CDXC - Earnings call transcript Q4 2020

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Operator

Ladies and gentlemen, thank you for standing by and welcome to ChromaDex Corporation’s Fourth Quarter 2020 Earnings Conference Call. My name is Chris, and I’ll be the conference operator today. At this time, all participants are in a listen-only mode. [Operator Instructions] This afternoon, ChromaDex issued a news release announcing the Company’s financial results for the fourth quarter of 2020.

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

Brianna Gerber

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

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

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

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

Rob Fried

Brianna I’d you, first XXXX joining by like afternoon, thank and welcoming begin to is for of time. story XXXX. ChromaDex us sharing good I’d of the you. for appreciation very ChromaDex everyone look investors, joining This and Thank to with that forward and like time you our partners, express during investor you quarter our that employees those are the to to fourth an we exciting at also were call. supportive

performance, consumer XX% sales we Niagen grew February, EBITDA market by The on define for another net sales Tru were Niagen brand but expense of We this financial improved were EBITDA a $XX This in ChromaDex as we also a scientific outlook the million sales and ever sequentially only all year. of a and year made net sales year-over-year. sequentially addressable as nearly XXXX. this delivered for the future. global EBITDA, had quarter excited is excited company E-commerce year-over-year. the crisis. we I’m challenging loss quarter grew As raised $XX year-over-year. which our for Total is large year. how product achieved XXXX a and Total a adjusted with new to company stronger XX% financial the excluding We and launched positive the for only for and international company Niagen contribution cash X% navigated. not begin proud strong than a Adjusted record the quite companies, and who million. million $X.X meaningful investor, fourth about $X considering of Tru is $XX was million globally. legal In by EverFund, million achievement X%

priority in its accelerate scientific remain break-even published will Niagen While as in in cash this selectively research well continues drive our a other Tru expand investment the increase very us on which flow The precursors capital incremental company, Niagen to marketing as to pipeline growth order remains in key on a Frank to for discuss enable in will to product and business. science research, strong the the Niagen moment, NAD preclinical well validate as to was studies. studying over XXXX health. to around of as year immunity, for We XXX This a research the ChromaDex. leading collaborations have are areas many published health other importance agreements, research now at XX XXX human They with in cardiovascular over published neurological, studies issues led and continues all scientific with areas, associated research aging. clinical institutions several and great world. has

of in more same the expect XXXX. We

emerge Walmart in and to distribution footprint EU. bring help now expands Health assisting China, UK, our to dietary leading research in W.R. as U.S. Grace quest Japan, We institutions Niagen gauge believe years others. us online This that business and in our the grateful border and Science, world. and sales across commitment as many the as the Tru Matakana possible Niagen to Kong, They for product many be partnerships with announced people around our Walmart Hong stores of we the New these important Walmart the soon science the with Watson X,XXX cross to the in will partnerships in is one many Niagen week, are we growing our Canada, as am A.S. proud addition among better. to available Health well strong Group, Singapore, includes to the world, Zealand, of Australia, and into In we potential most I their supplements are grateful see Nestlé and Tru

development, executives, our across legal, already business company. accomplishment hiring important These quarter Another the talent augment marketing. talented creative the in existing strong leaders of digital the new was

have for future we We most is resource of our ensure today. been ChromaDex. more I I potential important the that never in have team people. high realize am The to than expectations confident the

research, I to quarter and new steadily ChromaDex. making future As secured XXXX We processes collaboration foundational markets. our international to on general, We launched strengthened and important the our signed grew am research in execution entire Niagen. We surpassing reflect all XXXth our of about team’s changes significant proud e-commerce of major scientific on partnerships, this for and two quite this We our accomplished optimistic and launched on very I’m business. in approval regulatory organization. and operations contributed our while I

Tru We our have recruited is passionate a brand, Niagen. world-class about team that

pipeline more market grow problem would ingredient mission. research mission very with our never consumer the and Our over property Niagen defending for our for large. to the an aging. on clear And Jaksch steadily for awareness focused vigorously intellectual Frank flow while help trusting to solve a been cash The all our while future like The Frank? Chairman, us for you, thank scientific to this value. in against break-even building. continues the creating remain of is I to infringers. behind update now, has toward body scientific this research. We strong We progress building is addressable on call I loyal the shareholders will long-term growth pass of

