Full-Year 2023 Highlights:
- Revenues of $130.2 million, an increase of 47% over 2022
revenues of $88.6 million.
- GAAP net loss of $(24.4 million) compared with $(14.1 million)
for the prior-year period.
- Adjusted EBITDA of $28.1 million, an increase of 116% over 2022
Adjusted EBITDA of $13.0 million.
- Cash from operating activities of $3.8 million.
- GAAP gross margin was 70% compared with 71% in the prior-year
period.
- Core gross margin was 77% compared with 73% in the prior-year
period.
- Cash and cash equivalents of $83 million, including investments
in Eton Pharmaceuticals, as of December 31, 2023.
Harrow (Nasdaq: HROW), a leading U.S. eyecare pharmaceutical
company, announced results for the fourth quarter and year ended
December 31, 2023. The Company also posted its fourth quarter and
year-end Letter to Stockholders and corporate presentation to the
“Investors” section of its website, harrow.com. The Company
encourages all Harrow stockholders to review these documents, which
provide additional details concerning the historical quarterly
period as well as the future expectations for the business.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20240319708486/en/
“This past year, little Harrow grew up, transforming from a
company focused exclusively on its market-leading ImprimisRx
compounded business, to a growing leader in the North American
ophthalmic pharmaceuticals market – with a total 18 branded
products,” said Mark L. Baum, CEO of Harrow. “In addition to the
significant revenue and Adjusted EBIDTA growth the team delivered,
we launched products and began to generate cash from our Big Three
products – IHEEZO, VEVYE and TRIESENCE. Finally, we also attracted
experienced, well connected, and highly motivated talent to join
Harrow – setting the table beautifully for 2024 and for many years
to come, when we expect significant growth from IHEEZO, continued
success with our VEVYE launch, and having TRIESENCE back in
inventory and available, potentially this year. In summary,
supported by the tremendous progress we made in 2023, this year,
too, is shaping up to be another exciting year of growth. I am
confident that we have the products, resources, and people to take
full advantage of the opportunities we see ahead of us today and
for many years to come.”
Fourth quarter and year-end 2023 figures of merit:
For the Three Months Ended
December 31,
For the Year Ended December
31,
2023
2022
2023
2022
Net revenues
$
36,355,000
$
20,329,000
$
130,193,000
$
88,595,000
Gross margin
69
%
70
%
70
%
71
%
Core gross margin(1)
75
%
71
%
77
%
73
%
Net (loss) income
(9,148,000
)
1,055,000
(24,411,000
)
(14,086,000
)
Core net (loss) income(1)
(7,016,000
)
2,103,000
(11,512,000
)
(1,375,000
)
Adjusted EBITDA(1)
2,563,000
1,089,000
28,119,000
13,017,000
Basic and diluted net (loss) income
per share
(0.26
)
0.04
(0.75
)
(0.51
)
Core net (loss) income per share(1):
Basic
(0.20
)
0.08
(0.35
)
(0.05
)
Diluted
(0.20
)
0.07
(0.35
)
(0.05
)
(1)
Core gross margin, core net (loss) income
, core basic and diluted net (loss) income per share (collectively,
“Core Results”), and Adjusted EBITDA are non‑GAAP measures. For
additional information, including a reconciliation of such Core
Results and Adjusted EBITDA to the most directly comparable
measures presented in accordance with GAAP, see the explanation of
non-GAAP measures and reconciliation tables at the end of this
release.
Conference Call and Webcast
The Company’s management team will host a conference call and
live webcast tomorrow morning, Wednesday, March 20, 2024, at 8:00
a.m. Eastern Time to discuss the fourth quarter and year-end 2023
results and provide a business update. To participate in the call,
see details below:
Conference Call Details:
Date:
Wednesday, March 20, 2024
Time:
8:00 a.m. Eastern time
Participant Dial-in:
1-833-953-2434 (U.S.) 1-412-317-5763
(International)
Replay Dial-in (Passcode 6766979):
(telephonic replay through March 27, 2024)
1-877-344-7529 (U.S.) 1-412-317-0088
(International)
Webcast: (online replay through March
20, 2025)
harrow.com
About Harrow
Harrow, Inc. (Nasdaq: HROW) is a leading eyecare pharmaceutical
company engaged in the discovery, development, and
commercialization of innovative ophthalmic pharmaceutical products
for the North American market. Harrow helps eyecare professionals
preserve the gift of sight by making its comprehensive portfolio of
prescription and non-prescription pharmaceutical products
accessible and affordable to millions of patients each year. For
more information about Harrow, please visit harrow.com.
