Thursday - June 5, 2025
LAVAL, Quebec / Mar 18, 2025 / Business Wire / Crescita Therapeutics Inc. (TSX: CTX and OTC US: CRRTF) (“Crescita” or the “Company”), a growth-oriented, innovation-driven Canadian commercial dermatology company, today reported its financial results for the fourth quarter and fiscal year ended December 31, 2024 (“Q4-2024” and “F2024”). All amounts presented are in thousands of Canadian dollars (“CAD”) unless otherwise noted and in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board.
Financial Highlights
Q4-2024 vs. Q4-2023
F2024 vs. F2023
“While 2024 financial results reflected some past business challenges, we made progress on initiatives that we believe strengthen Crescita’s future,” said Serge Verreault, President and Chief Executive Officer of Crescita. “We expanded our product portfolio with the acquisition of Aquafolia, which was immediately accretive to our bottom line, secured key manufacturing and medical aesthetics partnerships, and signed a new U.S. distribution agreement for Pliaglis, which we expect will be relaunched in the U.S. this year.
“Diligent cash management continues to be a top priority. Considering cash deployment of over $2.0 million in 2024 to fund the acquisition of strategic assets and the upgrade of plant equipment, we ended the year with a strong cash balance of $9.3 million. Our cash position affords us agility, as we continue to explore opportunities to enhance revenue and profits,” concluded Mr. Verreault.
Operational and Corporate Developments
For the three months and year ended December 31, 2024 and up to the date of this press release:
New Distribution Agreement with IPG Pharmaceuticals Inc. for Pliaglis® in the United States
Normal Course Issuer Bid (“NCIB”)
Amendment to Contract Manufacturer Supply Agreement, Securing US$10M over Four Years
Exclusive Manufacturing and Supply Agreement with Leading Canadian Healthcare Services Provider
Exclusive Distribution Agreement with NanoPass Technologies Ltd.
Acquisition of Strategic Assets of Occy Laboratoire Inc.
Update on Licensing Agreement for Pliaglis® in China
Q4-2024 and F2024 Summary Financial Results
Note: Select financial information is outlined below and should be read in conjunction with Crescita's Consolidated Audited Financial Statements and related Management's Discussion and Analysis (“MD&A”) for the fiscal year ended December 31, 2024, which are available on Crescita’s profile on SEDAR+ at www.sedarplus.ca and on Crescita’s website at www.crescitatherapeutics.com.
In thousands of CAD, except per share data and number of shares | Quarter ended | Year ended | ||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 | |
| $ | $ | $ | $ | ||||
Commercial Skincare |
| 3,230 |
| 2,851 |
| 11,440 |
| 10,440 |
Licensing and Royalties |
| 303 |
| 1,547 |
| 1,251 |
| 2,030 |
Manufacturing and Services |
| 3,369 |
| 327 |
| 6,889 |
| 5,052 |
Revenues |
| 6,902 |
| 4,725 |
| 19,580 |
| 17,522 |
Cost of goods sold |
| 3,907 |
| 1,665 |
| 9,972 |
| 7,158 |
Gross profit |
| 2,995 |
| 3,060 |
| 9,608 |
| 10,364 |
Gross margin (%) |
| 43.4% |
| 64.8% |
| 49.1% |
| 59.1% |
Research and development (“R&D”) |
| 156 |
| 218 |
| 646 |
| 699 |
Selling, general and administrative (“SG&A”) |
| 2,742 |
| 2,576 |
| 10,811 |
| 10,115 |
Depreciation and amortization |
| 365 |
| 379 |
| 1,366 |
| 1,506 |
Total operating expenses |
| 3,263 |
| 3,173 |
| 12,823 |
| 12,320 |
Operating loss |
| (268) |
| (113) |
| (3,215) |
| (1,956) |
Interest income, net |
| (119) |
| (137) |
| (431) |
| (422) |
Foreign exchange (gain) loss |
| 91 |
| (33) |
| 41 |
| (10) |
Share of (profit) loss of an associate |
| 44 |
| 10 |
| 47 |
| (16) |
Net (gain) loss on convertible note measured at fair value through profit or loss |
| (108) |
| - |
| (108) |
| 22 |
Income (loss) before income taxes |
| (176) |
| 47 |
| (2,764) |
| (1,530) |
Deferred income tax (recovery) expense |
| (14) |
| 197 |
| (14) |
| 456 |
Net loss |
| (162) |
| (150) |
| (2,750) |
| (1,986) |
Adjusted EBITDA1 |
| 151 |
| 245 |
| (1,541) |
| (368) |