Frank Jaksch

NR clinical exciting published and for cytokines indicating to-date studies Thank be the NR of to in ChromaDex. published clinical an including the as Stage validated in reduce In early Eleven you, peer-reviewed efficacy riboside an precursor. inflammatory heart patients. extended XXXX, Rob. or XXXX of two XXXX health, year important white is safety NAD and/or blood the setting human pilot nicotinamide a D up may have of failure studies study, that areas cells

areas. were the the study Turkey potential dysfunction. ScandiBio The metabolic evaluating study NR X by Therapeutics, Phase Adil cardiovascular cofactor newly and study improves two function a benefits liver XXX in the population. Phase NR Dr. company of same X in on fat and in reduced X of the metabolic clinical controlled Mardinoglu associated registered the symptoms, Phase with Phase health XX% The time supplementation. in double-blind on potential diseases demonstrating COVID-XX led next including at briefly also and ScandiBio protocol, NR of protocol, steps recovery NR nutritional that finding focused patients other partnership Phase liver A X with with the focused Turkey. of nutritional and by is highlight second biotechnology COVID-XX reduces looking X placebo impact of that supplementation studies mild-to-moderate study including studies for treatment I’ll a clinical

sector now Care XXXX has is Davis and XX in largely into with healthy a age preclinical life next study a joint able field cellular partner and estimated health, lead nine study Extension, characterized and December, a This a its functional the with industry University randomized such California, the muscle being research. that within globe. through that the president explore investigate Health therapeutic XXXX continues to Development functional improving supplementation initiated the leading efforts Health of leaders the service to of followed Nearly, the preventative important Beard we as the Office to conference in rather as million increase Science. forward and milk for which market impairments it lives newborn pieces contributor This Nations, Health is and served and of was study the We trial. XXXX his study to Advisory Good older Unit. associated forward civil and James span governments, research and area million stave of rodents physiology, big Organization the The both around years population. on aligns of and medicine benefited Scientific mothers through Scientific to established our could Veterans controlled off Dr. of years strategy frail, at the a double-blind In age or by for the German, the magazine. in to health alongside the musculoskeletal population of its capacity will ChromaDex for Advisory and a serves Organization, life to Health Katz investors. frailty NR an to society, the nutritional a and on use deepen results An provide study cell Advisor, World award for to to XX and perfectly years journalism speaks is health science Katz to has Bruce the encouraging was experts in also Life Research clinical decade published that experts, veterans. the Initiative, NR our as of on by to the According Charles True nutrition private the to on of as featuring He dialogue Health Responsible cellular over Katz focus Buffalo Investigators program promising Brenner. science which industry the adding are study be According years in University many aging. impact we November, Intensive only global of Nestlé older has consumers will a lifestyle who investigate be registered and insight and of add to healthcare honored a to in reduction of in NR In supplementation the foundation frailty is The recently is remaining I research the Council represent United an NR. resilience declines. span. NAD services joined Dr. years. in New seen in with connections over for World are objective and industry and increasingly external Dr. other the surrounding discuss Board. medical of life, aging York will dedicated participated a healthy America/ABC health areas impacts veterans esteemed XXX member mother’s and the patients be to and and World quality health precursor research in of This costs. other a during in that the production showed accomplishments, with Chief with are collaboration the lifespan. research precursors. to in we well Morning growing in the announced colleagues institutions summary, I the investigator, to maintain NR at researchers, believe XX% through supplementation in those and Organization’s he Board. veterans. Dr. We news, a topic and than will XX% This look could a on-air presenting authority with First, month, the opportunity published with aging. Health Nutrition, was ChromaDex the life of Administration from driven benefit look scientific furthering non-profit of but among David placebo aging greater Neonatal Dr. on with is by Last high-risk on leader for focused of around organization its NAD NAD reports, working recognized on advancing conducted to NR not the was capacity Scientific finalist

science We pipeline NAD well our in as grow. market to investing are the more as as and continues R&D

I’ve studies companies. will transition a before, to from consumer adopters the the As published large natural our consumer base human I key mainstream be of said product peer-reviewed believe early for

seeing in about markets, addressable health future. momentum the to human published with large makes optimistic explore our build areas that, Kevin call me the NR are of of studies Kevin? that I’ll We benefits with the Farr. pass with which important

