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Thorne HealthTech Reports Fourth Quarter and Full-Year 2022 Results

Net Sales Growth of 24.1% and Adj. EBITDA1 growth of 19.1% for Full-Year 2022; Provides Full-Year 2023 Guidance

NEW YORK, March 30, 2023 /PRNewswire/ -- Thorne HealthTech, Inc. ("Thorne HealthTech", "Thorne" or the "Company") (NASDAQ:THRN), a leader in delivering innovative solutions for a personalized approach to health and wellness, today announced its financial results for the fourth quarter and full-year ended December 31, 2022.

Fourth Quarter 2022 Highlights:

  • Net sales grew 27.7% year-over-year to $63.0 million, with direct-to-consumer ("DTC") sales growth of 46.1%
  • Gross profit grew 14.1% year-over-year to $28.7 million; gross margin decreased 544 basis points year-over-year to 45.5%
  • Net income attributable to common stockholders grew to $12.5 million; adjusted EBITDA grew to $9.0 million
  • Diluted earnings per share ("EPS") of $0.24; adjusted diluted EPS of $0.13

Full-Year 2022 Highlights:

  • Net sales grew 24.1% year-over-year to $228.7 million, with DTC sales growth of 44.3%
  • Gross profit grew 19.2% year-over-year to $114.9 million; gross margin decreased 206 basis points year-over-year to 50.2%
  • Net income attributable to common stockholders grew to $15.7 million; adjusted EBITDA grew to $24.5 million
  • Diluted EPS of $0.30; adjusted diluted EPS of $0.32

Full-Year 2023 Outlook:

  • Net sales of $280 million - $290 million; adjusted EBITDA of $30 million - $32 million; adjusted EPS of $0.37 - $0.39

"Our strong fourth quarter performance completes a solid year in which we achieved sales growth of 24% and adjusted EBITDA growth of 19%, despite a headwind from the conflict in Ukraine early in the year," said Paul Jacobson, CEO. "We entered 2022 with a packed agenda that included releasing new premium supplement products in key health areas and launching our new gut health test with a first-to-market microbiome wipe that revolutionizes the user experience for testing. We also started working with regulators to achieve clearance our cutting-edge OneDraw blood sampling device for unsupervised medical use in the U.S., which we see as a catalyst for significant new growth opportunities across our end markets."

Mr. Jacobson continued, "The science-backed, consumer-centric approach we deploy is paying dividends, with Thorne's recent recognition in Fast Company's Top 10 Most Innovative Companies in Wellness of 2023. Looking ahead, we expect to further increase our value proposition as a total system for wellness as we drive towards another year of above-market growth, as reflected in our 2023 guidance."   

1Important disclosures about, and reconciliations of, non-GAAP measures to their most directly comparable GAAP measures, including adjusted EBITDA, adjusted net income (loss) and adjusted diluted earnings EPS are provided in the "Non-GAAP Financial Measures" section of this press release.

The following tables provide a summary of sales by channel for the three and twelve months ended December 31, 2022, compared to the three and twelve months ended December 31, 2021:





Three months ended December 31,







Amounts





Year-Over-Year





As % of Net Sales







2022





2021





$ Change





% Change





2022





2021



(dollars in thousands)





































DTC



$

25,643





$

17,553





$

8,090







46.1

%





40.7

%





35.6

%

Professional/B2B (1)





37,319







31,755







5,564







17.5

%





59.3

%





64.4

%

Net sales (2)



$

62,962





$

49,308





$

13,654







27.7

%





100.0

%





100.0

%











































Twelve months ended December 31,







Amounts





Year-Over-Year





As % of Net Sales







2022





2021





$ Change





% Change





2022





2021



(dollars in thousands)





































DTC



$

100,496





$

69,647





$

30,849







44.3

%





43.9

%





37.8

%

Professional/B2B (1)





128,236







114,654







13,581







11.8

%





56.1

%





62.2

%

Net sales (2)



$

228,732





$

184,301





$

44,430







24.1

%





100.0

%





100.0

%



















(1) "Professional" and "B2B" generally means the Company's network of health professionals and its business-to-business customers, respectively.

