Stable revenue and gross profit despite cost-cutting initiatives, indicating the strength of underlying segments and brands.
Solid liquidity position, with cash and cash equivalents exceeding $3.3 million.
Hard assets, mainly comprised of debt-free properties, valued at over $12 million; exceeding total debt and providing financing flexibility.
Liquid inventory position and accounts receivable that are collected at an accelerated pace provide additional flexibility.
Record-breaking results at CosmoFarm and in Amazon UK sales.
Various cost-cutting and efficiency initiatives are underway as revenue accelerates, with a focus on high-margin segments like CMO and proprietary brands.
CHICAGO, IL / ACCESSWIRE / November 15, 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 third quarter ended September 30, 2024.
Third Quarter 2024 Financial Highlights
Income Statement:
Revenue decreased by 3.22%, or $0.41 million, to $12.41 million, down from $12.82 million in Q3 2023.
For the nine months ended September 30, 2024, revenue rose by 7.1%, or $2.67 million, reaching $40.20 million compared to $37.5 million for the same period last year.
Gross profit held steady at $1.21 million versus Q3 2023.
For the nine-month period ending September 30, 2024, gross profit increased by 6.1%, or $0.19 million, totaling $3.31 million, up from $3.12 million year-over-year.
Gross margin increased to 9.72%, up 25 basis points from 9.47% in Q3 2023.
Operating Expenses were reduced by 18.6%, or $0.79 million, to $3.45 million from $4.23 million in Q3 2023, driven by a 30.7% decline in general and administrative costs and a 73.42% drop in sales and marketing expenses.
For the nine months ending September 30, 2024, operating expenses declined by 13%, or $1.48 million, to $9.89 million from $11.36 million for the comparable period last year.
Loss from operations improved, decreasing by 25.77%, or $0.78 million, to $2.24 million, down from $3.02 million in Q3 2023.
For the nine-month period ending September 30, 2024, operational losses dropped by 20.22%, or $1.67 million, to $6.58 million from $8.24 million year-over-year.
Total other income, net, rose to $0.06 million from a loss of $0.40 million, largely due to foreign currency gains.
Net loss declined by 34.8%, or $1.17 million, to $2.18 million, compared to $3.35 million in Q3 2023.
Adjusted EBITDA improved to a loss of $0.70 million, compared to a loss of $1.02 million in Q3 2023.
Adjusted net loss narrowed to $0.88 million from a loss of $1.11 million in Q3 2023.
Balance Sheet:
Total assets rose 6% to $64.52 million, up from $60.86 million as of June 30, 2024.
Cash and cash equivalents at quarter-end reached $3.31 million, an 865% increase from $0.34 million as of June 30, 2024.
Tangible assets rose to $10.58 million at quarter-end, driven by upgrades to the manufacturing facilities of Cana Laboratories.
Total liabilities increased by 2.9% to $29.54 million, up from $28.71 million as of June 30, 2024.
For the nine months ending September 30, 2024, total liabilities decreased by 1.4% to $29.54 million, down from $29.97 million as of December 31, 2023. This reduction was due to several factors, including:
$0.64 million, or 9.7%, decrease in lines of credit
$0.34 million, or 7.3%, decrease in notes payable
$1.24 million, or 42.4%, reduction in other non-current and finance/lease liabilities
Total Stockholders' Equity increased by 8.8% to $34.98 million from $32.15 million as of June 30, 2024.
Recent Highlights
CEO Greg Siokas issued a letter to the Company's shareholders.
Released updated 2024-2027 guidance, projecting revenue of $155.8 million and Adjusted EBITDA of $29.4 million annually by 2027.
Wholly owned subsidiary CosmoFarm achieved record revenue of approximately $43 million in the first ten months of 2024, marking an 8.62% increase over the same period last year and contributing to a 21% rise in gross profit.
Sales of the Company's proprietary brands, including Sky Premium Life, on Amazon UK surged by 160%.
Cosmos Health received its first round of purchase orders in the United Kingdom for its antimicrobial wash, C-Scrub Wash Chlorhexidine 4%.
Taglich Brothers published an updated coverage report on Cosmos Health, maintaining a speculative buy rating with a price target of $4 per share.
Regained full compliance with Nasdaq listing requirements.
Entered the development phase for CCDL24, an innovative treatment for gastrointestinal disorders.
