Cosmos Health Reports Full Year 2023 Results: Revenue Increases to $53.4M, or 6% YoY; Stockholders' Equity Remains Near Record Highs at $36M, or $2.25 per Share

CHICAGO, IL / ACCESSWIRE / August 6, 2024 / Cosmos Health Inc. ("Cosmos Health" or the "Company'') (NASDAQ:COSM), a diversified, vertically integrated global healthcare group engaged in innovative R&D, owner of proprietary pharmaceutical and nutraceutical brands, manufacturer and distributor of healthcare products, and operator of a telehealth platform, today reported financial results for the full year ended December 31, 2023.

Full Year 2023 Financial Highlights

Income Statement:

• Revenue increased by 6% to $53.38 million from $50.35 million in FY 2022, driven by a combination of organic growth and the implementation of an M&A plan.

• Gross margins were 8.1%, down from 11.8% in FY 2022, due to a larger contribution from the lower-margin logistics distribution segment.

• SG&A nearly doubled from $13.43 million in FY 2022 to $26.18 million, largely due to elevated R&D costs, additional reorganization expenses for integrating new acquisitions, stock-based compensation for services rendered, and increased bad debt provisions.

• Net interest expense, both cash and non-cash, decreased by 95% to $0.20 million from $3.73 million in FY 2022, due to substantial debt repayments in late 2022 and early 2023.

• Total other income, net, increased by 159%, reaching $3.29 million, compared to a loss of $5.58 million in FY 2022. This increase was primarily driven by a $1.44 million bargain purchase gain related to the acquisition of Cana Laboratories and a $1.91 million gain on the extinguishment of debt.

• Adjusted EBITDA amounted to -$0.60 million compared to $0.27 million in FY 2022.

• Adjusted Net Loss improved to -$0.81 million from -$2.62 million in the previous year.

Balance Sheet:

• Total assets decreased by 3% to $66.01 million from $68.04 million in December 2022.

  • Ended the year in a strong liquidity position with cash and cash equivalents of $3.83 million.

  • Property and equipment, net, increased by 475% to $10.46 million from $1.82 million in December 2022, due to the acquisition of CosmoFarm's logistics center and Cana Laboratories' facilities.

  • Goodwill and intangible assets, net, increased by 982%, from $0.71 million in December 2022 to $7.68 million, largely due to acquiring licenses for established pharmaceutical and nutraceutical products.

• Total liabilities increased by 6% to $29.97 million from $28.38 million in December 2022.

  • Notes payable decreased by 11% to $4.62 million from $5.18 million in December 2022.

• Total stockholders' and mezzanine equity decreased by 9% to $36.04 million from $39.66 million in December 2022.

Greg Siokas, CEO of Cosmos Health, stated: "I am very pleased with our progress in 2023. Despite it being a year of significant and transformative M&A activity for Cosmos, we delivered solid operating performance across the board. We achieved 6% revenue growth, expanded our brands globally, and accelerated our R&D program, all while maintaining a prudent capital structure, despite our focus on acquisitions. This is evidenced by our Stockholders' Equity-to-Assets ratio remaining above 50%.

Net interest expense decreased by 95%, underscoring our strong deleveraging efforts. Meanwhile, total assets remained near record highs at $66 million, including valuable licenses and debt-free properties at CosmoFarm and Cana, providing significant financial flexibility. Overall, total stockholders' equity remained close to record levels at $36 million, with a book value per share of $2.25, reinforcing our belief that our shares remain undervalued.

From a strategic perspective, 2023 was a year of laying the foundations for future growth. We made substantial progress in integrating several acquisitions, including GMP-licensed Cana, which enabled us to scale up our high-margin contract manufacturing business. We now expect this division to generate over $10 million in annual gross profit at full capacity by the end of 2025. Additionally, our ability to vertically integrate and manufacture our own medicines in-house led us to acquire a comprehensive portfolio of generic drugs, allowing us to further diversify our business and tap into new markets.

We invested in various business development efforts and are now seeing the results with multiple distribution agreements worldwide for our Sky Premium Life brand. