Thorne HealthTech Reports Third Quarter 2022 Results

16 3 Thorne HealthTech Reports Third Quarter 2022 Results

<br /> Thorne HealthTech Reports Third Quarter 2022 Results<br />

PR Newswire


Updates Full-Year 2022 Guidance



NEW YORK


,


Nov. 9, 2022


/PRNewswire/ — Thorne HealthTech, Inc. (“Thorne HealthTech”, “Thorne” or the “Company”) (NASDAQ: THRN), a leader in developing personalized, innovative solutions that empower individuals to live healthier, longer lives, today announced its financial results for the third quarter ended

September 30, 2022

.


Third Quarter Highlights:

  • Net sales grew 21.7% year-over-year to

    $58.4 million

    , with direct-to-consumer (“DTC”) sales growth of 47.2%
  • Gross profit grew 10.3% year-over-year to

    $28.2 million

    ; gross margin decreased 500 basis points year-over-year to 48.2%
  • Net income attributable to common stockholders grew to

    $3.7 million

    ; adjusted EBITDA grew to

    $8.3 million
  • Diluted earnings per share (“EPS”) of

    $0.07

    ; adjusted diluted EPS of

    $0.12

“People trust Thorne to support their daily wellness journeys because of the personalization we offer, the science behind our portfolio of solutions including our health tests and supplements, and our unmatched quality standards,” said

Paul Jacobson

, Thorne HealthTech’s chairman and CEO. “For these reasons, our high-end customer base has thus far been resilient. We saw no major changes in purchasing behavior and achieved record sales for the quarter driven by DTC channel growth of 47%. Our gross margins softened from proactive early actions, to secure a large supply of ingredients typically associated with lower margin products, in order to ensure product continuity for our customers ahead of anticipated supply chain risks. That decision allowed us to aggressively sell into a heightened demand environment as those risks materialized, increasing our brand awareness through product availability.”

Mr. Jacobson added, “We also made further strides bringing our OneDraw blood sample collection device into the home. In August, we achieved a major milestone by receiving DTC medical device clearance from Japanese regulators, while continuing to work towards DTC clearance in the U.S. We believe these clearances will offer significant business development opportunities, long-term. Our solid financial performance, continued efficiency gains from scale and recent cutting-edge developments will allow us to continue our long history of profitable growth and further strengthen our positioning heading into next year.”


Net Sales

The following tables provide a summary of sales by channel for the three and nine months ended September 30, 2022, compared to the three and nine months ended September 30, 2021:



Three Months Ended September 30,



Amounts



Year-Over-Year



As % of Net Sales



2022



2021



$ Change



% Change



2022



2021



(dollars in thousands)


DTC


$


26,975


$


18,322


$


8,653


47.2


%


46.2


%


38.2


%


Professional/B2B

(1)


31,444


29,688


1,756


5.9


%


53.8


%


61.8


%


Net sales


$


58,419


$


48,010


$


10,409


21.7


%


100.0


%


100.0


%



Nine Months Ended September 30,



Amounts



Year-Over-Year



As % of Net Sales



2022



2021



$ Change



% Change



2022



2021



(dollars in thousands)


DTC


$


81,668


$


54,758


$


26,910


49.1


%


48.3


%


40.5


%


Professional/B2B

(1)


87,487


80,625


6,862


8.5


%


51.7


%


59.5


%


Net sales


$


169,155


$


135,383


$


33,772


24.9


%


100.0


%


100.0


%


____________________________



(1)

“Professional” generally means the Company’s network of health professionals; and “B2B” generally means business-to-business customers.

The following table provides a summary of our annual life-time value (“LTV”) to customer acquisition cost (“CAC”) ratio for the three and nine months ended September 30, 2022, compared to the three and nine months ended September 30, 2021.



Three Months Ended September 30,



Nine Months Ended September 30,



2022



2021



2022



2021


LTV to CAC

(2)


7.8


x


2.4


x


3.2


x


3.7


x


____________


(2) Refer to the “Key Financial and Operating Data” section below.

As of September 30, 2022, the number of active subscriptions grew 50.5% to 329,569, compared to 218,935 as of September 30, 2021. Refer to the “Key Financial and Operating Data” section below for further detail.


