Earnings call transcript Q1 2023

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Operator

Ladies and gentlemen, thank you for standing by and welcome to ChromaDex Corporation's First Quarter 2023 Earnings Conference Call. My name is Brianna and I'll be the conference operator today. [Operator Instructions] 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 2023.

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

to of conference Media like Kendall over now Director Knysch, Relations. would turn call the to I Please go ahead, Ms. Knysch.

Kendall Knysch

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

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

statements Forward-looking and statements on are date matters relate these to to call of not to the yet conference as forward-looking assurance statements actual this intended any occurred, estimates represent that and inherently only have uncertainties. give Because risks results. future not the are company's subject to

adverse forward-looking include the reports cause Many differ These from effect or anticipated actual filed activities Form on on those factors statements. in most and conditions results the ChromaDex's pandemic financial the materially of operations, risk inflationary contained in results economic quarterly flows, to activities factors could recently with cash COVID-XX ChromaDex's and XX-Q well the SEC, of including our condition, results as business. as

forward-looking date to the obligation in that or any the statements update conform statements, of after to results, conference note expectations. assumes changes this no call its actual to Please company with the forward-looking

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

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

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

Rob Fried

Thanks, pleased achieved for we we a to you thank flows million Kendall. start We year-over-year. XX% while breakeven. XXXX. in us adjusted cash EBITDA call. that I'm investor increase had revenue, generated positive Good afternoon, on a to everyone, $XX.X today's strong and report joining operating remaining And

achieved growth these cash We achievements greater debt. in confident reflect for ended past fiscal quarter in commitment business. opportunities having We're maintaining million and consecutive to sustainable results the These quarters. X $XX for with in our record-breaking discipline and no our growth, future driving

our contribution revenue Our on our largest the source of e-commerce year-over-year, business remains last revenue. and from with XX% up the that event we net brand-building most large consistent mentioned call. was E-commerce

and across U.S. On a we of on brand placement Amazon had campaign homepage March XX, to Amazon refers the the that homepage as its large-scale awareness prominent takeover.

of single new-to-brand achieved significant we impressions event, in sales On over to a our highest the purchases. day the increase brand million day Amazon with according and in XXX Amazon on a

as And benefit our this by We was brand e-commerce see upfront efficiencies our future into quarter expect some continued We the large through Tru although forward should investment. in who reorders impacted quarter. moving second result, a retargeting Niagen searched XXXX, consumers we quarters. in also first the to advertising from

personnel and first encouraged growth website, indicators as were We own quarter partners more with As in in changes well as agency first made observed our improvement external we internal to new relates it customers. stronger some in the quarter in the to by our leading recently.

and social strategy impact some to Meanwhile, spend significantly changes our We as believe we net in pages. of time in search for well any campaigns this reflected have and on with transition, as landing takes bodes be But revenues. website reduced we quarters. for the revamp future it

very quarter, strengthen from Niagen ingredient delivered a year-over-year, partnerships This some XXX% partnerships. H&H. longtime including notably developed and partner partners recent like as We sales increase in continued contributions we Extension well solid as more to existing new Life

continue of be in by other and launches to Australia, product innovation featuring Niagen Swiss regions as their H&H China, impressed I portfolio. part

Extension's Life into model specialty a retail growth. for Additionally, distribution expansion is recent promising

And continue finally, of to products to we with Nestle development new with work support their Niagen.

first year. the later We this expect launch of these to

Sinopharm. our business partner, our to management JD.com platforms Niagen building as Tru multiple cross-border local cross-border Niagen. e-commerce cross-border the we is transition as wholesale borders, has within as China, retail year. In anticipate channels, its late reopens business to shifted level to a across Tru Kong for a benefit their actively Sinopharm's well Encouragingly, at of the Watsons' following our Tmall distribution China last China This business from Sinopharm, Hong to revenues and both

also quarter. strong in very Watsons product. our had of working $X.X due in Watsons was launched and closely Tru We with the Macau for will agreement our of which brand in them that Beauty campaigns of We the this excited Singapore foundation helping so them Tru to which their a Niagen continue to even Tru more on a strong social Niagen soon portion combining and sales and been consumers build marketing core second influencers they benefits with Niagen and have Hong Hong quarter with the established includes to quarter in to be lighter to TV We've messaging with the to understand first extended at million, shipments, Kong. on and Immune Niagen those co-investments, Kong markets. which the loyal We're refine timing are Tru be