Weighted average number of common shares outstanding | ||||||||
Basic and diluted |
| 19,124,184 |
| 19,987,774 |
| 19,356,979 |
| 20,255,285 |
Loss per share |
| |||||||
Basic and diluted | $ | (0.01) | $ | (0.01) | $ | (0.14) | $ | (0.10) |
Selected Balance Sheet Information |
|
|
|
| ||||
Cash and cash equivalents, end of period |
|
|
| 9,273 |
| 9,385 | ||
Selected Cash Flow Information |
|
|
|
| ||||
Cash provided by (used in) operating activities |
| 1,376 |
| (261) |
| 2,725 |
| 2,076 |
Cash used in investing activities |
| (353) |
| (105) |
| (2,019) |
| (133) |
Cash used in financing activities |
| (240) |
| (258) |
| (861) |
| (782) |
Revenue
We have three reportable segments: 1) Commercial Skincare (“Skincare”), which generates revenue from the commercialization of our branded non-prescription skincare products, manufactured in-house, in Canada and in certain international markets, as well as other brands under exclusive distribution agreements; 2) Licensing and Royalties (“Licensing”), which currently derives revenue from licensing our intellectual property related to Pliaglis®; and 3) Manufacturing and Services (“Manufacturing”), which generates revenue from contract manufacturing and product development services.
For the quarter ended December 31, 2024, total revenue was $6,902, compared to $4,725 for the quarter ended December 31, 2023. The net increase of $2,177 was mainly driven by the reimbursement of $1,620 (US$1,200) received under the terms of the Amended Agreement with our largest Manufacturing client (the “Reimbursement”), the deferral of purchase orders from Q4-2023 to Q1-2024 by this client, and higher Skincare revenue resulting from an increase in domestic sales from our core brands and incremental revenue from Aquafolia which was acquired in June 2024. This was partly offset by our last entitlement to minimum guaranteed royalties under the U.S. licensing agreement with Taro Pharmaceuticals Inc. in the amount of $1,343 (US$1,000) (the “Taro Royalties”) which was recorded in Q4-2023.
For the year ended December 31, 2024, total revenue was $19,580, compared to $17,522 for the year ended December 31, 2023. The net increase of $2,058 was mainly driven by the Reimbursement, the fulfillment of production volumes under the Amended Agreement with our largest Manufacturing client, and growth in our Skincare segment, as a result of the same factors as for the quarter, partly offset by the Taro Royalties that did not repeat.
Gross Profit and Gross Margin
For the quarter ended December 31, 2024, gross profit was $2,995, representing a gross margin of 43.4%, compared to $3,060 and 64.8%, respectively, for the quarter ended December 31, 2023. The net decrease in gross profit of $65 was mainly due to the Taro Royalties that did not repeat, partly offset by revenue from higher production volumes and favourable product mix in the Manufacturing segment, as well as the increase in Skincare revenue. The decrease in gross margin of 21.4% year-over-year was mainly a result of the Reimbursement, as described above, and the Taro Royalties in Q4-2023, partly offset by margin improvements in our Skincare segment, driven by favourable product and channel mix and lower obsolescence charges in the quarter. The Reimbursement was recorded in revenue with an equal corresponding charge to COGS, thus only impacting gross margin.
For the year ended December 31, 2024, gross profit was $9,608, representing a gross margin of 49.1%, compared to $10,364 and 59.1%, respectively, for the year ended December 31, 2023. The net decrease in gross profit of $756 was mainly due to the impact of the full margin Taro Royalties that did not repeat, as well as the fulfilment in 2023 of higher-margin Manufacturing purchase orders, partly offset by higher revenue in our Skincare segment driven by the same factors as the quarter. The decrease in gross margin of 10% year-over-year was mainly due to same drivers as for the gross profit, as well as the impact of the Reimbursement during the last quarter of the year.
