Earnings call transcript Q3 2022

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 Third Quarter 2022 Conference Call. My name is Joelle, 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 third quarter of 2022.

reviewed section both www.chromadex.com. of not the available have Relations Investor ChromaDex's you this are information, within If website at

would Agency, turn Tom to Shumaker. Please now call Mr. I to over go the ahead, Shumaker, Counsel IR conference Advisors for ChromaDex. LifeSci like

Tom Shumaker

Scientific results Chief Officer, Good you. of Executive will Andrew Vice Fried; Chief Financial XXXX Officer, Gerber; Dr. welcome With and us President Corporation's third to for Rob Regulatory Thank call. ChromaDex today Brianna Shao, Senior the and join quarter Q&A. afternoon, Affairs, investor and are ChromaDex's Interim who call

in Today's regulatory conference clinical to trial forward-looking the filings, the results including and ChromaDex's the and statements trials, timing of call related may include plans of development future research of and such statements, as timing investor business interest operations. results results, business TRU the opportunities, development of well financial and performance, expansion of as cash anticipated sale operating opportunities new markets, needs, of and NIAGEN prospects future

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

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

Finally, is will available section recorded webcast. The via www.chromadex.com. this our conference at be call website Investor being webcast of at Relations the

it's my now With to Officer, over the Executive call Chief that, to turn pleasure Rob Fried. our

Robert Fried

you Thanks, Tom. call for thank today. Good afternoon, our everyone, on and investor us joining

EBITDA, million quarter, of e-commerce The was grew the track bottom this achieved sales third positive which the delivered for cash of loss. improvement performance Over a is significant our or we we quarter. For direct-to-consumer remain And $X.X quarter adjusted EBITDA which a on with business, fourth EBITDA $XX.X XX% in solid line in came million deliver sales from year. of net X%. to period the the

investments profitable Our as dollars the media with of total on the measurable growth year-over-year most was percentage and decline we emphasis importantly, a net evident most efficient in absolute marketing in sales on as both focus return. expense digital in

improving quarter, $X.X Shaw, quarter fourth investors entered and Scientific more our with Also detail a Andrew net will of the in our and of CFO, Head Regulatory partnerships Affairs, the join will financial Following for a Q&A. balance moment. cover and in financials fees capital strong Brianna a in investor ChromaDex's We the Health Gerber, place sheet. we million us position solid of raised in Science. metrics, Nestle existing new with important strategic P&L

significant as declined while resources, optimizing one and content page vitamin our We've Growth and ranking website well in financial applying our dedicated business we're number campaign funnels driven our strategies BX nearly of a and e-commerce Amazon to in represents year-over-year. category. the on on people Amazon sales in brand website similar with nearly Amazon, focused own e-commerce XX% business, including as improve sales the now both a to consistent to impressive landing increase was XX% by on our results, conversion.

on more CPA, Against our to We or as our cost building as own decreased spend a Importantly, by media site we undergoing spend, to acquisition, of and approximately per and social XX% backdrop lower website our Amazon. Amazon both stronger revamp we're to project as are organic acquisition a traffic year-over-year reduced presence significantly overall drive our well website. engine. the this

fourth personality, is our airing. new supplement Shop focus who the any our of testing and the personal HX. during X show most This author first also with we spend. selling event TRU-NIAGEN to host television has an quarter for Sao XX benefits about allowed marketing and launch drive experience the One efficient We're the them to products with brand continue this X approaches us example speak successful a on any with told brand XX last segments. during been The to years. the the amazing on consumer as in was authenticity with its awareness The NIAGEN Danny team TRU is conviction count the Sao out minute launch

business Outside new by business, of is partnerships e-commerce improving. the are timing, our the impacted but

of spots, see Nestle H&H, Science. Looking Watsons, course, we several the including ahead to and Sinopharm fourth quarter, bright Health

demand awareness in to established to abate, beginning sales headwinds quarter align to by NIAGEN's on continue the the see a strengthen Kong. following the Hong brand ways we our to TRU quarter. our in to higher Watsons already seasonal We're and we in with expect COVID-XX in new Watsons, partnership pickup find third For shipments building fourth