Overall, as supplement FDA's enables as growth, in light in these to products voluntarily Amazon, are unlock brand we withdrawn particularly the the us position no longer ban of Several selling NMN. Niagen's significantly trusted and have retailers, that marketplace of sale U.S. the quality greater in NMN premium the including highest on Tru believe a

of down his expressed endotoxins NMN primary had the the presence has some no of into in about body. prior He Even also on before the in that the The Sinclair, virtually companies or has NR by a NMN. NMN being concern Amazon, used our breaks doing ban, showed products are promoter products. David mislabeled the And acknowledged FDA's still XX% own of promoting were NMN that NMN NMN to study disservice. general research

contrast, than Niagen, Niagen levels. in Tru available today who ingredient In is the the elevate consumers has to is and for tested, more data, NAD notifications, precursor want third-party legally is regulatory proper safety efficient extensive a NMN,

customers anticipation We time. more future many so purchased Niagen to did still Accordingly, them And NMN take transitioning they believe of that supply. demand. have may a who in

But market, understand early to on building through estimate And still this too shift we clearly term the elevating the NAD of our supplementation. the not revenue importance our already the capture longer are it is business this While we the impact see into potential to positive see early year. indications of this consumers such, we outlook. business it in as since

last to Just decision our Niagen. ingredient, clear, I as to proprietary FDA to NR, be does nicotinamide quarter, patented not said the riboside, apply ban NMN

in ahead, will opportunities. is enable building momentum strongest invest position to And will that new our bottom Looking to us top in financial commercial on and date. ChromaDex which the innovation line, unlock we are

that pipeline. And have strides XXXX. in our opportunities lie increasingly I'm ahead the great growth made We progress in innovation in confident and

we continue strong delivering quality based the in scientific on everyone stage I are highest to Niagen building the set NAD the a the we for growth, foundation while ChromaDex's marketplace. want As brand that product to remind

are the of or External Program anniversary reflect ChromaDex's preparing to We currently on Research XXth CERP.

in with CERP has to back was studies of our from today new far these clinical past XX science to majority it's advanced the the inspiring Looking XXXX. in collaborations years, its preclinical for time studies. And are all see how infancy were

to remarkable health areas and health consistency research such muscle shown Niagen from translate clinical with Importantly, studies as has brain, in that benefits health. preclinical from the models heart,

of orphan health, disease, been health and study notable heart nearly also of Some XX clinical Parkinson's including heart XX published studies disease have hypertension. preclinical There on studies and focus on include failure Alzheimer's over ongoing a the ataxia. and the clinical with studies, disease, conditions with brain

And XX XX ongoing over been as as also have published preclinical with X X studies and studies. with health preclinical along muscle well clinical studies There clinical ongoing clinical clinical and studies. published

the We're looking forward to next years. XX

observed and vitro X preclinical clinical to in extent studies. help and vivo and X whether efforts X, from are translatable Phase what primary to in Our validate are studies to benefits

believe as well into We Niagen emerging health we including through our neuropathy, as and for studies. clinical CERP, will infant translation of property development see findings preclinical early age-related vision intellectual health, olfactory other as and such on sensory, decline, reproductive hearing, the areas

of R&D CDXC that well are the as the understand a exploring unlock to and bioscience scientific Company. our And company research as is extensive IP We product opportunities consumer we value assets. both

and we to that our IP cited critical were to least combination next on which, patents our XX mentioned Grace, series In new existing continue with addition, protect we last we at last from obtain in expect the for to patents years. of IP W.R. a call, able NR as year,

seek as With have we secured, these continue innovations well on as years. innovations worked new for patents we to

commercialization, close beyond including portfolio our expanding to are increasingly We supplements.

