- Net product revenue of $4.6 million increased 26% over the prior-year quarter
- Wound care sales of $1.3 million mark a record quarterly high
- Sales and marketing expenses reduced by 16% through optimized digital marketing programs
- Operating loss decreased by 37% year-over-year
Conference call begins at 4:30 p.m. Eastern time today
NovaBay® Pharmaceuticals, Inc. (NYSE American: NBY) reports financial results for the three and six months ended June 30, 2023 and provides a business update.
“Net product revenue reached $4.6 million for the quarter, up 26% from the prior year as we benefited from a particularly strong quarter in our wound care segment,” said Justin Hall, NovaBay CEO. “We continue to control expenses by optimizing digital marketing programs, which led to a 16% year-over-year reduction in sales and marketing costs. We also reported a significant improvement in operating loss, which decreased 37% from the prior year.
“Looking ahead we expect growth in our eyecare segment during the remainder of 2023,” he added. “We are also shifting our strategy in our skincare segment away from new product development to focus more on driving sales of our top-selling products through our most efficient sales channels. This plan streamlines our business and conserves cash resources.”
Second Quarter Financial Results
Net product revenue for the second quarter of 2023 was $4.6 million, compared with $3.7 million for the prior-year period, and included $2.2 million of Avenova®-branded eyecare product sales, $1.1 million of DERMAdoctor® skincare product sales and $1.3 million of NeutroPhase® and PhaseOne® wound care product sales.
Gross margin on net product revenue remained consistent at 50% for both the second quarters of 2023 and 2022.
Total operating expenses for the second quarter of 2023 were $3.7 million, an 8% decrease from $4.0 million for the second quarter of 2022. Sales and marketing expenses for the second quarter of 2023 were $1.7 million, a 16% decrease from $2.0 million for the prior year, reflecting lower Avenova digital advertising costs and lower expenses for outside professional services. General and administrative (G&A) expenses remained consistent at $1.9 million for both the second quarters of 2023 and 2022. Research & development (R&D) expenses for the second quarter of 2023 were $27 thousand, versus $40 thousand for the second quarter of 2022.
Net loss attributable to common stockholders for the second quarter of 2023 was $4.0 million, or $1.27 per share, and included a $2.0 million non-cash retained earnings reduction related to the preferred stock down round feature. This compared with a net loss attributable to common stockholders for the second quarter of 2022 of $2.2 million, or $1.43 per share.
Six Month Financial Results
Net product revenue for the six months ended June 30, 2023 was $7.7 million, an increase of 11% from $6.9 million for the six months ended June 30, 2022.
Gross margin on net product revenue for the first half of 2023 increased to 55% from 53% for the first half of 2022.
For the six months ended June 30, 2023, sales and marketing expenses decreased 16% and G&A expenses declined modestly, both compared with the six months ended June 30, 2022. R&D expenses were $53 thousand for the first half of 2023, versus $68 thousand for the prior-year period.
Net loss attributable to common stockholders for the first half of 2023 increased to $5.8 million, or $2.21 per share. This compares with a net loss for the first half of 2022 of $2.3 million, or $1.54 per share.
NovaBay had cash and cash equivalents of $4.4 million as of June 30, 2023, compared with $5.4 million as of December 31, 2022. In April 2023, the Company completed a private placement of convertible debentures and warrants for aggregate gross proceeds of $3.0 million.
Conference Call
NovaBay management will host an investment community conference call today beginning at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss the Company’s financial and operational results and answer questions. Participants can pre-register for the conference call here. Callers who pre-register will be given a conference passcode and unique PIN to gain immediate access to the call and bypass the live operator. Participants may pre-register at any time, including up to and after the call start time.
Stockholders and other interested parties may also participate in the conference call by dialing 866-777-2509 from within the U.S. or 412-317-5413 from outside the U.S., and requesting the NovaBay Pharmaceuticals call.
A live webcast of the call will be available here and will be archived for 90 days. A replay of the call will be available beginning two hours after the call ends through August 31, 2023 by dialing 877-344-7529 from within the U.S., 855-669-9658 from Canada or 412-317-0088 from outside the U.S. and Canada, and entering the conference identification number 8198065.