Cost of Sales and Gross Profit

The following tables provide a summary of cost of sales and gross profit for the three and nine months ended September 30, 2022, compared to the three and nine months ended September 30, 2021:



Three Months Ended September 30,



Amounts



Year-Over-Year



As % of Net Sales



2022



2021



$ Change



% Change



2022



2021



(dollars in thousands)


Net sales


$


58,419


$


48,010


$


10,409


21.7


%


100.0


%


100.0


%


Cost of sales


30,239


22,470


7,769


34.6


%


51.8


%


46.8


%


Gross profit


$


28,180


$


25,540


$


2,640


10.3


%


48.2


%


53.2


%



Nine Months Ended September 30,



Amounts



Year-Over-Year



As % of Net Sales



2022



2021



$ Change



% Change



2022



2021



(dollars in thousands)


Net sales


$


169,155


$


135,383


$


33,772


24.9


%


100.0


%


100.0


%


Cost of sales


79,494


63,711


15,783


24.8


%


47.0


%


47.1


%


Gross profit


$


89,661


$


71,672


$


17,989


25.1


%


53.0


%


52.9


%

For the three months ended

September 30, 2022

, the increase in cost of sales and decrease in gross profit as a percentage of net sales was primarily from (i) the sell-through of higher cost inventory that included raw materials purchased ahead of demand to mitigate against potential supply chain disruptions and (ii) the strength of sales that contribute lower gross profit margins because of our ability to meet demand utilizing our sources in an otherwise challenging market.


Operating Expenses

The following tables provide a summary of select operating expenses for the three and nine months ended September 30, 2022, compared to the three and nine months ended September 30, 2021:



Three Months Ended September 30,



Amounts



Year-Over-Year



As % of Net Sales



2022



2021



$ Change



% Change



2022



2021



(dollars in thousands)


Research and development


$


1,815


$


2,237


$


(422)


(18.9)


%


3.1


%


4.7


%


Marketing


4,510


10,792


(6,282)


(58.2)


%


7.7


%


22.5


%


Selling, general and administrative


$


18,340


$


13,430


$


4,910


36.6


%


31.4


%


28.0


%



Nine Months Ended September 30,



Amounts



Year-Over-Year



As % of Net Sales



2022



2021



$ Change



% Change



2022



2021



(dollars in thousands)


Research and development


$


5,526


$


4,280


$


1,246


29.1


%


3.3


%


3.2


%


Marketing


27,508


20,077


7,431


37.0


%


16.3


%


14.8


%


Selling, general and administrative


54,483


37,001


17,482


47.2


%


32.2


%


27.3


%


Write-off of acquired Drawbridge in-process research

and development


$




$


1,563


$


(1,563)


(100.0)


%


0


%


1.2


%

The decrease in marketing as a percentage of net sales for the three months ended

September 30, 2022

was primarily from the timing of the Company’s major brand campaigns, which primarily occurred during the second quarter of 2022 instead of the comparative third quarter of 2021.


Net Income and Diluted EPS

The following tables provide a summary of net income attributable to common stockholders, adjusted EBITDA, adjusted net income (loss), diluted EPS and adjusted diluted EPS for the three and nine months ended September 30, 2022, compared to the three and nine months ended September 30, 2021:



Three Months Ended September 30,



Amounts



Year-Over-Year



2022



2021



$ Change



% Change

3




(dollars in thousands, except per share amounts)


Net income attributable to common stockholders


$


3,739


$


476


$


3,263


685.9


%


Adjusted EBITDA


8,343


1,077


7,266


674.4


%


Adjusted net income (loss)


6,123


(17)


6,140


n.m.


Diluted EPS


$


0.07


$


0.01


$


0.06


600.0


%


Adjusted diluted EPS


$


0.12


$




$


0.12


n.m.