Kevin Farr

payment sales margins metric our million full-year delivered Niagen ChromaDex sequential globally. total growing full million record million outlook for XX% to turning of a general million, company advertising across supplements the administrative expense sales $XX.X This and of slight basis XXXX, in by achievement $X.X year sales The strong break-even. expense. by the a R&D of the an path decrease a this and administrative $X gross of of underlying lower milestone of our non-GAAP delivered Thank capital driven to raised the clear and NAD financial $X $XX.X an cash year-over-year Tru cash, of also capitalize ended full you, quarter to with we demonstrating approximately the XXX percentage XX% $XX up $X net sequentially, and margins and potential sequentially million to invest expense including in legal fourth compared litigation. outlook metrics. awareness of only trends. net million to the of excluding cash only have It million the gross to as $X increase sequentially XX%. in NR, our selling then latest strengthening invest increase in XX%, February, we’ll North I’ll ended begin interest sales investors more XXXX, million sight, of fourth launch and points of of expense up on cash, growth Frank. for a year-over-year, $X other outlook our year Health year-over-year break-even, flow expense of and percentage a higher P&L net precursors year with delivered $XX.X to expense, sheet. higher versus Nestlé the financial on million, in marketing to reviewing our uncertainty brand Sciences year-over-year. more million, all incremental XXXX a is even XX%, is a increase posted which NAD the enables a includes further of of and American flow on surrounding campaigns and and our measured business of as legal quarter we by million. versus of us pipeline, their $X.X we with of loss in with We $X million X% the balance achieving discuss operational as approximately And related EBITDA, line XXX,XXX adjusted general increase a to higher versus year from results significant XXXX. discipline in the Celltrient. of loss we the

$XX.X X% December net to million, in X% sequentially. quarter sales compared Tru For up XX, of reported XXXX. $XX.X the sales months of net the up were three million ended Niagen ChromaDex XXXX, third

to which Packs expect are were to the XXX new $X.X remaining as were compared an with our last our XXXX. million of was This million the by XX.X% sales we $X.X fourth for Watsons of in on from roughly more of in also basis first quarter savings small from the X%, margin outlook. million investments XXXX, increase business growth product recognized million, growth. a new and third quarters intend XX% to shipment of since our our the of Watsons and of up sales million this launch. by was included and compared $XX.X fourth $X.X quarter fourth expenses expenses XXXX. $X of the driven this than of up a quarter. headwind million flat marketing selling prior retail Niagen quarter the portion since to ingredient term XXXX since quarter There’s $X.X quarter quarter to basis in XXXX, our are partners business, to this marketing to no this for compared in $X.X to $X.X in was up million customer quarter in few of with to and the XXXX consistent the the from Importantly, a and from to quarter Nestlé quarter quarter, initiatives, the fourth the the overall acceleration benefiting driven third our we gross financial ingredient fourth chain increased doubled benefit prior we deliver up in million cost XXXX. points revenue contract. upfront in was of we Stick over the total e-commerce of quarter, to quarter were the prior supply, on underlying third million the longer operating supply versus sales one replace milestone ingredient XXXX. strategic we payments continue the scale. of more customers. Niagen with $X.X drive third quarter a

As fourth this in basis was third sales, the expenditure points quarter a net the versus percentage XXXX. of up quarter XXXX of XXX of

marketing hires Rob teams. and As sales, development key made our out to business said, we build

in the in increase to million, messagings. of and quarter adjusting December. claims, time, such XXXX. new million of customer we the Delaware have continued discovery e-commerce expected, third to expense digital there was case also as Markman reported, in testing $X.X our third in ongoing the incurred fourth related to the metrics We in optimizing million the as At same expenses $X.X while legal York quarter we investments G&A XXXX. compared increased building of and up marketing also brand creative up as the was in related patent acquisition New was investment versus to infringement hearing been construction, to quarter expense litigation. $X.X XXXX $X.X million costs. our

slightly While lower expected were overall than legal expenses this quarter.