Operating Expenses
For the quarter and year ended December 31, 2024, total operating expenses were $3,263 and $12,823, compared to $3,173 and $12,320 for the quarter and year ended December 31, 2023. The net increase of $503 for the year was due to higher SG&A expenses, mainly from increased consulting and commercial partnership fees to support our digital strategy, headcount-related costs, and share-based compensation costs, as well as incremental acquisition-related and integration costs incurred in connection with the acquisition of Occy’s assets, partially offset by lower advertising and promotion spend.
Cash and Cash Equivalents
Cash and cash equivalents were $9,273 at December 31, 2024, compared to $9,385 at December 31, 2023. The net decrease of $112 was mainly driven by the investments made in manufacturing equipment, as well as for the acquisition of the non-real estate business assets of Occy in June 2024, partly offset by cash generated from operating activities.
Non-IFRS Financial Measures
We report our financial results in accordance with IFRS. However, we use certain non-IFRS financial measures to assess our Company’s performance. We believe these to be useful to management, investors, and other financial stakeholders in assessing Crescita’s performance. The non-IFRS measures used in this press release do not have any standardized meaning prescribed by IFRS and are therefore not comparable to similar measures presented by other issuers. These measures should be considered as supplemental in nature and not as a substitute for the related financial information prepared in accordance with IFRS. The following are the Company’s non-IFRS measures along with their respective definitions:
Management believes that Adjusted EBITDA is an important measure of operating performance and cash flow and provides useful information to investors as it highlights trends in the underlying business that may not otherwise be apparent when relying solely on IFRS measures. Below is a reconciliation of EBITDA and Adjusted EBITDA to their closest IFRS measures.
In thousands of CAD dollars | Quarter ended | Year ended | ||
2024 | 2023 | 2024 | 2023 | |
$ | $ | $ | $ | |
Net loss | (162) | (150) | (2,750) | (1,986) |
Adjust for: |
|
|
|
|
Depreciation and amortization | 365 | 379 | 1,366 | 1,506 |
Interest income, net | (119) | (137) | (431) | (422) |
Deferred income tax (recovery) expense | (14) | 197 | (14) | 456 |
EBITDA | 70 | 289 | (1,829) | (446) |
Adjust for: |
|
|
|
|
Acquisition-related and integration costs | 37 | - | 127 | - |
Share-based compensation | 17 | (21) | 181 | 82 |
Foreign exchange (gain) loss | 91 | (33) | 41 | (10) |
Share of (profit) loss of an associate | 44 | 10 | 47 | (16) |
Net (gain) loss on convertible note measured at fair value through profit or loss | (108) | - | (108) | 22 |
Adjusted EBITDA | 151 | 245 | (1,541) | (368) |
Caution Concerning Limitations of Summary Financial Results Press Release
This summary earnings press release contains limited information meant to assist the reader in assessing Crescita’s performance, but it is not a suitable source of information for readers who are unfamiliar with Crescita and is not in any way a substitute for the Company's Consolidated Audited Financial Statements and notes thereto, MD&A and latest Annual Information Form (“AIF”), all of which can be found on the Company’s profile on SEDAR+ at www.sedarplus.ca.
About Crescita Therapeutics Inc.
Crescita (TSX: CTX and OTC US: CRRTF) is a growth-oriented, innovation-driven Canadian commercial dermatology company with in-house R&D and manufacturing capabilities. The Company offers a portfolio of high-quality, science-based non-prescription skincare products and early to commercial stage prescription products. We also own multiple proprietary transdermal delivery platforms that support the development of patented formulations to facilitate the delivery of active ingredients into or through the skin. For more information visit, www.crescitatherapeutics.com.
Forward-looking Information
Certain statements in this press release constitute forward-looking statements and/or forward-looking information (collectively “forward-looking information”) within the meaning of applicable securities laws. All information in this press release, other than statements of current and historical fact, represents forward-looking information and is qualified by this cautionary note.