Nine Months Ended September 30,



Amounts



Year-Over-Year



2022



2021



$ Change



% Change



(dollars in thousands, except per share amounts)


Net income attributable to common stockholders


$


3,127


$


476


$


2,651


557.3


%


Adjusted EBITDA


15,552


15,146


406


2.7


%


Adjusted net income


9,977


10,281


(304)


(3.0)


%


Diluted EPS


$


0.06


$


0.01


$


0.05


500.0


%


Adjusted diluted EPS


$


0.19


$


0.20


$


(0.01)


(5.0)


%


__________________



(3)

Not meaningful (n.m.) year-over-year comparison as it relates to the percentage change due to net earnings in the current period and net loss in the

comparative prior period.

Amounts reported in thousands within this press release are computed based on the amounts in whole dollars. As a result, the sum of the components reported in thousands may not equal the amounts reported in whole dollars due to rounding. Percentage changes  presented are calculated from the underlying numbers in whole dollars.

Important disclosures about, and reconciliations of, non-GAAP measures to their most directly comparable GAAP measures, including adjusted EBITDA, adjusted net income (loss) and adjusted diluted earnings EPS are provided in the “Non-GAAP Financial Measures” section of this press release.


Financial Position

As of September 30, 2022, the Company had

$22.5 million

in unrestricted cash and cash equivalents and

$1.9 million

of debt outstanding, inclusive of

$0.7 million

attributable to finance lease liabilities.


Financial Guidance

The following table presents the Company’s (i) prior guidance, (ii) revised guidance, and (iii) the corresponding growth rates over full-year 2021 results at the low and high ends of the revised guidance ranges for each measure:



Revised Full-Year Guidance



Prior Guidance



Low – High



Low – High (Y/Y%)



Low – High


Net sales


$232 million – $235 million


25.2% – 26.9%


$ 235 million – $242 million


Gross margin


52% – 53%




53% – 55%


Adjusted EBITDA


$25.5 million – $28.5 million


24.0% – 38.5%


$28 million – $32 million


Adjusted EPS


$0.34 – $0.37


n.m.


$0.36 – $0.39

The Company’s revised full-year guidance assumes the following:

  • Marketing expenses of between 14% and 15% of net sales for the full-year
  • For adjusted net income and adjusted EPS, revised guidance also assumes (i) depreciation and amortization of approximately 2.7% of net sales, (ii) an estimated full-year adjusted tax rate of 10% and (iii) diluted weighted-average shares outstanding of 53 million as of

    December 31, 2022


Webcast and Conference Call Details

The Company will host a conference call on

Thursday, November 10, 2022

, at

8 a.m.

(U.S. Eastern Time) to discuss its third quarter 2022 financial results. A live webcast of the call can be accessed by logging onto the investors section of the Thorne HealthTech website at

https://investors.thornehealthtech.com

. A replay will be available on the same website after the call.

In addition, the conference call can be accessed over the phone by dialing +1 844 200 6205 for U.S. callers, or +1 929 526 1599 for international callers, approximately 10 minutes prior to the start time. The access code for the live call is 701723. An audio replay will be available for 7 days following the call. To access the replay, dial +1 866 813 9403 (U.S.) or +1 929 458 6194 (International). The access code for the replay is 356185.


About Thorne HealthTech

Thorne HealthTech is a leader in developing innovative solutions for delivering personalized approaches to health and wellness. As a science-driven wellness company that empowers individuals with the support, education, and solutions they need to achieve healthy aging – living healthier longer – Thorne utilizes testing and data to create improved product efficacy and to deliver personalized solutions to consumers, health professionals, and corporations. Predicated on the power of the individual, Thorne leverages artificial intelligence models to provide insights and personalized data, products, and services that help individuals take a proactive and actionable approach to improve and maintain their health over a lifetime. Thorne is the only supplement manufacturer that collaborates with Mayo Clinic on health and wellness research and content, and is trusted by more than five million customers, 46,000+ health-care professionals, thousands of professional athletes, and more than 100 professional sports teams and U.S. National Teams. For more information, visit Thorne.com.


