Net revenue up 21% year-over-year to record third-quarter high.
Achieved fourth consecutive positive cash flow quarter while still investing in future growth.
Growth in subscription-based sales generating an expanding recurring revenue stream.
Record increase in subscriptions driving greater customer lifetime value (CLV).
Outlook remains on track for more than 20% revenue growth in 2024, exceeding $3 million, and generate cash flow positive for the year.
LAS VEGAS, NV / ACCESSWIRE / November 12, 2024 / Healthy Extracts Inc. (OTCQB:HYEX), a platform for acquiring, developing, patenting, marketing, and distributing plant-based nutraceuticals that target select high-growth categories within the multibillion-dollar nutraceuticals market, reported results for the three and nine months ended September 30, 2024. All comparisons are to the year-ago period unless otherwise noted.
Q3 2024 Financial Highlights
Net revenue increased 21% to $745,000, a record for a third quarter, which was driven primarily by consumer sales growth and increased subscription-based revenue.
Gross profit increased 22% to $602,000 with gross margin up 50 basis points to 80.9% due to improved manufacturing efficiency and product mix.
Operating expenses decreased 31% to $517,000.
Reduced outstanding debt by $97,000, which brought the total debt reduction over the past two quarters to $205,000 and enabling additional capital to be applied to growth initiatives.
Net income totaled $355,000 or $0.12 per basic and diluted share, improving from a loss of $248,000 in the same year-ago period. The increase was primarily due to a change in fair value on derivative expense. Excluding expenses related to potential acquisitions and equity offerings, regulatory compliance, stock-based compensation, change in fair value of derivative expense and interest, net income in the third quarter of 2024 totaled $117,000 or $0.04 per basic and diluted share.
Amazon "Subscribe & Save" customers at September 30, 2024 increased 63% year-over-year to a record number of subscribers. Direct-to-consumer subscription customers (excluding Amazon) at September 30, 2024 increased 97% year-over-year. Subscription growth helps reduce customer acquisition costs, increases traction, and provides greater visibility into future revenue.
Management Commentary
"In Q3, we achieved another quarter of record-breaking revenue along with additional margin improvements and debt reduction," commented Healthy Extracts president, Duke Pitts. "This strong performance was driven by the sale of industry-leading products through our well-developed and diverse marketing channels-especially direct-to-consumer.
"The results also reflect how we achieved record-breaking Amazon sales in July and August, with this resulting from effectively targeted sales and marketing efforts for Prime Day, as well as record demand for our Amazon ‘Subscribe & Save' offerings.
"We also maintained a top three position among more than 100 competitors in Amazon's popular Citrus Bergamot category. We're looking forward to strong Black Friday and Cyber Monday events coming up later this month that we expect will take our Amazon sales to the next level.
"Given the tremendous success of our Amazon ‘Subscribe & Save' program, in July we introduced a 20% discount on monthly subscriptions on our direct-to-consumer eCommerce website, replacing our traditional Buy-2-Get-1 offers. This new offering has been well received, resulting in notable growth in subscription sign-ups.
"We see this new program helping to boost our sales and margins, as well as enable greater customer long-term retention rates. We estimate our subscription-based revenue is quickly approaching nearly a third of our overall revenue run-rate, with this supporting a significant increase in overall customer lifetime value or CLV.
"Now with our strongest fundamentals to date, including a streamlined capitalization structure, manageable debt levels, and four consecutive quarters of positive cash flow, our company is positioned exceptionally well.
"Despite navigating limited working capital due to challenging financial markets, we have maintained a consistent growth trajectory with a compound annual growth rate of approximately 25% over the last three years. Based on typical industry valuation multiples applied just to our Customer Lifetime Value (CLV), we believe our current market valuation is highly undervalued.
"For the rest of the year and into the next, we expect to continue to strengthen our top-line growth, profitability, and market share, especially as our addressable markets continue to expand. Our consistent growth momentum with our retail customers positions us well for the successful launch of new products that we're planning to roll out in the current fourth quarter. We are also in the best-ever position for making strategic, accretive acquisitions that would further accelerate our growth.
