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LAVAL, Quebec — 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.
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Financial Highlights
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Q1-2025 vs. Q1-2024
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- 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.
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“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.
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“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.
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Operational and Corporate Developments
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For the three months ended March 31, 2025 and up to the date of this press release:
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Repurchases under our Normal Course Issuer Bid
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- 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.
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Q1-2025 Summary Financial Results
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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.
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In thousands of CAD, except per share data and number of shares | Three months ended March 31, | ||||||||
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 EBITDA1 | (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 | ||||
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Revenue
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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.
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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®, 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.
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Gross Profit and Gross Margin
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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.
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Operating Expenses
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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.
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Cash and Cash Equivalents
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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.
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