(2) During the fourth quarter of 2022, we reclassified certain amounts in the condensed consolidated statements of operations as a result of certain immaterial classification errors related to prior interim periods reflecting a decrease of $3.4 million to net sales, a decrease of $4.2 million to marketing expenses, and an increase of $0.8 million to selling, general and administrative expenses for the year-to-date period ended September 30, 2022. To conform with current year presentation, certain amounts have been reclassified within the condensed consolidated statements of operations for the three-months ended December 31, 2021, the impact of which resulted in a decrease of $0.6 million to net sales, a decrease of $1.0 million to marketing expenses, and a net increase of $0.4 million to selling, general and administrative expenses. For the year ended December 31, 2021, the impact resulted in a decrease of $0.9 million to net sales, a decrease of $2.4 million to marketing expenses, and a net increase of $1.5 million to selling, general and administrative expenses. There was no impact of the reclassification adjustments to the balance sheets, statements of cash flows or key operating measures such as operating income, net income, adjusted EBITDA, adjusted net income, earnings per share or adjusted earnings per share for any period as a result of the reclassifications.

The following table provides a summary of our annual life-time value ("LTV") to customer acquisition cost ("CAC") ratio for the three and twelve months ended December 31, 2022, compared to the three and twelve months ended December 31, 2021.





Three months ended December 31,



Twelve months ended December 31,





2022



2021



2022



2021

LTV to CAC (3)



8.3x



2.4x



4.6x



4.5x











(3) Refer to the "Key Financial and Operating Data" section below.

As of December 31, 2022, the number of active subscriptions grew 45.9% to 375,185, compared to 257,070 as of December 31, 2021. Refer to the "Key Financial and Operating Data" section below for further detail.

Cost of Sales and Gross Profit

The following tables provide a summary of cost of sales and gross profit for the three and twelve months ended December 31, 2022, compared to the three and twelve months ended December 31, 2021: 





Three months ended December 31,







Amounts





Year-Over-Year





As % of Net Sales







2022





2021





$ Change





% Change





2022





2021



(dollars in thousands)





































Net sales



$

62,962





$

49,307





$

13,655







27.7

%





100.0

%





100.0

%

Cost of sales





34,303







24,182







10,121







41.9

%





54.5

%





49.0

%

Gross profit



$

28,659





$

25,125





$

3,534







14.1

%





45.5

%





51.0

%









Twelve months ended December 31,







Amounts





Year-Over-Year





As % of Net Sales







2022





2021





$ Change





% Change





2022





2021



(dollars in thousands)





































Net sales



$

228,731





$

184,301





$

44,430







24.1

%





100.0

%





100.0

%

Cost of sales





113,797







87,893







25,905







29.5

%





49.8

%





47.7

%

Gross profit



$

114,934





$

96,409





$

18,525







19.2

%





50.2

%





52.3

For the three and twelve months ended December 31, 2022, the increase in cost of sales and decrease in gross profit as a percentage of net sales was primarily from (i) the continued sell-through of higher cost inventory that included raw materials purchased ahead of  demand to mitigate against potential supply chain disruptions and (ii) the strength of sales that contribute lower gross profit margins because of our ability to meet demand utilizing our sources in an otherwise challenging market.

