CDXC - Earnings call transcript Q2 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by, and welcome to ChromaDex Corporation's Second Quarter 2020 Earnings Conference Call. My name is Josh, and I will be the conference operator today. At this time, all participants are in a listen-only mode. And as a reminder, this conference call is being recorded. This afternoon ChromaDex issued a news release announcing the company's financial results for the second quarter of 2020.

reviewed section both www.chromadex.com. of not the available have Relations Investor ChromaDex's you this are information within If website at would of turn Brianna to now call I to over the Gerber, and FP&A conference President Investor Relations. Vice like ahead, go Please Ms. Gerber.

Brianna Gerber

financial may ChromaDex's welcome investor and Chief interest Today's today the uncertainties XXXX future trials; Executive the us of ChromaDex's of ChromaDex in such Corporation's ChromaDex's relating future Chairman, results; forward-looking the operating of Founder of future opportunities; ChromaDex's Financial and Chief and Farr. Executive and include Frank afternoon results sale results Good future and NIAGEN second call and as business statements call. opportunities, and cash investor the future Officer, including you. Kevin risks related performance of the conference development results and future to and to anticipated to and research Thank in as Fried; prospects operations. clinical Jaksch; well needs; With regulatory filings; are plans TRU that expansion markets; timing quarter statements, trial Officer, subject are business timing new Rob to development

on its factors could anticipated Forward-looking that have to risk cash call COVID-XX Form of ChromaDex's the recently in actual These most give statements SEC, these occurred, with on condition from in of business, contained risks those ChromaDex's are results uncertainties. inherently any statements the our including to matters and filed cause changes date only yet actual financial actual XX-Q statement. operations, this the statements with the include Report Many or forward-looking or relate to that forward-looking not results flows. to the forward-looking Quarterly no differ results subject on the effect activities statements the pandemic call assurance and factors statements, future the assumes not intended activities date forward-looking results estimates represent of to materially of to conference as are this expectations. company's conference note and after any to in to company obligation update the conform results. Because and Please

certain addition, the release, references financial this afternoon were appropriate company's and issued measures. earnings non-GAAP earnings The measures. presented information and call, the in presentation GAAP In present which the website on are financial to reconciliations of press this company's available

to over conference www.chromadex.com. website Investor call the this our Rob webcast. to webcast being of Relations it's be Finally, is With Chief via available at recorded our Executive Rob? call The turn section the my pleasure Officer, that will now at Fried.

Rob Fried

increased investor legal total sequentially thank strong you, business million, sales X% of our Good goal year-over-year. ChromaDex EBITDA, excluding and and Thank quarter $XXX,XXX. Overall, of second $XX.X joining we another increase positive and sales quarter achieved were $XX.X Brianna. afternoon NIAGEN XX% TRU with total adjusted X% XXXX a call. a of increase for expense Also everyone, the net year-over-year. you XX% million. had net sequentially sales

businesses, many and know downturn ours. including have for you created the Coronavirus economic headwinds As the

flat Our well e-commerce were sales perform business this continued roughly sequentially. to environment, challenging in

opportunities Our Watsons focused retail has markets ahead. Coronavirus. the But new on to business, more impacted been we including and partners the sales in by international remain terrific

Coronavirus initiative that is ongoing. As when second quarter. was just excluding benefited the in mentioned, We adjusted costs legal hit the to expense reduce objective $XXX,XXX an positive our EBITDA a total by still

science brand, the pillars the strategy: focus discuss now own a build fundamentals. on the to three and to Let's to our business to global

health-care to to Sales represented TRU to business a in first the second as partners approximately in our China, the flat bottles excluding for the includes business hospitals. top were of sales. impacted quarter. Global initial TRU $X.X workers in Kong shipments million roughly This the This sales brand. TRU the total sales TRU in NIAGEN, Hong were in million sales second quarter, performing donated sales base of their purchase $X.X $XX.X Watsons Watsons Chinese sales in to sales TRU Canada. to million represented included NIAGEN Hong Zealand, who net net tourism supplement. XX% quarter. declines UK second NIAGEN total by NIAGEN was XX% It Kong Horizon's, store Singapore be NIAGEN also beauty beauty, NIAGEN quarter. TRU First, the of compared of TRU in the relative cross-border sales million Watsons the a sequentially. New outperformer in continued and International closures from The to NIAGEN includes and and the $X.X in Japan Australia, and in and Europe

addition, Watsons beauty, pleased of performance is with in launched early XXX In TRU the in NIAGEN which April. stores

year-over-year new T-mall China we this the for resilience in sales distribution Japan, addition, to and NIAGEN and and quarter The France, Coronavirus first Italy, the In below of a defense on TRU year-over-year. another XXX% China, elevating negatively with our business We relevant shopping million, with in were $X.X impacted through and the These in mid-year which the of introduced in economic and as face successful festival. efforts cross-border successful approximately and marketing of in messaging, China cellular quarter, second stress. a Kaola.com increase highlighting June responded US E-commerce we'll cross-border net Korea, beauty be We slightly downturn physiological in Spain, XX% continuing. UK, in launched launch. Jd.com April and e-commerce XXXX sell NAD We were XX quarter. grew sales Germany, expanded test mid-March. importance

and in-channel advertising earn Our is on as media. focused influencers, well marketing strategy as