start forward upon the about foundation this first formulation platforms beauty X Swiss innovation on roll We're last building its and where early of China in product since in Swiss their products in which Australia the and has has China, markets. NIAGEN NIAGEN results. quarter, expect XXXX. rolled portfolio, HMH the to it look developed launched largest out Australia, launch HMH with out additional with Swiss other brand activator is this they promising exclusive As mentioned exclusive for partnership into and optimistic to cross-border

of wanted agreement and purchase approximately period call, with manufacture Nestle. marketing with parent investment highlight October. science $X million and placement worldwide, but products as its a company, an to we NIAGEN us initial and exclusive which for not noted $X also The $X.X dietary an Science signing supply after a its world-class and collected the except by the And agreements, in provides has earlier company. only a to sell includes XXXX private deal agreement of year million fees, into and Health Nestle to using million of ChromaDex foods distribute commercial existing right the in NIAGEN calendar long-term nonexclusive the enables finally, departments brands we under ChromaDex necessary where market, supplement the work directly The or

The trying private brand are placement and worldwide to a a as by what is backed wellness we in of building strong healthy science. ChromaDex show from Nestle accomplish support for aging

We also made significant strategy advancements quarter. China in this our

TRU venture joint into a accelerate Health retailers trade now and in expo Sinopharm September. health known and of TRU distributors premiere China -- established NIAGEN platforms Asia's at Jinsha, fully we approval Nutrition Cross-border and over to in start for Hat Natural with largest Expo, began with of are XXX,XXX the NIAGEN food and to managing nutrition relaunch attendance. the with TRU Mainland NHNE, a NIAGEN Our sales approval. China registration International cross-border is off also as strong our began or Blue China, successful health

headway marketing distribution the TRU most and becoming market. in are in our excited of awarded assume continue NIAGEN the NAD real conference, the was popular to year premier the in at we NIAGEN boosting the of partners brand China, how make the knowing to brand TRU

still untapped. Our global addressable market is largely

the industry. to committed in to for scientific ingredient quality, by is its research that are supplement use to extensive data the enormous our and supported compelling promise NIAGEN, which We delivering rare broad cases, the potential dietary commitment on safety of speaks

I'll on recent NR. studies briefly X highlight

investigating a beneficial that we future respiratory almost First, ejection show tolerability clinical failure pave clinical was tolerated, demonstrating in call whole The well patients study step Stage research. a white will high-dose for reduced reduced of NR Xth levels, There's humans. research also of ChromaDex NAD the is external to study of mitochondrial marks function that crucial that safety and blood as decreasing demonstrated of on and the I it, safe milestone study results cell inflammation, the with way Results or fraction. inflammatory and the the this doubling expression heart program, published of markers. increasing we major NR consistency NR announced SERP, study effect the the remarkable blood in the

compared that mice. had preclinical rapid including these other accelerated recent effect in this study NR DNA metformin to agent. the in repair mouse mice model, greatest inability extending resveratrol in the lifespan DNA NR In and extended longevity popular neurodegeneration in faulted lifespan researchers on and a Interestingly, that found results Second, repair. compounds, demonstrated to

and ChromaDex We very strength our We're maintains the strong us confident District the on addition, NR we patent and NAD from patents Dartmouth leader reinforcing that In Delaware strong the note, exclusively scheduled believe On position is as December a the our industry. in licensed scientific the portfolio, appeal for X. other come. for precursors NR for of overturned provide in protection appeal, our and but arguments years of growing the regardless many and owned for portfolio decision licensed NAD to very outcome. Court's to to have be

results, quarter's Brianna? over then now the and to remarks. turn closing Q&A to discuss the on to to I'd like and call Brianna

