CHICAGO, IL / ACCESSWIRE / August 20, 2024 / Cosmos Health Inc. ("Cosmos Health" or the "Company'') (NASDAQ:COSM), a diversified, vertically integrated global healthcare group engaged in innovative R&D, owner of proprietary pharmaceutical and nutraceutical brands, manufacturer and distributor of healthcare products, and operator of a telehealth platform, today reported financial results for the first quarter ended March 31, 2024.
First Quarter 2024 Financial Highlights
Income Statement:
Revenue increased by 18.1%, or $2.23 million, to $14.58 million in Q1 2024, up from $12.35 million in Q1 2023, driven by organic growth and the positive impact of 2023 M&A activity.
Gross Profit increased by 39.3%, reaching $1.33 million in Q1 2024, up from $0.96 million in the prior-year period.
Gross Margin improved by 140 basis points to 9.1% in Q1 2024, up from 7.7% in Q1 2023, primarily due to a higher contribution from the nutraceuticals segment and benefits from horizontal integration at Cana Laboratories.
Operating Expenses decreased by 12.2% to $3.17 million in Q1 2024, down from $3.61 million in Q1 2023, largely due to a 32.1% reduction in general and administrative expenses and a 62.8% decline in sales and marketing expenses.
Loss from Operations decreased by 30.7% to $1.84 million in Q1 2024, compared to $2.65 million in Q1 2023, driven by improved gross profit and lower operating expenses.
Total other Income amounted to a loss of $0.03 million in Q1 2024, down from a gain of $2.16 million in Q1 2023, which was predominantly driven by a $1.91 million gain on the extinguishment of debt.
Net Loss amounted to $1.87 million in Q1 2024, compared to a loss of $0.46 million in Q1 2023.
Adjusted EBITDA decreased to a loss of $0.53 million in Q1 2024, compared to a gain of $0.59 million in Q1 2023.
Adjusted Net Loss amounted to $0.70 million in Q1 2024, compared to a gain of $0.48 million in the prior-year period.
Balance Sheet:
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Total Assets decreased by 5.6% to $62.35 million from $66.01 million as of December 31, 2023.
Ended the quarter with tangible assets of $10.17 million, reflecting the acquisition of CosmoFarm's logistics center and Cana Laboratories' facilities.
-
Total Liabilities decreased by 7.3% to $27.80 million from $29.97 million as of December 31, 2023. The decrease was due to a combination of factors, including:
$1.38 million or 47.3% decrease in other non-current and finance/lease liabilities
$0.58 million or 4.7% decrease in accounts payable and accrued expenses
$0.46 million or 9.9% decrease in notes payable
$0.20 million or 3.1% decrease in lines of credit
Total Stockholders' Equity decreased by 4.2% to $34.55 million from $36.04 million as of December 31, 2023.
Management Commentary
Greg Siokas, CEO of Cosmos Health, stated: "I am extremely pleased that our solid momentum from 2023 is continuing into 2024. Cosmos has returned to strong growth mode, achieving nearly 20% revenue growth, a nearly 40% increase in gross profit, and improved gross margins. At the same time, we continued our deleveraging efforts, with total liabilities decreasing by $2.17 million, or 7.8%, while total stockholders' equity remained near record levels at $34.55 million.
We are beginning to see the positive impact of our various investments, including, among others, our manufacturing facilities at Cana, benefiting from both vertical and horizontal integration; our expanded pharmacy distribution network, bolstered by multiple bolt-on acquisitions; the broader reach of our proprietary brands through global distribution agreements; and advances in our R&D program utilizing cutting-edge AI for drug repurposing through Cloudscreen.
We remain committed to achieving sustained profitability through operational efficiencies, disciplined cost management, and the continued momentum of our robust sales growth."
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
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Three Months Ended March 31, |
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2024 |
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2023 |
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(in $) |
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|
|
|
|
|
||
GAAP - Figures |
|
|
|
|
|
|
||
REVENUE |
|
|
14,584,473 |
|
|
|
12,349,777 |
|
GROSS PROFIT |
|
|
1,333,626 |
|
|
|
957,077 |
|
TOTAL OPERATING EXPENSES |
|
|
(3,169,734 |
) |
|
|
(3,608,249 |
) |
GAIN (LOSS) FROM OPERATIONS |
|
|
(1,836,108 |
) |
|
|
(2,651,172 |
) |
TOTAL OTHER INCOME (EXPENSE), NET |
|
|
(30,582 |
) |
|
|
2,164,011 |
|
NET LOSS |
|
|
(1,866,690 |
) |
|
|
(459,863 |
) |
|
|
|
|
|
|
|
|
|
NON-GAAP FIGURES |
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|
|
|
|
|
|
|
ADJUSTED EBITDA |
|
|
(532,922 |
) |
|
|
588,273 |
|
ADJUSTED NET INCOME (LOSS) |
|
|
(701,594 |
) |
|
|
481,198 |
|
(*) See "Definitions of Non-GAAP Measures" and "Reconciliation of Non-GAAP Measures" sections herein for an explanation and reconciliations of non-GAAP measures used throughout this release.
