CDXC - Earnings call transcript Q1 2022

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to ChromaDex Corporation's, first quarter 2022 Earnings Conference Call. My name is Stephanie 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 first quarter of 2022.

If you have not reviewed this information, both are available within the Investor Relations section of ChromaDex 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 Ms. Gerber.

Brianna Gerber

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

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

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

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

Rob Fried

first-quarter Niagen in this made Brianna, beginning Thanks good thanks brand. XXXX Tru afternoon, the we've and for our building call. our year, everyone, strides important very of Since and joining investor some

seen, our Our many commercial, and year. late quarter product, you new and road brand-building U.S. in Immune very the which our of second trends April. map later by encouraged was And in we're have new the Niagen recent TV launch other activities the by of March, began on it Tru have airing followed in this

have brand-building you seen, yet The studies reinforces recently Parkinson's. near-term but patents. the on Parkinson's of on And were over underway peer-reviewed is long-term on now never intellectual continuation to strategic has a we are study And clinical ChromaDex's our we property which initiatives, XX momentum that significantly another now scientific Beyond portfolio, U.S. patent plan, granted of patients. additional the been many there stronger. two announced Niagen as results disease

new quarter. began to among the scale important certainly taken. show Tru Niagen campaign science dependent, growing others, skin, active including metabolicly Niagen for most market continues about be the age supplements liver, to in The Niagen. should are the people tremendous among brain, that consistency the that on tissues TV Importantly, of that dietary heart, body way opportunity great with second which muscle, suggests their evidence validate continues the NAD concerned the the is to heavily bodies We

results quarter So will Kevin it did it first which on the discuss not have a a material moment. in impact

commercial ABC, FOX News, channels. NS, TV Business, new the CNN, aired SPN on science NBC, is channel, FOX Our Bloomberg including networks, major now

I consumers last As this the said a taking educate potential about of quarter, Niagen. Tru of benefits commercial to broader group is intended

took behind XX-second our science care team great into on distill to the testing. based marketing spot, Our deep a extensive ingredient

While it with discuss leading Kevin, believe is on we is trends tracking our sales that the consumers indicators resonating for of are we're Later the performance the second call, business. the TV message encouraging in e-commerce of early, will and quarter. some

at improving also sell-through As brand awareness expected, this Walmart. campaign is and

of is timing a initially little the anticipated, than this the had campaign we promising. later Although are results

of of our Tru Niagen you episode and Dr. featured April one Phil impactful, a know, on exciting and the Burke. the interview original an we're Brooke, Tru was fitness his Brooke brand. celebrity is And viewers experts X over Another during XXth several with seeing as moment, well markets, sales reaching across believers. highly driving many in re-aired segment as the of as and for increase exposure health million

in Tru Immune said, I launched April. also we As Niagen

Immune our suppliers. loyal very proven supplements. to And all-in-one nutrition together. this via on Niagen, of strategic quality and is support for immune community scientist Immune and existing asked with a recommendation be of the of taking companion Niagen. the individual formula the and efficacy meticulous immune holistic Tru kind, both supplements to Niagen bioavailability with based targeted first boosting subscribers high Tru Tru its TMOS launch highest selected to U.S. products were Our from our that of was Niagen a creating daily versus ingredients, taken of And ensure in feedback, that a combination NAD as

participated Niagen progresses. several it Immune in the launch. launch, forward as Tru helps agent, clear the look Tru sharing updates like Niagen is In And Niagen importantly, and [Indiscernible]. to health. which emphasis is Illustrated for Niagen who It Swimsuit Too Tru time message. brand on addition, immune benefit, target It's Brooke so the Burke publications, focused highlighting interviews the hero ingredients, to we as are such us healthy consumers in a on early there's market a larger with reinforces opportunity Immune.