We expect litigations. trial York up and driven these New for XXXX, Delaware to early ramp by in preparation

third fees, and compensation $X.X comparable higher was legal XXXX fourth expense by expense. versus to Excluding quarter G&A the equity expense, G&A severance, restructuring, of XXXX, quarter million

as key net were XXXX, our sales We higher our we fourth in operating strengthen Tru financial digital the up incentive $X.XX the loss or marketing loss in of accounting the recruiting financial BXB the new quarter for share reflect and fourth year-over-year or total million XX% of in to highlights. to financial versus third fourth business XXXX to of per gross in There in net by XXXX. compared to a measured by loss share relative primarily of $X.X XX% common for the being growth for to accrual and Niagen, attributable moving by of have fees $X.X $X.XX sales sales million a also the basis e-commerce as quarter team. investments. of million Marketing and partnerships quarter of fees compared third expenses margins the Watsons higher the and of the of a a XX% stockholders were year-over-year driven XX% combined XXXX points, growth $X.X net quarter for million results, growth XX% our with XX% loss points percentage results quarter to was quarter per XXX fourth net increased by marketing the quarter basis awareness fourth as $X.X decreased marketing objectives. and year to loss actual efficiency compared as a increased XXXX. selling in XXXX. brand to and XXX the was

in lower reported, million As $X.X administrative million, primarily debt we wrote-off of quarter to of the bad $X.X XXXX. by absence general which expense, expenses the were due Elysium-related fourth of the

year-over-year operating to enabling quarter cost excluding debt help business this break-even; by as expense our we second our EBITDA, the investors organizational in adjusted better business, the and Finally, expense. gauge of the our legal and underlying realignment loss financial savings are a coupled in flow bad cash the supply new improved measure, million performance non-GAAP towards chain year. investments introduced absence initiatives total $X.X of with the progress of XXXX,

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

compared the $X.X of quarter As to I legal a million quarterly this in near-term; XXXX. quarter to and EBITDA, fourth in quarter of a $X committed credit. as accessed in was in have loss XXXX, foundational the average $X place. XXXX XXXX, investments processes the break-even remains improved flow. making cash balance to in strategic of cash million versus were a million XXXX, million loss we quarter in and sheet Year-over-year, for $X We our highlighted, $X.X important of moving previously this from put XXXX metric ended line $XX.X company. of delivered in loss million the we million we $X not excluding and with expense Furthermore, systems key million the fourth essentially XXXX. objective $X.X the fourth has third in the of in of quarter of in total adjusted a improvement million an loss of this

million fourth was XXXX, provided other $X.X quarter timing milestone cash $X As purchases by this a in of The inventory and quarter difference negative expenses. of upfront, included capital this mentioned giving a was primarily net Nestlé. payment working the driven from third of versus lower in used quarter our XX,XXX launch the million the investments, by XXXX. operations

relates it XXXX we’ve total full-year marketing along legal of deliver our P&L to As key and our objective to EBITDA, to year presentation. key adjusted outlook, invest release details the this do with excluding press plan in earnings slide is R&D. positive a in provided metrics expense, but we more

year-over-year the significant So, be the two as will improvement last not years. as

break-even cash result, $XX a As flow of above will sales. be million quarterly

business. is once behind do we’re prudent now entire for summary, profitable brought exciting to passion, we legal operator, us an achieving has market. including we and a to us. are growth. positive maintain In the like ChromaDex. with balance total expense next team by be opportunity I’d this not incremental questions. of long-term main will as in take profitable to stage this and total delivering bring for which a as time of discipline that will far position their in to us for the ready we to growing EBITDA, we believe ChromaDex part close important to followed the thank these litigation a legal objectives the near-term the It’s always, we’re commitment milestone growth adjusted their NAD significant an as leader increase of our the very adjusted investments committed While the spending, excluding to expect expense, EBITDA,

Operator

Instructions] with from Nagel question first [Operator Our Brian Oppenheimer. comes

Your line is open.

Brian Nagel

good Hi, afternoon.

Rob Fried

Brian. Hi,

Kevin Farr

Hi, Brian.

Brian Nagel

Nice quarter. Congratulations.

Rob Fried

Thank you.