Operating Expenses

The following tables provide a summary of select operating expenses for the three and twelve months ended December 31, 2022, compared to the three and twelve months ended December 31, 2021: 





Three months ended December 31,







Amounts





Year-Over-Year





As % of Net Sales







2022





2021





$ Change





% Change





2022





2021



(dollars in thousands)





































Research and development



$

1,898





$

1,656





$

242







14.6

%





3.0

%





3.3

%

Marketing (2)





3,144







4,145







(1,001)







(24.1)

%





5.0

%





10.3

%

Selling, general and administrative (2)





20,280







18,325







1,955







10.7

%





32.2

%





35.9

%







Twelve months ended December 31,







Amounts





Year-Over-Year





As % of Net Sales







2022





2021





$ Change





% Change





2022





2021



(dollars in thousands)





































Research and development



$

7,424





$

5,936





$

1,488







25.1

%





3.2

%





3.2

%

Marketing (2)





26,443







22,769







3,674







16.1

%





11.6

%





12.4

%

Selling, general and administrative (2)





75,586







56,390







19,196







34.0

%





33.0

%





30.6

%

Write-off of acquired Drawbridge in-process research and development





—







1,563







(1,563)







(100.0)

%





0

%





0.8

%

Net Income and Diluted EPS

The following tables provide a summary of net income attributable to common stockholders, adjusted EBITDA, adjusted net income, diluted EPS and adjusted diluted EPS for the three and twelve months ended December 31, 2022, compared to the three and twelve months ended December 31, 2021:





Three months ended December 31,







Amounts





Year-Over-Year







2022





2021





$ Change





% Change



(dollars in thousands, except per share amounts)

























Net income attributable to common stockholders



$

12,547





$

3,270





$

9,277







283.7

%

Adjusted EBITDA





8,950







5,425







3,525







65.0

%

Adjusted net income





6,810







3,820







2,990







78.3

%

Diluted EPS



$

0.24





$

0.01





$

0.23







2267.9

%

Adjusted diluted EPS



$

0.13





$

0.07





$

0.06







85.7

%































Twelve months ended December 31,







Amounts





Year-Over-Year







2022





2021





$ Change





% Change



(dollars in thousands, except per share amounts)

























Net income attributable to common stockholders



$

15,674





$

3,746





$

11,928







318.4

%

Adjusted EBITDA





24,502







20,571







3,931







19.1

%

Adjusted net income





16,787







14,102







2,685







19.0

%

Diluted EPS



$

0.30





$

0.14





$

0.16







118.0

%

Adjusted diluted EPS



$

0.32





$

0.44





$

(0.12)







(27.3)

%

Financial Position

As of December 31, 2022, the Company had $36.0 million in cash and cash equivalents and $14.0 million of debt and notes payable outstanding, inclusive of $1.2 million related to equipment financing.

Financial Guidance

The following table presents the Company's full-year 2023 guidance and the corresponding growth rates over full-year 2022 results at the low and high ends of the guidance ranges for each measure:





Full-Year Guidance





Low - High



Low - High (Y/Y%)

Net sales



$280 million - $290 million



22.4% - 26.8%

Gross margin



49% - 52%



—

Adjusted EBITDA



$30 million - $32 million



22.4% - 30.6%

Adjusted EPS



$0.37 - $0.39



15.6% - 21.9% 

The Company's full-year guidance assumes the following:

  • Marketing expenses of between 13% and 15% of net sales for the full-year, weighted slightly higher towards the second half of the year, with the highest spend currently expected during the third quarter of 2023
  • For adjusted net income and adjusted EPS, revised guidance also assumes (i) depreciation and amortization of approximately 2.5% of net sales, with cost recognition expected to gradually increase during the year from the facility expansion, (ii) interest expense of approximately 1% of sales, (iii) an estimated full-year adjusted tax rate of 26% and (iv) diluted weighted-average shares outstanding of 54 million as of December 31, 2023

Webcast and Conference Call Details

The Company will host a conference call on Wednesday, March 31, 2023, at 8 a.m. (U.S. Eastern Time) to discuss its fourth quarter and full-year 2022 financial results. A live webcast of the call can be accessed by logging onto the investors section of the Thorne HealthTech website at https://investors.thornehealthtech.com. A replay will be available on the same website after the call.