Forward-Looking Statements

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this news release, including, without limitation, statements regarding the conditions of our industry, our future results of operations and financial position, business strategy, development plans, expected research and development costs, regulatory strategy, product and service development, sales and marketing activities, international expansion efforts, timing and likelihood of success, as well as plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “guidance,” “may,” “will,” “should,” “would,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this news release include, but are not limited to, statements regarding financial guidance, market opportunity, ability to penetrate the market, expanded product offerings and expectations for growth. We have based these forward-looking statements largely on our current expectations and projections about our business, the industry in which we operate and financial trends that we believe may affect our business, financial condition, results of operations and prospects, and these forward-looking statements are not guarantees of future performance or development. These forward-looking statements are current only as of the date of this news release and are subject to a number of risks, uncertainties and assumptions described in the section titled “Risk Factors” and elsewhere in Thorne HealthTech’s filings made with the Securities and Exchange Commission, including our Annual Report on Form 10-K filed on

March 16, 2022

and Quarterly Report on Form 10-Q, which we plan to file on or about

November 10, 2022

, and other SEC filings, copies of which are available free of charge on the SEC website at

www.sec.gov

. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events or otherwise.


Key Financial and Operating Data

To provide investors with additional information regarding its financial results, the Company has provided certain key financial and operating data metrics in this press release, including life-time value (LTV), customer acquisition costs (CAC), LTV to CAC ratio and number of subscriptions.

The Company defines LTV to CAC as LTV from a specific 12-month period divided by the CAC of a specific period. LTV is defined as the average gross contribution per purchasing DTC customer within a particular 12-month period divided by one less the customer retention rate (Churn Rate) during the same period. Average gross contribution is defined as the cumulative revenue from our DTC customers during a 12-month period, less the cost of goods, divided by the number of purchasing DTC customers in the same period. To arrive at the LTV for a particular period, the Company divides the average gross contribution by that period’s Churn Rate. CAC is defined as the total advertising and marketing expenses, less headcount expenses and associated benefit expenses, in a particular period divided by the number of customers who placed their first order during that same timeframe.

The Company defines subscriptions as orders resulting from direct-to-consumer (DTC) customers opting into automatic refills or orders that are recurring on Thorne.com and Amazon.com. Subscription programs on both platforms offer automatic ordering, payment and delivery of the products to a customer’s doorstep.


Non-GAAP Financial Measures

To provide investors with additional information regarding its financial results, the Company has provided certain financial measures that are not recognized under U.S. generally accepted accounting principles (GAAP) in this press release, including: earnings or loss before interest, taxes, depreciation and amortization (EBITDA), EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, adjusted net income (loss) and adjusted diluted earnings (loss) per share.

The Company calculates EBITDA, a non-GAAP financial measure, as net income or loss excluding depreciation and amortization, interest expense, net and income taxes. EBITDA margin represents EBITDA as a percentage of net sales. The Company calculates adjusted EBITDA, a non-GAAP financial measure, by further excluding non-cash items for stock-based compensation expenses, change in fair value of warrant liability, loss on Drawbridge step acquisition, loss on Drawbridge Transaction, guarantee fees, income or loss from equity interests in unconsolidated affiliates and transaction costs related to mergers and acquisitions. Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of net sales. The Company calculates adjusted net income or loss, a non-GAAP financial measure, as net income or loss excluding (i) stock-based compensation expenses, change in fair value of warrant liability, loss on Drawbridge step acquisition, loss on Drawbridge transaction, guarantee fees, income or loss from equity in unconsolidated affiliates and transaction costs related to mergers and acquisitions and (ii) utilizing an adjusted provision for income taxes based on the Company’s estimate of applicable statutory rates.

EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, adjusted net income (loss) and adjusted diluted earnings (loss) per share should be viewed as measures of operating performance that are supplements to, and not substitutes for, operating income or loss, net income or loss and other GAAP measures of income and loss. The Company has included EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, adjusted net income or loss and adjusted diluted earnings (loss) per share in this press release because they are key measures used by the Company’s management to evaluate and compare the Company’s financial and operational performance over multiple periods, identifying trends affecting the Company’s business, formulating business plans and making strategic decisions. In particular, the exclusion of certain expenses or income in calculating adjusted EBITDA and adjusted net income (loss) facilitates operating performance comparability across reporting periods by removing the effect of non-cash expenses and certain non-recurring variable charges. In addition, the Company believes that providing each of EBITDA and adjusted EBITDA and adjusted net income or loss, together with a reconciliation of net income or loss to each such measure, helps investors make comparisons between Thorne HealthTech and other companies that may have different capital structures, different tax rates and different forms of employee compensation. Each of EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, adjusted net income or loss and adjusted diluted earnings (loss) per share has inherent limitations because of the excluded items, and may not be directly comparable to similarly titled metrics used by other companies.