Brianna Gerber

Thank have you, today. to It's Rob. and investors, employees partners a joined who speak us to our pleasure

on immediate leaner organization all our mentioned and the as third was As quarter. emphasis in to look objective more an of areas a last quarter, interim becoming CFO focused at cost beginning with structure my

in $X.X an accomplished to proud of the we million. reporting say step adjusted objective EBITDA loss our first only I'm

of cash quarter. approaching year-over-year EBITDA achieve or reflected remain this underlying versus Our the look to partnership This better milestone $X.X is Furthermore, track was to drive team quarter. and to million breakeven an their I'm the business in in differently $X.X ChromaDex. in fourth achieved grateful order operational profitability breakeven, our improvement million we at leadership quarter's them and to ongoing flow on entire with efficiency. their and commitment teams for at last adjusted

into is to through more still a realize work leading and achieve the forward environment We profitability, look company heading do which in remains growth to I XXXX. transition. to sustainable focus current this the economic there critical

our strengthening million further third balance also fees the sheet. net raised $X.X quarter, We following of

gives of the quarter to Our profitability a third down net overall solid X% with sales grow financials. significant and improving let's gross that, cash business coupled us a of expenses. foundation total ChromaDex With operating strong a million, going XX.X%, reported in sound margin forward. reduction $XX.X position, the turn to year-over-year,

significant year-over-year e-commerce digital reduction grew in our X% Importantly, despite spend. business a media

challenging is this, remain the COV-XX due The were investment this is conversion, for but abating our continued down results financial pivoted return distribution primarily in Encouragingly, our spend term. expensive Consistent our company in markets. partners. a on headwinds highest paused to will and other our partner, and on strong slightly, to approach largest television short with has Overall marketing strategic we are a headwinds for these on channels sales campaign, affected Watson, more marketing evident short-term in which much quarter. which the with focus campaigns

P&L to details. Moving the

X% other other have said, X% total been the by down year-over-year, were the sales NIAGEN COVID-XX This driven with in ramp. decrease and I new slower flat net As in to third of but remain to sales. partnerships year-over-year XX% were a XXXX largely e-commerce. of impacted by Watson third decline and growth was combined a BXB roughly XXXX, offset sales in by X% quarter compared in Watsons partners TRU quarter

chain team us Gross third a to puts including was business environment, our primarily decline higher compared approximately by offset inflationary to XXXX. XX.X% gross decreased on pressures, wages supply quarter of other increases count, to driven the gross supply chain commend in mix. head margin inflationary basis XX% by in for The points in achieve our track consistent by strong margins full a year We partially challenging XXX and of achieving outlook. margin which XX.X%

most approximately more in customer We those XXXX. fourth of the in quarter, an percentage in within to those become in likely CPA. resulted to channels, decreased even marketing XX% acquisition targeting XX.X% costs on and a convert. the consumers channels net the we which decline compared and are investments were for efficient testing sophisticated Beginning in to to most third quarter expense XX.X% focus as of Selling sales tools

$X.X million general reported, lower legal to compensation. as by lower related was administrative expenses, $X As primarily lower including due of well million, share-based headcount and and expense expense as executive

million. legal related under year While XXXX appeal will the in expense we continue $X expect full quarter, to expense incur the to Delaware be to fourth we

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

legal business. the $X.X net other Finally, loss $X.X EBITDA recognized related prior of underlying out including our compared credit, adjusted EBITDA, tax to retention improved of in to of better expense, employee the loss quarter was of our a adjusted a the million million to of is income picture $X.X We provide million this year. reported a income, but which

Moving and to the balance sheet flow. cash

line credit. our the million ended Our not quarter strong. with balance sheet cash in did and on $XX.X borrow remains of We

offering a in separate Nestle net end, transactions. Following the existing million Science of Health $X.X strategic and with costs, investors investor, we quarter new raised X

loss, of versus in In XXXX. operations quarter year-over-year third used million use was in million driven a of $X.X cash quarter XXXX, the the net by of $X.X a our The primarily due well was to third cash difference of customers the of impacting receivables net payments timing included our from slightly as payable. working higher vendors by capital to timing offset higher accounts investments. trade lower These as payments