"The launch of these new products will benefit from the broad market channels we have strategically built and invested in over recent years. We believe these investments have proven to be the most effective way to create significant shareholder value. The continued pursuit of this strategy remains our top priority. Given our momentum coming into the fourth quarter, we expect to report record revenue and positive cash flow for the year, with this setting the stage for accelerated growth in 2025."
Financial Outlook
For the remainder of 2024, the company expects to remain on track for another year of record revenue at more than $3.0 million, representing a 20%+ year-over-year gain, and generate positive cash-flow for the year. New product introductions are expected to continue laying the way for stronger growth and greater profitability excluding non-cash expenses.
Product Outlook
Healthy Extracts' top brand ambassador and renowned fitness expert, Whitney Johns, is preparing to launch WHITNEY JOHNSâ„¢ NUTRITION on-the-go gel packs for COLLAGEN (anti-aging) in the first quarter of 2025. These products will be based on Healthy Extracts' exclusive oral delivery system and proprietary formulations.
The company is also planning to launch in the first quarter of 2025 its new BergaMet MYNUS sugar blocker, which is specially formulated to reduce up to 42% of the sugar impact from meals. The MYNUS on-the-go gel-packs will be made available under the company's exclusive U.S. and Canadian licensing and manufacturing agreement with Gelteq.
Q3 2024 Financial Summary
Net revenue in the third quarter of 2024 increased 21% to $745,000 from $614,000 in the same year-ago quarter, primarily due to consumer sales growth and increased subscription-based revenue.
Gross profit totaled $602,000 or 80.9% of net revenue as compared to $493,000 or 80.4% of net revenue in the same year-ago quarter. The 50 basis points increase in gross margin was the result of manufacturing efficiency and more favorable product mix.
Operating expenses decreased 31% to $517,000 as compared to $754,000 in the same year-ago quarter. The decrease in operating expenses was primarily due to one-time expenses in the year-ago quarter related to the company's planned uplist to Nasdaq and issuance of options and warrants that did not reoccur in the third quarter of 2024, and to a lesser extent the reduction in general operating expense in the third quarter of 2024.
Net income totaled $354,000 or $0.12 per basic and diluted share, as compared to a net loss of $248,000 or $(0.09) per basic and diluted share in the same year-ago period.
Excluding expenses related to planned acquisitions and public offerings, regulatory compliance, stock-based compensation, the change in fair value of derivative expense and interest expense, net income in the third quarter of 2024 totaled $117,000 or $0.04 per basic and diluted share versus net income of $33,000 or $0.01 per basic and diluted share.
First Nine Months of 2024 Financial Summary
Net revenue in the first nine months of 2024 increased 29% to a record $2.3 million compared to $1.8 million in the same year-ago period, primarily due to product line and distribution channel expansion.
Gross profit totaled $1.5 million or 63.9% of net revenue as compared to $1.1 million or 58.1% of net revenue in the same year-ago period. The increase in gross margin was a result of product mix sold as well as decreases in manufacturing and freight costs.
Operating expenses decreased 50% to $1.5 million compared to $3.0 million in the same year-ago period. The decrease in operating expenses was primarily due to one-time expenses in the same year-ago period related to the company's planned uplist to a Nasdaq and the issuance of options and warrants that did not reoccur in the 2024, and to a lesser extent the reduction in general operating expense in 2024.
Net loss totaled $394,000 or $(0.13) per basic and diluted share, compared to a loss of $2.1 million or $(0.72) per basic and diluted share in the same year-ago period. The improvement in net loss was primarily due to the same factors that drove improvement in the third quarter of 2024.
Excluding expenses related to the potential acquisitions and a public offering, regulatory compliance, stock compensation, change in fair value on derivative and interest expense, net income totaled $139,000 or $0.05 per basic and diluted share versus a net loss of $480,000 or $(0.16) per basic and diluted share in the same year-ago period.
About Healthy Extracts "Live Life Young Again"
Healthy Extracts Inc. is a platform for acquiring, developing, researching, patenting, marketing, and distributing plant-based nutraceuticals.
The company's subsidiaries, BergametNAâ„¢ and Ultimate Brain Nutrientsâ„¢ (UBN), offer nutraceutical natural heart and brain health supplements. This includes the only heart health supplement distributed in North America containing Citrus Bergamot SuperFruitâ„¢. This superfruit has the highest known concentration of polyphenols and flavonoids.