In addition, the conference call can be accessed over the phone by dialing +1 833 470 1428 for U.S. callers, or +1 404 975 4839 for international callers, approximately 10 minutes prior to the start time. The access code for the live call is 418469. An audio replay will be available for 7 days following the call. To access the replay, dial +1 866 813 9403 (U.S.) or +1 929 458 6194 (International). The access code for the replay is 547637.

About Thorne HealthTech

Thorne HealthTech is a leader in delivering innovative solutions for delivering personalized approaches to health and wellness. As a science-driven wellness company that empowers individuals with the support, education, and solutions they need to achieve healthy aging – living healthier longer – Thorne utilizes testing and data to create improved product efficacy and to deliver personalized solutions to consumers, health professionals, and corporations. Predicated on the power of the individual, Thorne leverages artificial intelligence models to provide insights and personalized data, products, and services that help individuals take a proactive and actionable approach to improve and maintain their health over a lifetime. Thorne is the only supplement manufacturer that collaborates with Mayo Clinic on health and wellness research and content, and is trusted by more than five million customers, 47,000+ health-care professionals, thousands of professional athletes, and more than 100 professional sports teams and multiple U.S. National Teams. For more information, visit Thorne.com.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this news release, including, without limitation, statements regarding the conditions of our industry, our future results of operations and financial position, business strategy, development plans, expected research and development costs, regulatory strategy, product and service development, sales and marketing activities, international expansion efforts, timing and likelihood of success, as well as plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as "guidance," "may," "will," "should," "would," "expect," "plan," "anticipate," "could," "intend," "target," "project," "contemplate," "believe," "estimate," "predict," "potential" or "continue" or the negative of these terms or other similar expressions. Forward-looking statements contained in this news release include, but are not limited to, statements regarding financial guidance, market opportunity, ability to penetrate the market, expanded product offerings and expectations for growth. We have based these forward-looking statements largely on our current expectations and projections about our business, the industry in which we operate and financial trends that we believe may affect our business, financial condition, results of operations and prospects, and these forward-looking statements are not guarantees of future performance or development. These forward-looking statements are current only as of the date of this news release and are subject to a number of risks, uncertainties and assumptions described in the section titled "Risk Factors" and elsewhere in Thorne HealthTech's filings made with the Securities and Exchange Commission, including our Annual Report on Form 10-K filed which we plan to file on March 31, 2023, and other SEC filings, copies of which are available free of charge on the SEC website at www.sec.gov. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events or otherwise.

Key Financial and Operating Data

Amounts reported in thousands within this press release are computed based on the amounts in whole dollars. As a result, the sum of the components reported in thousands may not equal the amounts reported in whole dollars due to rounding. Percentage changes  presented are calculated from the underlying numbers in whole dollars.

To provide investors with additional information regarding its financial results, the Company has provided certain key financial and operating data metrics in this press release, including life-time value ("LTV"), customer acquisition costs ("CAC"), LTV to CAC ratio and number of subscriptions.

We define annual life-time value to customer acquisition costs as LTV from a specific calendar year divided by the CAC of that same year. Annual LTV is defined as the average gross contribution per purchasing DTC customer within a particular calendar year divided by one less the customer retention rate ("Churn Rate") during the same period. Average gross contribution is defined as the cumulative revenue from our DTC customers during a calendar year less the cost of goods divided by the number of purchasing DTC customers in the same period. To arrive at the annual LTV for a particular calendar year, we divide the average gross contribution by that year's Churn Rate. Annual CAC is defined as the total advertising and marketing expenses, inclusive of cooperative advertising costs treated as a reduction of net sales, less headcount and associated benefit expenses as well as costs attributed to value-in-kind, product samples, and sponsorships for professional and B2B customers, divided by the number of DTC customers who placed their first order during that same calendar year. We view the annual LTV to CAC ratio as a key indicator for marketing efficiency. 

The Company defines subscriptions as orders resulting from direct-to-consumer ("DTC") customers opting into automatic refills or orders that are recurring on Thorne.com and Amazon.com. Subscription programs on both platforms offer automatic ordering, payment and delivery of the products to a customer's doorstep.

