Third Quarter 2024 and Recent Selected Highlights:
- Revenues increased 44% from $34.3 million in the prior-year
quarter to $49.3 million
- GAAP net loss of $(4.2) million
- Adjusted EBITDA of $8.8 million
- Operating cash flow of $3 million
- Cash and cash equivalents of $72.6 million as of September 30,
2024
- VEVYE® total prescriptions up 55% over the second quarter of
2024
- IHEEZO® customer unit demand volume up 15% over the second
quarter of 2024
- TRIESENCE® October 2024 relaunch underway
- Expansion of access and affordability through multiple new
partnerships
- First major Medicare Part D win for VEVYE with major plan
sponsors
- Fourth quarter revenue indicates meaningful overperformance of
2024 revenue guidance from the capture of third quarter revenue
slack and positive demand trends for VEVYE, IHEEZO, and
TRIESENCE
Harrow (Nasdaq: HROW), a leading North American eyecare
pharmaceutical company, announced results for the third quarter and
nine months ended September 30, 2024. The Company also posted its
third quarter 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 and future expectations for the business.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20241113897614/en/
“We are pleased with our progress in the third quarter of 2024,”
said Mark L. Baum, Chief Executive Officer of Harrow. “Alongside
44% year‑over‑year revenue growth, we achieved a modest sequential
revenue increase, despite the third quarter’s traditional summer
seasonality and operational bumps that pushed some third quarter
revenue into the fourth quarter. Nevertheless, our expected revenue
overperformance in the second half of 2024 versus the first half
remains intact, as are our longer-term growth plans. We are seeing
strong performance thus far in the fourth quarter, traditionally
our strongest, for what we expect to be a record‑breaking finish to
a truly transformative year for Harrow.”
Third quarter 2024 figures of merit:
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2024
2023
2024
2023
Total revenues
$
49,257,000
$
34,265,000
$
132,783,000
$
93,838,000
Gross margin
76
%
71
%
74
%
70
%
Core gross margin(1)
80
%
78
%
78
%
77
%
Net loss
(4,220,000
)
(4,391,000
)
(24,258,000
)
(15,263,000
)
Core net loss(1)
(1,619,000
)
(2,983,000
)
(13,455,000
)
(4,519,000
)
Adjusted EBITDA(1)
8,808,000
9,209,000
17,838,000
25,556,000
Basic and diluted net loss per share
(0.12
)
(0.13
)
(0.68
)
(0.48
)
Core basic and diluted net loss per
share(1)
(0.05
)
(0.09
)
(0.38
)
(0.14
)
(1)
Core gross margin, core net loss, core
basic and diluted net loss 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, Thursday, November 14, 2024, at 8:00
a.m. Eastern time to discuss the third quarter 2024 results and
provide a business update. Participants can access the live
conference call via webcast on the “Investors” page of Harrow’s
website. To participate via telephone, please register in advance
using this link. Upon registration, all telephone participants will
receive a confirmation email with detailed instructions, including
a unique dial-in number and PIN, for accessing the call. A replay
of the conference call webcast will be archived on the Company’s
website for one year.
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 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 (SEC), including its Annual
Report on Form 10-K for the year ended December 31, 2023,
subsequent Quarterly Reports on Form 10-Q, and other filings with
the SEC. 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
September 30,
2024
December 31, 2023
(unaudited)
ASSETS
Cash and cash equivalents
$
72,601,000
$
74,085,000
All other current assets
74,461,000
65,397,000
Total current assets
147,062,000
139,482,000
All other assets
204,477,000
172,682,000
TOTAL ASSETS
$
351,539,000
$
312,164,000
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities
$
95,005,000
$
49,344,000
Loans payable, net of unamortized debt
discount
186,057,000
183,172,000
All other liabilities
12,856,000
9,237,000
TOTAL LIABILITIES
293,918,000
241,753,000
TOTAL STOCKHOLDERS' EQUITY
57,621,000
70,411,000
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$
351,539,000
$
312,164,000
HARROW, INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2024
2023
2024
2023
Total revenues
$
49,257,000
$
34,265,000
$
132,783,000
$
93,838,000
Cost of sales
12,018,000
10,067,000
35,110,000
28,338,000
Gross profit
37,239,000
24,198,000
97,673,000
65,500,000
Selling, general and administrative
33,645,000
21,033,000
94,275,000
56,878,000
Research and development
2,273,000
1,421,000
7,475,000
3,316,000
Total operating expenses
35,918,000
22,454,000
101,750,000
60,194,000
Income (loss) from operations
1,321,000
1,744,000
(4,077,000
)
5,306,000
Total other expense, net
5,521,000
4,596,000
19,506,000
19,333,000
Income tax expense
(20,000
)
(1,539,000
)
(675,000
)
(1,236,000
)
Net loss attributable to Harrow,
Inc.