to As down all of quarter's from outlook unchanged to $X outlook, previous our million. $X now million our relates million, key $X down million remains from to full be guidance of to metrics $X last with year exception G&A improvement we the which an expense, expect it XXXX

slide mentioned as fourth release, press on are our flow P&L the on the better we track achieve to in quarter. the in We breakeven cash provided presentation. upfront, And details or metrics along earnings with

breakeven. progress In our summary, the towards we've months flow goal last X sustainable expect cash of in make meaningful and to strides to made continue

engaging scientific share frequently scientific team. improving Beyond and affairs with insights we educational are consumer to discipline, our more including partners operational our our with research, important sessions

important NIAGEN this Blue strategic market in company, world's In pursue our addition, entered in made a wellness expanded Sinopharm relaunched signed China, we Science. of one long-term leading supply Nestle with with registration the to health agreement TRU and progress. joint venture Health and We Hat into

team I as humbled our remain grateful to and for ChromaDex as the well support. entire their partners

Operator, we now to are questions. ready take

Operator

Your first Ladenburg comes with from Instructions] [Operator question Jeff Cohen Thalmann.

Jeff Cohen

is that tax retention employee That the credit. federal. there to future? any in this Brian, follow-on you, was And for Firstly expected

Brianna Gerber

we No SG&A. that at operations time, booked follow-on. we and it a payroll that Other way one income we in because the within offset exclude quarter, our to it wanted believe from underlying looking rather tax than

is yet So there's XXXX. expected. cash be no follow-on The collected would in sometime but not expected

Jeff Cohen

it. Got

And as and the decrease one out in there, of that call muted muted, was out television channels bolstered as the talk were the channels. spend I were channels about marketing you of them maybe quarter us the for you Okay. far some that that the for of imagine when some could

Robert Fried

less across brand bit actually, it's television. a on performance We also focus we marketing would top little funnel marketing and spent focus that conversions on the the and of -- marketing, less much more We of television. philosophical awareness. towards towards correct. a a include on But less switch board. spent spent more That's and less There's

So we across board. actually less spent the

Jeff Cohen

fourth added Okay. quarter? in The Perfect. come that through million Was I Rob, to bit. the order, be $X purchase about in then, quarter? October? this will a Or talk And did that that want little third

Robert Fried

Fourth quarter.

Jeff Cohen

Fourth quarter.

may bars, which thinking talk market, thinking Okay, or powders, get far as be little got what et yogurts, cetera? trying multi-ingredient a it. to maybe And of about they're then the better as snacks, more a understanding you're bit maybe us I'm to Nestle, what

Robert Fried

we're just thinking point, this dietary supplements. At

about the about we discussions with We're hero we NIAGEN that even something to great in take were interested going discussion hopeful advantage steal haven't of very a largest the out And We we Boost. of to in we've II, in included with But world supplement consider supply mentioned expand as [ph]. them some a the problem, be make try around ingredient it including making and that to was science-based, this companies or our end deal Nestle we there solved for the is liquid Nestle. to they're know, about the scientific in dietary that with the top excited ingredient it's companies infringe Boost. in enough they're to We sure sopping -- always know, dietary or there not supplying in this it of it stability to you very about. that making long know dietary NIAGEN are it companies. ingredient supplements. to you And to at we're still for be awareness are did science-based As Nestle patents world. agree whom that on date. or careful are in the Nestle past to the least from help us us They're We patents. this and our company at do And us

Jeff Cohen

Super.

Congratulations last on. fourth on certainly, breaking It over one cash And Okay. and question. sounds like point for the quarter. EBITDA through

Operator

Your with McGowan next ROTH Sean comes Capital. from question

Sean McGowan

questions. who them, of not wants them sure out. I'm I'll to couple A take fire but

or bit? function about website, think a concern that just on decline Amazon's in guys? pullback can the sales for growth you source of the you And marketing? So little of that that's is talk the a Or you do of a

Robert Fried

growth cannibalization a think a -- we It's function not there will and concern. more a do and attention. it come bit soon. think it's simply believe just reduced and love seeing believe Amazon, giving We it's of that little we spend. of not it's we'll We a it source don't of I from that start do function around,

Sean McGowan

say building? more on performance marketing the things to this referred Okay. rather and than when And kind one folks conversion brand you you of is of

Robert Fried

It is.