Brian Nagel

I step what – you And put by these, maybe, details in congratulations is special stock exciting with financial from get June? my some more is compared this few what any mentioned, back, of your of on with Walmart questions what going pricing so just Walmart, does kind that. thought don’t then it’s how say And made any partnership, the – to regard is on And Walmart? first So, type rated with extraordinarily you made an some but is basically so why stocking a Walmart. you Watsons I’m and start obviously overseas? on the doing a standpoint; the questions the initial on – release, mention today but not packaging, to ChromaDex stepping with you’ve there with you to supply commitment done together, Thanks. announcement to with Walmart that there In retail you or you’re of to think

Rob Fried

plan We existing customer Sure. a and skew there our customer have for that some between and base a a is but there with to Walmart. overlap We point lower some lower – dose of think price Walmart are not lot. base,

for with So, skew This are of just partners nothing are we so a in U.S., United advice stores. number experience There a mass of the retail. One before States. is retail in we reasons. offering – and we a small very in haven’t is new different that Hong X,XXX and customer of is handful have the stores, retail Kong might a but successful be Yes. Watsons the that think with This it’s significant. of offered and specialty we have did that base that consultation we to with appeal Walmart. We do

the type a different chain? case, will different supply Watsons, regard well this this create the nature to bit they awareness. and much So, of to is bear be Hong of advertising with requires onus the campaign. us brunt effort marketing relationship more the Kong, In a of the as responsibility. is With on important as In the a particular

Frank Jaksch

Yes.

is think in we to regard overall I growth sales going and contributor small a think XXXX. XXXX, be to with this

We are loading into a X,XXX stores, but of it’s a facings. couple

it’s we’ll in, be filling be we ship shelf a as huge in, amount going and regard not it that to filling but to their of will So, obviously, with load be revenues, it velocity make what XXXX. launch for we’re through and right the want centers in think distribution that to and I sure sell to XXXX Walmart we conservative are, as numbers it support for also getting space

Brian Nagel

Got I ask it. question. someone appreciate the I’ll Thank else let the color. you.

Rob Fried

Brian. Thanks,

Operator

is question Ram Selvaraju with H.C. next Wainwright. from Our

open. is line Your

Thomas Yip

And your in past this by on invest Frank Niagen is speaking Hi, potential together. of trial We interested get were interest questions Ram. do in of very in catalyze our investor I’ll COVID-XX over We to group the the Rob, Kevin, Tru weeks of some the Thank interested as you behalf and Thomas, in is Turkey. then well COVID were COVID-XX? several Turkey terms a COVID-XX for trial, and standard applicable if plan then of kind in U.S. of in total of the the then of and are plan consideration COVID-XX. in what’s the in for terms in development the other U.S. how is care characteristics versus study, a the you.

Rob Fried

overall the strategic. about talk I’ll

get into details of any You scientific. studies about the could the

So, there are studies are two in preclinical is or the relating was we have commenced in studies clinical is we that that that we’ve had an announced – study were right been now. announced, were There There United of number complete. yet a There that that COVID-XX. that public. made to States is in discussion that is study not – discussion another another underway that I study and preclinical NIH and clinical

is cell and the added is shown because to is away that virus the the nicotinamide – a COVID-XX indicate NAD also solution attaches amount nicotinamide go is So, this to COVID-XX. there protective shows off right being is And levels, work dramatically we is had – that being year when when – work riboside which we made the we’ve it a invader. in public what what fighting fair cell studies of done pre benefit. the down when on is intuitive, done a last that expected, riboside

surprised phase results weren’t X of out phase or came X that the we by Turkey. So,

dietary done was Tru conjunction Of that offered supplements. that was course, the that study Niagen three was plus other cocktail in

result phase Tru The was with hydroxychloroquine – in So, we thus was we’ve us another other of X can dramatic can’t in and the seen But care say Turkey, plus that is and phase such consistent per caused preclinical during was plus the hydroxychloroquine that it the result. neither the can’t Niagen standard se studies of X recall. one remember, a that ingredient that far. I

Frank Jaksch

is drug, but the other yeah, the remember can’t I care of standard different.

Rob Fried

think is the care point. don’t U.S. this I across there standard of Yes. at a

it’s… think I

Frank Jaksch

required of there, that like that trial. be Not they to the part

Rob Fried

Right.

Okay.

making of interests to had the that. results investor of other as do result question with The asked a you

Thomas Yip

Yes.