studies any the daily the on roll study the given in are engage highest consistently promising, to the discuss on an year. two will In per Finally, anticipate Frank on ambassador The of of XXX same I group of be NR at milligrams including our a which X,XXX initiatives science loyalty to-date, later very working Phase include expanded gram by brand and mentioned day. or published recently out administer which additional educate NR while this Niagen will in clinical a we will will is researchers. Parkinson's, program. II study We per study, in study clinical day, the Phase dose consumers, III moment. will patients

our an forms portfolio. same to other we also XXXX. XX two a for salt is our NRT NR the like and I'd various manufacturing NAD granted manufacturing progress short add give process NR. on made our step. to precursors, strengthening patents intermediate as patent on or our manufacturing requires forms brief the portfolio strengthen and through now true process for also process than We partnerships. patents, We And strategic and our quarter chloride salt the over In this its this significant to the continue and recently of protection NRT and nitrogen other new update

First, Xingsha. Sinophram

of It's and bad is impressed in are well are of the Asia how China already strategic commercial our comprehensive exclusively strategic from In growing relationship other been Swiss partnerships is in and launch, health with specialty Niagen, COVID discussion more large across We've a to remain markets. impactful to about HCPs. the as finalize similar make parallel, they're with time. care H&H product supplier continue conversations for debts will formulation brand channel, like to to the question established China. these as Blue early launching U.S. agreement over Australian we dietary recent science-based they for due course, sales, Niagen plan for having our in the Hat have NMN, the My progress. initial their We and eager and pursuing and and in a partner in we supplement progress plans are products And the while about slowed strong and premium formulated for board market strategic practitioner approach And to with towards off close by our to to a cross-border to future. optimistic partnership Sinophram Health, category offer the to a partners And approval we supply Designs start, differentiate the Netflix. Group. we

research I And on tremendous As this know, said leverage for clinical ingredient. internal will pre another complement our consumers. last respective Health quarter, launched us this the sales amazing Designs of Life and XXXX. marketing partner, body Niagen U.S. best -clinical and incredible you many as engaged how team We're to of help and insights articulate share late discussions their of in benefits in to Roaming ingredient Tru our to Ro with the and

contribute are partnerships increased sales various All new development, of them but stages XXXX. product we to in to of our in expect

internally As growth professional they Biz perhaps. as growth strategy. to we're very athletes, grow pipeline, I teams particular, recent of a renewed there's look excited initiative Dev BXB at team and on business. sports to focus relationships the about the our I'm as In and energy the side building the with ongoing deliver our an believe focus changes designed important in short-term making The on for healthcare inflection long-term well But groups are us influencer practitioners, two that key well not position are to long-term. I and

headed, is confident Company very for about far I'm Niagen. of more how and ever our think where Tru it proud the and than has As I about execution market opportunity the come

quick I which about break in I costs in without financial just one several an make ability control show Frank to to macroeconomic past the and comment mic for We've live. in want past. ChromaDex cash-flow legal developments, quarters scientific over been discipline. to the has about Before shown the the environment even hand the we talk to

is Our base extremely existing customer loyal.

can People benefits for you to you take months, are if retention more will focus Should do that. and the And there. And into Tru will that we that feel feel put us. company who take that to we three the Niajen have rates high. it that and are established Tru there understand the with shown continue attention have we do very, Our customers bottom line, need we very be that Niagen. take we we to two the

Jaksch, to share more on about like call the and Frank Co-Founder Chairman promising to the I'd Frank? Niagen. Now, our pass research to

Frank Jaksch

as produce you hope ago. trusted all CERP, that strides Shao made well our I last XX as entire advance pleasure which External mission, enjoyed diseases, to has Thank and and began aging. help years 's I team you grateful behind Andrew quarter It's science the NAD CERP Program, hearing has the the for understanding to to you, speak exciting Research accelerating about Andrew of Niagen, a to ChromaDex to health, I'm Dr. in from today. or Rob.

researchers XXX over over announced, recently a in This milestone for collaborative XX globally. amassed we a As CERP with estimated countries over This has is $XX in value. ingredient. research any representing institutions includes XXX million over agreements remarkable XXX total

are the 's recently Research XXXX and research for behind recognized to NAD. was by other NutraIngredients their dedication NutraIngredients pushing how program science. Niagen success, true cutting-edge the Nutrition boundaries awards European awarded of CERP Our award quality focus pioneering healthy It honored NutraIngredients and the website, project along research we the is long-term testament with a market leaders. to in and be research. on to We're category CERP industry aging innovation, According to