Forward-Looking Statements
This press release contains “forward-looking statements” within
the meaning of the U.S. Private Securities Litigation Reform Act of
1995. Any statements in this release that are not historical facts
may be considered such “forward-looking statements.”
Forward-looking statements are based on management's current
expectations and are subject to risks and uncertainties which may
cause results to differ materially and adversely from the
statements contained herein. Some of the potential risks and
uncertainties that could cause actual results to differ from those
predicted include, among others, risks related to: liquidity or
results of operations; our ability to successfully implement our
business plan, develop and commercialize our products, product
candidates and proprietary formulations in a timely manner or at
all, identify and acquire additional products, manage our pharmacy
operations, service our debt, obtain financing necessary to operate
our business, recruit and retain qualified personnel, manage any
growth we may experience and successfully realize the benefits of
our previous acquisitions and any other acquisitions and
collaborative arrangements we may pursue; competition from
pharmaceutical companies, outsourcing facilities and pharmacies;
general economic and business conditions, including inflation and
supply chain challenges; regulatory and legal risks and
uncertainties related to our pharmacy operations and the pharmacy
and pharmaceutical business in general; physician interest in and
market acceptance of our current and any future formulations and
compounding pharmacies generally. These and additional risks and
uncertainties are more fully described in Harrow’s filings with the
Securities and Exchange Commission, including its Annual Report on
Form 10-K and its Quarterly Reports on Form 10-Q. Such documents
may be read free of charge on the SEC's web site at sec.gov. Undue
reliance should not be placed on forward-looking statements, which
speak only as of the date they are made. Except as required by law,
Harrow undertakes no obligation to update any forward-looking
statements to reflect new information, events, or circumstances
after the date they are made, or to reflect the occurrence of
unanticipated events.
HARROW, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
December 31,
2023
December 31, 2022
(unaudited)
ASSETS
Cash and cash equivalents
$
74,085,000
$
96,270,000
All other current assets
65,397,000
21,990,000
Total current assets
139,482,000
118,260,000
All other assets
172,682,000
39,118,000
TOTAL ASSETS
$
312,164,000
$
157,378,000
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities
$
49,344,000
$
18,632,000
Loans payable, net of unamortized debt
discount
183,172,000
104,174,000
All other liabilities
9,237,000
7,332,000
TOTAL LIABILITIES
241,753,000
130,138,000
TOTAL STOCKHOLDERS' EQUITY
70,411,000
27,240,000
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$
312,164,000
$
157,378,000
HARROW, INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended
December 31,
For the Year Ended December
31,
2023
2022
2023
2022
Net revenues
$
36,355,000
$
20,329,000
$
130,193,000
$
88,595,000
Cost of sales
11,302,000
6,165,000
39,640,000
25,383,000
Gross profit
25,053,000
14,164,000
90,553,000
63,212,000
Selling, general and administrative
26,212,000
15,239,000
83,090,000
58,243,000
Research and development
3,336,000
703,000
6,652,000
3,050,000
Impairment of long-lived assets
380,000
-
380,000
-
Total operating expenses
29,928,000
15,942,000
90,122,000
61,293,000
(Loss) income from operations
(4,875,000
)
(1,778,000
)
431,000
1,919,000
Total other (expense) income, net
(4,808,000
)
2,833,000
(24,141,000
)
(15,930,000
)
Income tax benefit (expense)
535,000
-
(701,000
)
(75,000
)
Net loss (income) attributable to
Harrow, Inc.