Definitions of Non-GAAP Measures
We collect and analyze operating and financial data to evaluate the health of our business and assess our performance. In addition to Revenue, Income (Loss) from Operations and Net Income (Loss) under GAAP, we use: EBITDA, Adjusted EBITDA, and Adjusted Net Income (Loss). Our calculation of these non-GAAP financial measures may differ from similarly titled non-GAAP measures, if any, reported by our peer companies. These non-GAAP financial measures should not be considered in isolation from, or as substitutes for, financial information prepared in accordance with GAAP.
Adjusted EBITDA
We define Adjusted EBITDA as Income (Loss) before Income Taxes, excluding (i) depreciation and amortization expense, (ii) interest expense, (iii) non-recurring and extraordinary items, (iv) stock-based compensation expense, (v) other income (expense), net, (vi) gain (loss) on equity investments, net, , (vii) change in fair value of derivative liability, (viii) foreign currency transaction, net (ix) prior years bad debt allowances, and (x) other provisions.
We have included Adjusted EBITDA because it is a key measure used by our management team to evaluate our operating performance, generate future operating plans, and make strategic decisions. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management team and Board of Directors. In addition, it provides a useful measure for period-to-period comparisons of our business, as it removes the effect of certain non-cash expenses and non-recurring and extraordinary items.
Adjusted EBITDA has limitations as a financial measure, should be considered as supplemental in nature, and is not meant as a substitute for the related financial information prepared in accordance with GAAP.
Adjusted Net Income (Loss)
We define Adjusted Net Income (Loss) as Adjusted EBITDA (see above) adding provision for income taxes and deducting interest expense.
Adjusted Net Income has limitations as a financial measure, should be considered as supplemental in nature, and is not meant as a substitute for the related financial information prepared in accordance with GAAP.
Reconciliation of Non-GAAP Measures
Adjusted EBITDA & Adjusted Net Income (Loss)
The following table presents reconciliations of Adjusted EBITDA & Adjusted Net Income (Loss) to the most directly comparable GAAP financial measure for each of the periods indicated.
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Three Months Ended March 31, |
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(in $) |
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2024 |
|
|
2023 |
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INCOME (LOSS) BEFORE INCOME TAXES |
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(1,866,690 |
) |
|
|
(487,161 |
) |
Adjustments (add back): |
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|
|
|
|
|
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|
Depreciation and amortization expense |
|
|
319,787 |
|
|
|
102,521 |
|
Interest expense |
|
|
168,672 |
|
|
|
134,373 |
|
EBITDA |
|
|
(1,378,231 |
) |
|
|
(250,267 |
) |
Non-recurring and extraordinary items |
|
|
532,288 |
|
|
|
766,786 |
|
Stock based compensation |
|
|
340,194 |
|
|
|
96,888 |
|
Other income (expense), net |
|
|
(191,824 |
) |
|
|
(5,743 |
) |
Gain (loss) on equity investments, net |
|
|
(1,755 |
) |
|
|
(1,293 |
) |
Change in fair value of derivative liability |
|
|
- |
|
|
|
(3,384 |
) |
Foreign currency transaction, net |
|
|
161,254 |
|
|
|
(196,035 |
) |
Bad Debt Allowances |
|
|
- |
|
|
|
181,321 |
|
Other provisions |
|
|
5,152 |
|
|
|
- |
|
ADJUSTED EBITDA |
|
|
(532,922 |
) |
|
|
588,273 |
|
Interest income / (expense), net |
|
|
(168,672 |
) |
|
|
(134,373 |
) |
Provision for income taxes |
|
|
- |
|
|
|
27,298 |
|
ADJUSTED NET INCOME |
|
|
(701,594 |
) |
|
|
481,198 |
|
CONDENSED CONSOLIDATED BALANCE SHEET DATA
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March 31, 2024 |
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December 31, 2023 |
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September 30, 2023 |
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(in $) |
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ASSETS |
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Cash & cash equivalents |
|
|
865,099 |
|
|
|
3,833,195 |
|
|
|
2,360,604 |
|
Inventory |
|
|
4,871,349 |
|
|
|
4,789,054 |
|
|
|
5,960,342 |
|
Accounts receivable, prepaid expenses and other current assets |
|
|
28,550,495 |
|
|
|
27,131,193 |
|
|
|