UBN's KETONOMICS® proprietary formulations, which have been designed to enhance brain activity, focus, headache and cognitive behavior, provide many sales and intellectual property licensing opportunities.
For more information visit: healthyextractsinc.com, bergametna.com or tryubn.com.
Forward-Looking Statements and Safe Harbor Notice
All statements other than statements of historical facts included in this press release are "forward-looking statements" (as defined in the Private Securities Litigation Reform Act of 1995). Such forward-looking statements include our expectations and those statements that use forward-looking words such as "projected," "expect," "possibility" and "anticipate." The achievement or success of the matters covered by such forward-looking statements involve significant risks, uncertainties and assumptions. Actual results could differ materially from current projections or implied results. Investors should read the risk factors set forth in the Company's Annual Report on Form 10-K filed with the SEC on April 1, 2024, and future periodic reports filed with the SEC. All of the Company's forward-looking statements are expressly qualified by all such risk factors and other cautionary statements. The Company cautions that statements and assumptions made in this news release constitute forward-looking statements and make no guarantee of future performance. Forward-looking statements are based on estimates and opinions of management at the time statements are made. The information set forth herein speaks only as of the date hereof. The Company and its management undertake no obligation to revise these statements following the date of this news release.
Food & Drug Administration Disclosure
The product and formulation featured in this release is not for use by or sale to persons under the age of 12. This product should be used only as directed on the label. Consult with a physician before use if you have a serious medical condition or use prescription medications. A doctor's advice should be sought before using this and any supplemental dietary product. These statements have not been evaluated by the FDA. This product is not intended to diagnose, treat, cure or prevent any disease.
BergametNA™, Ultimate Brain Nutrients™, UBN™, Citrus Bergamot SuperFruit™ and F4T® are registered trademarks of Healthy Extracts Inc.™
Company Contact
Duke Pitts, President
Healthy Extracts Inc.
Tel (720) 463-1004
Email contact
Investor Contact
Ronald Both
CMA Investor Relations
Tel (949) 432-7566
Email contact
HEALTHY EXTRACTS INC.
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2024 AND DECEMBER 31, 2023
(Unaudited)
| SEPTEMBER 30, |
|
| DECEMBER 31, |
| |||
| 2024 |
|
| 2023 |
| |||
ASSETS |
| |||||||
|
|
|
|
|
| |||
CURRENT ASSETS |
|
|
|
|
|
| ||
Cash |
| $ | 100,402 |
|
| $ | 19,441 |
|
Accounts receivable |
|
| 19,766 |
|
|
| 30,440 |
|
Inventory, net |
|
| 1,437,482 |
|
|
| 1,626,283 |
|
Offering costs |
|
| 149,274 |
|
|
| 151,931 |
|
Right of use asset, net |
|
| 25,234 |
|
|
| 71,583 |
|
Total current assets |
|
| 1,732,158 |
|
|
| 1,899,678 |
|
|
|
|
|
|
|
|
| |
Fixed assets |
|
| 3,649 |
|
|
| 3,306 |
|
Patents/Trademarks |
|
| 521,881 |
|
|
| 521,881 |
|
Deposit |
|
| 16,890 |
|
|
| 16,890 |
|
Goodwill |
|
| 193,260 |
|
|
| 193,260 |
|
Total other assets |
|
| 735,679 |
|
|
| 735,336 |
|
|
|
|
|
|
|
|
| |
TOTAL ASSETS |
| $ | 2,467,837 |
|
| $ | 2,635,014 |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
LIABILITIES AND STOCKHOLDERS' EQUITY |
| |||||||
|
|
|
|
|
|
|
| |
LIABILITIES |
|
|
|
|
|
|
|
|
Accounts payable |
| $ | 42,703 |
|
| $ | 116,842 |
|
Accrued liabilities |
|
| 187,650 |
|
|
| 215,069 |
|