Rob Fried

far any don’t that activity I, particular the of we We of us was of course, question an of around you’re stock. than or lot know. there on more a here. saw expert that trading

out, focus We running we we we’ve is future establishing from a Soon after a pretty our of job building exciting. the done that very were. release or really a the know business. why went see don’t good day-to-day, expectations on press for think what What we brand. foundation,

there’s sometimes stock We price lot the have of is to direct not. confidence, and sometimes, relationship but there a a

Thomas Yip

territory in as Okay. plans And in U.S., another if then terms cryo of well? exploring you’re the then

Rob Fried

NAD with only at itself, the repair of to talk I post-COVID. side think looking potential the is riboside that hauler that’s effects nicotinamide which mean at looking is I are long we but looking one that can COVID Harvard, having it’s so sort necessarily not these to Well, function posted at related of haulers. about one basically the these people long

talk think about other point. really we’re So this that’s prepared one a least I to and at area exploring those at we are don’t trials. couple

Thomas Yip

about one Okay. That’s really Tru other other follow-up then contexts example. with I the curious back other beneficial supplements ingredient Niagen and minerals, might I’ll may, or queue. for jump what if related I’ll with We prove were in for color. combining helpful ask

Rob Fried

with is been think they I plan on ScandiBio studies and actually also that at beyond follow-on the those we collaboration neurodegenerative well. of they’ve that liver, continue – the And in indications. do this to results think their cocktail COVID. and the I with clinical Well, studies looking cocktail we’ve go had earlier same with Scandi, develop goes year, had to further reported that their that mean, as started I other disorders to to

it with – to we’re this as from relates it and Turkey results on as to the COVID – still relates working Turkey them So study.

So, but have anything that we don’t yet. on to report

So a cocktail things, generally, with as in other working interesting. yes, mean is I of I potential cocktail nicotinamide riboside, the – think

done fit. think There riboside to studies cocktail. liver by we was understand that on in it’s it also riboside that were before nicotinamide important us I what were clearly, with it would for own, nicotinamide so performed does understand where itself, a its

is know the is riboside So, we nicotinamide Alzheimer’s important. same.

disorders by they cocktail. cognitive a also evaluating mild riboside started with So, it impairment, Alzheimer’s itself evaluated have and as been nicotinamide before neurodegenerative

with to for combination nicotinamide riboside working it’s important as other well its does in understand what like as I on ScandiBio on. So, think us own, things has been

Thomas Yip

in and queue. the thanks jump fascinating. back I’ll and helpful Very

Rob Fried

much. very Thanks

Operator

with is question next Cohen line from your is Our Thalmann. Jeffrey Ladenburg open.

Destiny Buch

for overlap Hi, changes the on could especially heavily I investment the messaging marketing base. and you current all how the thank previous your in any and Walmart are be well, just through messaging use is your I’m I’ll to influencers color are the taking and additional minimal continue given Jeff. about destiny wondering curious for commentary you provide to actually, And would your then into strategy is questions. between past. know you going the have hope brief this as I different, XXXX, in I you for make mine customer and to you’re as your if if guess your messaging for here.

Rob Fried

group There influencers media. use cohort continue and social continue non-celebrity influencers to to of will that cohorts. of the necessarily our a then expect there the are in both use on We a We the change we have It’s a It’s various sophisticated growing influencers. of to we as true to influencers both. believers. [ph]. past. and a has in fairly understanding celebrity ChromaDex effectively, professional purchase in in groups use group not message. product It’s grow Hawaii developed change are

in that they variations for specific specifically There condition are it are that that cohort therapeutic purchase some some that managing groups metabolism. So, there buy for There data. purchase also are it is purchase some are it that Niagen people for fitness. they energy some and aging. there are demographic Tru for reason. a that believe that for it are There

different creative with endeavor of materials. Walmart, cohort target and at we So, distribution different going slightly to ad retail are those that different slightly channels mass to – the in slight demographics base. channels. and variation interest there mean that a of in customer levels base cohort existing will variation is the That customer the versus the those we if groups believe a We

find that a know versus that yet for exactly television spend. be might suggestion of customer marketing the Walmart out. the Niagen we impact. we narrative would when and So, test And It or likelihood and in, for what how aging that slight an that is aging, energy We don’t but increase thesis success, if would more Tru looking radio be example that’s example, that will group. is digital press they where will purchase to we and find metabolism, that cohort

Destiny Buch

it. got I Okay.

So, about the less about channels. messaging, the more

here. going follow-up one Okay. to I’m just ask

investment You as in as times, couple of referred your R&D. pipeline well a to an product

curious, just something include, new or I’m product, include that could existing Thank to would or be improvements So this this formulations or it the would is a complimentary? you.