also While in a have which beyond business portfolio. immediate property deep untapped not potential an driver, NR, precursors are we by NAD intellectual protected

knowledge space. these may there and process therapeutic significant chemistry synthetic which has in the NAD and leads unique behind of the pharmaceutical believe, ChromaDex us value also to possesses prophylactic precursors,

to the most way improve through one can and NAD of elevating diet people Beyond levels exercise, supplementation age. is do things the they important

passionate is Niagen about to the consumers ChromaDex bringing world. team Tru Our at around

the best trustworthy. believe brand build is trusted to way We be to a

this true we loyal who have on be as As world-class journey a chosen of a believers to with us. following partners have well result, as

product distribution channels expect new and offerings to new exciting We soon. announce

business the patience, more believe to Some unwavering of to quality takes but of enduring in trust, this these a and model. is are we years because commitment making which

then more to sharing Q&A in now the greater I this look Brianna? We to call closing to discuss like updates. to to turn detail, over on Brianna forward future and remarks. And quarter's and in would results

Brianna Gerber

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

year-over-year, ChromaDex delivered maintaining overall the line of with up million total a in and sales of operational strong margin in net results million, $XX.X reduction quarter objective XX% discipline. gross of expenses year-over-year, $X.X XX.X%, in with our of operating first

In exceeded loss an year to of improvement XXXX. following reporting outlook, $X.X the or I the expecting am year-over-year. of we of the XXXX quarter proud last EBITDA close EBITDA in full $XX,XXX breakeven adjusted million shared first an first better quarter, that our we period, with expectations only announce be to adjusted to

operations of cash e-commerce including was approximately Watsons The $XX takeover year-over-year. Furthermore, improvement of and we our a that continued $X.X delivered quarter result as as in homepage increased including this sales business, million of Niagen the Amazon partners, strong performance ingredient million, key Rob mentioned event growth well notable positive flows from to a partners.

performance. line coupled have Furthermore, we on collaborative disciplined achievements initiatives across without execute efficiency would our diligently growth balanced possible operational team organization, bottom not which to of in with the strategic expense our we contributed management. efforts entire solid These the initiatives, ChromaDex continue as to investments been

is XXXX are in focus quarter. and to position primary very execution for the we Our the encouraged by And sustainable business this profitability. growth

that, in financials let's quarter more to the first detail. With turn

said, Tru and Niagen, growth driven I sales. XXXX, quarter As other of XX% first year-over-year and to sales combined quarter up sales XX% total as with by in first XX% were in Watsons e-commerce XXXX in of net an growth in the XX% the BXB compared increase

in takeover partially Watson this homepage from growth growth e-commerce quarter other $X.X our event in connected that to business due modest is our year-over-year, sales with partially The were the occurred million partners. up Amazon mid-March. to timing

the our brand day Amazon the the shoppers observed event. visitors channel, attributed event, in and On spikes to generated can unique on over million be which impressions by the both of XXX we

analytics retargeting which visitors, addition, related access to we with follow these to chance initiatives. received sales up allowed unique to and additional second funnel data In offers us and

sequentially, are The Separately, of search. the spots majority trend to inflect, yet improvement. sales own up leading including indicators but these has are website our we on bright with signs of encouraging organic seeing

partnerships launches quarter in million new the grew and began as driver they year-over-year. the new important their This first and or accelerate Another was by into Niagen of was fueled expanded results existing which a recent of XXX% $X.X strengthening our development markets. ingredient sales, to partnership

we our observe recurring stable forward, about focus than successful Going business new partnerships and ramp. rather discussions less business until will a on predictable

As look partnerships to sharing updates. about new more future forward such, our and we

as lower to in our to primarily XXX e-commerce driven by XXXX. points the mix by decreased compared our compared net current only margins The prior of first was changes accounted XX.X% quarter. for total of Gross XX% XX% quarter gross to year margin in sales the XX% in the sales in business quarter basis

through our inflationary working continued to we modest savings initiatives. experienced offset cost pressures, we addition, are In which

Selling the to quarter to XXXX. and decreased percentage marketing expense of net first in of as compared sales a XX.X% XX.X%

in in focus and decreases which continued are XX% Amazon. quarter, accounts our by marketing decreased of calculation most quarter. the both per channels our beyond year-over-year, or efficient our customer distribution over own from of March. first and result yield this CPA the campaigns for Benefits cost CPA on the acquisition results a As with The takeover just homepage Amazon full expected website investment in to the

sequentially our own as by addition, XX% customers for efficiently. focused on CPA improved our In we acquiring website new

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

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

the to balance sheet cash Moving flow. and

of Our $XX.X of quarter The related year-over-year $X.X in cash driven our a a use cash first with not the million was first $X.X was of quarter balance $X.X in our first In versus the We first outflow which million $X.X line of borrow of of cash inflow difference ended credit. versus XXXX improvements million quarter cash a million did cash. net the flow in XXXX, our in loss an the and $X.X primarily net management impact of paired the million operations XXXX. million, on was with to inventory, in strong. sheet by XXXX, by quarter of quarter provided better positive to $X.X remains cash of million

of partners, higher more through to and management, stronger flow ingredient newer particularly Tru volume production efficient to cash of channels of was Niagen improved sell-through related result inventory e-commerce Our a our Niagen to key and regard in sales partnerships.