NIAGEN. selling TRU began mentioned of Europe, growing trend We and supplementation which UK, since expanding the June XXXX July including to markets major in following Magazine been Vogue, and Amazon issue other European on NAD HELLO! received have of covered We press French approval. favorable behind EFSA and the

build continuing with to are we partnerships. our global strong brand Additionally,

market one Launch But and on plans UK the our see in to NIAGEN were TRU PR do launches efforts, the in back This in recap online scaled as Matakana and to in over these superdrug.com. reorders with marketing XXXX importance influencer believe that in To full and retail efforts begin as March Superdrug's NIAGEN UK to not and TRU approach due believe to we mentioned In the as on in growing steadily into a for test as Health ChromaDex Superdrug supplement stores, Zealand, Nestle launches Sales with the from support our launch launched strong sales we As potential They quarter on to launch well each. in briefly for and market with into New expect markets. April, promotions. as launched of proven slower sales. of strong collaborate stores if rollout Coronavirus. long-term Matakana our time, UK deep potential We follows meaningful had us. were the successful well Superdrug distributors, their new TRU partners they very plan product. educate shipments TRU for we We quarter, second Australia and XXX the and later the Limited. sequentially the XXXX. knowledge market the is these and this growth growth category in NIAGEN well new in expand in the Science us We contributed NIAGEN soon. beyond. the first year. I'll down up small of have as digital in-store UK continue been from the over Health but new call, sales to NIAGEN Australia the local markets, to successful. of cellular to dietary we ramp expand of XXX plan TRU positioned all has is consumers a science-based as brings nutrition for shared

bring their allow products encouraged leading to Nestle TRU their timing Health Persona recommended NIAGEN health our their NIAGEN year. of to will are and and by later work Science awareness help we are determined now with Health related medical last will TRU with Persona along partnership Nutrition, containing launched believe Nestle will quarter. Science We platform Nestle. experts. program subscription personalized in market offered commitment direct-to-consumer build by vitamin Our vitamin their of packs Nestle NIAGEN panel Health But Science other the a by and ingredients, cellular effort. with Ultimately, on to science-based division Persona's this be them monthly for capsules NIAGEN. TRU high-quality TRU

Our the second core science. own objective is to

institutions world. leading the in and registered our Frank momentarily. studies behind published be XX by published We and signed the We NIAGEN. material update, including Research clinical our around which last new Several resulted safety agreement through the XXXth and our studied are has confident in which program, of have the to-date will ChromaDex universities studies studies been XX continues supporting patented ingredient NIAGEN, since External transfer to science summarize which efficacy published recently

our on science NR experience. from a of on provide this tissue which AboutNAD.com, In be we was All on quarter of COVID-XX. announced found results in-vitro April, user first better to combination a re-launched round the and can study

findings preclinical there reminder, a As from were two this key study.

Brenner. And the research cells the infected sought XX% face infection. We studied of NAD in recently to response may of attempt Charles found cells a second, and effect First out by This have riboside including the that COVID-XX COVID-XX that specifically of results reduction in introduction group, announced They this innate Dr. preclinical round these viral cells. nicotinamide the Coronavirus, replenish in to an an other the mouse in NR levels caused NAD. Coronaviruses to that form viruses. an the Officer, infection second inhibits virus of immune of Chief our the NR that may causes cells replication antiviral support Scientific suggests

still required. clinical research human course, Of is

the preclinical model supplementation to a COVID-XX NIH they required Institute find increasing determine potential NR Infectious support NAD in in proud any as humans. whether to logical within COVID-XX clinical NIAID, of infection be collaboration of this replication global benefits infection designed trials entered work progression COVID-XX NIAGEN response joint study assess to innate the to addition, assess limiting modulating animal is on and This the to This of models. may NIAGEN immune a reduce levels Ultimately, of severe to impact and a benefit Allergy National next or in response. is our assess In will to supplementation by and division hamsters. step help pandemic. have whether mice to Disease, the the We're a ChromaDex either into viral prior whether NIAID infection the with inflammatory answers of therapeutic and the

all will We collaborative share research the appropriate. findings COVID-XX to our of continue when

patent the continue in delays dates this California outbreak extended is our protect and for with Health. September Elysium been XXXX, property, of has York year. set. a In We have build intellectual Delaware, no of Markman Coronavirus to litigation with our upon December New which Hearing case trial ongoing includes and also and scheduled in trial The in

We licensed remain the have in ever seen of as and as Elysium's patents. construction initial claim strength confident our arguments

I are to to As repeatedly have said, all in eager the trial and facts cases. get for a to jury be three presented we to

fundamentals. received the American lead table supplements and and latest the around hosted the important Conference by to discussions. our industry. accreditation. pillar NIH protect transparency, Longmont topic in on highest us championed a this master greater joined to and to is In Frank In Council commitment standards Frank industry Quality files all world. for in just ISO three for This panel has June, science is and and of This in in to compliance its all consumers. by the strategic example Responsible mission meeting accreditation supplement big third the importance recognizes our round that focus consistency, consumer in Our this been regulatory week essential an bodies by our lab and control of is Nutrition, recognized enforcement on quality Institute ChromaDex's control, dietary presentations, two to international to It prestigious participated dietary which to safety. is the June of for the he Colorado part

for there for know to listening, deliver NIAGEN the Brenner we our American National Scientific and Chief are successfully from objectives name. bioactive eager for who household human our on Achievement Nutrition it continue XXXX become Advisor, strategic times. In field his I compounds to believe positively Dr. the Society of outstanding your the that Scientific research health a navigate many and has these impacted are in Charles health. Finally, received for TRU Award unprecedented summary,

investing community, We the hard the scientific clearly alongside Jaksch true the are Chairman, on and amazing So Frank to for globally, are are and word of to now responsible increasingly over we? update molecule Frank? an of them And attention our pass while to staying drive studying I'll this scientific working spread have the who we research. is our science-based philosophy important communications. research. to marketing We call