Non-GAAP Financial Measures

To provide investors with additional information regarding its financial results, the Company has provided certain financial measures that are not recognized under U.S. generally accepted accounting principles ("GAAP") in this press release, including: earnings or loss before interest, taxes, depreciation and amortization ("EBITDA"), EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, adjusted net income (loss) and adjusted diluted earnings (loss) per share.

The Company calculates EBITDA, a non-GAAP financial measure, as net income or loss excluding depreciation and amortization, interest expense, net and income taxes. EBITDA margin represents EBITDA as a percentage of net sales. The Company calculates adjusted EBITDA, a non-GAAP financial measure, by further excluding non-cash items for stock-based compensation expenses, change in fair value of warrant liability, loss on Drawbridge step acquisition, loss on Drawbridge Transaction, guarantee fees, income or loss from equity interests in unconsolidated affiliates and transaction costs related to mergers and acquisitions. Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of net sales. The Company calculates adjusted net income or loss, a non-GAAP financial measure, as net income or loss excluding (i) stock-based compensation expenses, change in fair value of warrant liability, loss on Drawbridge step acquisition, loss on Drawbridge transaction, guarantee fees, income or loss from equity in unconsolidated affiliates and transaction costs related to mergers and acquisitions and (ii) utilizing an adjusted provision for income taxes based on the Company's estimate of applicable statutory rates.

EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, adjusted net income (loss) and adjusted diluted earnings (loss) per share should be viewed as measures of operating performance that are supplements to, and not substitutes for, operating income or loss, net income or loss and other GAAP measures of income and loss. The Company has included EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, adjusted net income or loss and adjusted diluted earnings (loss) per share in this press release because they are key measures used by the Company's management to evaluate and compare the Company's financial and operational performance over multiple periods, identifying trends affecting the Company's business, formulating business plans and making strategic decisions. In particular, the exclusion of certain expenses or income in calculating adjusted EBITDA and adjusted net income (loss) facilitates operating performance comparability across reporting periods by removing the effect of non-cash expenses and certain non-recurring variable charges. In addition, the Company believes that providing each of EBITDA and adjusted EBITDA and adjusted net income or loss, together with a reconciliation of net income or loss to each such measure, helps investors make comparisons between Thorne HealthTech and other companies that may have different capital structures, different tax rates and different forms of employee compensation. Each of EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, adjusted net income or loss and adjusted diluted earnings (loss) per share has inherent limitations because of the excluded items, and may not be directly comparable to similarly titled metrics used by other companies.

The Company has not reconciled the forward-looking adjusted EBITDA and adjusted diluted EPS guidance included in this press release to the most directly comparable GAAP measures because this cannot be done without unreasonable effort due to the variability and low visibility with respect to certain costs, the most significant of which are incentive compensation (including stock-based compensation), certain fair value measurements, acquisition transactions and integration, tax items and others that may arise during the year, each of which are potential adjustments to future earnings. The Company expects the variability of these items to have a potentially unpredictable, and a potentially significant, impact on our future GAAP financial results.

 

Thorne HealthTech, Inc.

Condensed Consolidated Balance Sheets

(unaudited)











December 31,





December 31,







2022





2021



Assets













Current Assets













Cash



$

36,024,847





$

51,100,915



Current portion of restricted cash





4,900,000







—



Accounts receivable, net





14,367,785







5,285,321



Related party receivables





68,731







366,590



Inventories, net





58,643,928







41,012,124



Prepaid expenses and other current assets





2,615,593







3,494,473



Total current assets





116,620,884







101,259,423

















Restricted cash, net of current portion





—







4,900,000



Property and equipment, net





49,176,844







27,030,400



Operating lease right-of-use asset, net





17,546,240







17,836,756



Finance lease right-of-use asset





3,143,592







883,076



Intangible assets, net





11,830,249







6,592,316



Goodwill





20,041,040







14,440,683



Investments





1,400,000







400,000



Equity-method investments





942,501







963,685



Other related party receivables





153,556







—



Deferred tax assets





7,782,187







—



Other assets





1,166,928







993,538



Total assets



$

229,804,021





$

175,299,877



 

Thorne HealthTech, Inc.