I nominate larger park results patients, as recruit neural of study, and underway PD that NR will of Investigation group is exciting we'll improved NR some clinical These PD Andrew reviewed motor milligrams patients XXX our studies increased I'll for detail patients or showed trials. doses, NR inflammatory a researchers. the NAD and I Phase protective to that A study, function, levels, smaller cerebral NAD study decreased on X,XXX for further research, daily of study, in administer Phase same two briefly The on Moving in and published or onto significantly built the clinical of with same The highlight NR measures daily quarter. patients. XX-weeks, Parkinson's park last the supplementation The cytokines in study study therapy study study. second peer-reviewed, recently. PD the disease PD potential recent warranting register no new

the no Finally, in safety recruiting a third the of study, weeks at studies up tolerability X,XXX a couple doses. healthy milligrams to ago. daily signs doses NR XX NR The tested individuals The of with and assessing dose of PD clinical milligrams tolerability daily study, safety toxicity. NR higher objective to determine safe been of and a began to have in X,XXX enable of is humans with

and This double-blinded to three are this NR, an placebo is look speaks controlled It randomized In design research at So in great study learning collaborative is XXX in foundations dose role scientific NAD, on DNA. and tested our our a in trials the and is paralleled Serbs science. ChromaDex's interest agreements forward aging. summary, highest we and in studies. clinical health ingredient its to-date. of is exciting the in All more. clinical to NR, human area

we research, ingredients. call Tru academic Financial all of our our we trusted trusted the Farr. the on beyond brands to With science embed believe quality Importantly, pass I'll Chief and products that with Niagen start Kevin. that, like Officer, Kevin since into

Kevin Farr

late new Thank March. you, million XX%. TV behind significant sales Niagen solid investments our gross prioritizing a Tru that a margin campaign us, ChromaDex up net we Frank. and of are delivered With began $XX.X XX% with in total year-over-year, litigation quarter in including a of marketing, airing expense

new website in own customers growth Niagen by on this where broader year, as is leading new vitamin ranked in is includes indicators increases still the category. frequently encouraged and well only our recent initiatives in e-commerce site, BX visitors, our our best is we're of in trends searches seller and While component the this early, channel. Tru our organic This brand several on as Amazon, building now one as

pragmatically funnel than on we sequential and our focused as rather in business. TV in initiatives, be the other the of we'll forward, investments increase Moving trends top year-over-year marketing

earnings mentioned a in net Total measure forward, and focusing in release used for a the other We've of e-commerce be as expense in XX% up XX% GAAP addition, year-over-year Tru growth in quarter working sales. last before quarter the XXXX In were legal slides. EBITDA, call, first sales first on XXXX, provided BXB in proxy including with compared XX% growth combined our including to the in investments. of we'll of cash capital to Niagen, and reconciliation adjusted Watsons growth as going XX%

primarily Gross decreased mix ingredient XXXX. were shipments business had to decline XX% lower net since we Watsons The sales in to supply driven Niagen X% by year-over-year. Our last were compared disruptions. when XX.X% impacted was the of margins quarter down chain first to sales by year

headcount Overall, better expense saving increased of full-year growth. our cost the to offset gross start chain increased XXX a supply our inflationary this as offsetting XX% a also We solid are goal initiatives pressures support than to in slightly is margins, across to first XXXX. higher If inflation costs. global currently percentage to persistent, increases net in we'll XX.X% chains. Selling supply and remains marketing quarter to of consider compared price sales help of points XX.X% has basis product

by changes We customer higher are driven experiencing trends, costs iOS Apple's social well industry are costs advertising as on new efficiencies as primarily including channels, in acquisitions search. and for that broader impacting

support began on not top Tru does In to investing we're March. included funnel advertising commercial in television advertising immediately the more conversions. in drive that late of addition, incremental spending brand our This that new Niagen airing

platform, advertising top categories. more last also on have the television broader to supplement We their prospect streaming to across a including audience in consumers investments tools of other and of Amazon year, funnel compared to

