- Net product sales increased 13% over the prior year driven by higher sales of Avenova®-branded products through OTC channels and branded wound care products
- Sales and marketing expenses declined 15% reflecting continued digital marketing optimization
- Ordered product sales for Avenova-branded products on Amazon.com reached new all-time records in March and April
Conference call begins at 4:30 p.m. Eastern time today
NovaBay® Pharmaceuticals, Inc. (NYSE American: NBY) reports financial results for the three months ended March 31, 2024 and provides a business update.
“Net product sales growth of 13% versus the prior year was driven by higher sales of Avenova-branded products through online channels and by sales of branded wound care products,” said Justin Hall, CEO of NovaBay. “During the quarter, ordered sales for Avenova products on Amazon.com, our most important sales channel, hit new all-time records in March and again in April. We achieved these records by further optimizing our highly efficient digital marketing programs while reducing our sales and marketing spend, which declined by 15% versus the prior year.
“NovaBay is operating under a streamlined business model primarily focused on the large and growing eyecare market, with creative marketing programs that are resonating well with online customers,” he added. “We are working to build upon this growth by introducing new and enhanced digital media programs to cost-efficiently support our loyal customer base and reach new prospective customers.”
First Quarter Financial Results
Financial results for the first quarters of 2024 and 2023 do not include results from DERMAdoctor, which was divested on March 25, 2024 and is accounted for in discontinued operations. Financial information about discontinued operations is available under “Divestiture and Discontinued Operations” in the Company’s Form 10-Q, which is to be filed with the SEC later today.
Product sales, net for the first quarter of 2024 were $2.6 million, an increase of 13% from $2.3 million for the prior-year period, with the increase due primarily to higher Avenova-branded products sold through online channels and an increase in PhaseOne®-branded wound care products.
Gross margin on net product revenue for the first quarters of 2024 and 2023 remained consistent at 68%.
Sales and marketing expenses for the first quarter of 2024 were $1.1 million, a 15% decrease from $1.2 million for the prior-year period, reflecting continued lower digital advertising and related consulting costs. General and administrative (G&A) expenses for the first quarter of 2024 were $2.3 million, compared with $1.7 million for the prior-year period, with the increase due mainly to higher legal costs primarily related to non-recurring strategic initiatives. Research & development (R&D) expenses for the first quarter of 2024 were $19 thousand, versus $10 thousand for the prior-year period. The Company recorded a non-cash loss of $865 thousand for the first quarter of 2024 related to the DERMAdoctor divestiture, with no comparable item in the prior-year period.
For the first quarter of 2024, non-cash items included a gain on changes in fair value of warrant liabilities of $0.2 million, a gain on change in fair value of embedded derivative liability of $65 thousand and accretion of interest and amortization of discounts on convertible notes of $0.4 million. There were no comparable items for the first quarter of 2023.
Other expense, net for the first quarter of 2024 was $0.5 million, primarily due to the issuance of the March 2024 warrant and the unsecured convertible notes issued in March 2024, with no comparable item in the first quarter of 2023.
Net loss attributable to common stockholders for the first quarter of 2024 was $3.6 million, or $0.15 per share, compared with a net loss attributable to common stockholders for the first quarter of 2023 of $1.7 million, or $0.85 per share.
NovaBay had cash and cash equivalents of $1.8 million as of March 31, 2024, compared with $2.9 million as of December 31, 2023.
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 emailed conference details and a unique Registration ID 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 888-500-3691 from within the U.S. or 646-307-1951 from outside the U.S., and requesting conference ID# 85516.
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 three hours after the call ends through June 9, 2024 by dialing 877-660-6853 from within the U.S. or 201-612-7415 from outside the U.S., and entering the conference ID #13746453.
About NovaBay Pharmaceuticals, Inc.:
NovaBay’s leading product Avenova® Antimicrobial Lid & Lash Solution is often prescribed by eyecare professionals for blepharitis and dry-eye disease and is available directly to consumers through online distribution channels such as Amazon.com. It is clinically proven to kill a broad spectrum of bacteria to help relieve the symptoms of bacterial dry eye, yet is non-irritating and completely safe for regular use. NovaBay offers a full portfolio of scientifically developed products for each step of the standard dry eye treatment regimen, including the Avenova Eye Health Support antioxidant-rich oral supplement, Avenova Lubricating Eye Drops for instant relief, Avenova Warm Eye Compress to soothe the eyes and the i-Chek by Avenova to monitor physical eyelid health. The Avenova Allograft, an amniotic tissue prescription-only product, is available through eyecare professionals in the United States.