Frank Jaksch

Rob. you, Thank

Rob core our heard you science. own one to say As of objectives is the

committed scientific NR on global are a research. remaining and We authority to NAD

with commitment We innovative was setting are standard than conferences registered XX for an science-based NAD clinical ingredients of are mentioned our XX. the NR on has excellence in of update. safety and represent trials and therapeutic on last very There publication call last other proud continued industry total XX supplement two to pharmacokinetics test This the our published to ongoing and Rob combination I with completed at clinicaltrials.gov research effects our company currently dietary science, are Since the also to earlier. the a additional and industry quality. in NR or to responsible as panels to accelerate. An is trials ChromaDex that in NR. more of for registered the clinical investigate

reached signed research our by of milestone approximately also last to up We collaborations update. a the compared XXX during five quarter,

including in preclinical study disorder. with or clinical As have supplementation announced these associated XX Rob the has said effects trials. a published the XX resulted of traits recently investigating We results of human publications behaviors spectrum autism in to-date, collaborations mice that NIAGEN

other their male oxytocin, of corrected, data, effect first positive that such body but in model, demonstrating by to partially behavior interact growing were studied of social for The on autism study is found levels that's a that an release levels fearful Specifically, joins mice. these and missing mice happiness they health. deficit; and evaluate allowing have like with them the was a NAD anxiety that production essential cognitive boosting mice, and responsible normally into NAD the were preclinical as a in NIAGEN mouse Researchers gene feelings attachment. elevating for it which of may

published of injection Science. when the egg examined of egg study weight yoke addition, They respectively. effects increased chicks. X%, researchers respectively. was muscle muscle last riboside month into study, Journal and injected the muscle the XX% were that sac, significantly In yoke, In in yoke or the INNOVO the and depth in the by an of the increased effects preclinical also a density this found Translational nicotinamide development Animal the into XX% by when pectoral on and fiber pectoral growth The length NR XX% width, XX% and greater injected and versus white. into

NR muscle As stated in due the effective paper, it is unknown whether the chick to quality. increase in of weight the growth pectoral future affect will and be

stress impact However, according NR addressable This new since quality. touch and study was industry with potentially a disease. NIAGEN explores and is mild registered This cognitive the be the XX-week with on oxidative newly metabolism, to participants and that poultry a on in the Alzheimer's X,XXX interesting was NIAGEN energy National effects product function researchers, XX Hospital the clinical Institute cognitive study mild I'll yields this impact will collaboration of to of a market. impairment it McLean Aging June. an in registered given briefly period. of milligrams by study on brain the registered affected over on individuals study

NIAGEN. the capacity account ongoing intrinsic roughly quarter, cognition-related on that Within introduced framework I all for XX% last of research studies

NAD NR the easily research As accessible. summary, the NR, health has In goal capacity making a in option Rob intrinsic the conversation. site to filter cellular an of remaining ChromaDex leader to with new on relaunched and is all mentioned, domain. science we committed AboutNAD.com This the by

precursors, patent while next-generation portfolio. continue to strong potential NR, intellectual NAD by the exploring also growing a property are which our and protected of defend We will around

to With on to for Kevin thankful this are putting front of Farr. deliver opportunity to team trust call I'll our their in the We in the investors us. that, pass Kevin?

Kevin Farr

Thank you, Frank.

by the of business investors. of restructuring we well. financial million our XXXX, sequential margins, of general as navigate the key second XXXX, very primarily Compared of objectives quarter challenging and results The ended advertising $XX.X improvement sales, $X.X strong second the percentage stock year-over-year. continued higher look and total against lower performance. underlying and second a administrative legal the is higher at the lower was strong financial to charges, savings have the quarter which profit to driven a raised quarter progress delivered allowed lower achieved underlying in This slightly our and strategic with We strong quarter net improvement related line which business expenses with million growth, expense and million measured quarter excluding $XXX,XXX. top legal Let's results financial which the environment cash, a from $X.X expense, for EBITDA, and gross adjusted first severance discipline, breakeven cost in sequentially existing to These million expense. and by are us operational $X reflect initiatives including common macroeconomic reflected

we not was additional immediate there economic While for an believe need was the prudent uncertainty. given it capital,

have $X credit, We have not accessed. our with million line of which flexibility we additional

In registration, company statement. has issue addition, no plans to $XXX securities filed registration we the under million the shelf present

to capital However, provides the registration to corporate opportunities. to we place It prudent business future believe financing have financial respond shelf as and governance. it's good matter to in of markets the access flexibility a

up XXXX NIAGEN and the hospitals included second up and net were were XX% the net second up of the of TRU quarter year-over-year. $X.X by by quarter results, beauty. net donated to versus the months of second were sales X% sales the the million cross-border quarter initial a to sales XX, grew by US as at in compared but, TRU international shipments June for solid expected, three down which compared quarter, million TRU sales NIAGEN ended NIAGEN first million sequentially Kong Year-over-year who the quarter Hong Horizon's, $XX.X ChromaDex to Moving $XX.X XX%, XXXX. workers reported first million, remained XXXX. growth purchase to of driven with Watson at in $X.X year-over-year X% health-care e-commerce, launches

encouraged third by to trends consumer shipping more improving sell-through quarter. are expect with in closely takeaway the quarter the second and We in Watsons in align