Sean McGowan

step taking Nestle, it for sales the little were on thought basis in the kind quarterly just a than a back, guidance same. the necessarily, be -- of you great. I On don't guide would it I bit lower know but the the was still quarter but year is a Okay,

thought would it whole been you of really the order your get year? would to outlook? in overall the hasn't you as you Nestle of and plan change it in of characterize sales what is kind So part kind incremental a earlier the Or

Robert Fried

the largely is for outlook the Our year. same

-- some or year is Nestle in BXB our are retaining either getting the of full there we're accretive, that but same that anticipated lower. some outlook, including Nestle. So we are things partners. Overall, deferred

Sean McGowan

last know numbers, on the backwards. there's or eye? I if to be thing, gross just significant And pretty tight Okay. seem on I'm something there the center there going there Is take going to but margin wondering -- Ingredients anything a step

Brianna Gerber

That's any but largely unusual. good excuse still us. get Nothing a They consumers. of -- margin it's for certain our lower a business function get to may customers -- price, a scale. pricing gross me, very

historically, is It look forecast. other numbers. relative gets The from to if their recognized ingredient necessary time, in time booked overall gets to purchases quarter revenue the thing, recognition you those in in that there's sales

those it causes in So lumpiness some numbers.

Sean McGowan

Okay.

gets gross it low unusually margin? unusually higher recognized, that when So is

Brianna Gerber

margins accretive when look gross recognized It's you Thanks, the rather in to at Sean. there. the deferred getting

Robert Fried

No.

Operator

comes with B. Sinderen Van next from Your Jeff question Riley.

Jeff Van Sinderen

second. or Just there on elements for Walmart to some there transitional touch some was I there. wanted were transitional know a

at what Just there? Walmart and outlook the you're seeing kind wondering of

Robert Fried

Walmart X:X. we sales the the Well, from per high as back pretty the reduced you store X,XXX on on the very we've spend. ChromaDex. from know, XXXX, Walmart we've and is SKUs Notwithstanding of reduced know, of are to TV as number that, and in pulled you But number stores strong

kick more start to to that XXXX, driving We expect going in TV Walmart. that and traffic again in we're

the NIAGEN. next very expectation remains up we'll that up. year will But our again, bullish year, the and So pick TRU sales start on sometime Walmart is during

Jeff Van Sinderen

to better realize next -- along they're there been if to Okay. floor those you're results sets potentially start see And mean, year lines, more if it they then bullish I such. back okay... there I discussion dealing of on with stores, and it's any is it, -- has But adding

Robert Fried

Yes.

Jeff Van Sinderen

wanted I a over if to for then And moment, Okay. Nestle could. shift to we

overall the QX. realize look there's you on what But give sort any us -- year, the Nestle $X be any you Just like expectations going what can for give you about that from for us from color can next might of I to million sales? have progression Nestle of sort color quarterly in contribution

Robert Fried

what know plans they We know don't this U.S. that in are distribute made projections the aggressive we the have especially $X but purchase, they this they until marketing some product. that globally, globally. not know purchasing We their yet. know we pretty launch to But million just and don't

Jeff Van Sinderen

a they're Okay. -- launch? in for have And mind launching they date do

Robert Fried

the launched I few next expect it be months. to within

Jeff Van Sinderen

Okay.