XXXX year with press have to presentation. full provided outlook, in it key relates our release, the earnings metrics along on we the As P&L slide our details

key now metrics our And exception outlook. remain million to to unchanged down we raised outlook of $X expense, from $X the with be end of $X quarter's million to all previous versus million $X million. the we've last G&A of expect Overall, revenue down which guidance low our

We outlook, up but conservative at approach line at least take growth expect top continue to a to XX.X% now our from year-over-year, previously. least XX%

conservative our estimate realized include a quarter. on market major sustainable opportunities upside our of or from and least on projected newer development, from NAV the outlook our is XX.X% note, revenues pipeline our Tru end earlier. the is that the e-commerce recurring NMN partners growth largely from of based with impact business first not existing still in highlighted increase early at partnerships of it based slight the Rob which in Since upside to too to Niagen, conversion Of does customers XXXX

new significantly and opportunities year, development products. this However, greater stemming growth partners, we from new revenue including initiatives, channels, business for see still many

investments, sustainable through it focus EBITDA, As financial adjusted with to remains relates achieving balanced our profitability on discipline. strategic

expect to quarter. EBITDA be We close adjusted each to breakeven

the we may R&D and in Notably, due volatility quarterly heavier we investments initiatives. of the However, R&D experience quarter. to sales second timing important anticipate

to sales ingredient to Watsons compared due from were purchases. lower the of Some customers first quarter to and of first with along delayed the quarter which Niagen timing

and In business. seeing in first strong encouraging in the trends summary, and opportunities our delivered we performance quarter are overall

be in partnerships we our have pipeline. the growth many on in already sustainable of confident efficiencies, pursuit initiatives internal to operational our Beyond and based reasons

impressed success. still position for ChromaDex their by and is the more But I company there the to do. am to long-term team dedication realized continuously work We

Operator, now to we ready take are questions.

Operator

question first Your Instructions] the B. Riley. [Operator Van comes Jeff with Sinderen from line of

Jeff Van Sinderen

the through you strong to mentioned just in you did in can of the in Maybe think Great top But much partnerships. you could walk much Amazon business how how the quarter. contributed has in ingredient the see in of just And I quarter? Same the with coming sense event your give for growth comments. Amazon; them, know that. I line prepared some the a special the this you

that. mentioned around you think I something

the near helpful. Just you unpack growth and in some And of of the around touch kind maybe, just other drivers is of be how maybe can think ingredient term? the don't and know, going business to be you that if Nestle would sustainable business the of the that I on partners

Rob Fried

question. supposed It's one Yes. to be

for you Anyway, kind like X questions. words. You packed thank the

So little I'll as is about don't business it but we much. talk strong is and will a be and ingredients growing control to first. bit continue strong, ingredient The

come Sometimes quarter. purchase partners. its And often in in of the will timing they our will Order then not from one related. subsequent

Niagen early an supply us as brands we've companies. to you that. is number did there for in been a extremely days, know, interested are demand selective from And But increasing about supplying. other that of the ChromaDex In

of stole were Some pay cases, unreliable didn't in partners their the whom some ingredient bills. from being and or, up ended us actually

Now, we're have of very Nestle. supply who mentioned, We're about as group like H&H you a the we careful presently, as And excellent and Life to very to. Extension Nestle. we really partners ingredient excited and

of they haven't the As yet. you product know, as launched

for of They That them Niagen. It's in of we certainly, brands Niagen. They which expect quarters, ChromaDex single probably to next, intend next quarter any for in maybe launch reserved quarter, selling be Tru the We they have Niagen. all the after to couple won't product that. a a formulations. number launch ingredient

