WESTBROOK, Maine, May 15, 2025 (GLOBE NEWSWIRE) -- Synergy CHC Corp. (NASDAQ: SNYR) (“Synergy” or the “Company”), a provider of consumer health care and lifestyle products, is announcing its financial results for the three months ended March 31, 2025.
“We are very pleased to report 30% growth in earnings per share year-over-year, marking our ninth consecutive quarter of profitability,” said Jack Ross, CEO of Synergy. “Additionally, we expanded our EBITDA margins significantly to 24.1% compared to 19.7% in the prior year period. This performance highlights the strength of our operating model and our ongoing discipline around cost management.”
“We continue to make meaningful progress toward our 2025 priorities, including preparing for international expansion into three new markets later this year for our FOCUSfactor brand and Ready-To-Drink beverages, and expanding our Flat Tummy product line in response to rising interest in GLP-1 support. We also successfully entered into term sheets to refinance our debt that we expect to close as expeditiously as possible, which is expected to accelerate free cash flow in the business in the near term and extend our debt maturity date into 2029. This will provide us the added flexibility to pursue our long-term strategic goals and accelerate our 2025 growth initiatives. With continued momentum and the expected refinancing, Synergy has a clear path forward. We remain confident in our ability to drive sustainable growth and shareholder value. We are truly excited about our ability to accelerate our growth initiatives in the coming quarters.”
First Quarter 2025 Financial Summary vs. Same Year-Ago Period
Recent Business Highlights
First Quarter 2025 Financial Results
Revenue in the first quarter of 2025 was $8.2 million, down 13% compared to $9.4 million in the first quarter of 2024. The decrease was driven by a new product sell-in to one customer in 2024, that did not repeat in 2025.
Gross margin in the first quarter of 2025 was 75.4% compared to 72.0% in the first quarter of 2024. The increase was largely driven by a favorable shift in product mix.
Operating expenses in the first quarter of 2025 were $4.2 million, down 15% compared to $5.0 million in the first quarter of 2024. The improvement was driven by management of operating costs and the decrease in net revenue.
Income from operations for the first quarter of 2025 was $1.9 million, up 8% compared to $1.8 million in the first quarter of 2024. The increase in operating income was due to a decrease in operating expenses.
Net income in the first quarter of 2025 was $876.3 thousand, up 51% compared to net income of $580.5 thousand in the first quarter of 2024.
EBITDA (a non-GAAP financial measure) in the first quarter of 2025 was $1.98 million, up 7% compared to $1.85 million in the first quarter of 2024. The increase was primarily due to lower SG&A expenses.
Balance Sheet and Cash Flow
As of March 31, 2025, Synergy had approximately $177.9 thousand in cash and cash equivalents, compared to $687.9 thousand in cash and cash equivalents as of December 31, 2024. As of March 31, 2025, Synergy had $31.3 million in total liabilities, compared to $33.0 million in total liabilities as of December 31, 2024, an improvement of $1.7 million.
As of March 31, 2025, Synergy had $2.3 million in inventory, compared to $1.7 million in inventory as of December 31, 2024.
Cash used in operating activities for the three months ended March 31, 2025 was $822.8 thousand compared to cash used in operating activities of $858 thousand for the three months ended March 31, 2024.
EBITDA
Along with this information, to assist financial statement users in an assessment of our historical performance, the Company discloses non-GAAP financial measures in press releases and on investor conference calls and related events, as the Company believes that the non-GAAP information enhances investors' overall understanding of our financial performance, and should be read in addition to, rather than instead of, the financial statements prepared in accordance with GAAP.
The following table reconciles net income to EBITDA (in millions of US dollars):
| 3 Months ended March 31 | ||
| 2025 | 2024 | |
| Net income for the period | $ 0.88 | $ 0.58 |
| Adjusted for: | ||
| Interest expense, net | 1.08 | 1.11 |
| Amortization of intangible assets | 0.03 | 0.03 |
| Taxes expense (benefit) | (0.01) | 0.13 |
| EBITDA | $1.98 | $1.85 |
Conference Call
In conjunction with this announcement, Synergy will host a conference call at 9:00 a.m. ET / 6:00 a.m. PT on May 15, 2025 with the Company’s Chief Executive Officer, Jack Ross, and the Company’s Chief Financial Officer, Jaime Fickett. A live webcast of the call will be available on the Investor Relations section of Synergy’s website. To access the call by phone, please register here and you will be provided with dial in details. To avoid delays, we encourage participants to dial into the conference call 15 minutes ahead of the scheduled start time. A replay of the webcast will also be available for a limited time on the Company’s website.
About Synergy CHC Corp.