$
(9,148,000
)
$
1,055,000
$
(24,411,000
)
$
(14,086,000
)
Net loss (income) per share of
common stock, basic and diluted
$
(0.26
)
$
0.04
$
(0.75
)
$
(0.51
)
HARROW, INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Year Ended
December 31,
2023
2022
Net cash provided by (used in):
Operating activities
$
3,840,000
$
1,705,000
Investing activities
(152,553,000
)
(1,743,000
)
Financing activities
126,528,000
54,141,000
Net change in cash and cash
equivalents
(22,185,000
)
54,103,000
Cash and cash equivalents at beginning of
the period
96,270,000
42,167,000
Cash and cash equivalents at end of the
period
$
74,085,000
$
96,270,000
Non-GAAP Financial Measures
In addition to the Company’s results of operations determined in
accordance with U.S. generally accepted accounting principles
(GAAP), which are presented and discussed above, management also
utilizes Adjusted EBITDA and Core Results, unaudited financial
measures that are not calculated in accordance with GAAP, to
evaluate the Company’s financial results and performance and to
plan and forecast future periods. Adjusted EBITDA and Core Results
are considered “non‑GAAP” financial measures within the meaning of
Regulation G promulgated by the SEC. Management believes that these
non-GAAP financial measures reflect an additional way of viewing
aspects of the Company’s operations that, when viewed with GAAP
results, provide a more complete understanding of the Company’s
results of operations and the factors and trends affecting its
business. Management believes Adjusted EBITDA and Core Results
provide meaningful supplemental information regarding the Company’s
performance because (i) they allow for greater transparency with
respect to key metrics used by management in its financial and
operational decision-making; (ii) they exclude the impact of
non-cash or, when specified, non-recurring items that are not
directly attributable to the Company’s core operating performance
and that may obscure trends in the Company’s core operating
performance; and (iii) they are used by institutional investors and
the analyst community to help analyze the Company’s results.
However, Adjusted EBITDA, Core Results, and any other non-GAAP
financial measures should be considered as a supplement to, and not
as a substitute for, or superior to, the corresponding measures
calculated in accordance with GAAP. Further, non‑GAAP financial
measures used by the Company and the way they are calculated may
differ from the non-GAAP financial measures or the calculations of
the same non‑GAAP financial measures used by other companies,
including the Company’s competitors.
Adjusted EBITDA
The Company defines Adjusted EBITDA as net loss, excluding the
effects of stock‑based compensation and expenses, impairment of
intangible assets, interest, taxes, depreciation, amortization,
investment (income) loss, net, and, if any and when specified,
other non-recurring income or expense items. Management believes
that the most directly comparable GAAP financial measure to
Adjusted EBITDA is net loss. Adjusted EBITDA has limitations and
should not be considered as an alternative to gross profit or net
loss as a measure of operating performance or to net cash provided
by (used in) operating, investing, or financing activities as a
measure of ability to meet cash needs.
The following is a reconciliation of Adjusted EBITDA, a non-GAAP
measure, to the most comparable GAAP measure, net loss, for the
three months and year ended December 31, 2023, and for the same
periods in 2022:
HARROW, INC.
RECONCILIATION OF NET LOSS TO
ADJUSTED EBITDA
For the Three Months Ended
December 31,
For the Year Ended December
31,
2023
2022
2023
2022
GAAP net (loss) income
$
(9,148,000
)
$
1,055,000
$
(24,411,000
)
$
(14,086,000
)
Stock-based compensation and expenses
4,175,000
2,033,000
15,696,000
7,974,000
Impairment of intangible assets
380,000
-
380,000
-
Interest expense, net
5,124,000
1,858,000
21,324,000
7,244,000
Income tax (benefit) expense
(535,000
)
-
701,000
75,000
Depreciation
435,000
387,000
1,530,000
1,477,000
Amortization of intangible assets
2,448,000
378,000
10,082,000
1,578,000
Investment (income) loss, net
(416,000
)
670,000
(3,092,000
)
14,047,000
Loss on disposal of equipment
146,000
69,000
168,000
69,000
Gain on sale of non-ophthalmology
assets
-
(5,259,000
)
-
(5,259,000
)
Other expense (income), net
(46,000
)
(102,000
)
5,741,000 (1)
(102,000
)
Adjusted EBITDA
$
2,563,000
$
1,089,000
$
28,119,000
$
13,017,000
(1)
Includes $5,465,000 for the loss on
extinguishment of debt.