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, expanded access to our products through new and existing sales channels, 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 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
Financial tables follow
NOVABAY PHARMACEUTICALS, INC. |
||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||
(in thousands, except par value amounts) |
||||||||
|
|
March 31, |
|
|
December 31, |
|
||
2024 |
2023 |
|||||||
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
1,823 |
|
|
$ |
2,924 |
|
Accounts receivable, net of allowance for credit losses ($3 at March 31, 2024 and December 31, 2023) |
|
|
734 |
|
|
|
680 |
|
Inventory, net of allowance for excess and obsolete inventory and lower of cost or estimated net realizable value adjustments ($229 and $264 at March 31, 2024 and December 31, 2023, respectively) |
|
|
663 |
|
|
|
564 |
|
Prepaid expenses and other current assets |
|
|
371 |
|
|
|
256 |
|
Current assets, discontinued operations |
|
|
— |
|
|
|
2,730 |
|
Total current assets |
|
|
3,591 |
|
|
|
7,154 |
|
Operating lease right-of-use assets |
|
|
1,212 |
|
|
|
1,296 |
|
Property and equipment, net |
|
|
77 |
|
|
|
87 |
|
Other assets |
|
|
477 |
|
|
|
478 |
|
Other assets, discontinued operations |
|
|
— |
|
|
|
19 |
|
TOTAL ASSETS |
|
$ |
5,357 |
|
|
$ |
9,034 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
1,117 |
|
|
$ |
906 |
|
Accrued liabilities |
|
|
1,266 |
|
|
|
1,169 |
|
Secured Convertible Notes, net of discounts |
|
|
973 |
|
|
|
1,137 |
|
Unsecured Convertible Notes, net of discounts |
|
|
34 |
|
|
|
— |
|
Embedded derivative liability |
|
|
159 |
|
|
|
— |
|
Operating lease liabilities |
|
|
375 |
|
|
|
368 |
|
Current liabilities, discontinued operations |
|
|
— |
|
|
|
698 |
|
Total current liabilities |
|
|
3,924 |
|
|
|
4,278 |
|
Warrant liabilities |
|
|
232 |
|
|
|
334 |
|
Operating lease liabilities-non-current |
|
|
1,041 |
|
|
|
1,108 |
|
Total liabilities |
|
|
5,197 |
|
|
|
5,720 |
|
Commitments & contingencies |
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Preferred stock, $0.01 par value; 5,000 shares authorized; |
|
|
|
|
|
|
|
|
Series B Preferred Stock; 1 and 6 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively |
|
|
44 |
|
|
|
275 |
|
Series C Preferred Stock; 1 shares issued and outstanding at March 31, 2024 and December 31, 2023 |
|
|
1,441 |
|
|
|
1,675 |
|
Common stock, $0.01 par value; 150,000 shares authorized, 32,025 and 11,230 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively |
|
|
320 |
|
|
|
112 |
|
Additional paid-in capital |
|
|
176,798 |
|
|
|
176,101 |
|
Accumulated deficit |
|
|
(178,443 |
) |
|
|
(174,849 |
) |
Total stockholders’ equity |
|
|
160 |
|
|
|
3,314 |
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
$ |
5,357 |
|
|
$ |
9,034 |
|
NOVABAY PHARMACEUTICALS, INC. |
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||
(Unaudited) |
||||||||
(in thousands, except per share data) |
||||||||
|
|
Three Months Ended |
|
|||||
March 31, |
||||||||
|
|
2024 |
|
|
2023 |
|
||
Sales: |
|
|
|
|
|
|
|
|
Product revenue, net |
|
$ |
2,624 |
|
|
$ |
2,332 |
|
Other revenue, net |
|
|
7 |
|
|
|
7 |
|
Total sales, net |
|
|
2,631 |
|
|
|
2,339 |
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
|
837 |
|
|
|
739 |
|
Gross profit |
|
|
1,794 |
|
|
|
1,600 |
|
Operating expenses |
|
|
|
|
|
|
|
|
Research and development |
|
|
19 |
|
|
|
10 |
|
Sales and marketing |
|
|
1,055 |
|
|
|
1,236 |
|
General and administrative |
|
|
2,291 |
|
|
|
1,699 |
|
Loss on divestiture of subsidiary |
|
|
865 |
|
|
|
— |
|
Total operating expenses |
|
|
4,230 |
|
|
|
2,945 |
|
Operating loss |
|
|
(2,436 |
) |
|
|
(1,345 |
) |
|
|
|
|
|
|
|
|
|
Non-cash gain on changes in fair value of warrant liabilities |
|
|
194 |
|
|
|
— |
|
Non-cash gain on change in fair value of embedded derivative liability |
|
|
65 |
|
|
|
— |
|
Accretion of interest and amortization of discounts on convertible notes |
|
|
(433 |
) |
|
|
— |
|
Other expense, net |
|
|
(480 |
) |
|
|
— |
|
Net loss from continuing operations |
|
|
(3,090 |
) |
|
|
(1,345 |
) |
|
|
|
|
|
|
|
|
|
Loss from discontinued operations |
|
|
(124 |
) |
|
|
(394 |
) |
Net loss |
|
|
(3,214 |
) |
|
|
(1,739 |
) |
Less: Increase to accumulated deficit due to adjustment to Preferred Stock conversion price |
|
|
380 |
|
|
|
— |
|
Net loss attributable to common stockholders |
|
$ |
(3,594 |
) |
|
$ |
(1,739 |
) |
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per share |
|
|
|
|
|
|
|
|
Loss from continuing operations |
|
$ |
(0.14 |
) |
|
$ |
(0.66 |
) |
Loss from discontinued operations |
|
|
(0.01 |
) |
|
|
(0.19 |
) |
Net loss per share attributable to common stockholders (basic and diluted) |
|
$ |
(0.15 |
) |
|
$ |
(0.85 |
) |
Weighted-average shares of common stock outstanding used in computing net loss per share of common stock (basic and diluted) |
|
|
24,672 |
|
|
|
2,035 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240509593442/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