However, with sequentially the our sales million payment included in recognition the recent up in a related and of Nestle, is the in NIAGEN small year-over-year. XX% cases which in risk. a rise COVID-XX a to net in revenues shipment this This were resulted $X X% Kong, Total of second quarter. portion upfront Hong

have can expect lower these from of other sales We half ingredient we NIAGEN for the sales fluctuate NIAGEN year. strong customers, and the demand but experienced in second

the gross margins and savings improvement the overall Turning our XX.X%, cost to of the sequential to up XXXX quarter XXXX. was gross XXX first from gross XXX our quarter Product to XX.X% P&L, Year-over-year to basis second a quarter scale rest of compared of points basis the XX.X% in chain by in the second increased drove on XXXX. initiatives supply XX.X% in of basis the margin margins. in in points

savings expected in our On of in million, $XX.X in of initiatives, prior our year a resulted for approximately growing compared quarter year, in of one-time to XXXX. mix as second product points was This XXXX. TRU While, a XXXX originally to million, the the benefit efficiency quarter. the form believe the a cost down total $X.X margins reflected consumer sequential of savings second for in portion tailwind operating was sales, the supply expenses basis, as a gross basis was this of represent favorable margins rebate recorded in to from product first later quarter. our NIAGEN the We well quarter XXX in realized be chain savings cost gross second initiatives, which a

of million first Our the the $X in $X.X $X.X compared million selling second quarter to up quarter and to XXXX. XXXX, million of marketing in expenses were

basis XXXX. this of net of XXXX expenditure was points the in first versus XXX percentage the a of As up second quarter sales quarter

messaging continue daily e-commerce as fluid important is such cost metrics, We in to monitor which environment. to adjust spending, consumer acquisition increasingly this and

with the support during in the UK, in Australia PR in launch quarter. to invest our as as Superdrug also well second events We Matakana

XXXX XXXX. As down second $X.X legal quarter. This fees the expenses million to million included expense in $X.X versus current and severance first was restructuring of $X the million million quarter $X.X quarter million and of reported, in of of G&A $X.X the in

Through second equity Markman was our for and lower Excluding XXXX. investments comparable prepare $X.X down of patent XXXX G&A construction, severance, Hearing quarter legal trial ongoing as fees, first G&A $X.X case we expense, XXXX compensation infringement the the first expense. expense the by versus September expense in XXXX in million, Delaware to and in quarter claims million Legal quarter restructuring was compared December XXXX.

Discovery We York the litigation. also New in incurred related expenses to

legal the by to in up the litigation. third York expect We ramp quarter, New begin to and expense Delaware driven

versus the our of to or For for loss per the of million $X.X $X.X $X.X was of for $X.X share second $X.XX operating a to loss quarter million loss loss XXXX. in the shareholder compared first million million quarter The was per quarter attributable second of net $X.XX net a of loss XXXX, of XXXX. as common a or quarter share, XXXX a first the of

expense, on sequential costs, is financial interest, of ChromaDex As help restructuring measure, towards debt total the and total as non-cash depreciation, EBITDA, net cash legal expenses believe adjusted EBITDA, Elysium, it's loss, stock adjusted we progress business, new which expense. adjusted better to To or second we excluding the underlying compensation non-GAAP severance related important legal focus in quarter in breakeven. amortization, excluding said, income flow and our a our expense income spending. gauge tax, to bad defines to introduced business performance XXXX demonstrate trends legal for of total investors we

a included release GAAP to reconciliation the appropriate our slides. measures have in We earnings

of and primarily improvement $X.X quarter the in of sales XXXX. gross in second driven quarter legal we the of highlighted, delivered loss and in the loss profit second compared second previously excluding lower higher XXXX XXXX. the in administrative million general improved expenses. the of quarter improvement expense million was total As to $X.X $X.X The first margins quarter of by adjusted EBITDA, by a versus million $X.X XXXX to and of XXXX, of million in million $X.X a second quarter I Year-over-year, higher

was sheet the of quarter $X.X operations to million, of Moving balance of $XX.X versus first million XXXX. cash XXXX, flow, was up second quarter used quarter driven lower XXXX. quarter not by cash The risk successfully with expect this sequential At In million second in investment. our a improvement XXXX reduction of COVID-XX we in to the our assessment and pandemic Coronavirus cash we ended of capital. our net during loss time, net and and $X.X we've in the managing the disruption the navigated million do date, from manage implemented To in quarter the business going versus $X.X working first strategies this the capital a working any supply this forward. chain have

outlook, our second to the relates deliver growth, slowdown including growth temporary macroeconomic to top-line quarter due to impact Coronavirus. continued which expect business, it the growth in experienced in As e-commerce our the XXXX in full-year we of

savings which the from We changes e-commerce growing business, and due implemented product of chain the to quarter expect initiatives, XXXX late mix additional continue first margin design gross implemented we cost favorable to in our expansion, XXXX. supply beginning

cross-border to and expense $X in market continue expect We awareness an million, including in brand in new platforms launches, of increase and in selling to million China. investments marketing investments $X including

customers expenses sales of We by continued driven in marketing net on a returning our from improvement business. as and scale expect strong selling sales, and percentage

by up expense we total key million that debt to G&A expenses expense in Elysium-related the XXXX. excluding G&A bad and excluding year-over-year severance be $X expect to Lastly, $X expense will million to XXXX metric. Adjusted expense a remains legal and comparable excluding EBITDA, continue restructuring legal

XXXX R&D expect driven timing significant of We improvement there full-year quarter-to-quarter versus XXXX, campaigns by investments. the our full-year fluctuations, marketing may a for and but be

achieve $XX in cash near-term, and in $XX be to of We decline. continue if by expenses operating higher likely quarterly we million breakeven quarterly driven ends litigation. the litigation costs will the to revenues million higher believe can that flow legal Total

margins execute approximately important sales savings higher this. deliver supply to this continue continue gross on we're $XX We'll we'll million and XX% line to chain of we how objective. challenging ready macroeconomic P&L result to operational executed very as in manage demonstrating environment. than deliver on better financial gross a As We take margins we and entire proud to we while the need deliver is the slightly of cost top levers Operator, all questions. at growth, of initiatives. I'm believe achieve to team consistent this ChromaDex summary, discipline. now In