Completed recent upgrades to manufacturing capabilities and capacities at Cana Laboratories, securing multiple contract manufacturing agreements.
Responded promptly to the outbreak of mpox by expanding its agreement with Virax Biolabs, securing distribution deals for PCR detection kits across multiple markets, including Europe, the Gulf Cooperation Council, and India.
Management Commentary
Greg Siokas, CEO of Cosmos Health, stated: "We are pleased with our results as we continue to make solid progress on multiple fronts. Importantly, we achieved stable revenue and gross profit while significantly reducing operating expenses by nearly 20%, driven by a 30.7% reduction in general and administrative costs and a 73.4% decrease in sales and marketing expenses. We have additional cost-cutting initiatives underway and are focused on enhancing efficiencies through horizontal and vertical integration, with a goal of becoming a leaner organization. This is just the beginning.
Our balance sheet remains robust, with total stockholders' equity at $35 million, close to record levels, as our asset growth outpaced that of our liabilities. Notably, we ended the quarter with strong liquidity, maintaining a healthy cash position exceeding $3.3 million and a solid base of tangible assets, primarily our unencumbered properties at Cana and CosmoFarm, with a fair market value of over $12 million. For context, the value of these properties alone significantly surpasses our total debt.
Looking ahead, we are accelerating efforts to scale our businesses globally, with a particular focus on high-margin areas, including our contract manufacturing (CMO) division and proprietary brands such as Sky Premium Life and C-scrub. These initiatives, combined with our disciplined expense management program, will drive us toward our goal of eliminating our cash burn as we work to achieve positive operating cash flow by the end of next year."
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
| |||||||||||
| 2024 |
|
| 2023 |
|
| 2024 |
|
| 2023 |
| |||||
(in $) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
REVENUE |
|
| 12,411,048 |
|
|
| 12,823,797 |
|
|
| 40,202,238 |
|
|
| 37,537,003 |
|
GROSS PROFIT |
|
| 1,206,862 |
|
|
| 1,214,758 |
|
|
| 3,307,736 |
|
|
| 3,118,669 |
|
TOTAL OPERATING EXPENSES |
|
| (3,446,726 | ) |
|
| (4,232,059 | ) |
|
| (9,885,734 | ) |
|
| (11,363,607 | ) |
GAIN (LOSS) FROM OPERATIONS |
|
| (2,239,864 | ) |
|
| (3,017,301 | ) |
|
| (6,577,998 | ) |
|
| (8,244,938 | ) |
TOTAL OTHER INCOME (EXPENSE), NET |
|
| 57,330 |
|
|
| (397,776 | ) |
|
| (61,937 | ) |
|
| 3,454,341 |
|
NET LOSS |
|
| (2,182,534 | ) |
|
| (3,349,204 | ) |
|
| (6,639,935 | ) |
|
| (4,790,597 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
NON-GAAP FIGURES* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED EBITDA |
|
| (698,907 | ) |
|
| (1,021,290 | ) |
|
| (2,436,820 | ) |
|
| (1,481,023 | ) |
ADJUSTED NET INCOME (LOSS) |
|
| (880,336 | ) |
|
| (1,106,691 | ) |
|
| (3,129,367 | ) |
|
| (2,010,805 | ) |
(*) 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) gain on extinguishment of debt, (viii) change in fair value of derivative liability, (ix) foreign currency transaction, net (x) prior years bad debt allowances, and (xi) 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.