But and about into conservative projections lot excited time for our in it. that. are very they're a But it. energy being very putting of And we they're

year this from projecting In surprised. know, hope no be But to fact, Nestle. pleasantly purchases you we additional as we're

company a and contacting very making coming marketing be shouldn't calling brand business. and They partner standards we the with another They We But bills interested. bills. months. There marketing or as the pay with X put able with partner. They have their again, that are us and have specifically want in high don't be claims. to should strict add of a our ingredient guidelines should existing in us an They few consistent companies whom to and been in quite with pay claims should business. false types we to the may our Niagen. We their have be

in and out there U.S. partnering are interested the on But good we're whom business. the there in companies some with Niagen abroad

think Niagen. ahead I there in So that is growth do

did revenue that is haven't the homepage day. But from retargeting well as significant revenue returning The but that that a disclosed opportunities actually brought Amazon what's interesting It more we it's there. deal in But number. quite number, amount sizable we a number. was a of the the in exact as

came to product we're returning day. page people But many many subsequently. seeing them and many, So purchasing that the on of Amazon

deal, So of so we're general. a is in isn't the deal with on very it performance pricey can that Amazon do frequently. the encouraged you overall It kind

to that They Amazon their their consumers doesn't brands. highly. that marketing that special. rate in see offer And and they there's brands many they a to claims that are safe think that offer are reliable brands that very, very

And we sort fit bill. that of

so And a partner. good and Amazon supportive very is

seem improvement our had few as headwinds internal well as discussed made a and working. some our those But as in starting to see to previous have quarters. we've there. We in we're internally partners changes be external here changes structure on We've Shopify

quarters. expecting see on to growth hoping we're as meaningful website and in the the well so more coming And

the very conservative that you we're there. projections in give we again, But

Jeff Van Sinderen

then, one And if I could. just follow-up,

can Just up about anything you're investments you R&D us else wondering the ramping in if QX. there's tell

Rob Fried

ask I'm Brianna standpoint, financial to a to going answer From that.

Brianna Gerber

those focused innovation on really our Jeff, are pipeline. So

opportunities. say innovation as could they what those point, commercial this not definitely about at but going So as are and we there's are future towards, much

add Rob, to anything to that?

Rob Fried

see as out. come look mean all out know But because the I the the studies in at press you volume that put extraordinary. No. can releases we you that I is

and our studies There’s great been daily. several, We’re this NAD in consistency. seeing now almost with week

or better And on is that you levels, our clear your stress we’re elevate if a stressors works. body body, your stress pretty long-term handle it’s equipped experience NAD the personal of based it’s life, your short-term the are quite the or just the organs mean, cells, I thing convinced and aging. whether of data own to your that

increasingly are the are getting And studies studies. clinical –

clinical the of Phase some Phase from moving are X. And to X

more we and dietary make So time for limited commercialize one have than we’re a when collection they’re that selling now can these than data just analytics. us a claims of more supplement. And quite – it’s to it

to So NAD pharmaceutical we’re we other areas and we great expecting take extensions control. future all NR area intellectual chloride, have other property the for have, that and even this of only but potentially analogs not in NR and the data the in advantage in our the

Operator

Selvaraju Your H.C. next Wainwright. question with comes from Ram

Ram Selvaraju

could in gross little of that, of environment, firstly, in more the the margin possibility price was if some So comment and context you you respect demand to a give evolution, taking degree wondering the with I on see increases to the granularity inflationary us which bit elasticity.

Brianna Gerber

business Ram, in I'll take more the it that a we thought down was was one. was pretty it It quarter, gross about pressures. year-over-year. good than had margin almost inflationary We That was mix XX%.

navigating fairly also We the and year-over-year is well are impact inflationary subsiding. pressures those

more So that decline sales the offset business we by scale quarter the the mix, higher with partially had. about was

environment. fairly large macro group the we're pricing, do As consumers are in a indirect of looking our think We more mindful it that priced relates of at to backdrop. elastic. But current we're levers consumer the in

we're shipping indirect levers, that. considering at not there direct things And some this price for be speeds, charging shipping, may like example, increases. point, changing But for

anything question. add Rob, your like answered you'd that think it? to to I

Rob Fried

Tru Niagen people a than or who milligrams thing XXX take It's noticed good know less. that Yes. gram take people and well, is probably higher particularly dose, to much of a a as you that, the in know a more who addition one answer. benefits day, we But Ram, that