37,353,753 |
|
Property and equipment, net |
|
|
10,170,328 |
|
|
|
10,455,499 |
|
|
|
10,249,782 |
|
Goodwill and intangible assets, net |
|
|
7,962,908 |
|
|
|
7,684,183 |
|
|
|
4,065,513 |
|
Loans receivable |
|
|
6,664,506 |
|
|
|
7,903,378 |
|
|
|
7,762,888 |
|
Other noncurrent assets |
|
|
3,260,510 |
|
|
|
4,218,309 |
|
|
|
3,772,497 |
|
TOTAL ASSETS |
|
|
62,345,195 |
|
|
|
66,014,811 |
|
|
|
71,525,379 |
|
|
|
|
|
|
|
|
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LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
|
11,728,191 |
|
|
|
12,309,890 |
|
|
|
12,825,486 |
|
Other current liabilities |
|
|
3,940,119 |
|
|
|
3,487,353 |
|
|
|
3,023,875 |
|
Lines of credit |
|
|
6,426,197 |
|
|
|
6,630,273 |
|
|
|
5,354,752 |
|
Notes payable |
|
|
4,162,038 |
|
|
|
4,617,510 |
|
|
|
4,230,750 |
|
Other non-current and finance/lease liabilities |
|
|
1,541,968 |
|
|
|
2,926,757 |
|
|
|
1,522,362 |
|
Stockholders' and mezzanine equity |
|
|
34,546,682 |
|
|
|
36,043,028 |
|
|
|
44,568,154 |
|
TOTAL LIABILITIES AND STOCKHOLDERS'/MEZZANINE EQUITY |
|
|
62,345,195 |
|
|
|
66,014,811 |
|
|
|
71,525,379 |
|
About Cosmos Health Inc.
Cosmos Health Inc. (Nasdaq:COSM), incorporated in 2009 in Nevada, is a diversified, vertically integrated global healthcare group. The Company owns a portfolio of proprietary pharmaceutical and nutraceutical brands, including Sky Premium Life®, Mediterranation®, bio-bebe® and C-Sept®. Through its subsidiary Cana Laboratories S.A., licensed under European Good Manufacturing Practices (GMP) and certified by the European Medicines Agency (EMA), it manufactures pharmaceuticals, food supplements, cosmetics, biocides, and medical devices within the European Union. Cosmos Health also distributes a broad line of pharmaceuticals and parapharmaceuticals, including branded generics and OTC medications, to retail pharmacies and wholesale distributors through its subsidiaries in Greece and the UK. Furthermore, the Company has established R&D partnerships targeting major health disorders such as obesity, diabetes, and cancer, enhanced by artificial intelligence drug repurposing technologies, and focuses on the R&D of novel patented nutraceuticals, specialized root extracts, proprietary complex generics, and innovative OTC products. Cosmos Health has also entered the telehealth space through the acquisition of ZipDoctor, Inc., based in Texas, USA. With a global distribution platform, the Company is currently expanding throughout Europe, Asia, and North America, and has offices and distribution centers in Thessaloniki and Athens, Greece, and in Harlow, UK. More information is available at www.cosmoshealthinc.com, www.skypremiumlife.com, www.cana.gr, www.zipdoctor.co, as well as LinkedIn and X.
Forward-Looking Statements
With the exception of the historical information contained in this news release, the matters described herein, may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements preceded by, followed by, or that otherwise, include the words "believes," "expects," "anticipates," "intends," "projects," "estimates," "plans" and similar expressions or future or conditional verbs such as "will," "should," "would," "may" and "could", are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing. These statements, involve unknown risks and uncertainties that may individually or materially impact the matters discussed, herein for a variety of reasons that are outside the control of the Company, including, but not limited to, the Company's ability to raise sufficient financing to implement its business plan, the Company's ability to regain compliance with Nasdaq listing requirements, the impact of the COVID-19 pandemic and the war in Ukraine, on the Company's business, operations and the economy in general, and the Company's ability to successfully develop and commercialize its proprietary products and technologies. Readers are cautioned not to place undue reliance on these forward- looking statements, as actual results could differ materially from those described in the forward-looking statements contained herein. Readers are urged to read the risk factors set forth in the Company's filings with the SEC, which are available at the SEC's website (www.sec.gov). The Company disclaims any intention or obligation to update, or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Investor Relations Contact:
BDG Communications
cosm@bdgcommunications.com
+44 207 0971 653
SOURCE: Cosmos Health Inc.
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