these XXXX, optimize For brand or campaigns continue balanced year we'll if investments full performance, we marketing. conversion with to

to general primarily expense negative reported, spend support technology As offset investments severance $X.X to legal and was a areas administrative higher in $XXX,XXX head functional lower million, count by key lower growth. largely expense, of by due in

as quarter, to related incurred nominal to expenses motions and we Delaware baseline expected, the the million post-trial California in litigation, legal the expense $X well in approximately Thorne the expense appeal as of IPR. As related to

settlement in the ruled Furthermore, ChromaDex New will pay the New to million We the negotiated York California Elysium the that $X.X York and the resolve highest XXXX. expense expect litigations. have legal of recently quarterly first-quarter judge should

decision, full currently with appeal this expect to year under $X we to legal possible trial XXXX planned, no expense it's million. be While

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

legal of prior to adjusted our in Finally, of million million year. $X.X loss a the including EBITDA, compared loss a was $X.X expense,

of and committed sheet in Moving ended flow, access cash of with balance cash a of credit. In operations support quarter to decrease to payable and not remains in the $XX our to million first a cash, use was difference net the line in operations million vendors. balance due we net quarter and year-over-year first $X.X payments of quarter did versus well timing strong. our the sheet million our We inventory our $X.X The negative primarily larger our accounts used as in growth, the negative XXXX, the by was a of driven in our as XXXX. to increase cash

marketing, full last to XXXX the year year As outlook are Consistent expect slide on key outlook, our growing plus in changes details prior press to our metrics we outlook, it release, our the market. we acquisition relates in provided invest maintain brand no with leader in customer earnings our since to to our presentation. the as update. There position R&D NAD in our awareness, with quarterly along

Hong Finally, the in headwind have second Watson's. see second relates relates to variant shipments The and as continues lessening of this XXXX, the Omicron of The half backdrop, late. of Watson's fourth the primary shifting approximately to to we the following Kong to of this quarter Due tailwinds. residents, an it quarter headwinds impact is although quarter on to year. its

the is well unchanged. in as your we for the second our influence quarter approximately campaigns, and a year We've incentive be staff fourth quarter brand as programs, XXXX. half full with on of store but had shipments, outlook success Watson's to shipments result, a quarter the the XXXX first As basis, for anticipate

remainder for similar XXXX to help manage of through the plans Watson's COVID-XX related these headwinds. We have

Importantly, awareness. drive a tailwinds brand business domestic of we to see emerging e-commerce result initiatives in as our greater recent

an will Watson's our brand, excited momentum recommend growing education, TV Tru large payback. to requires awareness leadership communication which summary, offset most the a In that absence campaign, head We're of the investment are invest ChromaDex the emphasizes to market, different a consumer stages continue our initiatives, maintain building at they with Tru position. think is implementing including product the another macroeconomic holistic large we approach near-term and caters XXXX. of in Immune. Niagen rest through audience engaged to is NAD to We of this Niagen of ambassador partially we're but an place leader customers upfront In win which confident our about a should needs, and to I'm to and in brand loyalty this expect TV Tru incentivizes should be disruption, launch customer second quarter. We have these year-end. would or our including expanded which starting program that the portfolio expect consumer recent various in global and Niagen our campaign, our of before which mass education, raise new in the

We are expect to see when place. accelerated initiatives growth exiting these of all XXXX in

company base done work Operater, Tru Niagen's capture to next We proud do now growth. work the the questions. the for we've potential. very market But take have to I'm of to we're more ready position to full

Operator

[Operator you. Thank Instructions].

with comes Brian question Nagel from first Oppenheimer. Your

open. is line Your

Brian W. Nagel

Congratulations afternoon. on good Hi, --

Rob Fried

Brian. Hi,

Brian W. Nagel

ad, you're or you new TV on bit increase do address building tracking I with improving mean, if discuss is on of a think driver demand the near-term we should ads? -- could then, add a the here? in you first mean, more a as the how how couple plan brand there little just frequency, And here to TV? I questions. TV of A about