But gets pricy. be to it

highly, consumers educated that bases elastic. are consumer and affluent understand relatively highly and pricing our we they So of the are bulk

base that a there's sensitive large consumer to However, is price.

a milligrams it a gram. you're dietary can And be if they a XXX it if or supplement, expensive view taking supplement, dietary particularly as quite

at a a significantly lower in there's end. large XXX they of the day, per There's a price milligrams XXX, when So to the there. market bifurcation But at the likely price experience we talking opportunity benefit. less understand you're bit lower only a are

we it's So price lower to because a to on make. of offer to and at challenge are for quantities consumers. those it a expensive have NR ways we working higher But is

Ram Selvaraju

question in R&D the neurodegenerative your when of think activities. relates second to lot being And neurological particular, planned there's then And particular. a disease, we on these about placed clearly, focus days Alzheimer's in conditions,

any of to tropic to disease. I thoughts if with neurodegenerative wanted respect specifically to NR you drugs have combining see something regarding any the be tailored had you exploration development like around potentially to with, that? that ideas And new for specific would example, something develop plans clinical if addressing

Rob Fried

Alzheimer’s researchers Yes, do. in from drug we’ve dietary and us on many extremely topic received a a Yes, calls an we companies with I supplement. Alzheimer’s, days. these And both hot as agree numerous interested as is working and combination

disorders. just Alzheimer’s reduction neurological trends neuroinflammation, take not see the this neuroinflammation. that reduces now research all Alzheimer’s Tru does sufficient you it’s barrier a there’s quite but right of these and that inflammation in cross it of involve Many blood-brain you the And when and amounts Niagen, in clear

into of Niagen tangles as great supplement is are and a a inflammation of amount with something either putting brain or the or might else we energy it. in excellent Tru agent combination reduce and interest time in to an So reductive us a that as plaques in as drug fair

not our in of, coordination Scientific leading who’s Rudy Advisory member, field. the Board if considered expert with the one In Tanzi

Operator

from question comes Pinheiro Sturdivant. next Mitch with Your

Mitch Pinheiro

quarter's of sure make I do But quarterly don't composition. of know second sort you I want give sort the I understand guidance. to revenue

guess line? to can -- revenues So recurring can of you due Amazon had a to e-commerce hit that I good start some the day.

e-commerce result of a Should Amazon homepage the in we expect a as day? lift

Brianna Gerber

So Mitch, there the didn't some efforts. say continue on convert reorders also of, retargeting but on consumers anticipated maybe day we to Rob who your those retargeting mentioned yes question and I'd will be

great day going get that to sequential clearly But event single in been growing not event. was growth for It's without us. specific a steady e-commerce. that and We're on

I'd So on sequentially. outside I'm happy that's what to say that about the e-commerce. comment of others

else anything Rob, But on e-commerce?

Rob Fried

No.

Mitch Pinheiro

had timing. Watsons some so And

So sequential that Watsons that will comp, tough Watson correct? equal and -- in things the probably be BXB all line, be a being would

Brianna Gerber

some Watsons, retailer. seasonality business a yes, there's to as their

So year. last saw timed you as they down key period promotional to you a QX to the if look purchases step from QX their the more later year, around in

a not going can Again, to You that we're just too to specific. look as get guide. directional

Mitch Pinheiro

quarter, And in the on staying the of just sort then, e-commerce.

like the So quarter, the versus mix was in new what first customer recurring customer?

Rob Fried

it the extraordinarily quarter takeover. customers. in new obviously, was new almost Well, mean was customer first for in of I successful Amazon the all because that part

Shopify But So a it's day. as dramatic also that fairly was well. true in

on seeing in our mean, I acquisition. our we're customer healthy, website, And it's new an been increase new customers.

Mitch Pinheiro

the is delta And pace conversion to change there? -- mean, I any recurring, that of

Rob Fried

flat. pretty been It's

Mitch Pinheiro

The normal conversion rates?

Rob Fried

Correct.

retention mean Yes. You rates.