About NovaBay Pharmaceuticals, Inc.:
NovaBay Pharmaceuticals, Inc. develops and sells scientifically created and clinically proven eyecare, skincare and wound care products. NovaBay’s leading product, Avenova® Antimicrobial Lid & Lash Solution, is proven in laboratory testing to have broad antimicrobial properties as it removes foreign material including microorganisms and debris from the skin around the eye, including the eyelid. Avenova Antimicrobial Lid & Lash Solution is available direct to consumer primarily through online distribution channels such as Amazon, and is also available by prescription and dispensed by eyecare professionals for blepharitis and dry-eye disease. DERMAdoctor® offers more than 30 dermatologist-developed skincare products through the DERMAdoctor website, well-known traditional and digital beauty retailers, and international distributors. NovaBay also manufactures and sells effective, yet gentle and non-irritating wound care products. The PhaseOne® brand is distributed through commercial partners in the U.S. for professional use only, and the NeutroPhase® brand is distributed in China by Pioneer Pharma (Hong Kong) Company Ltd.
Forward-Looking Statements
This release contains information about management's view of the Company's future expectations, plans and prospects that constitute forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they do not relate strictly to historic or current facts. Such forward-looking statements are based upon management’s current expectations, assumptions, estimates, projections and beliefs. These statements include, but are not limited to, statements regarding our business strategies, commercial progress, current and potential future product offerings, the continuing integration of DERMAdoctor, expanded access to our products, and any future revenue, and the timing of such revenue, that may result from selling these products, as well as generally the Company’s expected future financial results. These statements involve risks, uncertainties and other factors that may cause actual results or achievements to be materially different and adverse from those expressed in or implied by these forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, risks and uncertainties relating to the integration of DERMAdoctor’s business with the Company’s business (and further related impairments to goodwill and intangible assets), the size of the potential market for our products, the Company’s products not being able to penetrate one or more targeted markets and the Company’s ability to continue as a going concern and revenues (or the execution on capital raise opportunities) not being sufficient to meet the Company’s cash needs. Other risks relating to NovaBay’s business, including risks that could cause results to differ materially from those projected in the forward-looking statements in this press release, are detailed in NovaBay’s latest Form 10-K/Q filings with the Securities and Exchange Commission, especially under the heading “Risk Factors.” The forward-looking statements in this release speak only as of this date, and NovaBay disclaims any intent or obligation to revise or update publicly any forward-looking statement except as required by law.
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Avenova Purchasing Information
For NovaBay Avenova purchasing information:
Please call 800-890-0329 or email sales@avenova.com
Avenova.com
DERMAdoctor Purchasing Information
For DERMAdoctor purchasing information:
Please call 877-337-6237 or email service@dermadoctor.com
DERMAdoctor.com
NOVABAY PHARMACEUTICALS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except par value amounts) |
||||||||
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2023 |
|
|
2022 |
|
||
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
4,414 |
|
|
$ |
5,362 |
|
Accounts receivable, net of allowance for credit losses ($3 and $19 at June 30, 2023 and December 31, 2022, respectively) |
|
|
2,623 |
|
|
|
1,973 |
|
Inventory, net of allowance for excess and obsolete inventory and lower of cost or estimated net realizable value adjustments ($446 and $499 at June 30, 2023 and December 31, 2022, respectively) |
|
|
3,660 |
|
|
|
3,437 |
|
