ProPhase Labs Inc (PRPH) Reports Mixed Q3 Results Amid Strategic Transformations
Net revenue decreased to $8.4 million in Q3 2023 from $24.2 million in Q3 2022.
Gross profit fell to $2.3 million in Q3 2023, down from $12.0 million in Q3 2022.
Net loss of $(5.1) million, or $(0.30) per share, compared to a net income of $1.0 million, or $0.06 per share, in Q3 2022.
Adjusted EBITDA loss of $(2.5) million in Q3 2023 versus an income of $6.3 million in Q3 2022.
On November 9, 2023, ProPhase Labs Inc (NASDAQ:PRPH) announced its financial results for the third quarter ended September 30, 2023. The company has seen significant momentum in its subsidiaries Pharmaloz Manufacturing, Nebula Genomics, and ProPhase BioPharma, with plans to increase Pharmaloz's capacity significantly by 2024 and indications of strong demand for its expanded capacity.
Financial Performance Overview
ProPhase Labs Inc (NASDAQ:PRPH) reported a decrease in net revenue to $8.4 million for Q3 2023, down from $24.2 million for the same period in 2022. This decline was primarily due to a $18.0 million decrease in net revenue from diagnostic services, partially offset by a $2.2 million increase in consumer products. The company attributed the decrease in diagnostic services revenue to reduced COVID-19 testing volumes as a result of the Omicron variant's emergence in early 2022.
The company's gross profit for the quarter was $2.3 million, a significant decrease from the $12.0 million reported in Q3 2022. The overall gross margin also declined to 27.8% from 49.5% year-over-year. The net loss for Q3 2023 was $(5.1) million, or $(0.30) per share, compared to a net income of $1.0 million, or $0.06 per share, in the prior year's quarter. Adjusted EBITDA showed a loss of $(2.5) million compared to an income of $6.3 million in Q3 2022.
Operational Highlights and Future Outlook
ProPhase Labs Inc (NASDAQ:PRPH) has been actively transitioning to growth-oriented subsidiaries, maintaining a healthy net working capital balance of $33.4 million as of September 30, 2023. The company is optimistic about potential liquidity events in the first half of 2024 for one or more subsidiaries, which may have valuations greater than the current market cap of the company.
Pharmaloz Manufacturing is expected to increase its capacity to over $75 million by 2024, with strong indications of demand for the entire planned capacity expansion. Nebula Genomics has opened a new Whole Genome Sequencing lab and is planning significant capacity expansion due to strong demand signals. ProPhase BioPharma is on track with its development goals and is expected to receive Current Procedural Terminology (CPT) codes in early 2024 for insurance reimbursement.
Ted Karkus, CEO of ProPhase Labs, expressed confidence in the company's diversified healthcare technology strategy and the potential for significant returns in the next 12 to 24 months.
Liquidity and Capital Resources
As of September 30, 2023, ProPhase Labs Inc (NASDAQ:PRPH) had $3.3 million in cash, cash equivalents, and marketable securities, compared to $17.4 million at the end of 2022. The decrease in cash and cash equivalents was primarily due to cash used in operating activities and various investments and expenditures.
The company will hold a conference call to discuss the financial results and provide updates on corporate developments. Interested parties can register for the call or dial in directly.
For more detailed information on ProPhase Labs Inc (NASDAQ:PRPH)'s financial results, please visit www.ProPhaseLabs.com.
ProPhase Labs Inc (NASDAQ:PRPH) remains committed to maximizing shareholder value and is poised to capitalize on the growth opportunities presented by its subsidiaries in the biotech, genomics, therapeutics, and diagnostics industries.
Explore the complete 8-K earnings release (here) from ProPhase Labs Inc for further details.
This article first appeared on GuruFocus.