Mitch Pinheiro

cetera. debt just then last touch And consumer more than quarter I just up backdrop bad that expense to relates normal. in it very guess et the noticed question, pressure, from just I a the macro minor question, a but was as

if And concerned anything about? indicative I was that's we of be need wondering to

Brianna Gerber

at partners. a our lot concerned we anything large established due AR with No, is be remained to on think growth receivables timing. to look not about. overall, of they indicative balance, And If of we

a one was to of some vendors. reserve initiative reduction there newer said, our bad has you quarter. That's debt As to impacted related about the been payments partners in a very who that transparent debt

I'd But resumed on what that partner. is usual we've So say we receivables. with conservatively those that as took reserve business

So we to be conservative get track, one wanted on back there. think we but that

Operator

with Sean ROTH comes next Your McGowan from MKM. question

Sean McGowan

phone why that's very yesterday, problems asked. having was I this same with so I

regarding of mid thought XXXX. cases or both the them is kind related and somewhat and question there, First late at lowest in of quite absolute inventories both than levels I payables, a lower bit since

So have want look payables for we this some we do to enough guidance inventory there. be Do low? and

Brianna Gerber

CMOs, for those, in, Sean. Niagen a ingredient our Grace, There We from relation the we is in right, create our some You're purchases. example, inventory both got between payable. W.R.

So some there. relation there is

largest things holding e-commerce Obviously, safety We're go job doing other well. our the a our But into stock nice payables as business. inventory managing our team a what is for -- say inventory. is still I'd

we bit look we're predictable When more and We prepared tight and a a do meet us always comfortable. that what's chains inventory. at the have businesses, want enough COVID that to supply it allowed business demand sustainable And in more of to less We make a of there. managed feel -- tightly, that's to less coming out predictable we we're disruptions, sure managing versus a bit more do of tightly. spirit made-to-order the the

working But there. proud I'd our very is and with team yes, of the comfortable overall, We're managing levels it inventory capital manage the to our say well. efforts

Sean McGowan

them they to expect safety stock? have as of lower to been because maybe much in see sales need we relationship kind don't have to So than

Brianna Gerber

Correct. really inventory placed we Yes, we chains work time if to we extended certainly that us X, help X from purchase supply the X maybe got order so can months. until back as our that the manage X, And it, well. COVID

Sean McGowan

And then expenses. X on clarify other points if you can

the million legal. you $X.X magnitude mentioned legal that or in mean that that, Did the in was quarter You the spending reduction? the was of

Brianna Gerber

reduction. The of magnitude the

Sean McGowan

And down would because taken is this marketing, confused, the expenses, sales and have actually in dollars. quarter that then for a in expense the the Amazon little expense the been I'm like first marketing

up? showing So is that where

Rob Fried

we’re finding might quarter. this we previous been aggressive have in quarters a efficiencies Well, and in little

a to absorb in able were operating manner. overall more by particular we the just department investment efficient this So

Operator

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

JP Mark

Good quarter.

one Just question.

focusing an progress something previous if Pro quarters on I which we've if you're about market, know talked that wondered as and I area. about in the opportunity. Just that it's in there's

Rob Fried

the care market? practitioner health about talking You're

JP Mark

That's Correct. right.

Rob Fried

future P&L we very priority. as this a did category expect quarters. this consider But high not It We a grow to the in it in quarter. in Yes.

JP Mark

grow effort? Are you how Or do would Or there? to adding it it that why expect you grow? to salespeople

Rob Fried

We are.

and we category category. the are to the adding salespeople to adding resources We’re

Operator

question next from Ladenburg comes with Jeff Your Thalmann. Cohen

Jeff Cohen

from here. a couple So

throughput So the other other you lawsuits nice B&B. you on Could Could currently Kong, a little about of an I heard looks firstly, and Hong Macau, it from B&B? bit stores, to Singapore. give any into talk are servicing idea locations? which like further XX% us and a us insight

Brianna Gerber

mean selling Watsons you today? do with Jeff, are we where

Jeff Cohen

Yes. Yes.