Kevin Farr

digital attribute question first. is So Television difficult to second let the me more media. take than

on the relationship retail. your So traffic in between and And of even ads ad, and Amazon, it's is on are that sales, traffic TV website the timing But you it dramatic with to understand one in and air. the more there you with website metrics to we're when that of spot to can the increases see traffic metrics can challenging seeing Amazon. direct can the measure, particularly a and the measure selling coincides or when we're and you the align traffic

seeing You can in at rate improvements as that conversion and time, also rate track we're the dramatic conversion well.

working, sell-through ads the and ads encouraged also since we're at the that to So we're seem the by Walmart. be ran seeing,

we're using. There's So these also are the television. over-the-top metrics that

and metrics airing easier track. we're television, It's you the as the that of a to spot streaming are more that to conversion there sale a So and to OTT, can well. seeing attribute with

we're encouraged pause, time spend, increase. doing increasing been measuring go. now, be expect right so But where we continue to and to the as we we've And And but what in is we're we dramatically there may point we're

Rob Fried

an what the and again. spot. and so start analyze was is But good data, far, effective then a we're it seeing it's move

We may that. testing we spots, one we that the optimizing and that have. slight have We're There it. are some spot editing complementary also other changes have the that to also behind spots be one there so we might be

can -- of exist. so are answer that So that metrics using and use, a question there it's you ones the the the is to we're handful

The question it? again? was the what cover first I first did Or question,

Brian W. Nagel

Well, you answered.

was that. Just here? you basically, from we [Indiscernible] about But Will should the asking additional TV I plan ads? be [Indiscernible] discuss think there is how

Frank Jaksch

on organic and And to new Rob as mentioned growth in well searches couple site, these update of continue ranked Tru regard We're earlier, as outlook. trends website with and increases now own and trends in Yeah. the as as seeing BX customers in Niajen, visitors, had strong new monitor seller things. broad, I it's best a our we frequently category, e-commerce to Amazon. vitamin the on in

at also POS recent trends saw increase, Walmart substantially. We

seeing we're the However, of Walmart the POS later timing result the is as for initially bit Walmart, a TV campaign. of anticipated campaign at good lift we than but a

Brian W. Nagel

are to question, a new Niagen shift product? seeing Niagen Tru seeing over Tru or the existing say That's new my to are follow-up perfect. you regard you customer so that Then immune, immune customers, just is with to

Kevin Farr

shifting not It's over, taking they're both. customers, but existing they're

Brian W.Nagel

it. Got

Rob Fried

cannibalizing it's sales. don't we Tru Niagen think So

Brian W. Nagel

Thanks, guys.

Kevin Farr

Sure.

Operator

Company. with Mitchell comes Your and next from Sovetec question Pinheiro

Your line open. is

Mitchell Pinheiro

afternoon. good Hello, there

Rob Fried

Hi. afternoon. Nich. Hey, Good

Mitchell Pinheiro

with TV. the So

much can of -- Can us going give are you how So that that the you vest? TV start spending -- can is you -- on are we or closer keeping talk right -- we baseline can you to now? some to sort

Rob Fried

the with because KPIs performance keeping to same proprietary We're vest, our it measurements. close of

So not that to we will marketplace. disclose the

Mitchell Pinheiro

potential, and TV, look were in a a mid-term political at et have that about at election crowd that coming that a you increase Is -- get into cetera. more Are more bit you bit? when as that Okay. a rate have you does year, a out might ads, QX? substantial little as -- When -- little looked talk you in this can you maybe you preparing for And little ads? TV

Rob Fried

that's a seeing the impact television Well, of affect that more of are of available It's the one But we're we're of playfully. ads one seeing rates economy of of and remnant the that lot there's them. there late. ads, also -- it -- factors on

third might in So opportunity. future, near-term there to with be in the that quarter. hard it's certainly know. we we're an if But the buys, think the particular [Indiscernible]

Mitchell Pinheiro

-- the and so you last that for budgetary point-of-view, thinking in when curious what sometimes went I the were ad up, just you this average, for. year. the above remnant was way mean, election from paid get eyeballs a I was included in whether rates But cycle your while

first customers. about, quarter? and there. your growth new The Rob, So you second obviously, recurring retention getting you're in customer question is obviously strong around, the Was growth is talked just there