Condensed Consolidated Balance Sheets

(unaudited)











December 31,





December 31,







2022





2021



Liabilities, Convertible Preferred Stock and Stockholders' Equity













Current Liabilities













Accounts payable



$

26,997,203





$

16,889,756



Accrued payroll





3,508,583







2,526,917



Other accrued liabilities





3,563,843







1,144,573



Related party payables





988,778







1,634,775



Current portion of operating lease liability





1,504,433







2,633,236



Current portion of finance lease liability





1,660,404







413,487



Current portion of notes payable





814,576







—



Current portion of long-term debt





523,510







494,173



Total current liabilities





39,561,330







25,736,917



Long-term Liabilities













Operating lease liability, net of current portion





28,430,474







27,605,739



Finance lease liability, net of current portion





1,455,011







482,544



Long-term debt, net of current portion





12,646,049







1,083,634



Warrant liability





1,059,343







2,058,566



Total liabilities





83,152,207







56,967,400

















Series E convertible preferred stock; par value $0.01, 0 shares authorized as of December 31, 2022 and December 31, 2021; 0 shares issued and outstanding as of December 31, 2022 and December 31, 2021





—







—



Stockholders' Equity













Common stock; par value $0.01, 200,000,000 shares authorized as of December 31, 2022 and December 31, 2021, respectively; 53,487,517 and 52,554,214 issued and outstanding as of December 31, 2022 and December 31, 2021, respectively





534,875







525,542



Common stock, Class B; no par value, 0 shares authorized as of December 31, 2022 and December 31, 2021; 0 shares issued and outstanding as of December 31, 2022 and December 31, 2021





—







—



Treasury stock





(9,678)







—



Additional paid-in capital





260,978,339







250,163,984



Accumulated deficit





(116,483,976)







(132,158,016)



Accumulated other comprehensive loss





(29,136)







—



Total stockholders' equity —Thorne HealthTech, Inc.





144,990,424







118,531,510



Non-controlling interest





1,661,390







(199,033)



Total stockholders' equity





146,651,814







118,332,477



Total liabilities, convertible preferred stock and stockholders' equity



$

229,804,021





$

175,299,877



 

Thorne HealthTech, Inc.

Condensed Consolidated Statements of Operations

(unaudited)





Three months ended

December 31,





Years Ended

December 31,





2022





2021





2022





2021



Net sales

$

62,961,872





$

49,307,423





$

228,731,362





$

184,301,485



Cost of sales



34,302,921







24,181,876







113,797,288







87,892,579



Gross profit



28,658,951







25,125,547







114,934,074







96,408,906



Operating expenses:























Research and development



1,897,434







1,655,660







7,423,884







5,935,514



Marketing



3,144,175







4,144,207







26,442,805







22,768,555



Selling, general and administrative



20,279,664







18,324,583







75,586,115







56,389,672



Write-off of acquired Drawbridge in-process research and development



—







—







—







1,563,015



Income from operations



3,337,678







1,001,097







5,481,270







9,752,150



Other income:























Interest expense, net



1,670







56,918







(26,328)







(449,908)



Guarantee fees



—







84,305







—







(336,915)



Change in fair value of warrant liability



432,317







969,836







999,223







1,872,364



Loss on Drawbridge Transaction



—







—







—







(165,998)



Other income, net



1,298,325







171,466







1,342,810







249,082



Total other income, net



1,732,312







1,282,525







2,315,705







1,168,625



Income before income taxes and loss from equity interests in unconsolidated affiliates



5,069,990







2,283,622







7,796,975







10,920,775



Income tax (benefit) expense



(7,516,756)







289,467







(7,309,658)







411,919



Net income before loss from equity interests in unconsolidated affiliates



12,586,746







1,994,155







15,106,633







10,508,856



Loss from equity interests in unconsolidated affiliates



(184,999)







(359,562)







(173,976)







(3,664,058)



Net income



12,401,747







1,634,593







14,932,657







6,844,798



Net loss—non-controlling interest



(145,323)







(85,619)







(741,383)







(408,625)



Net income attributable to Thorne HealthTech, Inc.