$
(4,220,000
)
$
(4,391,000
)
$
(24,258,000
)
$
(15,263,000
)
Net loss per share of common stock,
basic and diluted
$
(0.12
)
$
(0.13
)
$
(0.68
)
$
(0.48
)
HARROW, INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended
September 30,
2024
2023
Net cash (used in) provided by:
Operating activities
$
(4,423,000
)
$
(4,856,000
)
Investing activities
4,396,000
(152,350,000
)
Financing activities
(1,457,000
)
126,546,000
Net change in cash and cash
equivalents
(1,484,000
)
(30,660,000
)
Cash and cash equivalents at beginning of
the period
74,085,000
96,270,000
Cash and cash equivalents at end of the
period
$
72,601,000
$
65,610,000
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, interest, taxes,
depreciation, amortization, investment loss (income), 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 (used in) provided by 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 nine months ended September 30, 2024 and for the
same periods in 2023:
HARROW, INC.
RECONCILIATION OF NET LOSS TO
ADJUSTED EBITDA
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2024
2023
2024
2023
GAAP net loss
$
(4,220,000
)
$
(4,391,000
)
$
(24,258,000
)
$
(15,263,000
)
Stock-based compensation and expenses
4,385,000
4,476,000
12,825,000
11,521,000
Interest expense, net
5,525,000
5,749,000
16,411,000
16,200,000
Income taxes
20,000
1,539,000
675,000
1,236,000
Depreciation
497,000
405,000
1,382,000
1,095,000
Amortization of intangible assets
2,605,000
2,584,000
7,708,000
7,634,000
Investment loss (income), net
-
(1,348,000
)
3,171,000
(2,676,000
)
Other (income) expense, net
(4,000
)
195,000
(76,000
)
5,809,000
(1)
Adjusted EBITDA
$
8,808,000
$
9,209,000
$
17,838,000
$
25,556,000
(1)
Includes $5,465,000 for the loss on extinguishment of debt.
Core Results
Harrow Core Results, including core gross margin, core net loss,
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 certain 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 nine months ended September 30, 2024 and for the same periods
in 2023:
For the Three Months Ended
September 30, 2024
GAAP Results
Amortization of Certain
Intangible Assets
Investment
Gains
Other Items
Core Results
Gross profit
$
37,239,000
$
2,191,000
$
-
$
-
$
39,430,000
Gross margin
76
%
80
%
Operating income
1,321,000
2,605,000
-
-
3,926,000
(Loss) income before taxes
(4,200,000
)
2,605,000
-
(4,000
)
(1,599,000
)
Taxes
(20,000
)
-
-
-
(20,000
)
Net (loss) income
(4,220,000
)
2,605,000
-
(4,000
)
(1,619,000
)
Basic and diluted loss
per share ($)(1)
(0.12
)
(0.05
)
Weighted average number of shares of
common stock outstanding, basic and diluted
35,702,200
35,702,200
For the Nine Months Ended
September 30, 2024
GAAP Results
Amortization of Certain
Intangible Assets
Investment
Gains
Other Items
Core Results
Gross profit
$
97,673,000
$
6,471,000
$
-
$
-
$
104,144,000
Gross margin
74
%
78
%
Operating loss
(4,077,000
)
7,708,000
-
-
3,631,000
(Loss) income before taxes
(23,583,000
)
7,708,000
3,171,000
(76,000
)
(12,780,000
)
Taxes
(675,000
)
-
-
-
(675,000
)
Net (loss) income
(24,258,000
)
7,708,000
3,171,000
(76,000
)
(13,455,000
)
Basic and diluted loss per share
($)(1)
(0.68
)
(0.38
)
Weighted average number of shares of
common stock outstanding, basic and diluted
35,597,409
35,597,409
For the Three Months Ended
September 30, 2023
GAAP Results
Amortization of Certain
Intangible Assets
Investment
Gains
Other Items
Core Results
Gross profit
$
24,198,000
$
2,480,000
$
-
$
-
$
26,678,000
Gross margin
71
%
78
%
Operating income
1,744,000
2,584,000
-
-
4,328,000
(Loss) income before taxes
(2,852,000
)
2,584,000
(1,348,000
)
195,000
(1,421,000
)
Taxes
(1,539,000
)
-
-
-
(1,539,000
)
Net (loss) income
(4,391,000
)
2,584,000
(1,348,000
)
195,000
(2,960,000
)
Basic and diluted loss
per share ($)(1)
(0.13
)
(0.09
)
Weighted average number of shares of
common stock outstanding, basic and diluted
34,255,197
34,255,197
For the Nine Months Ended
September 30, 2023
GAAP Results
Amortization of Certain
Intangible Assets
Investment
Losses
Other Items
Core Results
Gross profit
$
65,500,000
$
7,174,000
$
-
$
-
$
72,674,000
Gross margin
70
%
77
%
Operating income
5,306,000
7,634,000
-
-
12,940,000
(Loss) income before taxes
(14,027,000
)
7,634,000
(2,676,000
)
5,786,000
(3,283,000
)
Taxes
(1,236,000
)
-
-
-
(1,236,000
)
Net (loss) income
(15,263,000
)
7,634,000
(2,676,000
)
5,786,000
(4,519,000
)
Basic and diluted loss per share
($)(1)
(0.48
)
(0.14
)
Weighted average number of shares of
common stock outstanding, basic and diluted
31,689,947
31,689,947
(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
Condensed Consolidated Financial Statements included in the
Company’s Quarterly Report on Form 10-Q for the quarter ended
September 30, 2024.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241113897614/en/
Jamie Webb, Director of Communications and Investor Relations
jwebb@harrowinc.com 615-733-4737
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