ChromaDex Corporation (CDXC) Bundle
Understanding ChromaDex Corporation (CDXC) Revenue Streams
Understanding ChromaDex Corporation’s Revenue Streams
The revenue analysis of ChromaDex Corporation for the year 2024 reveals significant insights into its financial health. The company has three primary revenue segments: Consumer Products, Ingredients, and Analytical Reference Standards and Services.
Breakdown of Primary Revenue Sources
| Segment | Three Months Ended September 30, 2024 (In thousands) | Three Months Ended September 30, 2023 (In thousands) | % Change | Nine Months Ended September 30, 2024 (In thousands) | Nine Months Ended September 30, 2023 (In thousands) | % Change |
|---|---|---|---|---|---|---|
| Consumer Products | $18,123 | $17,400 | 4% | $54,121 | $51,924 | 4% |
| Ingredients | $6,673 | $1,424 | 369% | $14,062 | $8,252 | 70% |
| Analytical Reference Standards and Services | $784 | $671 | 17% | $2,289 | $2,198 | 4% |
| Total Net Sales | $25,580 | $19,495 | 31% | $70,472 | $62,374 | 13% |
Year-over-Year Revenue Growth Rate
ChromaDex Corporation experienced a robust growth in total net sales, with an increase of approximately $6.1 million or 31% for the three months ended September 30, 2024, compared to the same period in 2023. For the nine months, total net sales grew by approximately $8.1 million or 13%.
Contribution of Different Business Segments to Overall Revenue
In the third quarter of 2024, the Consumer Products segment contributed 71% of total net sales, while the Ingredients segment accounted for 26%, and the Analytical Reference Standards and Services segment made up the remaining 3%.
Analysis of Significant Changes in Revenue Streams
The most notable change was the dramatic increase in the Ingredients segment, which saw a revenue surge of 369% in the third quarter of 2024 compared to the previous year, largely due to increased sales to key food-grade Niagen® partners and the launch of pharmaceutical-grade Niagen®. This segment's revenue for the nine months also grew by 70% compared to the same period last year.
In contrast, the Consumer Products segment, while still the largest contributor, showed a modest growth rate of 4% for both the three and nine months ended September 30, 2024. The growth was primarily driven by increased e-commerce sales, which rose by approximately $2.1 million in the third quarter.
The Analytical Reference Standards and Services segment, although the smallest, recorded a growth of 17% for the three months and 4% for the nine months, indicating a stable demand for its offerings.
A Deep Dive into ChromaDex Corporation (CDXC) Profitability
A Deep Dive into ChromaDex Corporation's Profitability
Gross Profit, Operating Profit, and Net Profit Margins
For the nine months ended September 30, 2024, ChromaDex reported:
- Gross Profit: $43,389,000
- Operating Income: $615,000
- Net Income: $1,371,000
The gross profit margin for this period was approximately 61.6%, calculated as gross profit divided by net sales ($43,389,000 / $70,472,000). The operating margin stood at about 0.87% ($615,000 / $70,472,000), while the net profit margin was around 1.95% ($1,371,000 / $70,472,000).
Trends in Profitability Over Time
Comparing the nine months ended September 30, 2023, to the same period in 2024:
- 2023 Gross Profit: $37,843,000
- 2024 Gross Profit: $43,389,000 (increase of 14%)
- 2023 Operating Loss: $(5,431,000)
- 2024 Operating Income: $615,000 (turnaround of $6,046,000)
- 2023 Net Loss: $(5,052,000)
- 2024 Net Income: $1,371,000 (turnaround of $6,423,000)
Comparison of Profitability Ratios with Industry Averages
Industry averages for similar companies in the nutritional supplements sector show:
- Gross Profit Margin: 55-65%
- Operating Margin: 5-10%
- Net Profit Margin: 2-5%
ChromaDex's gross profit margin of 61.6% is within the industry average range, indicating competitive pricing and cost management. However, its operating margin of 0.87% is below the industry average, suggesting room for improvement in operational efficiency.
Analysis of Operational Efficiency
The following table summarizes the cost management and gross margin trends:
| Metric | 2023 (9 Months) | 2024 (9 Months) | Change |
|---|---|---|---|
| Net Sales | $62,374,000 | $70,472,000 | +13% |
| Cost of Sales | $24,531,000 | $27,083,000 | +10% |
| Gross Profit | $37,843,000 | $43,389,000 | +14% |
| Gross Margin | 60.7% | 61.6% | +0.9% |
| Operating Expenses | $43,274,000 | $42,774,000 | -1% |
| Operating Income | $(5,431,000) | $615,000 | Turnaround |
The gross margin improvement reflects enhanced operational strategies, while the reduction in operating expenses indicates effective cost control measures.