Operator

Sinderen Instructions] comes go Jeff Your Riley Vansen first Co. B. [Operator ahead. & with from question Please

Jeff Vansen Sinderen

me congratulations strong Can about the speak can background. a with maybe little say that more How let on with protection, cellular about, First, the TRU especially on enhancement And came strength results, and and most your closely what lab? you Fauci's you immunity pandemic you the thinking ongoing? around that studies touch are from cellular potential watching NIAGEN. guess I other currently project are

Rob Fried

as to I'll well. pass begin Yes, to contribute the answer that and I'll then it over Frank to

that your called a of website them we to answers and we've some question lab, on a compiled was questions on they the Before saw And of these interesting. questions. on to - say submitted are initial raisingnad.com, very Coronavirus read that there data that to of the you to decline particularly all want very impressive We published Investor that cell. they're XX% was the Obviously, when original Fauci how in the Colorado that found interested the There's a BioArchive and might NAD of ChromaDex the connection lab. storm. team member to which there many IR that list In and a website one our in IL-X plan Fauci fairly and in that I our answer of cytokine storm investor do, inflammation between co-founders the impact they technical. cytokine in in quickly marker I showed attached is And want an the know reduction response and post website. the

little to want right elaborate that fact, over In more. a it bit I'm now, you to pass if Frank to going on

Frank Jaksch

decline in the of had the of doing like fact researcher, NAD have did mitochondria do the that Coronavirus. become can mice pickup had ability studying prior - the the to so models, of infected it's and of the mice mentioned, way out. can't of energy that now and that at to they in what will a be on hamster successfully Rob the becoming is Yes, dosed sort to who of were sort to that's publication a initial looking model one exactly that to of naturally been model. infected be BioArchive, we're study be they're so going at mouse helping the Coronavirus, to that And on going in able on sort looking and a rescue model they the And that potentially contributor be infected. two-stage the a a is produce metabolism showed actually so BioArchive study - specific as to and be Mice by mouse as

we'll to see well. as and is that then the mice before and got they the get see afterwards has - dosing it So, on before we're effect infected what impact

the do model, hamsters, to hamster so. become fact in modifications On without any infected having do

the Do controlling sort other any their recovery impact itself, questions on So of meaning And thesis only that's an but that on it's essentially repairing or? virus the is really the the and have of also not that, virus, going replication core you animals. the have of significant it. a specific NAD of on to and impact having survivability

Jeff Vansen Sinderen

I which study, on? which focused then of helpful. I studies other that's that's mean, to other - sense you're get really And studies, but No, a wanted terrific I guess, most which your studies

Rob Fried

me first, in entities are possibilities. happening ChromaDex let excited research there are still other not yet we time. and - of we and that a important Well, say, the let this have point exploring at number between But announced, are me about conversations

Jeff Vansen Sinderen

go helpful. that's Okay, ahead. - then And maybe

Frank Jaksch

good study think that to prior comment it's model we're Just model I that, well. well, it's looking is evaluating studies that it of one a have mouse as going in or animal other an place on responsible a I look, at to think way other as a

Jeff Vansen Sinderen

touched update this should Nestle? a an any a if I And you for can you on we give turn to that then, with Nestle guess then, of color I you Nestle Absolutely. could sort with we if a on what bit? that's How year, little look more us as And just partner for moment, evolving? know, work

Rob Fried

we're business So doing been we about they else impacted about they're like speak NIAGEN what with excited Nestle everybody and by and very they're Coronavirus. But very have frequently, plans. excited their and

to in it's then begin launch at commenced, the launch June marketing although of and the marketing late the it July, they they in planned beginning September, initially and that So product August their September, imminent. to it's now moved assure us they hasn't

be we the they long-term will many a they're delayed. delayed, and be it. imminent it product time a how really obviously it they've think got on do way think to really they and what don't pursue idea much of for they're we to organization good in up thinking and like at beyond it Nestle, they to want in but it. and know that. it going to significantly point they're we it's But and working have We we slightly what expect they this like they But launch how when significant facets do their is don't see, they're doing and be thinking We -

Jeff Vansen Sinderen

And I just touch you anti-aging on evolved anticipate then Maybe and what changing could that's second those. more plans. half near-term? should we your for guess cellular you've in just Okay, around I protection can how versus your on squeeze marketing I - know, one helpful. if those

Rob Fried

dietary interesting supplement Sales based me doing well. over market months. of this has have are Right, last few Sales that well. that dietary immunity been not answer the so immune way. been question extremely supplements been not based let The for doing of supplements dietary have quite

in phenomenon headwinds. general well, in general interesting is e-commerce has is doing experiencing retail extremely Another been

TRU means bag. of is and what NIAGEN a mixed So sort for that ChromaDex

e-commerce and TRU as to is - science an health a behind nicotinamide an dietary to Having that be to We there well. supplement, well. a cellular benefit well-known immune as is the over attaches anti-aging said the cell. when as year based that, as our but significant riboside also NIAGEN an extremely company, virus likely We had are known we understand predominantly supplement. a supplement understand a component last a retail not has strategy international but fitness

previously, prove believe cellular instinctively So Frank is cell human we studies but then of enough animal, say clinical, a There believe. plenty scientifically. positioning well defense, need therapeutic initially began verify research the that that what do prophylactic mechanisms and that of there benefit. and things to hasn't We been us health, perhaps we to part like We cellular to for the then first to immediately preclinical, marketing said the and dish, as understand is protection. to science

what defense see we and we important, idea So a this resilience a the seen speak this supplement, cell per on defense, working. is health. cell cell is immunity of of addition lot as that speak perhaps and cohort in fitness time dietary At cell towards are launching as and the we've to did to but bit resilience away more end an we of is fitness, attention see our cellular these of day, anti-aging and well. this And message sub-cohort to groups is presently, anti-aging speak concept cell strength. and studies, se pivoted we still and and is other that that What groups from to

plan So continue. we to

is we nobody There Coronavirus be - the it a conclusion, course, future a to in it markets. in a where don't our knows what point we resurgence. of drawing see and market, looked then know, was like was the Of time worldwide going to really and,

narrative certain it's cellular think markets, a we health, it's in idea health know, it's is this the know, to viruses. to hard be likely see and of to our in a to difficult run immunity Now, the for we part be that sensitive that of in resurgence going but are time long people And to likely long come. general to