Rob Fried

it TV over we a TV we customers. months question, in in than new related several wasn't dramatic last surprise campaign new but most seen had the increase just the did Actually, couple Mitch. of the a campaign, in the to show increase a dramatic had years. What customers And

what historically customer weeks has that the will the, rate retention new new time. new But same The dramatically is the purchases lot single the Now, impact we've than long like skews number trying out. the buying customers overall question we've and is, and people see have last very didn't the revenue, of higher very, because of an necessarily these lower-priced a on it seen customer in been that the month months have had. over a we

Mitchell Pinheiro

pretty and has had You've your probably your recurring wouldn't been new customer growth Why they? the customers your -- -- recurring new stable.

Rob Fried

Yes.

Mitchell Pinheiro

So be new of different? customers Is any any why thoughts around that? this cohort you would expect there

Rob Fried

impact There when their might the find are is, we of are for to higher. and two high. they rates not retention rate there performance as why it the much retention on be when seem couple their physical a One to that that's people three possibilities take months, notice

somebody people to if television. it then a These a they're it trying weeks, few of buying time is, there's Tru going are, spend some And month So greater is a the just the impact They reorder. that for other even in researching less informed. not who for cases or likelihood are less Niagen.

of we yet. retention know have yet, again, and what we high we see in. So don't But customers that measure will And number it's come will new early the rates are. it's very a

Mitchell Pinheiro

saying it by said you quarter, to were the sounds are like with so recent the you trends. encouraged -- then you second And respect very Okay.

little So QX, all you've about. just had the given wondering I talked was little whether estimate, than e-commerce see see a growth acceleration, slower and that thought is I in a might my you maybe

Rob Fried

the and to estimated. what have see think quarter, to in first with thing then days you one And say There's first answer. just let if you quarter, about days be might number me the in way the fewer averaging you'd let in first the probably normalize quarter. And you'd day, I the quarter second per quarter. days Well, the I'll the the number of we're fourth Kevin closer of -- regard

Kevin Farr

Due to half Watsons we quarter of lessening The impact the variant its this to my following of about shipments second late. in tailwinds. headwinds Omicron approximately and and The shifting of year. although an on fourth the have the is talked we the Hong primary discussion quarter think quarter I Kong to second Watsons. see continues in headwind that residents, backdrop, is

the we what But the outlook shipments unchanged. through for was it XXXX, program of brand staff as We help quarter Watsons fourth in manage of down the result, our plans and since in store campaigns, well is to headwinds. remainder similar anticipate as success COVID-XX half first quarter. second-quarter related with of influencer and about a As had XXXX these be full-year to incentive for the have Watsons

as emerging in of our e-commerce Rob business brand domestic Importantly, initiatives tailwinds result to seeing a just we're awareness. as indicated drive the greater recent

growth absence that e-commerce this in in rest the of headwind quarter, offset expect XXXX. the and largely the disruption, in the should continue We another momentum of micro economic will [Indiscernible] through second

Mitchell Pinheiro

is Okay. mix And margin or Is me. first there XX% just the was for a lower, margin to the there lower is one -- that right margin, in caused in the some the it's gross question quarter? just for that little ingredients, be then last on little the gross

Rob Fried

mix is that business. with gross segment the to around of the XX%, to ordinary the think the so of regard on XX% nothing I out margins

Mitchell Pinheiro

you. Okay. Thank

Operator

Ladies all ask you to ask question one time please that for do follow-up. one allow and gentlemen, questions we and

with Your next H.C. [Indiscernible] Wainwright. question from comes

line Your is open.

