Results for the Quarter Ended December 31, 2024
Revenues for the quarter ended December 31, 2024 of $3.6 million increased by $0.5 million, or 14%, compared to $3.1 million for the same period last year. Sales in all regions, except the U.S., increased due to increased demand for Sonoma's products. U.S. sales decreased 29%, primarily due to a decrease in demand for consumer-focused animal health care products.
For the quarter ended December 31, 2024, Sonoma reported revenues of approximately $3.6 million and cost of revenues of $2.3 million, resulting in gross profit of $1.3 million, or 36% of revenue, compared to a gross profit of $1.5 million, or 47% of revenue, for the same period last year. Gross margins decreased by 11% for the quarter ended December 31, 2024 when compared to the same period last year as a result of prior period utilization of manufacturing resources to support new regulatory requirements in Europe, which were reported within research and development expense.
Total operating expenses during the quarter ended December 31, 2024 were $2.3 million, approximately flat when compared to $2.3 million during the same period in the prior year.
Net loss before income taxes for the quarter was $0.9 million, compared to $0.9 million for the same period last year. EBITDA loss for the quarter ended December 31, 2024 of $1.0 million increased by $0.3 million, compared to an EBITDA loss of $0.7 million for the same period last year.
Results for the Nine Months Ended December 31, 2024
Revenues of $10.5 million for the nine months ended December 31, 2024 increased by $1.2 million, or 13%, compared to $9.3 million for the same period last year. Sales in all regions except the U.S. and Rest of World increased due to increased demand for Sonoma's products.
For the nine months ended December 31, 2024, Sonoma reported revenues of $10.5 million and cost of revenues of $6.6 million, resulting in gross profit of $3.9 million, or 37% of revenues, compared to a gross profit of $3.7 million, or 39% or revenues, in the same period last year.
Total operating expenses during the nine months ended December 31, 2024 of $7.0 million increased by $0.1 million, or 1%, compared to $6.9 million during the same period last year.
Net loss before income taxes for the nine months ended December 31, 2024 was $2.4 million, compared to $3.7 million for the same period in the prior year. EBITDA loss for the nine months ended December 31, 2024 of $2.8 million increased by $0.1 million, compared to an EBITDA loss of $2.7 million for the same period last year.
About Sonoma Pharmaceuticals, Inc.
Sonoma Pharmaceuticals is a global healthcare leader for developing and producing stabilized hypochlorous acid (HOCl) products for a wide range of applications, including wound, eye, oral and nasal care, dermatological conditions, podiatry, animal health care and non-toxic disinfectants. Sonoma's products are clinically proven to reduce itch, pain, scarring, and irritation safely and without damaging healthy tissue. In-vitro and clinical studies of HOCl show it to safely manage skin abrasions, lacerations, minor irritations, cuts, and intact skin. Sonoma's products are sold either directly or via partners in 55 countries worldwide and the company actively seeks new distribution partners. The company's principal office is in Boulder, Colorado, with manufacturing operations in Guadalajara, Mexico. European marketing and sales are headquartered in Roermond, Netherlands. More information can be found at www.sonomapharma.com. For partnership opportunities, please contact busdev@sonomapharma.com.
Forward-Looking Statements
Except for historical information herein, matters set forth in this press release are forward-looking within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including statements about the commercial and technology progress and future financial performance of Sonoma Pharmaceuticals, Inc. and its subsidiaries (the "company"). These forward-looking statements are identified by the use of words such as "continue," "reduce," "develop," "aim," and "expand," among others. Forward-looking statements in this press release are subject to certain risks and uncertainties inherent in the company's business that could cause actual results to vary, including such risks that regulatory clinical and guideline developments may change, scientific data may not be sufficient to meet regulatory standards or receipt of required regulatory clearances or approvals, clinical results may not be replicated in actual patient settings, protection offered by the company's patents and patent applications may be challenged, invalidated or circumvented by its competitors, the available market for the company's products will not be as large as expected, the company's products will not be able to penetrate one or more targeted markets, revenues will not be sufficient to meet the company's cash needs or fund further development, as well as uncertainties relative to fluctuations in foreign currency exchange rates, global economic conditions, prospective tariffs or changes to trade policies, varying product formulations and a multitude of diverse regulatory and marketing requirements in different countries and municipalities, and other risks detailed from time to time in the company's filings with the Securities and Exchange Commission. The company disclaims any obligation to update these forward-looking statements, except as required by law.
