• Revenue: $22.7 million, a 12% increase year-over-year.

• Net Income: Near breakeven with a $15,000 net loss.

• Adjusted EBITDA: Positive $1.6 million, marking the fifth consecutive quarter of positive adjusted EBITDA.

• Cash and Cash Equivalents: $27.9 million with no debt.

• Gross Margin: 60.2%, slightly down from 60.8% in the prior year.

• Operating Expenses: Reduced by $0.7 million compared to the previous year.

• E-commerce Revenue: $13 million, stable year-over-year.

• Watsons and Other B2B Sales: 44% increase, partly due to timing of sales.

• Operating Loss: $0.3 million, an improvement from a $2.3 million loss in the prior year.

• Net Cash Provided by Operations: Near breakeven at $31,000 for the first six months of 2024.

• Warning! GuruFocus has detected 6 Warning Signs with ASRT.

Release Date: August 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• ChromaDex Corp (NASDAQ:CDXC) reported a 12% year-over-year increase in revenue, reaching $22.7 million for the second quarter of 2024.

• The company achieved its fifth consecutive quarter of positive adjusted EBITDA, with $1.6 million reported.

• ChromaDex Corp (NASDAQ:CDXC) ended the quarter with $27.9 million in cash and no debt, indicating strong financial health.

• The launch of the Niagen+ product line, including pharmaceutical-grade Niagen IV and injections, opens significant growth opportunities in a global market valued at over $2 billion.

• ChromaDex Corp (NASDAQ:CDXC) received orphan drug designation from the US FDA for NR as a candidate for treatment of Ataxia Telangiectasia, highlighting potential therapeutic benefits.

Negative Points

• The commercialization of Niagen IV took longer than anticipated, impacting growth plans for the remainder of 2024.

• ChromaDex Corp (NASDAQ:CDXC) faces challenges in communicating the scientific benefits of Niagen IV to clinics and consumers.

• The presence of misleading NAD boosting products on the market poses a challenge to ChromaDex Corp (NASDAQ:CDXC)'s brand integrity.

• The company revised its 2024 growth outlook to 10% to 15% year-over-year, down from previous expectations due to delays in product launches.

• ChromaDex Corp (NASDAQ:CDXC) is experiencing difficulties in obtaining Blue Hat approval in China, affecting its market expansion plans.

Q & A Highlights

Q: Can you provide more details about the Niagen+ launch and its advantages over current products? Why wouldn't you expect faster adoption given its benefits? A: Robert Fried, CEO: We anticipate gaining more than 50% market share due to Niagen+'s significant advantages over NAD IV, such as shorter infusion times and fewer side effects. The challenge lies in communicating these benefits and ensuring supply. We've faced delays due to the rigorous process of obtaining FDA approval and ensuring pharmaceutical-grade quality. We expect larger batches by October, which should help meet demand.

Q: Once you have full availability of Niagen IV, what do you see as the biggest hurdle to its adoption? A: Robert Fried, CEO: The main challenge will be communicating the product's availability and benefits. The demand is already there, as NAD IV therapy is popular despite its unpleasant experience. Niagen IV offers a superior alternative, which should help expand the market.

Q: How will you set the pricing for Niagen IV, and what impact will it have on gross margins? A: Robert Fried, CEO: We priced Niagen IV slightly higher than existing NAD IV products, working backward from market prices. The margins are higher than our corporate average, which should positively impact our gross margins.

Q: How does the process for Ataxia Telangiectasia (AT) differ from previous efforts with Cockayne syndrome? A: Robert Fried, CEO: The AT process is further along, with human clinical trials already conducted, unlike Cockayne syndrome, which only reached mouse studies. The regulatory process is similar, but AT has shown more promise in human trials.

Q: What is the addressable market for Parkinson's if favorable results are obtained in 2025? A: Robert Fried, CEO: There are approximately 10 million diagnosed Parkinson's patients globally. If the study results are positive, even without drug approval, a significant percentage of these patients might seek a safe dietary supplement like Tru Niagen, presenting a substantial market opportunity.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.