Synergy CHC Corp. is a provider of consumer health care and lifestyle products. Synergy's current brand portfolio consists of two marquee brands, FOCUSfactor, a clinically-tested brain health supplement that has been shown to improve memory, concentration and focus, and Flat Tummy, a lifestyle and wellness brand that provides a suite of nutritional products to help women achieve their weight management goals.
Forward Looking Statements
Certain statements contained in this press release constitute "forward-looking statements," including statements regarding expansion and growth initiatives, refinancing of our indebtedness and our free cash flow. These forward-looking statements represent Synergy's expectations or beliefs concerning future events, and it is possible that the results described in this press release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, which are set forth in Synergy's registration statement on Form S-1, as amended, many of which are outside of Synergy's control, that could cause actual results to differ materially from the results discussed in the forward-looking statements.
Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Synergy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Synergy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements in Synergy’s filings with the SEC. The risk factors and other factors noted in Synergy's filings could cause its actual results to differ materially from those contained in any forward-looking statement.
Investor Relations
Gateway Group
Cody Slach
949.574.3860
SNYR@gateway-grp.com
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Synergy CHC Corp. Condensed Consolidated Balance Sheets |
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March 31, 2025 |
December 31, 2024 |
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| (unaudited) | |||||||
| Assets | |||||||
| Current Assets | |||||||
| Cash and cash equivalents | $ | 177,882 | $ | 687,920 | |||
| Restricted cash | 100,000 | 100,000 | |||||
| Accounts receivable, net | 4,380,518 | 5,321,037 | |||||
| Other receivables | 1,855,000 | 1,999,637 | |||||
| Loan receivable (related party) | 4,375,892 | 4,375,059 | |||||
| Prepaid expenses (including related party amount of $508,879 and $312,966, respectively) | 2,170,263 | 1,859,563 | |||||
| Inventory, net | 2,346,487 | 1,716,552 | |||||
| Total Current Assets | 15,406,042 | 16,059,768 | |||||
| Intangible assets, net | 250,000 | 283,333 | |||||
| Total Assets | $ | 15,656,042 | $ | 16,343,101 | |||
| Liabilities and Stockholders’ Deficit | |||||||
| Current Liabilities: | |||||||
| Accounts payable and accrued liabilities (including related party payable of $217,956 and $88,644, respectively) | $ | 3,098,590 | $ | 5,191,868 | |||
| Income taxes payable | 77,564 | 242,977 | |||||
| Contract liabilities | 36 | 24,252 | |||||
| Short term loans payable, net of debt discount | 4,754,555 | 7,725,272 | |||||
| Current portion of long-term notes payable, net of debt discount and debt issuance cost, related party | 135,000 | 4,000,000 | |||||
| Total Current Liabilities | 8,065,745 | 17,184,369 | |||||
| Long-term Liabilities: | |||||||
| Notes payable, net of debt discount, related parties | 12,333,053 | 8,333,053 | |||||
| Notes payable | 10,896,610 | 7,457,022 | |||||
| Total long-term liabilities | 23,229,663 | 15,790,075 | |||||
| Total Liabilities | 31,295,408 | 32,974,444 | |||||
| Commitments and contingencies | |||||||
| Stockholders’ Deficit: | |||||||
| Common stock, $0.00001 par value; 300,000,000 shares authorized; 8,752,178 and 8,721,818, shares issued, respectively; 8,572,105 and 8,541,745 outstanding, respectively | 88 | 87 | |||||
| Additional paid in capital | 27,761,307 | 27,643,660 | |||||
| Accumulated other comprehensive loss | (49,712 | ) | (47,777 | ) | |||
| Accumulated deficit | (43,223,549 | ) | (44,099,813 | ) | |||
| Less: Treasury stock (180,073 shares) at cost | (127,500 | ) | (127,500 | ) | |||
| Total stockholders’ deficit | (15,639,366 | ) | (16,631,343 | ) | |||
| Total Liabilities and Stockholders’ Deficit | $ | 15,656,042 | $ | 16,343,101 | |||
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Synergy CHC Corp. Unaudited Condensed Consolidated Statements of Income and Comprehensive Income | |||||||
| For the three months ended |
For the three months ended |
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March 31, 2025 |
March 31, 2024 |