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
| |||||||||||
| 2024 |
|
| 2023 |
|
| 2024 |
|
| 2023 |
| |||||
(in $) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
INCOME (LOSS) BEFORE INCOME TAXES |
|
| (2,182,534 | ) |
|
| (3,415,077 | ) |
|
| (6,639,935 | ) |
|
| (4,790,597 | ) |
Adjustments (add back): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization expense |
|
| 304,139 |
|
|
| 248,530 |
|
|
| 937,000 |
|
|
| 478,466 |
|
Interest income / (expense), net |
|
| 181,429 |
|
|
| 151,274 |
|
|
| 692,547 |
|
|
| 529,782 |
|
Non-cash interest expense |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
EBITDA |
|
| (1,696,966 | ) |
|
| (3,015,273 | ) |
|
| (5,010,388 | ) |
|
| (3,782,349 | ) |
Non-recurring and extraordinary items |
|
| 712,772 |
|
|
| 1,265,739 |
|
|
| 1,786,788 |
|
|
| 2,948,634 |
|
Stock based compensation |
|
| 422,811 |
|
|
| 206,524 |
|
|
| 1,103,200 |
|
|
| 311,393 |
|
Other income (expense), net |
|
| 1,921 |
|
|
| (14,404 | ) |
|
| (160,598 | ) |
|
| 14,330 |
|
Gain (loss) on equity investments, net |
|
| (428 | ) |
|
| 1,093 |
|
|
| (2,518 | ) |
|
| (2,876 | ) |
Gain on extinguishment of debt |
|
| - |
|
|
| (706 | ) |
|
| - |
|
|
| (1,911,476 | ) |
Change in fair value of derivative liability |
|
| - |
|
|
| - |
|
|
| - |
|
|
| (3,384 | ) |
Foreign currency transaction, net |
|
| (139,016 | ) |
|
| 371,115 |
|
|
| (158,463 | ) |
|
| 108,406 |
|
Bad Debt Allowances |
|
| - |
|
|
| 164,622 |
|
|
| - |
|
|
| 836,299 |
|
Other provisions |
|
| - |
|
|
| - |
|
|
| 5,159 |
|
|
| - |
|
ADJUSTED EBITDA |
|
| (698,907 | ) |
|
| (1,021,290 | ) |
|
| (2,436,820 | ) |
|
| (1,481,023 | ) |
Interest income / (expense), net |
|
| (181,429 | ) |
|
| (151,274 | ) |
|
| (692,547 | ) |
|
| (529,782 | ) |
Provision for income taxes |
|
| - |
|
|
| 65,873 |
|
|
| - |
|
|
| - |
|
ADJUSTED NET INCOME |
|
| (880,336 | ) |
|
| (1,106,691 | ) |
|
| (3,129,367 | ) |
|
| (2,010,805 | ) |
CONDENSED CONSOLIDATED BALANCE SHEET DATA
| September 30, 2024 |
|
| June 30, 2024 |
|
| December 31, 2023 |
| ||||
(in $) |
| (Unaudited) |
|
| (Unaudited) |
|
| (Unaudited) |
| |||
ASSETS |
|
|
|
|
|
|
|
|
| |||
Cash & cash equivalents |
|
| 3,314,845 |
|
|
| 343,509 |
|
|
| 3,833,195 |
|
Inventory |
|
| 4,885,015 |
|
|
| 4,323,784 |
|
|
| 4,789,054 |
|
Accounts receivable, prepaid expenses and other current assets |
|
| 27,101,314 |
|
|
| 28,719,634 |
|
|
| 27,131,193 |
|
Property and equipment, net |
|
| 10,575,928 |
|
|
| 10,053,986 |
|
|
| 10,455,499 |
|
Goodwill and intangible assets, net |
|
| 7,746,761 |
|
|
| 7,751,472 |
|
|
| 7,684,183 |
|
Loans receivable |
|
| 7,398,180 |
|
|
| 6,431,599 |
|
|
| 7,903,378 |
|
Other noncurrent assets |
|
| 3,497,939 |
|
|
| 3,238,590 |
|
|
| 4,218,308 |
|
TOTAL ASSETS |
|
| 64,519,982 |
|
|
| 60,862,574 |
|
|
| 66,014,810 |
|
Accounts payable and accrued expenses |
|
| 12,818,143 |
|
|
| 11,912,508 |
|
|
| 12,309,890 |
|
Other current liabilities |
|
| 4,769,933 |
|
|
| 4,246,269 |
|
|
| 3,487,353 |
|
Lines of credit |
|
| 5,989,425 |
|
|
| 7,105,599 |
|
|
| 6,630,273 |
|
Notes payable |
|
| 4,279,340 |
|
|
| 3,948,470 |
|
|
| 4,617,510 |
|
Other non-current and finance/lease liabilities |
|
| 1,686,542 |
|
|
| 1,494,923 |
|
|
| 2,926,757 |
|
Stockholders' and mezzanine equity |
|
| 34,976,599 |
|
|
| 32,154,804 |
|
|
| 36,043,028 |
|
TOTAL LIABILITIES AND STOCKHOLDERS'/MEZZANINE EQUITY |
|
| 64,519,982 |
|
|
| 60,862,574 |
|
|
| 66,014,810 |
|
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®, C-Sept® and C-Scrub®. 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 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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