Question: Why was there no Nestle revenue in Q1? - Management confirmed that the slow rollout of Nestle's Celltrient product was anticipated, and they expect the relationship to expand over time [40][41] Question: What will the financials look like for the H&H Group agreement? - The agreement is a conventional supply deal without royalties, focusing on a price per kilogram [43] Question: How is the HCP segment performing post-restrictions? - Management sees the HCP market as a growth area and plans to invest more in educating healthcare practitioners about the benefits of Tru Niagen [49] Question: What are the expectations for margins throughout 2021? - Management expects margins to remain slightly above 60% for 2021, with potential improvements as sales increase [50]