The Company has not reconciled the forward-looking adjusted EBITDA and adjusted diluted EPS guidance included in this press release to the most directly comparable GAAP measures because this cannot be done without unreasonable effort due to the variability and low visibility with respect to certain costs, the most significant of which are incentive compensation (including stock-based compensation), certain fair value measurements, acquisition transactions and integration, tax items and others that may arise during the year, each of which are potential adjustments to future earnings. The Company expects the variability of these items to have a potentially unpredictable, and a potentially significant, impact on our future GAAP financial results.



Thorne HealthTech, Inc.



Condensed Consolidated Balance Sheets



September 30,



December 31,



2022



2021



(unaudited)



Assets


Current Assets


Cash and cash equivalents


$


22,508,492


$


51,100,915


Accounts receivable, net


13,411,032


5,285,321


Related party receivables


9,450


366,590


Inventories, net


60,875,809


41,012,124


Prepaid expenses and other current assets


2,464,475


3,494,473


Total current assets


99,269,258


101,259,423


Restricted cash


4,900,000


4,900,000


Property and equipment, net


32,868,069


27,030,400


Operating lease right-of-use assets, net


17,716,629


17,836,756


Finance lease right-of-use assets


641,853


883,076


Intangible assets, net


15,608,266


6,592,316


Goodwill


16,541,041


14,440,683


Investments


1,400,000


400,000


Equity-method investments


1,063,716


963,685


Other related party receivables


152,424




Other assets


1,046,951


993,538


Total assets


$


191,208,207


$


175,299,877



Thorne HealthTech, Inc.



Condensed Consolidated Balance Sheets



September 30,



December 31,



2022



2021



(unaudited)



Liabilities, Convertible Preferred Stock and Stockholders’ Equity



Current Liabilities


Accounts payable


$


19,171,370


$


16,889,756


Accrued payroll


3,021,403


2,526,917


Other accrued expenses


1,941,968


1,144,573


Related party payable


1,730,007


1,634,775


Current portion of operating lease liabilities


2,228,088


2,633,236


Current portion of finance lease liabilities


361,514


413,487


Current portion of long-term debt


516,345


494,173


Total current liabilities


28,970,695


25,736,917



Long-term Liabilities


Operating lease liabilities, net of current portion


27,827,347


27,605,739


Finance lease liabilities, net of current portion


301,773


482,544


Long-term debt, net of current portion


693,554


1,083,634


Warrant liability


1,491,660


2,058,566


Total liabilities


59,285,029


56,967,400


Series E convertible preferred stock; par value $0.01, 0 shares authorized as of September

30, 2022 and December 31, 2021; 0 shares issued and outstanding as of September 30, 2022

and December 31, 2021







Stockholders’ Equity


Common stock; par value $0.01, 200,000,000 shares authorized as of September 30, 2022

and December 31, 2021; 52,812,379 and 52,554,214 issued and outstanding as of

September 30, 2022 and December 31, 2021, respectively


528,124


525,542


Common stock, Class B; no par value, 0 shares authorized as of September 30, 2022 and

December 31, 2021; 0 shares issued and outstanding as of September 30, 2022 and

December 31, 2021






Additional paid-in capital


258,951,528


250,163,984


Accumulated deficit


(129,031,046)


(132,158,016)


Accumulated other comprehensive loss


(332,141)




Total stockholders’ equity —Thorne HealthTech, Inc.


130,116,465


118,531,510


Non-controlling interests


1,806,713


(199,033)


Total stockholders’ equity


131,923,178


118,332,477


Total liabilities, convertible preferred stock and stockholders’ equity


$


191,208,207


$


175,299,877



Thorne HealthTech, Inc.