Unidentified Analyst

Thanks just was I updates if questions. and either you first on of all, some expect to companies. could front very maybe any wondering provide those Health respect collaborating you with much for of Sciences taking developments if Sinophram with us noteworthy my the Nestle

Rob Fried

both of them. We are working closely with

to we precise to as relationship. We hope this we with expand business very but at constant But to the our something are say, them are we they in discussions have don't terms time. are and in about ways

Unidentified Analyst

respect of this back, demand And SKUs to look percentage of like? price with they pricing, that them? Okay. And we pull without so, all across or then percentages at seeing if what specific is would And there some for do think as in? for look those that ultra-inflationary potentially the outlook we're potential increases meaningful the applicable be might environment currently magnitude only you

Rob Fried

know or conversion. exactly you don't most. customers it at meaningful can't increase retention all, across impact follow-up, how like [Indiscernible] we We're is price what be presently. that answer it four a that be question, the we do consumers? will looking without yet having one could The exactly the there. We to but And don't think know probably one across yes, all much, questions the that in be. we answer No but question, number and got on can

Unidentified Analyst

Thanks. Yeah.

Kevin Farr

have than better margins XXXX is our regard by gross cost with chain XX% margins, consistent continued flight, Rob similar we’re slightly in the initiatives. overall other which could I been We're savings just on It's seeing incremental maintain looking is changes favorable XXXX, We're in setting. driven design our most initiatives scale gross trying have in business. think we with to also, mix, those [Indiscernible] which got seeing us said, savings strong levels. recently, We've to that and supply help just an XXXX. to at

some persistently seeing remarks, in I pressures we there prepared are across if supply price that are a my as think considering I inflationary consistent pressure inflation high. said remains chain. And our global if increase, are We

Unidentified Analyst

much. very you Thank

Operator

next from with comes ROTH McGowan Your Capital. question Sean

line open. is Your

Sean McGowan

you. guys. Thank Hi,

Rob Fried

Hi.

Sean McGowan

will Can for of you And are be questions Couple things. timing see? you or the looking you a about primarily segments talk other clarified in increases to well? expect increases that R&D and that the to little segment, bit the of consume as in

Kevin Farr

with the then think increase. slight over I second Sean. forgot going be it's going be that And regard think see I get should quarter a it's to year. we as I to you the to, each or question, mean, I

Sean McGowan

concentrated the the increase segments? be of other an consumer segment outside looking you it or for in are Will any in

Kevin Farr

segment consumer The mostly. Yes.

Sean McGowan

follow-up clarification my Okay. question. slash other And then

to the Watsons, on mean it mean first Just and you Watsons half of shipments just right? say half, just -- this the what say the do you shifting shift, none what's of for you quarter, it's Watsons? when That's when you was

Kevin Farr

Yeah.

Watsons. Just

Sean McGowan

Okay.

Rob Fried

contribute just -- your answer to question, Kevin's also to I mind. want first to Sean, don't you if previous

Sean McGowan

Please.

Rob Fried

the property, important I will of very intellectual that that it in stealing science, science product. be others something and consumer in property. And investment just not And is and we -- be has monetization we've very, discussed recognize on. And that protecting we and recognize the direct is that the for in from is that that continues it ChromaDex's been property we have intellectual R&D shareholders’ investment. a to conceivable intellectual how to significant the us our work quite that and monetize it in

Sean McGowan

Appreciate Okay. that Thank you.

Operator

Your next from comes question with Bill Dezellem Tieton.

open. is line Your

Bill Dezellem

be only have Z A will M. the My through follow-up A question parts will through and

begin may examples might you may that Would a tantalizing there, if we want disclose with than could not us to, was you said comment fall us that give Let that I'm you under some what it consumer category, -- your not product. you earlier to indication but just that please. be pretty asking

Rob Fried

selling that listening most therapeutic know that that company cannot dietary the or people followed claim knows is study fairly dietary laws disease. that imply make a now who or clear the here COVID you're supplement and claim. this a Parkinson's had Everybody prophylactic studies that on are you're on we had that see we interesting is as very a company So and disease if for supplement you

it But those one there of on approval licensing of or continues a in if conceivable of the some at sort. others either in So impress case, that's effectiveness be riboside a business time. for about various either the partnership that will science the arrangement to a and sort drug states. towards is some ChromaDex point joint arrangement a And disease indications nicotinamide of or some opportunity us there is venture

Bill Dezellem

question that up since and Rob, it with you brought question. helpful, to the That's I'll attribute last you

seriousness, have a I couple do, all So in more.

the what's or First successful, update And we're there Turkey? be in study the COVID that that used of from study update can China all, is results Sinopharm? to there relative to the Turkey relative so by an

Rob Fried

The results can used, you be they what not of mean say, when exactly. I'm you sure that,

Bill Dezellem

be -- able Sinopharm would to they market able be if would If them.