Jeff Vansen Sinderen

and Okay, that's questions taking luck. best Thanks for helpful. of my

Frank Jaksch

you. Thank

Rob Fried

Jeff. Thanks,

Operator

Brian Please Nagel from ahead. comes Oppenheimer. go with question next Your

Brian Nagel

Hi, afternoon. good

Rob Fried

Brian. Hey,

Brian Nagel

questions. taking for you my Thank

my question, to a I of last So a first question. think, follow-up that bit

of both comments in the sales, you Kevin, in discussed COVID-XX and headwinds your given Rob crisis TRU just the and prepared So NIAGEN the to some United elsewhere. States

demand I their your beginnings function So it kind just maybe will you States closed. And as of, TRU NIAGEN? started Is of of general stores abate you and start - trimming economic have more budgets? malaise of have improving Is trend then is, these is overseas, to just mostly that where a my be what it an a in - consumers this headwinds on your for elsewhere, United headwind? here seen have guess, being maybe question are stores? function elaborate what

Rob Fried

middle for strong Yes, In improvement the we TRU June domestically stronger we May significant the saw have NIAGEN seen in trend of and an improving Watsons - show demand continued were abroad. to quarter, strength. sell-through, and I think and

that, downturn closures foot store So the back, of to consumer because of so Watsons lack as coming Yes, traffic of speak. initially and opposed was we're lack to confident that simply is demand.

Now are obviously Kong but sales, recently business, Kong, very Hong there. there dramatic uncertainty with recover the is highly impact, we finished fairly in confident resurgence, of strong. seen something is US were a Same e-commerce has still the we saw of immediate middle Hong fairly quarter performance we able fairly in true March, and and our to of the but in some the

going So as we the as business that future. the still in Watsons have to confidence growth in see e-commerce continued we're basic well

Brian Nagel

are NIAGEN What the studies a supplement? to and wait NIAGEN what ChromaDex of - lean then, What conviction leeway marketing more give there guess, very do you And for? my all the question this the - the as need of I follow with into is some to - closely, follow-up other who science, these TRU order waiting to from from studies is benefits in those Okay. you to potential well. and To watching from you TRU about us or of science marketing. these a regard

Rob Fried

on take a the fundamentally side. a approach side we pride And good operation side, and conservative the operating fact true on it's great the question. sound business. financial and in our that's the that are way on in the Well, We we marketing

bodies, that international approach the part, those relationships if the a drug. with disease have we And not pride any way type, great in approved the with in FDA, large with we it. the FTC, bodies. mention of In relationships you regulatory have regulatory US, the We an have you because we with of can't are the

with you're generally to So or in need more And to function supplement clinical order a going claim. the you food than do to make best publish one. the claim, structure is a function study, structure dietary

other a time, sales want - are claims take we when that We see we paying FTC to the wish way not doing the we sciences claims don't believe not supplement approach understand people goes that some about the Now, an our and that's there we don't dietary today. pay support understand more it is some in But what careful that they last. They going they on ingredient and we is And the quarter-by-quarter, happen why conservative building it going investors science and very they by we into the step brick-by-brick we more often business, it, by other in are the even just at they or patents time it, don't. and make is being is that time. even it patents in and It's royalties year-by-year. studies to after letting wanted lean theirs way - have published the ingredients And just quicker built to way doing health we what just them. by pretend television we're they that being one in that actually careful see growing don't the that they it companies, actually and organization it understand are to when We're don't for precede a steal quicker. that was do they're takes that appropriate isn't ingredient, are frustrated, go the to and see hoping way. by licensing because claims there to or there on way FDA and We're there these are making it.

Brian Nagel

very I appreciate the all much. Thank color. you

Rob Fried

Thanks, Brian.

Frank Jaksch

Brian. Thanks,

Operator

from next your provide company Please comes question. Your name and question Jeffrey Cohen. your ask

Unidentified Analyst

to is the around I able have question health Destiny echo Hi, transitioned receive e-commerce them? able more you on to think on into have continually customers insight may quarter. have any this that through that there how NIAGEN? And nice to them My placed you be do congratulations restrictions NIAGEN, is Jeff. this coping to to were with NIAGEN for really maybe been they're Are a [ph] into channel order various want practitioners. actually are in that some the on getting that care have

Rob Fried

interesting care studies, preclinical confidence care them distill translate Health a consumers. in to and is a can then then and can studies more responsible end that's the data to supporting think would that I present there to aggressively data, then question. Yes, health to market animal very the One they consumer that practitioners you show way. practitioners, to it

And is themselves. our important and and practitioners strategic practitioner community that as nurse our the very part care direct patients. through consumers of ChromaDex nutritionists, practitioners, bottles both do and extremely business, from of to their So health we health care are in NIAGEN start purchase it TRU physicians actually wholesale and practitioner, resellers practitioners chiropractors we They their as well believe connections growing health that health care some care then sports product a actually see by resell community, many the to introduced yes, the as are themselves.

to that consumer, see these ours. customers become of just recommend consumers it. Some many do direct of we But then e-commerce