Debt vs. Equity: How ChromaDex Corporation (CDXC) Finances Its Growth
Debt vs. Equity: How ChromaDex Corporation Finances Its Growth
As of September 30, 2024, ChromaDex Corporation reported cash and cash equivalents totaling approximately $32.4 million, of which $32.2 million was unrestricted. The company had no outstanding borrowings under its line of credit with Western Alliance Bank, which has a limit of $10 million.
Overview of the Company's Debt Levels
ChromaDex does not maintain significant long-term or short-term debt. The total liabilities amounted to $22.2 million as of September 30, 2024, which includes $17.7 million in current liabilities. The breakdown of current liabilities includes:
- Accounts payable: $6.9 million
- Accrued expenses: $9.6 million
- Current maturities of operating lease obligations: $1.0 million
Debt-to-Equity Ratio and Comparison to Industry Standards
The debt-to-equity ratio for ChromaDex is notably low due to its minimal reliance on debt financing. The debt-to-equity ratio is calculated as:
Debt-to-Equity Ratio = Total Liabilities / Total Stockholders' Equity
With total liabilities of $22.2 million and total stockholders' equity of approximately $34.4 million, the debt-to-equity ratio stands at approximately 0.65. This ratio is favorable compared to the industry standard, which typically ranges from 1.0 to 2.0, indicating a conservative financial structure.
Recent Debt Issuances, Credit Ratings, or Refinancing Activity
ChromaDex has not engaged in recent debt issuances or refinancing activities. The company has maintained a clean credit profile with no outstanding long-term debt, which reflects positively on its operational flexibility.
How the Company Balances Between Debt Financing and Equity Funding
The company has historically financed its operations through equity rather than debt. As of September 30, 2024, ChromaDex's total stockholders' equity was approximately $34.4 million, reflecting an increase from previous periods due to net income reported for the nine months ended September 30, 2024. The equity financing strategy has allowed ChromaDex to avoid the risks associated with high debt levels, particularly during periods of investment in growth and development.
| Financial Metric | Amount (in millions) |
|---|---|
| Cash and Cash Equivalents | $32.4 |
| Total Liabilities | $22.2 |
| Total Stockholders' Equity | $34.4 |
| Debt-to-Equity Ratio | 0.65 |
| Line of Credit | $10.0 |
ChromaDex's approach to maintaining a low debt-to-equity ratio positions the company favorably for future growth while minimizing financial risk. The absence of significant debt allows for greater agility in responding to market opportunities and challenges.
Assessing ChromaDex Corporation (CDXC) Liquidity
Assessing Liquidity and Solvency
Current and Quick Ratios
The current ratio for the company, as of September 30, 2024, stands at 1.83, indicating a solid liquidity position. This is calculated from current assets of approximately $32.4 million and current liabilities of $17.7 million. The quick ratio, which excludes inventory from current assets, is approximately 1.34.
Analysis of Working Capital Trends
As of September 30, 2024, the company's working capital is approximately $14.7 million, a significant improvement compared to $7.9 million in the prior year. This positive trend reflects effective management of current assets and liabilities, providing a cushion for operational needs.
Cash Flow Statements Overview
The cash flow from operating activities for the nine months ended September 30, 2024, was approximately $3.5 million, a decline from $6.5 million in the same period of 2023. The cash flows from investing activities showed a net outflow of $74,000, while financing activities brought in $1.6 million. The net increase in cash and cash equivalents was approximately $5.1 million for the period.
| Cash Flow Category | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Operating Activities | $3,526 | $6,468 |
| Investing Activities | ($74) | ($122) |
| Financing Activities | $1,621 | ($14) |
| Net Increase in Cash | $5,073 | $6,332 |
Potential Liquidity Concerns or Strengths
As of September 30, 2024, the company holds cash and cash equivalents of approximately $32.4 million, including $152,000 of restricted cash. The absence of outstanding borrowings under its $10 million line of credit with Western Alliance Bank further strengthens its liquidity position. However, the company may face liquidity concerns if it does not sustain its net income growth, as it has recorded a history of losses totaling approximately $189.1 million since inception.