Sonoma Pharmaceuticals™, Microcyn®, GramaDerm®, Pediacyn®, Acuicyn®, Epicyn®, Levicyn®, Celacyn®, Lasercyn® and Microdacyn60® are trademarks or registered trademarks of Sonoma Pharmaceuticals, Inc. All other trademarks and service marks are the property of their respective owners.
Media and Investor Contact:
Sonoma Pharmaceuticals, Inc.
ir@sonomapharma.com
Website: www.sonomapharma.com
Follow us on LinkedIn: https://www.linkedin.com/company/sonoma-pharmaceuticals
Follow us on Instagram: https://www.instagram.com/sonomapharma_us/
Follow us on Facebook: https://www.facebook.com/sonomapharma/
SONOMA PHARMACEUTICALS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except share amounts)
| | | December 31, 2024 | | | March 31, 2024 | |
| | | (Unaudited) | | | | |
| ASSETS | | | | | | |
| Current assets: | | | | | | |
| Cash and cash equivalents | | $ | 5,236 | | | $ | 3,128 | |
| Accounts receivable, net | | | 2,405 | | | | 2,898 | |
| Inventories, net | | | 3,143 | | | | 2,719 | |
| Prepaid expenses and other current assets | | | 1,387 | | | | 3,541 | |
| Current portion of deferred consideration, net of discount | | | 209 | | | | 262 | |
| Total current assets | | | 12,380 | | | | 12,548 | |
| Property and equipment, net | | | 215 | | | | 365 | |
| Operating lease, right of use assets | | | 119 | | | | 286 | |
| Deferred tax asset | | | 760 | | | | 1,145 | |
| Deferred consideration, net of discount, less current portion | | | 121 | | | | 330 | |
| Other assets | | | 73 | | | | 66 | |
| Total assets | | $ | 13,668 | | | $ | 14,740 | |
| | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Accounts payable | | $ | 1,395 | | | $ | 607 | |
| Accrued expenses and other current liabilities | | | 1,916 | | | | 2,113 | |
| Deferred revenue, current portion | | | 302 | | | | 478 | |
| Short-term debt | | | - | | | | 323 | |
| Operating lease liabilities, current portion | | | 90 | | | | 198 | |
| Total current liabilities | | | 3,703 | | | | 3,719 | |
| Deferred revenue, net of current portion | | | 30 | | | | 87 | |
| Withholding tax payable | | | 5,036 | | | | 4,710 | |
| Operating lease liabilities, less current portion | | | 29 | | | | 87 | |
| Total liabilities | | | 8,798 | | | | 8,603 | |
| Commitments and Contingencies | | | | | | | | |
| Stockholders' Equity: | | | | | | | | |
| Preferred stock, $0.0001 par value; 714,286 shares authorized at December 31, 2024 and March 31, 2024, no shares issued and outstanding at December 31, 2024 and March 31, 2024 | | | - | | | | - | |
| Common stock, $0.0001 par value; 50,000,000 and 24,000,000 shares authorized at December 31, 2024 and March 31, 2024, respectively, 1,615,765 and 780,371 shares issued and outstanding at December 31, 2024 and March 31, 2024, respectively | | | - | | | | - | |
| Additional paid-in capital | | | 206,454 | | | | 203,209 | |
| Accumulated deficit | | | (197,030 | ) | | | (194,349 | ) |
| Accumulated other comprehensive loss | | | (4,554 | ) | | | (2,723 | ) |
| Total stockholders' equity | | | 4,870 | | | | 6,137 | |
| Total liabilities and stockholders' equity | | $ | 13,668 | | | $ | 14,740 | |
SONOMA PHARMACEUTICALS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Loss
(In thousands, except per share amounts)
(Unaudited)
| | | Three Months Ended December 31, | | | Nine Months Ended December 31, | |
| | | 2024 | | | 2023 | | | 2024 | | | 2023 | |