Rob Fried

a are and the is answer question. question And you a NAD, both. the good deep know, very very we those have besides developed precursors NR generation precursors to and NR next NR. better that we that R&D in even investing in think combination perhaps perhaps understanding on portfolio patent ChromaDex has to a as we That’s NR are with than or developing in of fairly complimentary

create of to it’s to to In a that significant addition, claims. to and addition ingredient as products purpose are we comes well researching health studying If the more it. as are it some something either would of improve investigating efficacy, it claims, combination be benefit in or and therapeutic health that an with NR we else

to are looking all looking capsules. just that both we’re ways extensions as These at those at NR of of at. product of and just – we’re are also So, looking delivering alternative we extensions, product simply types as opposed

As a form powder do presently. you of we NR have know,

for mechanisms We’re you as question. looking delivery other well. Thank that at

Destiny Buch

Thank Yes. you.

Operator

is Our Co. Sturdivant with next from Pinheiro & Mitch question

line is open. Your

Mitch Pinheiro

good approach that follow Hey, things; them? I’m They start? you? two just approached Hi, of afternoon. up Did curious to one, did relationship how you Walmart, on

Rob Fried

Walmart approached us.

Mitch Pinheiro

happen long. product shelf, dealing right. fit the on And with won’t when you’re Walmart, can’t the for That just

can is support – are going you’re the going, deals? those circular be a as you’re that addition be in get How to you’ve launch, support going special in-store in Walmart I amounts questions? you to be are to spend to mean, to you little have talking – of going much or do to So, bit part Walmart going to kind there talk think it of your significant you

Rob Fried

is Well, Kevin a going approach. this suggested, brick-by-brick be to one-step-at-a-time

launch. at very anything major, We’re very do not dramatic going to

the We’re stores. going it to in place

measuring We’re going to after decisions the data conjunction, but then do advertising going and to making some in we’re that. be

Kevin Farr

I’d add to that.

aligned we Walmart think they’re I business to building are this on launch and overtime. expectations the committed and

So, believes Tru it really and business build brick-by-brick think and I it’s Tru to in said, the believe is Niagen, as a Rob I a the buyer Niagen.

Rob Fried

They spent time Walmart. offer to product fair of amount in us persuasive. the Walmart a And trying persuade to very was

they know, in it it. we well, understood And succeed why great be, the or it’s core you frankly part extremely of short of is As Kevin a expectations case don’t U.S. for but product spent researching run. But of were distribution are wasn’t, the time saying not our thought the convincing had it a that there. not strategy consumers as deal would also, made expect and we high to it

it one-step-at-a-time, with this we that so We’re to launch. successful are going take

Mitch Pinheiro

buy sort in how – shift just the you is that customer channel all or or for product some to between on – you the Amazon mean I is there channels say, can reason be that? will approach Well, there that obviously, either through there to a to at so you’re let’s last any at be something Walmart, Walmart. – be tie longer of terms there a do Would

Rob Fried

is We hope don’t extremely and have it Walmart for at successful our Walmart. that a plan for is It for that. ChromaDex

Mitch Pinheiro

Okay. One more question.

talk had be the color growth sequential helpful? entering would versus you existing customer around – what that nice nice growth So, you of rates, about can your new customer quarter, any

Rob Fried

because which but tell that was encouraging for increase new is fourth XXXX. We’re flattening rate, the we out had what substantial customer can us, growth is not you showing seen actual that we quarter, during in the the

Mitch Pinheiro

you time. Thank for your Okay.

Rob Fried

Thank you.

Kevin Farr

Thanks, Mitch.

Operator

is Jeff Van Our from next Sinderen with question B. Riley.

line is Your open.

Jeff Van Sinderen

is, for happy you terrific this How you it approaching adding into are that a question for go how other about, wondering make my to would you’re really First, Just the are timeframe you or you future? thinking thinking perhaps about about I’m point? at the that, retailers? drugstore channel sense Walmart in retailers guess other let I my to me a perhaps is how are that. congratulations. partner. how add thinking see or

Rob Fried

good a question. that’s Yes.