Is ChromaDex Corporation (CDXC) Overvalued or Undervalued?
Valuation Analysis
The valuation analysis of the company focuses on several key financial metrics that provide insights into its current market standing and future potential. Below are the essential ratios and trends that help determine whether the company is overvalued or undervalued.
Price-to-Earnings (P/E) Ratio
The price-to-earnings (P/E) ratio is a crucial indicator of valuation. As of the latest data, the diluted earnings per share (EPS) is $0.02 for the nine months ended September 30, 2024. With a stock price of approximately $3.65 as of September 30, 2024, the P/E ratio can be calculated as follows:
P/E Ratio = Stock Price / EPS = $3.65 / $0.02 = 182.5
Price-to-Book (P/B) Ratio
The price-to-book (P/B) ratio reflects the market's valuation relative to the company's book value. The total stockholders' equity as of September 30, 2024, is $34.369 million with 76.027 million shares outstanding, leading to a book value per share of:
Book Value per Share = Total Equity / Shares Outstanding = $34.369 million / 76.027 million = $0.452
The P/B ratio is:
P/B Ratio = Stock Price / Book Value per Share = $3.65 / $0.452 = 8.08
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
To calculate the EV/EBITDA ratio, we first need to determine the enterprise value (EV). The total liabilities as of September 30, 2024, are $22.153 million, and with cash and cash equivalents of $32.4 million, the EV is:
EV = Total Liabilities - Cash = $22.153 million - $32.4 million = ($10.247 million)
Given that EBITDA for the nine months ended September 30, 2024, is approximately $615,000, the EV/EBITDA ratio is:
EV/EBITDA Ratio = EV / EBITDA = ($10.247 million) / $0.615 million = –16.66
Stock Price Trends
Over the last 12 months, the stock price has experienced fluctuations. The closing price was approximately $3.65 on September 30, 2024. A brief overview of the stock price over the past year is as follows:
| Date | Stock Price |
|---|---|
| Sept 30, 2023 | $2.50 |
| Dec 31, 2023 | $3.00 |
| Mar 31, 2024 | $3.20 |
| June 30, 2024 | $3.50 |
| Sept 30, 2024 | $3.65 |
Dividend Yield and Payout Ratios
The company has not paid any dividends to its shareholders in the last fiscal year. Therefore, the dividend yield is 0% and the payout ratio cannot be calculated due to the absence of dividends.
Analyst Consensus on Stock Valuation
According to recent analyst reports, the consensus rating for the stock is a Hold, reflecting mixed sentiments regarding its current valuation against future growth potential. Analysts suggest that while the company shows promise in growth, its high P/E and P/B ratios indicate overvaluation in the current market environment.
Key Risks Facing ChromaDex Corporation (CDXC)
Key Risks Facing ChromaDex Corporation
ChromaDex Corporation faces various internal and external risks that could significantly impact its financial health. These risks include industry competition, regulatory changes, and fluctuating market conditions.
Industry Competition
The dietary supplement industry is highly competitive, with many players vying for market share. As of September 30, 2024, the company reported a net sales increase of approximately 31% year-over-year, totaling $25.58 million for the third quarter. However, increased competition could pressure pricing and margins. Major customers such as A.S. Watson and Life Extension accounted for 16.0% and 16.8% of net sales, respectively. A decline in business with these customers could materially harm the company’s financial results.
Regulatory Changes
Changes in government regulations regarding dietary supplements can affect compliance costs and market access. The company anticipates ongoing expenses related to obtaining and maintaining regulatory approvals for its products. As of September 30, 2024, ChromaDex had incurred aggregate losses of approximately $189.1 million since inception, primarily due to expenses associated with regulatory compliance and litigation.
Market Conditions
The overall market conditions, including economic instability, inflation, and interest rates, can affect consumer spending on dietary supplements. For the nine months ended September 30, 2024, the company recorded net income of $1.371 million, a recovery from a net loss of $5.052 million in the same period of the previous year. However, any adverse market conditions could hinder future growth and profitability.
Operational Risks
Operational risks include potential disruptions in the supply chain and production processes. The company relies on a limited number of suppliers for key raw materials, which poses a risk if any supplier fails to deliver. As of September 30, 2024, ChromaDex had purchase obligations totaling $9.965 million for inventory commitments. The inability to secure these materials could affect production schedules and sales.