12,547,070







1,720,212







15,674,040







7,253,423



Undistributed earnings (loss) attributable to Series E convertible preferred stockholders



—







(1,663,446)







—







3,507,892



Net income attributable to common stockholders—basic

$

12,547,070





$

3,383,658





$

15,674,040





$

3,745,531



Net income attributable to common stockholders—diluted













$

15,674,040





$

3,349,308



Earnings per share:























Basic

$

0.24





$

0.06





$

0.30





$

0.14



Diluted

$

0.24





$

0.06





$

0.30





$

0.10



Weighted average common shares outstanding:























Basic



52,987,544







52,541,020







52,757,834







27,478,411



Diluted



52,987,544







55,182,900







52,757,834







32,328,565



 

Thorne HealthTech, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)











Years Ended December 31,







2022





2021



Cash Flows from Operating Activities













Net income



$

14,932,657





$

6,844,798



Adjustments to reconcile net income to net cash provided by operating activities:













Depreciation and amortization





5,823,357







4,453,057



Change in fair value of warrant liability





(999,223)







(1,872,364)



Non-cash lease expense





3,687,380







5,963,123



Stock-based compensation





11,335,299







4,554,024



Deferred income tax benefit





(7,782,187)







—



Amortization of debt issuance cost and debt discount





6,280







—



Provision for doubtful accounts





(266,719)







(10,767)



Inventory write-downs





(725,074)







(56,781)



Loss on sale of equipment





5,527







—



(Gain) loss from equity interests in unconsolidated affiliate





(131,607)







3,664,058



Loss on Drawbridge Transaction





—







165,998



Write-off of acquired Drawbridge in-process research and development





—







1,563,015



Other non-cash





24,886







—



Change in operating assets and liabilities













Accounts receivable





(8,801,275)







(2,886,874)



Related party receivables





(383,682)







(231,191)



Related party payables





(645,997)







825,695



Inventories





(16,753,665)







(12,879,268)



Prepaid expenses and other current assets





843,758







(2,417,918)



Accounts payable





4,432,440







7,217,084



Accrued payroll





981,666







(65,226)



Other accrued liabilities





2,249,931







(952,043)



Operating lease liability





(2,611,848)







(4,794,134)



Net cash provided by operating activities





5,221,904







9,084,286



Cash Flows from Investing Activities













Purchase of property and equipment, net





(17,112,171)







(4,311,015)



Proceeds from disposal of property and equipment, net





99,000







—



Acquisition of Nutrativa, net of cash acquired





(14,861,996)







—



Acquisition of Drawbridge Health assets, net of cash acquired





—







(1,412,279)



Purchase of investment in unconsolidated subsidiaries





(1,000,000)







—



Purchase of investment in equity method investments





—







(704,637)



Purchase of license agreements





(750,000)







(750,457)



Net cash used in investing activities





(33,625,167)







(7,178,388)



 

Thorne HealthTech, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)











Years Ended December 31,







2022





2021



Cash Flows from Financing Activities













Proceeds from term loan



$

12,000,000





$

—



Proceeds from notes payable





1,163,680







—



Proceeds from issuance of common stock in IPO





—







70,000,000



Payment of notes payable - equipment financing





(498,215)







—



Payments on notes payable





(349,104)







—



Payments on finance leases





(934,975)







(1,242,948)



Payments of revolving line of credit





—







(20,000,000)



Debt issuance costs





(105,572)







—



Investment from minority partner in joint venture





2,601,806







—



Proceeds from exercise of stock options





446,539







75,619



Shares repurchased for tax withholdings on vesting of Restricted Stock Units





(967,828)







—



Common stock issuance costs





—







(9,999,748)



Net cash provided by financing activities





13,356,331







38,832,923

















Effect of exchange rate changes on cash and restricted cash





(29,136)







—



Net (decrease) increase in cash and restricted cash





(15,076,068)







40,738,821



Cash and restricted cash, beginning of year





56,000,915







15,262,094



Cash and restricted cash, end of year



$

40,924,847





$

56,000,915



 

Thorne HealthTech, Inc.