Walmart As persuasive. are potential retail calls smart strategy. people to is nicotinamide But we extremely what a Ultimately, riboside, expensive has we better do our been get is core everybody very from and who and know, and product partners age deserves you people that phone afford Walmart online. And from just part frequent benefit company. can an of course, great the decided not not very of

it as we their and that possible, many improves us it as when know, And it of hopefully, a many stress. is So, possible. growing is older Tru stress. to age mission as health, We they’re getting course, physiological they as of physiological get many think or people to understand under Niagen as our exposed as taking particularly,

conceivable is don’t step other plans to point, that at it then to retail take it with is time. like we succeed will partners, have what one expand So, now. some we there at that We’d for but a right and

Jeff Van Sinderen

point. fair worth, making it’s Well, it enough. a plan for with Walmart price Okay, accessible I what think it’s at lower brilliant more

going I be extremely that’s to think successful.

new on inclusion about for the products and thinking in to partners us guess also, about, give are outlook update, any Nestlé Just metrics can how working with with you similar I future? there you then speak any Nestlé, and around working the potential

Rob Fried

mentioned, do very quite phone but get we and partners, from selective. a potential few very, careful calls we’re we’re very, I very As

We is Nestlé with had We much There one. chagrin with think the one. We Watsons conversations, many. some our think is grace. having we of great are now. are other love and in have one. whom to business companies is think We with Walmart companies partnership We right are but

careful slow. We’re very and and deliberate very very

for partner. it yes, another brand. the our deal deal to to could goal is has to Nestlé another deal with Generally, that a So, in strategically global do possible has see like and sense But primary build a that. like you to make fit it shareholders our is it

building a we’re brand. So, global consumer

them to very their with succeed situation. So, has own delicate want a the it’s that to We if time, our and partner same at brand, need further it’s brands goals. we consumer strategic their

these difficult sometimes be points to can So out. work negotiating

was how’s Nestlé? going it with question other The

Jeff Van Sinderen

Correct.

Rob Fried

– as relationship, they in that things of – speak help more did help both and deal interest ways there companies many NR, frequently succeed. There them We to did discussions at them sit doing, been Celltrient. Nestlé is launch expand fact, to of Nestlé ever relationship, would the than is the fact, and ChromaDex great they in excellent. describe have frequently, So, now a I on to before the their brand to

with we Tru As capsules did at you of areas as of supply another Persona, finished There that Nestlé a division deal division Niagen to know, Nestlé, other that’s where Persona. we are called relationship a are Nestlé that announcements within the and whom there I’ve about have we nothing eminent and family nest no are the is we had but with to and discussions, make. there

Jeff Van Sinderen

I’ll Okay. Thanks rest questions. my for the offline. take taking

Rob Fried

Sure.

Kevin Farr

Jeff. Thanks, Okay.

Rob Fried

Jeff. Thanks,

Operator

from is next Bill Our with Tieton question Management. Dezellem Capital

line Your open. is

Bill Dezellem

ask you. cetera? the I’ll couple and et the of scheme, and same, numbers the Tru look color Niagen one be a Thank Walmart under then same have please. question will name selling questions, to the Relative bottle you will Walmart,

Rob Fried

both. To Yes.

Bill Dezellem

jumped What a that? the fair G&A versus was then quarter. quarter And you. third amount driving the Thank up in fourth

Kevin Farr

Yes.

in accrual, year think incentive that there comments an some perspective, would the in full accounting driver that And my fourth from said that were calculation and that quarter. exceeded and bigger in quarter. number fees to we what incentive the a we I fourth fees in the was were I do as be for the expected recruiting other big that

Bill Dezellem

this of magnitude you you the we year. one, mention increase the anticipate? last half in it the did then And Great. expense increased that to expect should legal of first What’s

Kevin Farr

Yes.

look lower, you year bit because XXXX, it to this at a was when didn’t think, we in I trial. go it,

court next was to ready are and to Next to said year, be we’ve be the going a New and case Delaware case what September the year, in in million we judge I the $X higher. million be think cases quarter, consistent California year said happening, $X in going case it’s August. the York September, to think the I in think before X.X, This it’s

working in to trial more likely, you range. XXXX, three back none of the be we went those of to high end cases, going in it’s it’s where to the on were all to but referenced And maybe, So, XXXX.

Bill Dezellem

Great. Thank you, both.

Kevin Farr

Thank you.

Operator

call Gerber and remarks. for closing time for any gentlemen, Ms. back the have I’ll all And is now today. turn to the this we ladies over

Brianna Gerber

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

Operator

gentlemen, this conclude Ladies and call. today’s conference does

may You disconnect. now

ChromaDex (CDXC) 11 Mar 212020 Q4 Earnings call transcript