Unidentified Analyst

give interesting. us that. there on? you're high-level some you on color some I working if Okay. a then is mention wondering appreciate And what of Very just I'm I R&D investments. heard brief can

Rob Fried

for a with are Our also manufacturing our margins make - that job across and are investments investments chain, working manufacturing in we're ingredient and gross also research, there spectrums, partners deeper reducing knowledge our claims, can to there where R&D this I think stronger, some incredible cost are fuller have but of processes. very, we supply good There so the a ingredients a we've is investments constantly of product with a we improve investments that molecule many think find done very increase food or and other then And up benefit to or marketing company. formulations consumer, we're combination this group. would of to these particular sub-market, various whether investments are offer NIAGEN might to in nicotinamide even R&D or the all a also powder a And to other beverage that the ways incredible - there where it's ladder ingredient. trying riboside

Unidentified Analyst

aware coming conferences as pretty at And should we Frank, be is and there curious, I'm well? you've round thank different busy just tables. anything then, been up of you. Okay, at that

Frank Jaksch

about aspects more the lately in that what event Well, participated I and I there lot to enforce FDA in be FDA as about and the as spoke enforce lot roundtable for and mean, more the I news the seems about a to would better been of fact or that largely say week the FDA as those largely there's We're that related well. responsible. are a that's - for NIH, being well Rob for the those various regulations that regulations need this regulations

the I the we're to. So be better my would going definitely say that as within spending the fact drum needs FDA that, on the enforce long as keep on we to - that regulations beating And to they need space drum to I'm going have do time, been. than beating their to job the

a just to important also for the I whole industry. support it's ChromaDex, but one think an it's not topic, good

Unidentified Analyst

taking you the it, Got [ph]. for thank questions. Alrighty

Rob Fried

you. Thank

Frank Jaksch

Thank you.

Operator

Your go from Co. Instructions] ahead. with next Pinheiro [Operator question comes Sturdivant Please Mitch &

Mitchell Pinheiro

Yes. Hi afternoon. good

to address know, your you on marketing. I like directly cautious you to what do sort When NAD? to aspects you the following of, think you'll in can related more up approach ability viruses mean, say and this I'm have a - curious, is talking out. be year out, able two it more are be six realistic to address directly? it'd think out, mean, you is we years to I this months - just So, do when

Rob Fried

of that other know is there the hard and studies conduct do an complete when The you to course hoping for to are harder expect, what clinical no that are strong of a are study clinical indication be. you it's but claim. are there many you Well, with a study know results what going can't make might so you control, sure to results for, until to preclinical the when human you study a the variables you really are way

it's even these could much a on be be but few it think year, it possible. but months, that be could when as that So and what it say. are be. It completed could possible not it's studies don't weeks, as would it it's theoretically I possible a likely, theoretically depends it's the results

Mitchell Pinheiro

mean, tell just a hard it's people instead difficult beating Okay. without why to to around - being it. I bush. the take need product sell to able they directly of Yes, just

sort the important marketing. aspect of So a it's to

half, going Speaking right this do quarter suggests What in the million is. I an confidence? the up the I marketing? to in the half. the of $X gives it's the it for first that in you marketing, that, so was that you $X thing mean, - see $X is up market second gives flat be to to acceleration was million year, the in million sequentially, e-commerce confidence accelerate to the What

Rob Fried

the it the and versus said, quarter flat first it first was Well, the significantly It But was the of as recovered. half then was I flat. second second quarter. in quarter down

to we're we're customers, couple time. what another the TRU we months, trends a very is, that's begin seeing we So retention for rebounding here. stick become is know is, and very, And significant what seeing we're looking at for reason. here And and know customers especially growth, we we're of know so that NIAGEN it that tend to and stay long strength, the one those product seeing a that with reason

the So come. to business many, suggests be growing that look long one at is In there could happen. we business, time going for quarter, around to this metrics e-commerce a many and anything are any in that

significant to a that quarter be for see and believe we might the this two. is But very You could that or Coronavirus like have business events grow. continue we'll disruptive a and long-term

Mitchell Pinheiro

just provide color rates retention guess weaker I a - there e-commerce in as new customer just would or my to Was And different helpful. be was growth any can is was lower? final follow-up channel? sequentially color and the question Any you

Rob Fried

actual then saw used In new to in first headwinds that the beginning rates but very of the to, as the and retention new rates in an of then - that good to the the quarter, customer like the time rates been in acquisition, saw well. return we we've some and for in saw we the by customer quarter, March and retention improved turnaround end the we - very acquisitions reduction

Mitchell Pinheiro

thank Okay, you.

Rob Fried

Sure.

Frank Jaksch

Mitch. Thanks,

Operator

Research. comes ahead. question go JP with from Equity next Your Farmhouse Mark Please

JP Mark

EBITDA. also positive adjusted afternoon good on congratulations and Hi,

Rob Fried

you. Thank

JP Mark

and is positive is ramp heard to that big phase, it you thing may up actually, a I sitting there. go little bit what correct? another EBITDA back it obviously down getting And measure about that that's was but talked regarding as overall, So sounds you the it like that into legal was sequentially,

Rob Fried

correct. that's Yes,

in third We the New quarter expect it litigation in increase litigation and in the Delaware due to the to York.