Prepaid expenses and other current assets |
|
|
519 |
|
|
|
560 |
|
Total current assets |
|
|
11,216 |
|
|
|
11,332 |
|
Operating lease right-of-use assets |
|
|
1,636 |
|
|
|
1,831 |
|
Property and equipment, net |
|
|
108 |
|
|
|
119 |
|
Goodwill |
|
|
348 |
|
|
|
348 |
|
Other intangible assets, net |
|
|
2,204 |
|
|
|
2,280 |
|
Other assets |
|
|
496 |
|
|
|
489 |
|
TOTAL ASSETS |
|
$ |
16,008 |
|
|
$ |
16,399 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
1,481 |
|
|
$ |
1,080 |
|
Accrued liabilities |
|
|
2,755 |
|
|
|
2,724 |
|
Convertible notes, net |
|
|
1,185 |
|
|
|
— |
|
Embedded derivative liability |
|
|
169 |
|
|
|
— |
|
Operating lease liabilities |
|
|
476 |
|
|
|
453 |
|
Total current liabilities |
|
|
6,066 |
|
|
|
4,257 |
|
Operating lease liabilities-non-current |
|
|
1,379 |
|
|
|
1,588 |
|
Total liabilities |
|
|
7,445 |
|
|
|
5,845 |
|
Commitments & contingencies |
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Preferred stock, $0.01 par value; 5,000 shares authorized; |
|
|
|
|
|
|
|
|
Series B Preferred Stock; 9 and 12 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively |
|
|
449 |
|
|
|
570 |
|
Series C Preferred Stock; 1 and 2 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively |
|
|
1,675 |
|
|
|
2,403 |
|
Common stock, $0.01 par value; 150,000 shares authorized, 4,214 and 2,035 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively |
|
|
673 |
|
|
|
652 |
|
Additional paid-in capital |
|
|
169,689 |
|
|
|
165,081 |
|
Accumulated deficit |
|
|
(163,923 |
) |
|
|
(158,152 |
) |
Total stockholders’ equity |
|
|
8,563 |
|
|
|
10,554 |
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
$ |
16,008 |
|
|
$ |
16,399 |
|
NOVABAY PHARMACEUTICALS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except per share data) |
|||||||||||||||
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
||||
Sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product revenue, net |
|
$ |
4,599 |
|
|
$ |
3,660 |
|
|
$ |
7,716 |
|
|
$ |
6,927 |
Other revenue, net |
|
|
11 |
|
|
|
2 |
|
|
|
18 |
|
|
|
8 |
Total sales, net |
|
|
4,610 |
|
|
|
3,662 |
|
|
|
7,734 |
|
|
|
6,935 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product cost of goods sold |
|
|
2,304 |
|
|
|
1,824 |
|
|
|
3,492 |
|
|
|
3,283 |
Gross profit |
|
|
2,306 |
|
|
|
1,838 |
|
|
|
4,242 |
|
|
|
3,652 |
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
27 |
|
|
|
40 |
|
|
|
53 |
|
|
|
68 |
Sales and marketing |
|
|
1,718 |
|
|
|
2,040 |
|
|
|
3,371 |
|
|
|
4,025 |
General and administrative |
|
|
1,916 |
|
|
|
1,910 |
|
|
|
3,907 |
|
|
|
4,093 |
Total operating expenses |
|
|
3,661 |
|
|
|
3,990 |
|
|
|
7,331 |
|
|
|
8,186 |
Operating loss |
|
|
(1,355 |
) |
|
|
(2,152 |
) |
|
|
(3,089 |
) |
|
|
(4,534) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash gain on changes in fair value of warrant liability |
|
|
216 |
|
|
|
— |
|
|
|
216 |
|
|
|
2,056 |
Non-cash gain on changes in fair value of combined derivative liability |
|
|
40 |
|
|
|
— |
|
|
|
40 |
|
|
|
— |
Non-cash gain on changes in fair value of contingent liability |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
219 |
Other expense, net |
|
|
(937 |
) |
|
|
(3) |
|
|
|
(942 |
) |
|
|
(7) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
(2,036 |
) |
|
(2,155 |
) |
|
(3,775 |
) |
|
(2,266) |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Retained earnings reduction related to preferred stock down round feature triggered |
|
|
(1,996 |
) |
|
|
— |
|
|
|
(1,996 |
) |
|
|
— |
Net loss attributable to common stockholders |
|
$ |
(4,032 |
) |
|
$ |
(2,155 |
) |
|
$ |
(5,771 |
) |
|
$ |
(2,266) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Net loss per share attributable to common stockholders (basic and diluted) |
|
$ |
(1.27 |
) |
|
$ |
(1.43 |
) |
|
$ |
(2.21 |
) |
|
$ |
(1.54) |
Weighted-average shares of common stock outstanding used in computing net loss per share of common stock (basic and diluted) |
|
|
3,176 |
|
|
|
1,507 |
|
|
|
2,609 |
|
|
|
1,469 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230810046583/en/
Contacts
NovaBay Contact
Justin Hall
Chief Executive Officer and General Counsel
510-899-8800
jhall@novabay.com
Investor Contact
LHA Investor Relations
Jody Cain
310-691-7100
jcain@lhai.com