| Revenues | | $ | 3,564 | | | $ | 3,138 | | | $ | 10,534 | | | $ | 9,296 | |
| Cost of revenues | | | 2,294 | | | | 1,678 | | | | 6,597 | | | | 5,642 | |
| Gross profit | | | 1,270 | | | | 1,460 | | | | 3,937 | | | | 3,654 | |
| Operating expenses: | | | | | | | | | | | | | | | | |
| Research and development | | | 427 | | | | 601 | | | | 1,403 | | | | 1,462 | |
| Selling, general and administrative | | | 1,874 | | | | 1,703 | | | | 5,588 | | | | 5,484 | |
| Total operating expenses | | | 2,301 | | | | 2,304 | | | | 6,991 | | | | 6,946 | |
| Loss from operations | | | (1,031 | ) | | | (844 | ) | | | (3,054 | ) | | | (3,292 | ) |
| Other income (expense), net | | | 112 | | | | (79 | ) | | | 675 | | | | (380 | ) |
| Loss from operations before income taxes | | | (919 | ) | | | (923 | ) | | | (2,379 | ) | | | (3,672 | ) |
| Income tax (expense) benefit | | | (9 | ) | | | 57 | | | | (302 | ) | | | (96 | ) |
| Net loss | | $ | (928 | ) | | $ | (866 | ) | | $ | (2,681 | ) | | $ | (3,768 | ) |
| | | | | | | | | | | | | | | | | |
| Net loss per share: basic and diluted | | $ | (0.63 | ) | | $ | (1.59 | ) | | $ | (2.40 | ) | | $ | (10.74 | ) |
| Weighted-average number of shares: basic and diluted | | | 1,464 | | | | 546 | | | | 1,117 | | | | 351 | |
| | | | | | | | | | | | | | | | | |
| Other comprehensive loss: | | | | | | | | | | | | | | | | |
| Net loss | | $ | (928 | ) | | $ | (866 | ) | | $ | (2,681 | ) | | $ | (3,768 | ) |
| Foreign currency translation adjustments | | | (357 | ) | | | 297 | | | | (1,831 | ) | | | 595 | |
| Comprehensive loss | | $ | (1,285 | ) | | $ | (569 | ) | | $ | (4,512 | ) | | $ | (3,173 | ) |
SONOMA PHARMACEUTICALS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(In thousands)
(Unaudited)
| | | Three Months Ended December 31, | | | Nine Months Ended December 31, | |
| | | 2024 | | | 2023 | | | 2024 | | | 2023 | |
| (1) Loss from operations minus non-cash expenses EBITDA loss: | | | | | | | | | | | | |
| GAAP operating loss as reported | | $ | (1,031 | ) | | $ | (844 | ) | | $ | (3,054 | ) | | $ | (3,292 | ) |
| Non-cash adjustments: | | | | | | | | | | | | | | | | |
| Stock-based compensation | | | 13 | | | | 140 | | | | 134 | | | | 447 | |
| Depreciation and amortization | | | 33 | | | | 45 | | | | 107 | | | | 135 | |
| Non-GAAP income (loss) from operations minus non-cash expenses EBITDAS income (loss) | | $ | (985 | ) | | $ | (659 | ) | | $ | (2,813 | | | $ | (2,710 | |
| | | | | | | | | | | | | | | | | |
| (2) Net loss minus non-cash and one-time expenses: | | | | | | | | | | | | | | | | |
| GAAP net income (loss) as reported | | $ | (928 | ) | | $ | (866 | ) | | $ | (2,681 | ) | | $ | (3,768 | ) |
| Non-cash adjustments: | | | | | | | | | | | | | | | | |
| Stock-based compensation | | | 13 | | | | 140 | | | | 134 | | | | 447 | |
| Non-cash foreign exchange transaction losses and other (income) and expense | | | (3 | ) | | | 92 | | | | (405 | | | | 421 | |
| Income taxes expense (benefit) | | | 9 | | | | (57 | | | | 302 | | | | 96 | |
| Depreciation and amortization | | | 33 | | | | 45 | | | | 107 | | | | 135 | |
| Non-GAAP net income (loss) minus non-cash expenses | | $ | (876 | ) | | $ | (646 | ) | | $ | (2,543 | ) | | $ | (2,669 | ) |
| | | | | | | | | | | | | | | | | |
| (3) Operating expenses minus non-cash expenses | | | | | | | | | | | | | | | | |