C


ondensed Consolidated Statements of Operations



(unaudited)



Three Months Ended September 30,



Nine Months Ended September 30,



2022



2021



2022



2021


Net sales


$


58,419,270


$


48,009,678


$


169,155,294


$


135,383,383


Cost of sales


30,239,482


22,469,952


79,494,367


63,710,703


Gross profit


28,179,788


25,539,726


89,660,927


71,672,680


Operating expenses:


Research and development


1,814,972


2,236,913


5,526,450


4,279,854


Marketing


4,510,223


10,792,331


27,507,937


20,077,293


Selling, general and administrative


18,339,657


13,430,325


54,482,948


37,001,465


Write-off of acquired Drawbridge in-process research and

development








1,563,015


Income (loss) from operations


3,514,936


(919,843)


2,143,592


8,751,053


Other income (expense), net:


Interest income (expense), net


33,673


(29,089)


(27,998)


(392,990)


Guarantee fees




(141,949)




(421,220)


Change in fair value of warrant liability


37,926


2,212,554


566,906


902,528


Loss on Drawbridge Transaction








(165,998)


Other income (expense), net


391


39,473


44,485


77,616


Total other income (expense), net


71,990


2,080,989


583,393


(64)


Income before income taxes and gain (loss) from equity interests in

unconsolidated affiliates


3,586,926


1,161,146


2,726,985


8,750,989


Income tax expense




78,914


207,098


122,452


Net income before gain (loss) from equity interests in unconsolidated affiliates


3,586,926


1,082,232


2,519,887


8,628,537


Gain (loss) from equity interests in unconsolidated affiliates


(14)


(131,390)


11,023


(3,304,496)


Net income


3,586,912


950,842


2,530,910


5,324,041


Net loss — non-controlling interests


(151,704)


(77,945)


(596,060)


(323,006)


Net income attributable to Thorne HealthTech, Inc.


3,738,616


1,028,787


3,126,970


5,647,047


Undistributed earnings attributable to Series E convertible preferred

stockholders




553,078




5,171,338


Net income attributable to common stockholders


$


3,738,616


$


475,709


$


3,126,970


$


475,709


Earnings per share:


Basic


$


0.07


$


0.02


$


0.06


$


0.02


Diluted


$


0.07


$


0.01


$


0.06


$


0.01


Weighted average common shares outstanding:


Basic


52,742,926


21,212,668


52,680,422


19,032,403


Diluted


52,742,926


51,222,522


52,921,051


50,327,893



Thorne HealthTech, Inc.



Condensed Consolidated Statements of Cash Flows



(unaudited)



Nine Months Ended September 30,



2022



2021



Cash Flows from Operating Activities


Net income


$


2,530,910


$


5,324,041


Adjustments to reconcile net income to net cash (used in) provided by operating activities:


Depreciation and amortization


4,438,607


3,329,145


Change in fair value of warrant liability


(566,906)


(902,528)


Non-cash lease expense


2,811,428


4,897,207


Stock-based compensation


8,405,873


1,425,192


Non-cash interest expense


2,570




Change in inventory and receivable reserves


120,503


65,484


(Gain) loss from equity interests in unconsolidated affiliates


(11,023)


3,304,496


Loss on Drawbridge Transaction




165,998


Write-off of acquired Drawbridge in-process research and development




1,563,015


Other non-cash


(39,062)




Change in operating assets and liabilities


Accounts receivable


(8,042,351)


(3,296,652)


Related party receivables


204,716


(563,291)


Related party payables


95,232


307,226


Inventories


(20,061,241)


(9,732,333)


Prepaid expenses and other assets


999,715


(3,164,633)


Accounts payable and accrued liabilities


2,863,414


8,211,866


Operating lease liabilities


(2,553,593)


(4,794,134)


Net cash provided by (used in) operating activities


(8,801,208)


6,140,099



Cash Flows from Investing Activities


Purchase of property and equipment


(5,233,668)


(2,124,385)


Acquisition of Nutrativa, net of cash acquired


(14,862,287)




Acquisition of Drawbridge Health assets, net of cash acquired




(1,412,279)


Purchase of investment in unconsolidated subsidiary


(1,000,000)




Purchase of license agreements


(562,500)