Rob Fried

that Superdrug in do off of Kong. to very coming as in in in the I bulk Kong, sell-through a was primarily point well. first their Well, and continue sell the bit in Macau, quarter Watsons we could out to U.K. COVID. Singapore The -- Hong still of their and in we sales are Hong strong,

COVID, they there. those even protests to prior And had

they So But Kong, to to a be it be on lifting of with and well headwinds it's back track. been Hong Watsons. long seems period seemed

Jeff Cohen

was And that first second I the than the a $X.X lighter be would you guess, said, quarter. probably that million bit and quarter

Brianna Gerber

Correct. for mentioned. underpinnings Rob nice the that But given year of still the some growth growth

Jeff Cohen

and takes XX% worth I there's headwinds. talking to about how perhaps know about 'XX? margin the or feel any year on and Brianna, for On XX% company the you some there puts work front, that the do or continued And continues range full

Brianna Gerber

Yes.

comfortable the the did So still XX.X% gross XXXX feel stable quarter, mix, which It XX.X% we’re margin. still out. We full year we we that with – in and even the we with outlook. called was on was some reiterated and business

Niagen even ingredient. notably – though larger Watsons contribution and both was from That’s there e-commerce grew, a

was and – total that’s a highest as XX% maybe our margin percentage of less year-over-year of e-commerce mix our business. So

we feel So comfortable.

Operator

time for have one final question. We

Your next with from Capital comes Management. Dhane Matt Tieton question

Matt Dhane

to ask Amazon the little what expected. the more about sounds I a results that That's want did like bit homepage you takeover. beyond were Tieton Capital. It

expecting that did the you takeover? weren't what find you curious, homepage out Just from

can you queue work? conclusions curious, something of this then you here, to I And from something what hopefully draw have X it's get to again you is was say, do allow But does do. Or been Amazon that now? from where consistently able sort this allow to that that? longer-term And said you in not months the you how finally,

Rob Fried

first evaluation an it it close day. But the very It investment of expectations. doesn't we to on of day. that in terms on the sales our was of that projected did happen what as not Well, one exceed all,

You have consideration the to the take into retargeting and renewals.

will of it's it's pursuing it return on other overall do not opportunity a brand why for frequently it's is And And just because difficult And cost us that. awareness to take of assess investment. the to cost not It's that opportunities. the reason the the while expensive.

what we pretty to in Tru that learned, already advertising like times sense I how advertising with convert. of we to already many In Niagen. to people terms types We the we mean terms hit what much. of get people and of online have not of learned good know them we have a

going like assume what are it mass Whenever of those you're going And not sense to based reasonable because good your consistent, rates with reduced pretty a consistent conversion and have our are. conversion targeted. we a certainly expectations. that, And on scale rates somewhat reasonably it's was that to be more it's broadly

overall But expectations with the our it consistent quite was day. on

Matt Dhane

did I also to Rob. helpful, ask. want that's No, Okay.

as have you have currently well. mentioned enthusiastic most on that out? the I recent developments think here Andrew What come seen really call Andrew research folks you

Rob Fried

Andrew, it's all yours.

Andrew Shao

take that. Rob. go Yes, Thank you, ahead I'll and

is I earlier. NAD known the area that the of function brain. development for Perhaps the in NR, based for it and normal in of and critical exciting preclinical think years health many neurodegeneration. Clearly, Rob areas NAD, we've the is on studies of to neurons alluded most

where are And evolved most those is now, now Norway. for advanced probably in Phase results speak, that studies X preclinical And Parkinson's alluded, into clinical as right and from area into have seeing clinical we X ongoing studies we're the Rob disease, translate X now studies. as in Phase

most So many, of think, as well. area that's that's there the many I area. are advanced the most, But probably think others research. I exciting But

Matt Dhane

When that Andrew, those Norway place in referencing, from currently. the And are is that you're expected taking those? readouts studies

Andrew Shao

is These goes Probably long. a PARK. are they're XXX over acronym that NO trials. And the that's patients, One now. by and one than over away. on more a right large is going year It's registered year of

So then sometime will in months probably and that. XXXX-XXXX be published finish up it after

X and trials to X tend Phase much longer these So be term.

Rob Fried

be of well. much There might secondary safety as on part interim same researchers was by study, a some Niagen. dose of they included endpoints, higher for as And group interesting which an that study the of

Andrew Shao

has is That’s publication completed, That the correct, at Rob. moment. peer study undergoing review but

publication those of So await the we eagerly results.

Operator

There are like over Gerber. no call further to back I questions would turn Brianna now this at the time. to

Kendall Knysch

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

Operator

conference today's call. concludes This

You may now disconnect.

ChromaDex (CDXC) 10 May 232023 Q1 Earnings call transcript