Rob Fried

still a not they assistant we have regulatory be No, great sell And in we get in able think are Sinopharm. have partner of to We that. to to Sino's approval that on working that inside make we and will pursuing with China, claim.

other make be in but closes able their in China, and COVID, deal cross-border and of not terms into ways. claim take initiatives, they able over to if to that they that, In their sales cross-border that's that use when will a be it they'll still

an be or approval their it's and For effective. obtain order science safe shown part their been dossiers example, nicotinamide it example will both that there has because dossier of in is shows riboside regulatory to of that excellent

Bill Dezellem

update? That relative is the And then, Turkey to helpful.

Kevin Farr

Turkey have update There an have Turkey. we there. and a don't Even have on quarters have update. challenges I that the not by, still, go know We gone received been a in of lot

the rate. read I think inflation recently over I XX%

Rob Fried

think the on Yeah, and would could same I Sinopharm for Parkinson's. go that study also. the use I mean,

Kevin Farr

Yeah.

For sure.

Bill Dezellem

Great.

Kevin Farr

Turkey for application. drug in update the an have don't We

Bill Dezellem

and the business, for thank referenced that is your ecosystem? the what's they scenes those press two like behind headcount more my the current new second that fit when Super. as allow, the Relative please. would not partners, I be you the into will in would questions, are to increase partners And And chain that. in that new if will why? included And you happening The scale release you to to how guidance. question you supply referenced then

Rob Fried

supply answers first. chain I'll

So of into And or we're we've going added keep those with lineup. a product complexity to more bodies a chain and demand in but territories, supply something amount customers, or that it's costs. it is differentiated different is up not chain XXXX significant supply and people, impacting as the

Kevin Farr

question? other Any

Rob Fried

have Do you follow a up?

Bill Dezellem

New you ecosystem partners the have with of the partners? that -- currently

Rob Fried

Okay. What was question? the

Bill Dezellem

the will partners fit partners? in you pipeline current the ecosystem in the are How discussions new that with of into

Rob Fried

I'm having that Bill. gymnastics trouble the of one, mental tracking

Bill Dezellem

Sinopharm, is a No know I with directly worries. that that have partner for to going competing new not you're example.

get that that partnerships that's evaluating partnerships So essentially of I'm I'm trying to And you're you're new you or think fit some holes that there that distribution out. out build your understanding where or where suspecting in? wanting fill these to are in may system

Rob Fried

that's the now opportunity for government it They us so and manage people partners advantage Niagen be Sinopharm, think in know that been is of or have we've be for of take but XX. only years conditions and expect initiative is opportunity, been that partnering the the a significant. get riboside, But mix there nicotinamide coming the saying aging. the -- over have China the interested. an important for one year into to in the a has that we of to reason might with Niagen million Sinopharm age to Tru not population, we well. as you will they specifically aging to related rapidly by China But less. And XXX is interested in other order Well, the And

of taking to to together been take that advantage time and We our the right many right pointed the time, very have and you put infrastructure as and think of taking we out, are have close. partners we're opportunity, right our the strategy,

Bill Dezellem

all questions last Great. for the your and lack Thank my clarity with of you one. on taking the patience for

Kevin Farr

questions. Thank you, Great Bill

Operator

Gerber, further to time. are call at this you. no There turn I questions back over the Brianna

Brianna Gerber

is Pacific for continued support for your and be you, ChromaDex. Time Thank everyone a will PM of replay XX:XX replay XXXXXXX. us There Stephanie. is you, today. today and this The Thank at call ID number conference joining of beginning XXXXXXXXXXX, the

Operator

This you. conference concludes Thank today's call.

now You may disconnect.

ChromaDex (CDXC) 13 May 222022 Q1 Earnings call transcript