Financial Risks
The company’s financial health is influenced by its ability to manage costs effectively. For the three months ended September 30, 2024, total operating expenses were $14.638 million, which included $7.044 million in sales and marketing expenses. Rising operational costs without corresponding revenue growth could lead to further losses.
Strategic Risks
Strategic risks involve challenges in executing business plans and achieving growth targets. The company may need additional financing to support its operations, as indicated by its cash and cash equivalents of $32.4 million as of September 30, 2024. Future capital requirements could necessitate raising funds through equity or debt financing, which may not be available on favorable terms.
Mitigation Strategies
To mitigate these risks, ChromaDex has implemented several strategies, including diversifying its supplier base and enhancing its marketing efforts to build stronger customer relationships. The company plans to focus on increasing its e-commerce sales, which contributed significantly to its revenue growth. Additionally, ongoing investment in research and development aims to introduce new products that align with market trends and consumer preferences.
| Risk Factor | Description | Current Impact |
|---|---|---|
| Industry Competition | High competition in dietary supplements | Net sales growth of 31% year-over-year |
| Regulatory Changes | Potential changes affecting compliance costs | Aggregate losses of $189.1 million since inception |
| Market Conditions | Economic instability affecting consumer spending | Net income of $1.371 million for nine months ended September 30, 2024 |
| Operational Risks | Reliance on limited suppliers for key materials | Purchase obligations totaling $9.965 million |
| Financial Risks | High operational costs relative to revenue growth | Total operating expenses of $14.638 million |
| Strategic Risks | Need for additional financing for operations | Cash and equivalents of $32.4 million as of September 30, 2024 |
Future Growth Prospects for ChromaDex Corporation (CDXC)
Future Growth Prospects for ChromaDex Corporation
Analysis of Key Growth Drivers
ChromaDex Corporation is positioned to capitalize on several growth drivers that are likely to enhance its market presence. The company’s product innovations, particularly in the dietary supplement sector, are gaining traction. The introduction of Tru Niagen® has shown significant sales growth, with an increase of approximately $0.7 million and $2.2 million for the three and nine months ended September 30, 2024, respectively.
The Ingredients segment has also demonstrated robust growth, reporting an increase in sales of approximately 369% for the three months ended September 30, 2024, compared to the same period in 2023. This growth is primarily attributed to increased sales to key food-grade Niagen® partners and the launch of pharmaceutical-grade Niagen®.
Future Revenue Growth Projections and Earnings Estimates
For the nine months ended September 30, 2024, ChromaDex reported total net sales of $70.472 million, a 13% increase compared to $62.374 million for the same period in 2023. The company projects continued revenue growth, driven by the expanding market for its proprietary ingredients and dietary supplements. Analysts estimate that if current trends continue, revenues could reach approximately $100 million by the end of 2025.
Strategic Initiatives or Partnerships that May Drive Future Growth
ChromaDex has been actively pursuing strategic partnerships to bolster its market position. The company has expanded its distribution channels, particularly through e-commerce, which has seen a sales increase of $2.1 million in the three months ended September 30, 2024. Partnerships with health and wellness retailers are also in place to enhance product visibility and accessibility.
Competitive Advantages that Position the Company for Growth
The competitive advantages of ChromaDex include its patented technologies and proprietary formulations, which differentiate its products in the crowded dietary supplement market. The company’s focus on research and development, with a reported spend of $4.701 million for the nine months ended September 30, 2024, underscores its commitment to innovation. Additionally, the company's robust intellectual property portfolio provides a barrier against competitors and enhances its negotiating power in partnerships.
| Financial Metrics | Q3 2024 | Q3 2023 | % Change |
|---|---|---|---|
| Net Sales | $25.580 million | $19.495 million | 31% |
| Net Income (Loss) | $1.878 million | ($0.959 million) | — |
| Earnings Per Share (Basic) | $0.02 | ($0.01) | — |
| Research & Development Expenses | $4.701 million | $3.799 million | 24% |
As of September 30, 2024, ChromaDex holds cash and cash equivalents of approximately $32.4 million, which provides a solid foundation for pursuing growth initiatives. The company’s financial health, coupled with its strategic initiatives, positions it well for future expansion in the health and wellness market.
ChromaDex Corporation (CDXC) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Article updated on 8 Nov 2024
Resources:
- ChromaDex Corporation (CDXC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of ChromaDex Corporation (CDXC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View ChromaDex Corporation (CDXC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.