Core Results
Harrow Core Results, including core gross margin, core net
(loss) income, and core basic and diluted loss per share exclude
(1) all amortization and impairment charges of intangible assets,
excluding software development costs, (2) net gains and losses on
investments and equity securities, including equity method gains
and losses and equity valued at fair value through profit and loss
(“FVPL”), and preferred stock dividends, and (3) gains/losses on
forgiveness of debt. In other periods, Core Results may also
exclude fair value adjustments of financial assets in the form of
options to acquire a company carried at FVPL, obligations related
to product recalls, certain acquisition‑related items,
restructuring charges/releases and associated items, related legal
items, gains/losses on early extinguishment of debt or debt
modifications, impairments of property, plant and equipment and
software, as well as income and expense items that management deems
exceptional and that are or are expected to accumulate within the
year to be over a $100,000 threshold.
The following is a reconciliation of Core Results, non-GAAP
measures, to the most comparable GAAP measures for the three months
and year ended December 31, 2023, and for the same periods in
2022:
For the Three Months Ended
December 31, 2023
GAAP Results
Amortization of Certain
Intangible Assets
Investment Gains
Other Items
Core Results
Gross profit
$
25,053,000
$
2,140,000
$
-
$
-
$
27,193,000
Gross margin
69
%
75
%
Operating (loss) income
(4,875,000
)
2,448,000
-
-
(2,427,000
)
(Loss) income before taxes
(9,683,000
)
2,448,000
(416,000
)
100,000
(7,551,000
)
Tax benefit
535,000
-
-
-
535,000
Net (loss) income
(9,148,000
)
2,448,000
(416,000
)
100,000
(7,016,000
)
Basic and diluted loss per share
($)(1)
(0.26
)
(0.20
)
Weighted average number of shares of
common stock outstanding, basic and diluted
35,353,848
35,353,848
For the Year Ended December
31, 2023
GAAP Results
Amortization of Certain
Intangible Assets
Investment Gains
Other Items
Core Results
Gross profit
$
90,553,000
$
9,314,000
$
-
$
-
$
99,867,000
Gross margin
70
%
77
%
Operating income
431,000
10,082,000
-
-
10,513,000
(Loss) income before taxes
(23,710,000
)
10,082,000
(3,092,000
)
5,909,000
(12,899,000
)
Tax expense
(701,000
)
-
-
-
(701,000
)
Net (loss) income
(24,411,000
)
10,082,000
(3,092,000
)
5,909,000
(11,512,000
)
Basic and diluted loss per share
($)(1)
(0.75
)
(0.35
)
Weighted average number of shares of
common stock outstanding, basic and diluted
32,616,777
32,616,777
For the Three Months Ended
December 31, 2022
GAAP
Results
Amortization of Certain
Intangible
Assets
Investment
Losses
Core
Results
Gross profit
$
14,164,000
$
341,000
$
-
$
14,505,000
Gross margin
70
%
71
%
Operating (loss) income
(1,778,000
)
378,000
-
(1,400,000
)
Income before taxes
1,055,000
378,000
670,000
2,103,000
Tax expense
-
-
-
-
Net income
1,055,000
378,000
670,000
2,103,000
Income per share ($)(1):
Basic
0.04
0.08
Diluted
0.04
0.07
Weighted average number of shares of
common stock outstanding:
Basic
27,958,392
27,958,392
Diluted
29,426,567
29,426,567
For the Year Ended December
31, 2022
GAAP
Results
Amortization of Certain
Intangible
Assets
Investment
Losses
Core
Results
Gross profit
$
63,212,000
$
1,364,000
$
-
$
64,576,000
Gross margin
71
%
73
%
Operating income
1,919,000
1,578,000
-
3,497,000
(Loss) Income before taxes
(14,011,000
)
1,578,000
11,133,000
(1,300,000
)
Tax expense
(75,000
)
-
-
(75,000
)
Net (loss) income
(14,086,000
)
1,578,000
11,133,000
(1,375,000
)
Basic and diluted (loss)
per share ($)(1)
(0.51
)
(0.05
)
Weighted average number of shares of
common stock outstanding, basic and diluted
27,460,968
27,460,968
(1)
Core basic and diluted loss per share is
calculated using the weighted-average number of shares of common
stock outstanding during the period. Core basic and diluted loss
per share also contemplates dilutive shares associated with
equity-based awards as described in Note 2 and elsewhere in the
Consolidated Financial Statements included in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2023.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240319708486/en/
Jamie Webb, Director of Communications and Investor Relations
jwebb@harrowinc.com 615-733-4737
Harrow (NASDAQ:HROW)
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