Robert Fried

launched again, And going Nestle brands. several across it's to be

Jeff Van Sinderen

looking to and Okay, factoring for feasible overall you year rate of as Do single great. us And color idea? any range, can early, be revenue but it's then at are it's sort what digit, realize for of digit, you there, that just today kind everything? -- high I can see mid-single you everything Anything just kind in some think next a of the double give you you're maybe growth digit? can you company contemplating

Robert Fried

a are going about. us we and in of now next position on right year. lot developing yet are But certainly that give excited to you this more a we're that than I forecast. year things not grow to are expect There

Brianna Gerber

margin our next year. On

outlook you that give expect to next to March. We

Jeff Van Sinderen

in best luck rest the of Got quarter. it. And of the

Operator

Pinheiro Your Mitch from next Sturdivant Company. with comes question &

Mitchell Pinheiro

theme on as curious, I'm in for the deal? a second. an why ChromaDex didn't part early message Staying of stake take a ingredient

Robert Fried

great of diligence Nestle has a done about ChromaDex. deal

brand the NIAGEN they property company. intellectual science TRU on our the the our of like On quality on --

Mitchell Pinheiro

-- are Okay. -- And purchase or a are -- there a is I $XXX amount. here's they rounding didn't this modest thought but kind something billion where that that stake, just anything to or of them there our -- any permitted permitted to not than there I -- it any company. mean more but is and you was consumer are are certain -- lockup take I was a so there this they small

Robert Fried

lockup. X-year I believe a there's

Mitchell Pinheiro

to how much of there buy? they any is limit No. Okay. And -- ChromaDex. can they is could

Robert Fried

not. is there No,

Mitchell Pinheiro

TRU -- their part of be as And at is or Nestle is of using Nestle branded all this, Okay. NIAGEN brand? will then be

Robert Fried

ingredient, NIAGEN be will branded will an but brand. It it be as their consumer

Mitchell Pinheiro

Okay.

the Moving quarter? in Is size, meaningful? I cross-border sense on, -- mean, to China it some strong it $X cross-border I of strong don't I really start. start sales mean as works. how a even so far off get been does just have a how -- -- to how the know million as

If about you just little talk a bit. could that

Robert Fried

is Sino very methodical.

As talking the marketing their are long we've for you cadence been time they to impressive took it to deal. But them work. long and know, to the -- close us. is very that have to plans know a a their enormous that And we've addressable plans We seen way they a market marketing do there.

it's when know don't to going we kick in. So really

expectations quarter. don't a the be know million just numbers than I more as will eventually significantly when. Our $X

Mitchell Pinheiro

sort things can we Sinopharm United can't there Are in States. and China that have have of things that claim the in

Robert Fried

we making No. has false CFDA make a never down cracking and a selling other outside what's are a them, the lot products of but and from allowed. of claims I stop been who people would on do claim

Mitchell Pinheiro

And then business back getting e-commerce here. Okay. your to just

-- or sort are which your remain own neutral you as of correct? Amazon, Amazon sales generated, channel, site So generally to or that you indifferent

Robert Fried

we be to site. on think No, our prefer I

Amazon. fairly not much fee, data XX%. customer pay have of And by shared You to Amazon significant is of the there's

Mitchell Pinheiro

Okay.

that Amazon Can with And why okay so explain so own being up then and the you're you're site sounded -- okay what -- talk with then? you like Or being quarter, but down. were it your okay to what rates... the just you in

Robert Fried

we're with No, not interrupt. that. Sorry okay

our the going the site managing website. optimized every They there. the Amazon that Amazon very we have start very managed It's And Amazon proactive we've category marketing with expect grow to continued and We like see seeing our way and within to that expectation ChromaDex. like it, And our like growth obviously, themselves our within sales grow, it way just put the and we've relationship we with and and the own But on strong in is larger we're improving. to we've our have we're -- it's Amazon we'd that they spend website with content way will. been the categories.

Mitchell Pinheiro

new then for and you'd testing correct? own as the as mentioned That's far fourth new for tools Okay. tools this, website, you're And your to related quarter.