(562,958)


Net cash used in investing activities


(21,658,455)


(4,099,622)



Cash Flows from Financing Activities


Proceeds from issuance of common stock in IPO




70,000,000


Payments on long-term debt and finance leases


(680,677)


(580,049)


Debt issuance costs


(25,700)




Common stock issuance costs




(10,031,797)


Proceeds from issuance of ownership interest in consolidated subsidiary


2,601,806




Proceeds from exercise of stock options


303,952




Net cash provided by financing activities


2,199,381


59,388,154



Effect of exchange rate changes on cash and restricted cash


(332,141)





Net increase (decrease) in cash and restricted cash


(28,592,423)


61,428,631



Cash, cash equivalents and restricted cash, beginning of period


56,000,915


15,262,094



Cash, cash equivalents and restricted cash, end of period


$


27,408,492


$


76,690,725



T


horne HealthTech, Inc.



Reconciliations of Non-GAAP Financial Measures



(unaudited)



Three Months Ended

September 30,



Nine Months Ended

September 30,



2022



2021



2022



2021


Net income attributable to common stockholders


$


3,738,616


$


475,709


$


3,126,970


$


475,709


Undistributed earnings attributable to Series E convertible preferred

stockholders




553,078




5,171,338


Net income attributable to Thorne HealthTech, Inc.


3,738,616


1,028,787


3,126,970


5,647,047


Net loss — non-controlling interests


(151,704)


(77,945)


(596,060)


(323,006)


Net income


$


3,586,912


$


950,842


$


2,530,910


$


5,324,041


EBITDA and Adjusted EBITDA Reconciliation


Net income


$


3,586,912


$


950,842


$


2,530,910


$


5,324,041


Net income margin


6.1


%


2.0


%


1.5


%


3.9


%


Depreciation and amortization


1,573,008


1,067,176


4,438,607


3,329,145


Interest (income) expense, net


(33,673)


29,089


27,998


392,990


Income tax expense




78,914


207,098


122,452


EBITDA


5,126,247


2,126,021


7,204,613


9,168,628


EBITDA margin


8.8


%


4.4


%


4.3


%


6.8


%


Adjustments:


Stock-based compensation


3,254,625


890,527


8,405,873


1,425,192


Change in fair value of warrant liability


(37,926)


(2,212,554)


(566,906)


(902,528)


Write-off of acquired Drawbridge in-process research and

development








1,563,015


Loss on Drawbridge Transaction








165,998


Guarantee fees




141,949




421,220


(Gain) loss from equity interests in unconsolidated affiliates


14


131,390


(11,023)


3,304,496


Acquisition costs






519,236




Adjusted EBITDA


$


8,342,960


$


1,077,333


$


15,551,793


$


15,146,021


Adjusted EBITDA margin


14.3


%


2.2


%


9.2


%


11.2


%


Adjusted Net Income (Loss) Reconciliation


Net income


$


3,586,912


$


950,842


$


2,530,910


$


5,324,041


Income tax expense




78,914


207,098


122,452


Stock-based compensation


3,254,625


890,527


8,405,873


1,425,192


Change in fair value of warrant liability


(37,926)


(2,212,554)


(566,906)


(902,528)


Write-off of acquired Drawbridge in-process research and

development








1,563,015


Loss on Drawbridge Transaction








165,998


Guarantee fees




141,949




421,220


(Gain) loss from equity interests in unconsolidated affiliates


14


131,390


(11,023)


3,304,496


Acquisition costs






519,236




Adjusted net income (loss) before adjusted tax expense


6,803,625


(18,932)


11,085,188


11,423,886


Adjusted income tax expense (benefit)


680,363


(1,893)


1,108,519


1,142,389


Adjusted net income (loss)


$


6,123,262


$


(17,039)


$


9,976,669


$


10,281,497


Diluted weighted-average shares outstanding


52,742,926


51,222,522


52,921,051


50,327,893


Adjusted diluted earnings per share


$


0.12


$




$


0.19


$


0.20

Cision
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SOURCE Thorne HealthTech, Inc.

rt Thorne HealthTech Reports Third Quarter 2022 Results

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