Forward-looking information may relate to the Company’s future financial outlook and anticipated events or results and may include information regarding the Company’s financial position, business strategy, growth strategies, addressable markets, budgets, operations, financial results, taxes, dividend policy, plans, objectives, and expectations. Such information is provided for the purpose of presenting information about management’s current expectations and plans relating to the future and allowing investors and others to get a better understanding of the Company’s anticipated financial position, results of operations and operating environment. Readers are cautioned that such information may not be appropriate for other purposes.
Often, but not always, forward-looking information can be identified by the use of forward-looking terminology such as: “outlook”, “objective”, “anticipate”, “intend”, “plan”, “goal”, “seek”, “believe”, “aim”, “project”, “estimate”, “expect”, “strategy”, “future”, “likely”, “may”, “should”, “will”, “growth strategy”, “future”, “prospects”, “continue”, and similar references to future periods or suggesting future outcomes or events. In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances contain forward-looking information.
Examples of forward-looking information include, but are not limited to, statements made in this press release under the heading “Financial Highlights”, including statements regarding the Company’s objectives, plans, goals, strategies, growth, performance, operating results, financial condition, business prospects, opportunities and industry trends, and similar statements concerning anticipated future events, results, circumstances, performance or expectations.
Forward-looking information is neither historical fact nor assurance of future performance. Instead, it reflects management’s current beliefs, expectations and assumptions and is based only on information currently available to us. Forward-looking information is necessarily based on a number of estimates and assumptions that, while considered reasonable by the management of the Company as of the date of this press release, are inherently subject to significant business, economic, and competitive uncertainties and contingencies that are difficult to predict and many of which are outside of our control.
The Company’s estimates, beliefs and assumptions, which may prove to be incorrect, include various assumptions regarding, among other things: the Company’s future growth potential, results of operations, future prospects and opportunities; the Company’s ability to retain and recruit, as applicable, customers, members of management and key personnel; industry trends; legislative or regulatory matters, including expected changes to laws and regulations and the effects of such changes; future levels of indebtedness; availability of capital; the Company’s ability to secure additional capital and source and complete acquisitions; the Company’s ability to maintain and expand its market presence and geographic scope; economic and market conditions, including the imposition of and adverse changes to tariffs and other trade protection measures; the impact of currency exchange and interest rates; the Company’s ability to maintain existing financing and insurance on acceptable terms; the Company’s ability to execute on, and the impact of, its environmental, social and governance initiatives; the impact of competition; and the Company’s ability to respond to changes to its industry and the global economy.
Forward-looking information involves risks and uncertainties that could cause Crescita’s actual results and financial condition to differ materially from those contemplated by such forward-looking information. Important factors that could cause such differences include, among others:
If any risks or uncertainties with respect to the above materialize, or if the opinions, estimates or assumptions underlying the forward-looking information prove incorrect, actual results or future events might vary materially from those anticipated in the forward-looking information. This list is not exhaustive of the factors that may impact the Company’s forward-looking information. Although management has attempted to identify important risk factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other risk factors not presently known or that management believes are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking information. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, investors should not place undue reliance on forward-looking information, which speaks only as of the date provided, and is subject to change after such date. Except as required by applicable securities laws, the Company undertakes no obligation to publicly update any forward-looking information, whether written or oral, that may be provided from time to time, whether as a result of new information, future developments or otherwise.
1Please refer to the Non-IFRS Financial Measures section of this press release.
Last Trade: | C$0.53 |
Daily Volume: | 0 |
Market Cap: | C$10.130M |
May 23, 2025 November 06, 2024 August 07, 2024 |
Recursion Pharmaceuticals is a clinical stage TechBio company leading the space by decoding biology to industrialize drug discovery. Enabling its mission is the Recursion OS, a platform built across diverse technologies that continuously expands one of the world’s largest....
CLICK TO LEARN MOREAmneal Pharmaceuticals is a fully-integrated essential medicines company. We make healthy possible through the development, manufacturing, and distribution of generic and specialty pharmaceuticals. The Company has a diverse portfolio of over 250 products in its Generics segment and is expanding across...
CLICK TO LEARN MOREEnd of content
No more pages to load