Brianna Gerber

you think cohorts to referring customer to test and I tools the our targeting were on own Mitch, website.

testing We and about own we're that more those. the and our That's doing are fourth quarter. in tools, website targeting

Mitchell Pinheiro

Okay.

for me. it that's Okay,

Operator

next Nagel comes Oppenheimer. question from with Your Brian

Brian Nagel

reiterated is so the just in with in near-term first uptick of here fourth that seems through that trajectory to being in have because the have to quarter, you sales regard in if the at for of to you your My question press release, a significant sales sorry focus look kind have that QX you pretty guidance growth it order you hit guidance. QX,

that that are what's the basically that the the growth on QX so the the in business, fourth is are I in business into guess get new as that, the help the underlying just sales of to So have we're the the assumption maybe Are us growth quarter I of from going side there question trajectory of QX the with for other building of blocks. there coming pieces certain guidance.

Robert Fried

segments. the large BXB orders segment. we and of other some like timing ingredient of really X have you know, segment partners. particular, there's as control direct-to-consumer And of really some There's Watsons the we remember, So the these in the BXB can't but

might in quarter going in know we quarter to or in, orders coming BXB are that in have is are on confident answer to are your coming do looks be that in, question the fact answer has come that big. fourth lot the coming the side. of in third certain that yes. the quarter And fourth pretty like the is a is with the to it The So

do your at growth getting of how in question, right? Am that part do with had second look The I think, general. we I to

Brian Nagel

Rob, Well, I was looking the focused at I on guess, just other QX.

coming that orders have bolstering you are in QX. in these So BXB growth

versus were new expected mean improve growth if we what that if that, will. if is So how to QX guess, business, normal here is you I a back -- to core we to you I the in just QX? QX, get that excluding also saw business, will,

Robert Fried

Yes. have starting seeing by they Remember, seeing to world And we're Colin, we're partners lighten retail-based. up. who impacted impact that COVID change also and were one is the around -- and we the a is thing are there.

So seeing issues, a pretty we're there's board seeing -- good. have we of But we growth yes, partners lot and timing looks the are at this that point. across

partners But Some of up, those them yes, some down. general, the good. looks of are were it of in

Brianna Gerber

And the Brian. more quarter. is that, just with aligned we've call on Watsons said one fourth

plus in number the bigger a that's then fourth we quarter. Nestle And So have now.

callouts. So those are X

Brian Nagel

have prior second a Got to questions. question of one I follow-up is it. the Then the

ask would you expect you there Someone And you in growth just talked a -- than haven't breakeven. really here again, about was I guess focus is yet the beyond question you haven't out not all way on you're But 'XX. 'XX asked that. be and there lot better of I congratulations growth guidance I think in put to about QX the expense you said before the Rob,

be [ph]? to keeping As you accelerate Are in Or -- that growth look have to you expenses the exactly think trajectory, to a model? expenses at that, going should to be lean? our growth able about you reinvestment have how phase will in there immediate-term whilst we growth the longer-term will

Robert Fried

Amazon. opportunity, basic to in to has potentially growth we optimization we see is H&H, opportunity. No. also some profitable think and is additional partners think, get retailers some maybe we're is growth. Nestle new remember, good many be and We like at and fundamental we in At of in expand the as it a our is television be -- a in awareness that profitability into stay one to sometime and in reinvest relationship is and there very will XXXX. expansion expect Walmart core growth very, already Sino point, looking opportunities we But third growth a is opportunities. but in we're we And think, showing we're a differential profitability, still our advantage markets, R&D. growth, website other strong growth one, we plan And ChromaDex that will

other we and investing precursors in been technologies. that NAD many molecules are So have

soon. have will an we so that innovation And expectation through growth fairly see you

Brian Nagel

products new will... or you're saying follow-on was in NIAGEN products that the addition that to X been So one talking new about

Robert Fried

new products. be it new be could It Yes, new be could channels. technologies. could It

Brian Nagel

you. Appreciate it. Thank

Operator

Sean Your next McGowan question with Capital. ROTH comes from

Sean McGowan

is Just be from in the -- going Ingredients to going revenue the a housekeeping kind of of forward booked all Nestle segment?

