Crescita Reports First Quarter 2025 Results

LAVAL, Quebec--(BUSINESS WIRE)--May 14, 2025-- 

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 first quarter ended March 31, 2025 ("Q1-2025"). 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

Q1-2025 vs. Q1-2024

   -- Revenue was $3,537, compared to $4,996, a decrease of $1,459; 
 
   -- Gross profit was $1,747, compared to $2,411, a decrease of $664; 
 
   -- Operating expenses were $2,809, compared to $3,142, a decrease of $333; 
 
   -- Net loss was $(932), compared to $(626), an increase of $306; 
 
   -- Adjusted EBITDA1 was $(679), compared to $(325), an increased loss of 
      $354; 
 
   -- Ending cash of $8,538, compared to $9,273, a decrease of $735 for the 
      quarter. 

"As anticipated, our Q1 results were less than the prior year, mainly due to the timing of order fulfillment in our Manufacturing segment. A large purchase order was fulfilled in Q1-2024 whereas some deliveries originally scheduled for Q1-2025 were advanced into Q4-2024. We do, however, expect topline improvement in the coming quarters as we begin delivering on larger scheduled orders," said Serge Verreault, President and Chief Executive Officer of Crescita.

"We continue to implement a disciplined approach to capital deployment, carefully balancing investments in organic and inorganic growth, with the prudent preservation of our financial strength," concluded Mr. Verreault.

Operational and Corporate Developments

For the three months ended March 31, 2025 and up to the date of this press release:

Repurchases under our Normal Course Issuer Bid

   -- In Q1-2025, we repurchased 76,094 common shares through our Normal Course 
      Issuer Bid at a weighted average purchase price per share of $0.57 for 
      total cash consideration of $43. 

Q1-2025 Summary Financial Results

Note: Select financial information is outlined below and should be read in conjunction with Crescita's Condensed Consolidated Interim Financial Statements and related Management's Discussion and Analysis ("MD&A") for the three months ended March 31, 2025, which are available on Crescita's profile on SEDAR+ at www.sedarplus.ca and on Crescita's website at www.crescitatherapeutics.com.

 
                                       Three months ended March 31, 
----------------------------  ----------------------------------------------- 
In thousands of CAD, except 
per share data and number of 
shares                               2025             2024         Change 
----------------------------   ----------       ----------      --------- 
                                        $                $              $ 
----------------------------  -----------      -----------      --------- 
Commercial Skincare                 2,457            2,535            (78) 
Licensing and Royalties               250                -            250 
Manufacturing and Services            830            2,461         (1,631) 
----------------------------   ----------       ----------       -------- 
Revenues                            3,537            4,996         (1,459) 
----------------------------   ----------       ----------       -------- 
Cost of goods sold                  1,790            2,585           (795) 
Gross profit                        1,747            2,411           (664) 
----------------------------   ----------       ----------       -------- 
Gross margin (%)                     49.4%            48.3%           1.1% 
============================   ==========       ==========       ======== 
Research and development 
 ("R&D")                              131              170            (39) 
Selling, general and 
 administrative ("SG&A")            2,325            2,587           (262) 
Depreciation and 
 amortization                         353              385            (32) 
----------------------------   ----------       ----------       -------- 
Total operating expenses            2,809            3,142           (333) 
----------------------------   ----------       ----------       -------- 
Operating loss                     (1,062)            (731)          (331) 
----------------------------   ----------       ----------       -------- 
Interest income, net                  (88)            (116)            28 
Foreign exchange (gain) loss          (55)               2            (57) 
Share of loss of an 
 associate                             14                9              5 
Fair value gain on 
 convertible note measured 
 at fair value through 
 profit or loss                        (1)               -             (1) 
----------------------------   ----------       ----------       -------- 
Net loss                             (932)            (626)          (306) 
----------------------------   ----------       ----------       -------- 
Adjusted EBITDA(1)                   (679)            (325)          (354) 
----------------------------   ----------       ----------       -------- 
Weighted average number of 
 common shares outstanding 
                    Basic 
                     and 
                     diluted   19,028,110       19,591,906       (563,796) 
----------------------------   ----------       ----------       -------- 
Loss per share 
                    Basic 
                     and 
                     diluted  $     (0.05)     $     (0.03)     $   (0.02) 
----------------------------   ----------       ----------       -------- 
Selected Balance Sheet 
Information 
Cash and cash equivalents, 
 end of period                      8,538            9,531           (993) 
Selected Cash Flow 
Information 
Cash (used in) provided by 
 operating activities                (513)             378           (891) 
Cash used in investing 
 activities                           (66)               -            (66) 
Cash used in financing 
 activities                          (159)            (236)            77 
----------------------------   ----------       ----------       -------- 
 

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$(R)$ ; and 3) Manufacturing and Services ("Manufacturing"), which generates revenue from contract manufacturing and product development services.

For the three months ended March 31, 2025, total revenue was $3,537 compared to $4,996 for the three months ended March 31, 2024. The year-over-year decrease of $1,459 was primarily driven by lower Manufacturing segment revenue of $1,631, mainly due to the fulfilment of a purchase order from our largest Manufacturing client in Q1-2024, and by a slight decrease of $78 in Skincare sales, primarily due to the decreases in e-commerce and export sales versus Q1-2024, partly offset by incremental revenue from Aquafolia(R) , acquired in June 2024. The decreases were also partly offset by Licensing revenue of $250 for the quarter, reflecting product sales from supplying Pliaglis under licensing agreements.

Gross Profit and Gross Margin

For the three months ended March 31, 2025, gross profit was $1,747, representing a gross margin of 49.4%, compared to $2,411 and 48.3%, respectively, for the three months ended March 31, 2024. The net decrease of $664 was mainly due to lower Manufacturing revenue, as described above, which was at a higher margin, while the net increase of 1.1% in gross margin was mainly driven by favorable revenue mix, as Skincare sales represented a larger proportion of total revenue in Q1-2025 compared to Q1-2024.

Operating Expenses

For the three months ended March 31, 2025, total operating expenses were $2,809 compared to $3,142 for the three months ended March 31, 2024. The year-over-year decrease of $333 was mainly driven by lower headcount-related expenses as a result of position vacancies, as well as lower commercial partnership fees in connection with our ecommerce sales.

Cash and Cash Equivalents

Cash and cash equivalents were $8,538 at March 31, 2025, reflecting a decrease of $735 for the quarter, mainly due to the net loss incurred in Q1-2025.

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:

   1. EBITDA is defined as earnings before interest, income taxes, depreciation 
      of property, plant and equipment, and amortization of right-of-use asset 
      and intangible assets. 
 
   2. Adjusted EBITDA is defined as earnings before interest, income taxes, 
      depreciation of property, plant and equipment and amortization of 
      right-of-use asset and intangible assets, share of (profit) loss of 
      associates, fair value (gains) losses, share-based compensation, 

(MORE TO FOLLOW) Dow Jones Newswires

May 14, 2025 07:35 ET (11:35 GMT)