Reconciliations of Non-GAAP Financial Measures

(unaudited)







Three months ended

December 31,





Twelve months ended

December 31,







2022





2021





2022





2021



Net income attributable to common stockholders



$

12,547,070





$

3,269,822





$

15,674,040





$

3,745,531



Undistributed earnings attributable to Series E convertible preferred stockholders





—







(1,663,446)







—







3,507,892



 Net income attributable to Thorne HealthTech, Inc.





12,547,070







1,606,376







15,674,040







7,253,423



 Net loss — non-controlling interests





(145,323)







(85,619)







(741,383)







(408,625)



 Net income



$

12,401,747





$

1,520,757





$

14,932,657





$

6,844,798





























EBITDA and Adjusted EBITDA Reconciliation

























Net income



$

12,401,747





$

1,520,757





$

14,932,657





$

6,844,798



Net income margin





19.7

%





3.1

%





6.5

%





3.7

%

Depreciation and amortization





1,384,750







1,123,912







5,823,357







4,453,057



Interest (income) expense, net





(1,670)







56,918







26,328







449,908



Income tax expense (benefit)





(7,516,756)







289,467







(7,309,658)







411,919



EBITDA





6,268,071







2,991,054







13,472,684







12,159,682



EBITDA margin





10.0

%





6.1

%





5.9

%





6.6

%

Adjustments:

























Stock-based compensation





2,929,426







3,128,832







11,335,299







4,554,024



Change in fair value of warrant liability





(432,317)







(969,836)







(999,223)







(1,872,364)



Write-off of acquired Drawbridge in-process research and development





—







—







—







1,563,015



Loss on Drawbridge Transaction





—







—







—







165,998



Guarantee fees





—







(84,305)







—







336,915



Loss from equity interests in unconsolidated affiliates





184,999







359,562







173,976







3,664,058



Acquisition costs





—







—







519,236







—



Adjusted EBITDA



$

8,950,179





$

5,425,307





$

24,501,972





$

20,571,328



Adjusted EBITDA margin





14.2

%





11.0

%





10.7

%





11.2

%



























Adjusted Net Income (Loss) Reconciliation

























 Net income



$

12,401,747





$

1,520,757





$

14,932,657





$

6,844,798



Income tax expense (benefit)





(7,516,756)







289,467







(7,309,658)







411,919



Stock-based compensation





2,929,426







3,128,832







11,335,299







4,554,024



Change in fair value of warrant liability





(432,317)







(969,836)







(999,223)







(1,872,364)



Write-off of acquired Drawbridge in-process research and development





—







—







—







1,563,015



Loss on Drawbridge Transaction





—







—







—







165,998



Guarantee fees





—







(84,305)







—







336,915



Loss from equity interests in unconsolidated affiliates





184,999







359,562







173,976







3,664,058



Acquisition costs





—







—







519,236







—



Adjusted net income (loss) before adjusted tax expense





7,567,099







4,244,477







18,652,287







15,668,363



Adjusted income tax expense (benefit)





756,710







424,448







1,865,229







1,566,836



Adjusted net income



$

6,810,389





$

3,820,029





$

16,787,058





$

14,101,527





























Diluted weighted-average shares outstanding





52,987,544







55,182,900







52,757,834







32,328,565



Adjusted diluted earnings per share



$

0.13





$

0.07





$

0.32





$

0.44



 

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SOURCE Thorne HealthTech, Inc.