Brianna Gerber

still NIAGEN. to expectation accounting, is milestone will it event, and since this that payments would ingredient but quarter recognized those at through be fourth in it over going sales my be point time agreement similar and deferred a revenue And again, there. the as So yes, booked we're previous was the

Sean McGowan

with recognized segment expected margin be revenue as Okay. from the And you line would ingredient characterize or the line it company overall that gross in the gets in average? with to

Brianna Gerber

still think margin. you ingredient would a to when the it, it the lower still of healthy gross ingredients about which basis. overall, obviously well. NIAGEN be payments, say, there's there's tiered And as royalties, I'd piece blend it, then purchase price, on bit and putting call but a then is biggest than lower, milestones a blended milestone

Sean McGowan

very much. Thank you

Operator

[indiscernible]. from next a ask question Again, comes would like if question you to

Unidentified Analyst

questions. of group A

of winning of how brand is award it Chinese of First the all, most a show? the health big at popular Year deal

Robert Fried

entrants Well, there were that. into many

very deal. that So how it's know though. don't a the in numbers, We big translates into terms of money,

Unidentified Analyst

indication, Sino; has historically that what given much with and award they have winning any happened. do familiarity

Robert Fried

award won ever the before. they've think don't I

I there's this attention The that lot great they're Sino. won of that at they've a the putting into and They're thing is the time award. of think enthusiasm methodical. had a resources only that product very first they this. a time is and Look, deal

owns H&H, a partner, high And to So which China. have is cross-border selling we bit cross-bordering brands, a have is into China. we selling expectations. also, Swiss Watsons also Remember, which

those we expect when. significant; others, just yet we potentially don't to very to be cross-border So China some and know sales three between

Unidentified Analyst

And with H&H Rob. stick be that from will show, really popular lack that somehow helpful, others that to my with able due of familiarity Sino? and does brand specifically That's award? Or to benefit most

Robert Fried

XXX,XXX selling Watson's is NIAGEN also because that there but people Watsons TRU selling ingredient HNH brand, well-attended It's not convention. who were a per Well, NIAGEN went brand to benefits conventions. NIAGEN consumer very the se. is brand, the But TRU

there. is So TRU NIAGEN awareness clearly, of growing

Unidentified Analyst

then a off start? strong help recognize sales over. that that have And you can had us the has cross-border you with were Sino that share metrics What helpful. start that us you That's referenced do strong taken to once

Brianna Gerber

Bill, Yes, sure. Brandon. it's

So first, quick just a point.

beginning in You'll quarter, will no e-commerce, next in revenue from longer other BXB. see be Sinopharm the it Trinidad

shift. note So is on a that just a quick

Rob excited some a matter that Sinopharm, and the was to we timing from the -- be it's over And posted that big we're platform, in we've a to large But cross-border business had as show, orders forward. of from going which they've when. about Sinopharm. So have again, step, time, taken predict expect over said, and orders hard just

Unidentified Analyst

acquisition more did you if around we quarter. few did that would XX%, correctly success? provide hear you then XX% we correctly, customer And a cost And that by hear that this reduced details

Brianna Gerber

Sure.

but yes, Amazon also Shopify. did as blended So basis, is on on as you achieved well XX% a

in some to spend the we're know, also we optimize touched improvement want that. social to we search. on I there to Amazon, So do efficiencies and or better. looking on optimize don't United like website and you are how there that saw continue as if Rod anything Rob, there? And add

Robert Fried

near more like and It's in expect what presence. more not our the of marketing a of future. website brand our on that the said I No, top Amazon focus I funnel optimization also versus of performance of continued see presence to but before. it's only marketing

Unidentified Analyst

both Thank you the for time.

Operator

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

Tom Shumaker

the XXXX-XXX-XXXX at you, Pacific Thank and will The Rob. be is ID replay XXXXXXX. is replay [ph] a Thank today. Joelle. this number you, P.M. X:XX call There of Time beginning conference

for for you, everyone, joining and of today Thank support your continued us ChromaDex.

Robert Fried

everyone. you, Thank

Operator

call. conference today's concludes This

may disconnect. now You

ChromaDex (CDXC) 2 Nov 222022 Q3 Earnings call transcript