| GAAP operating expenses as reported | | $ | 2,301 | | | $ | 2,304 | | | $ | 6,991 | | | $ | 6,946 | |
| Non-cash adjustments: | | | | | | | | | | | | | | | | |
| Stock-based compensation | | | (13 | ) | | | (140 | | | | (134 | ) | | | (447 | ) |
| Depreciation and amortization | | | (33 | ) | | | (45 | ) | | | (107 | ) | | | (135 | ) |
| Non-GAAP operating expenses minus non-cash expenses | | $ | 2,255 | | | $ | 2,119 | | | $ | 6,750 | | | $ | 6,364 | |
(1) Income (loss) from continuing operations minus non-cash expenses (EBITDA) is a non-GAAP financial measure. The company defines operating income (loss) minus non-cash expenses as GAAP reported operating income (loss) minus operating depreciation and amortization, and operating stock-based compensation. The company uses this measure for the purpose of modifying the operating loss to reflect direct cash related transactions during the measurement period. Non-GAAP measures should not be considered a substitute for financial measures presented in accordance with GAAP. Non-GAAP measures are not always consistent across, or comparable with, non-GAAP measures disclosed by other companies.
(2) Net income (loss) minus non-cash and one time expenses is a non-GAAP financial measure. The company defines net income (loss) minus non-cash expenses as GAAP reported net income (loss) minus depreciation and amortization, stock-based compensation, forgiveness of PPP loan and non-cash foreign exchange transaction losses. The company uses this measure for the purpose of modifying the net loss to reflect only those expenses to reflect direct cash transactions during the measurement period. Non-GAAP measures should not be considered a substitute for financial measures presented in accordance with GAAP. Non-GAAP measures are not always consistent across, or comparable with, non-GAAP measures disclosed by other companies.
(3) Operating expenses minus non-cash expenses is a non-GAAP financial measure. The company defines operating expenses minus non-cash expenses as GAAP reported operating expenses minus operating depreciation and amortization, and operating stock-based compensation. The company uses this measure for the purpose of identifying total operating expenses involving cash transactions during the measurement period. Non-GAAP measures should not be considered a substitute for financial measures presented in accordance with GAAP. Non-GAAP measures are not always consistent across, or comparable with, non-GAAP measures disclosed by other companies.
SONOMA PHARMACEUTICALS, INC. AND SUBSIDIARIES
PRODUCT RELATED REVENUE SCHEDULES
(In thousands)
(Unaudited)
The following table presents the company's disaggregated product revenues by geographic region:
| | | Three Months Ended December 31, | | | Nine Months Ended December 31, | |
| | | 2024 | | | 2023 | | | 2024 | | | 2023 | |
| United States | | $ | 614,000 | | | $ | 868,000 | | | $ | 1,930,000 | | | $ | 2,214,000 | |
| Europe | | | 1,257,000 | | | | 1,217,000 | | | | 3,943,000 | | | | 3,488,000 | |
| Asia | | | 579,000 | | | | 522,000 | | | | 1,832,000 | | | | 1,730,000 | |
| Latin America | | | 829,000 | | | | 368,000 | | | | 2,174,000 | | | | 1,165,000 | |
| Rest of the World | | | 285,000 | | | | 163,000 | | | | 655,000 | | | | 699,000 | |
| Total | | $ | 3,564,000 | | | $ | 3,138,000 | | | $ | 10,534,000 | | | $ | 9,296,000 | |
SOURCE: Sonoma Pharmaceuticals, Inc.