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| Revenue | |||||||
| Product Sales | 6,670,534 | $ | 9,411,863 | ||||
| License Revenue | 1,500,000 | - | |||||
| Total Revenue | 8,170,534 | 9,411,863 | |||||
| Cost of Sales | 2,006,513 | 2,637,139 | |||||
| Gross Profit | 6,164,021 | 6,774,724 | |||||
| Operating expenses | |||||||
| Selling and marketing | 2,876,271 | 3,584,677 | |||||
| General and administrative | 1,306,714 | 1,348,385 | |||||
| Depreciation and amortization | 33,333 | 33,333 | |||||
| Total operating expenses | 4,216,318 | 4,966,395 | |||||
| Income from operations | 1,947,703 | 1,808,329 | |||||
| Other (income) expenses | |||||||
| Interest income | (13,882 | ) | (387 | ) | |||
| Interest expense | 1,095,369 | 1,109,980 | |||||
| Remeasurement loss (gain) on translation of foreign subsidiary | 1,412 | (8,983 | ) | ||||
| Total other expenses | 1,082,899 | 1,100,610 | |||||
| Net income before income taxes | 864,804 | 707,719 | |||||
| Income tax benefit (expense) | 11,460 | (127,189 | ) | ||||
| Net income after tax | $ | 876,264 | $ | 580,530 | |||
| Net income per share – basic | $ | 0.10 | $ | 0.08 | |||
| Net income per share – diluted | $ | 0.10 | $ | 0.08 | |||
| Weighted average common shares outstanding | |||||||
| Basic | 8,560,636 | 7,373,745 | |||||
| Diluted | 8,577,620 | 7,373,745 | |||||
| Comprehensive income: | |||||||
| Net income | $ | 876,264 | $ | 580,530 | |||
| Foreign currency translation adjustment | (1,935 | ) | 131,637 | ||||
| Comprehensive income | $ | 874,329 | $ | 712,167 | |||
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Synergy CHC Corp. Unaudited Condensed Consolidated Statements of Cash Flows | |||||||
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For the three months ended |
For the three months ended | ||||||
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March 31, 2025 |
March 31, 2024 |
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| Cash Flows from Operating Activities | |||||||
| Net income | $ | 876,264 | $ | 580,530 | |||
| Adjustments to reconcile net income to net cash used in operating activities: | |||||||
| Amortization of debt discount and debt issuance cost | 406,841 | - | |||||
| Depreciation and amortization | 33,333 | 33,334 | |||||
| Foreign currency transaction loss (gain) | (3,137 | ) | 11,178 | ||||
| Remeasurement gain on translation of foreign subsidiary | (1,412 | ) | (8,983 | ) | |||
| Non cash implied interest | - | 7,199 | |||||
| Changes in operating assets and liabilities: | |||||||
| Accounts receivable | 940,519 | (318,330 | ) | ||||
| Other receivables | 144,637 | - | |||||
| Loan receivable, related party | (833 | ) | 25,162 | ||||
| Inventory | (629,935 | ) | 1,016,455 | ||||
| Prepaid expenses | (114,787 | ) | (202,888 | ) | |||
| Prepaid expense, related party | (195,913 | ) | (165,687 | ) | |||
| Income taxes payable | (165,413 | ) | (20,315 | ) | |||
| Contract liabilities | (24,216 | ) | 12,932 | ||||
| Accounts payable and accrued liabilities | (2,218,041 | ) | (1,808,989 | ) | |||
| Accounts payable, related party | 129,312 | (19,640 | ) | ||||
| Net cash used in operating activities | (822,781 | ) | (858,042 | ) | |||
| Cash Flows from Investing Activities | - | - | |||||
| Cash Flows from Financing Activities | |||||||
| Advances from related party | 135,000 | 1,400,000 | |||||
| Repayment of notes payable, related party | - | (84,500 | ) | ||||
| Proceeds from notes payable | 1,496,250 | 125,000 | |||||
| Repayment of notes payable | (1,316,572 | ) | (435,880 | ) | |||
| Net cash provided by financing activities | 314,678 | 1,004,620 | |||||
| Effect of exchange rate on cash, cash equivalents and restricted cash | (1,935 | ) | 131,637 | ||||
| Net decrease in cash, cash equivalents and restricted cash | (510,038 | ) | 278,215 | ||||
| Cash and restricted cash, beginning of year | 787,920 | 732,534 | |||||
| Cash and restricted cash, end of period | $ | 277,882 | $ | 1,010,749 | |||
| Supplemental Disclosure of Cash Flow Information: | |||||||
| Cash paid during the period for: | |||||||
| Interest | $ | 573,529 | $ | 1,102,781 | |||
| Income taxes | $ | - | $ | 147,728 | |||
| Supplemental Disclosure of Noncash Investing and Financing Activities: | |||||||
| Accounts payable converted to loan payable upon settlement | $ | - | $ | 3,770,824 | |||
| Issuance of common stock for loan financing | $ | 117,648 | $ | - |