Lease liabilities - current |
|
| 26,187 |
|
|
| 65,229 |
|
Lease liabilities - long-term |
|
| - |
|
|
| 9,222 |
|
Notes payable |
|
| 154,254 |
|
|
| 361,093 |
|
Notes payable - related party |
|
| 178,366 |
|
|
| 83,366 |
|
Convertible debt, net of discount |
|
| 566,711 |
|
|
| 608,601 |
|
Accrued interest payable |
|
| 61,566 |
|
|
| 64,386 |
|
Accrued interest payable - related party |
|
| 19,854 |
|
|
| 2,465 |
|
Derivative liabilities |
|
| 427,586 |
|
|
| 154,150 |
|
Total current and total liabilities |
|
| 1,664,876 |
|
|
| 1,680,424 |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par value, 75,000,000 shares authorized, none and none shares issued and outstanding, respectively |
|
| - |
|
|
| - |
|
Common stock, $0.001 par value, 50,000,000 shares authorized, 2,989,406 shares issued and outstanding as of September 30, 2024, and 2,954,104 shares issued and outstanding as of December 31, 2023, respectively |
|
| 354,532 |
|
|
| 354,492 |
|
Additional paid-in capital |
|
| 19,247,244 |
|
|
| 18,999,770 |
|
Treasury stock, at cost, 4,166 shares, respectively |
|
| (5,400 | ) |
|
| - |
|
Accumulated deficit |
|
| (18,793,415 | ) |
|
| (18,399,673 | ) |
Total stockholders' equity |
|
| 802,961 |
|
|
| 954,590 |
|
|
|
|
|
|
|
|
| |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
| $ | 2,467,837 |
|
| $ | 2,635,014 |
|
HEALTHY EXTRACTS INC.
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDING SEPTEMBER 30, 2024 AND 2023
(Unaudited)
| FOR THE THREE MONTHS ENDING |
|
| FOR THE NINE MONTHS ENDING |
| |||||||||||
| SEPTEMBER 30 |
|
| SEPTEMBER 30 |
| |||||||||||
| 2024 |
|
| 2023 |
|
| 2024 |
|
| 2023 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
REVENUE |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Revenue |
| $ | 744,916 |
|
| $ | 613,541 |
|
| $ | 2,342,091 |
|
| $ | 1,816,968 |
|
Net revenue |
|
| 744,916 |
|
|
| 613,541 |
|
|
| 2,342,091 |
|
|
| 1,816,968 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
COST OF REVENUE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
| 142,456 |
|
|
| 120,309 |
|
|
| 845,185 |
|
|
| 760,825 |
|
Total cost of revenue |
|
| 142,456 |
|
|
| 120,309 |
|
|
| 845,185 |
|
|
| 760,825 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
GROSS PROFIT |
|
| 602,460 |
|
|
| 493,233 |
|
|
| 1,496,906 |
|
|
| 1,056,143 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative |
|
| 517,068 |
|
|
| 754,026 |
|
|
| 1,485,945 |
|
|
| 2,977,998 |
|
Total operating expenses |
|
| 517,068 |
|
|
| 754,026 |
|
|
| 1,485,945 |
|
|
| 2,977,998 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net of interest income |
|
| (39,963 | ) |
|
| (24,502 | ) |
|
| (131,268 | ) |
|
| (138,774 | ) |
Change in fair value on derivative |
|
| 309,037 |
|
|
| 37,371 |
|
|
| (273,436 | ) |
|
| (33,687 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Total other income (expense) |
|
| 269,074 |
|
|
| 12,869 |
|
|
| (404,703 | ) |
|
| (172,461 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net income/(loss) before income tax provision |
|
| 354,466 |
|
|
| (247,924 | ) |
|
| (393,742 | ) |
|
| (2,094,316 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
NET INCOME/(LOSS) |
| $ | 354,466 |
|
| $ | (247,924 | ) |
| $ | (393,742 | ) |
| $ | (2,094,316 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Income/(Loss) per share - basic and diluted |
| $ | 0.12 |
|
| $ | (0.09 | ) |
| $ | (0.13 | ) |
| $ | (0.72 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Weighted average number of shares outstanding - basic and diluted |
|
| 2,974,892 |
|
|
| 2,902,370 |
|
|
| 2,974,892 |
|
|
| 2,915,410 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
SOURCE: HEALTHY EXTRACTS INC.