JP Mark

then, that, believe mean, next you gets by correct? that away? I the other, of way the resolved goes end year, it And one do or

Rob Fried

is legal next of to hard as terms said, Rob case. case. magnitude spending in scheduled to the of result to case. that, case. I and case we're That to is predict as moderate we we spending so think it's want would that legal that Yes, the for the to in timing, case the but Delaware is most That that September important And get get hopeful year, trial that after

JP Mark

margin quarter. recognized and talks last points that initiatives is in XXX great. improvement about gross then related to about it year this also press an heard gross question basis Okay, The prior And my like that the of you're got sounds of margin. I release that Is that is sort was even this you few - margins benefit, next you are is over sort quarters. the - still one-time you've XX%-plus the gross that still improving, so to optimistic of plan? get though

Kevin Farr

we bottles bottle. I shipping packaging three quarter to supply Yes, timing, that to design bottle we change haven't costs. the That configuration cost, in implemented fourth the three-month we a taken from from think worked one XXXX. think but our was set in timing That of really smaller resulted perspective, on of I a lower and lower

the $X be quarter based second through regard versus to And of go in see work fourth. through our savings through third first come the benefits programs, of of expected I quarter, year, most that would but and second quarter, we we we third also did in XXXX. we've in that year, to half in the first implemented also the this about it what launched which - improvement And the hit as in expect fourth we an upon million that and will have So some then then the up we of some show savings the because we already we last think year, highlighted that's would has the quarter. with in that of

JP Mark

great. very you. Thank you Okay, Thank much.

Operator

question with comes Wainwright. Raghuram Selvaraju Please next from go Your H.C. ahead.

Unidentified Analyst

H.C. Raghuram, on my This taking behalf speaking Thanks of afternoon. for questions. Good is Mark [ph] Wainwright.

So I have two.

nutraceuticals how does And has The of in first recently? your the FDA's you? evolved how impacted is view, regulation that

Frank Jaksch

and I really the biggest around over on recently, evolved regulations and the the - you into regulations the Hi, regulations same second It's really NDIs. were of then. really like put Duchene those that of more core wasn't wouldn't know, I that between practices XXXX issue is Frank. have this the good was one course the And the of are say saying about it's manufacturing how is it's implemented those around before, and enforcement regulations necessarily those based themselves. XXXX the enforcement the it's But, place time basic enforced. - in

fact, the a the get companies There on problem sometimes responsible don't that said be. they should a companies the that out. that. follows money has necessarily We're has don't a in lot of the that today. operates that that ChromaDex FDA how the spending rules do money - way following spends Rob they by are should is the call regulations that benefit And are the the responsible like company meaning times and As company multiple the laid

say really would the enforcement then regulations. I So more That it's structure, question. your about of answers

Unidentified Analyst

was in female deficits this, researchers, Were mice question sense. too, the in planning in makes press if that And you in recently Yes, replicating male? to published fascinating relates about know the to Okay. this a release the autism. the addition this second on study social

Frank Jaksch

a that's there - don't were question. know I good if I'm plans.

have replicate they they think it. type don't hopeful I studies lot is had and from clinical in us a take have we started XXXth easier lot was Rob a the past preclinical the it studies, And I think studied plan model studies it like transitioned that female that that passed the mentioned male studies in human be it for our model, study. successful like I would that - if collaborative know more trials. collaborative probably model, mouse that this of mouse of like to to into specifically because mouse

this investigate so hopeful looking model. further be would to So mouse form trial, clinical a want some than that at maybe additional somebody more even in

Unidentified Analyst

questions. fantastic. thanks taking Thank be you for very would And much. That the

Rob Fried

Sure.

Frank Jaksch

Thank you.

Operator

Your company next question comes question. provide your ask from Matt Dhane. Please your and

Matt Dhane

deeper or Wanted COVID-XX the studies a referenced call. been studies into Matt from on Capital Tieton Coronavirus the Hi, Dhane this that have little to delve is Management.

You've we're humans is as is as obviously being In out, referenced onto that animal there. curious I'm the human studies. done much couple And much since that's rapidly studies how came and people study something this that smoothed such work developing? in right and know NIH Are or it? crazy efforts would around well doing something is how looking otherwise, evolving the don't lab now? a be formal versus situation I a just that at

Rob Fried

discussions numerous We researchers. haven't announced having are with any human studies yet, but we

Matt Dhane

people in or like or are of it's looking be that things research that, things that's a hospital Is there might where doing done that, informally whether you're or that publishable anything assist? situation aware into being

Rob Fried

things various discussed. place, are that announced of but or know none taking - We publicly we've that that have

Matt Dhane

Okay. to ask also sales wanted out about China. of I

two here that how there on this announced color what the would You for seeing yes, partners curious be additional of that great. your top associations. And, market is you're added quarter any you of was China, prior I out developing you?

Rob Fried

surging there, it and invest growing. an interest we more we definitely in see is as it's intend so a opportunity it. There to Yes, and

Matt Dhane

time, material Rob? this at point it Is in

Rob Fried

work But have sell are approval still it's we blue-hat I to cross-border still wouldn't we we say on day. it Remember, - a It's every business. material in China. yet. don't

Matt Dhane

you when have at you any all approval? sense the it Okay. Do make blue-hat

Rob Fried

can't within will happen. are the blue-hat They fairly last of that of changing give established rapidly. only, their for Things No, interest. a year, approval. when any rules indication great deal is But there we there getting

Matt Dhane

good. Well, you. thank Okay, sounds

Rob Fried

Sure.

Frank Jaksch

Matt. Thanks,

Kevin Farr

Thanks, Matt.

Operator

That is for Brianna all the the turn I'll Gerber time questions. we closing remarks. call back have to for

Brianna Gerber

beginning call for Josh. number Thank everyone and ID Time will this you replay your is The X:XX today continued XXXXXXX. a Pacific and joining of us support be conference you, p.m. is for replay There ChromaDex. today. at XXXX-XXX-XXXX the of Thank

Operator

concludes gentlemen, Ladies and call. this today's conference

You may now disconnect.

ChromaDex (CDXC) 9 Aug 202020 Q2 Earnings call transcript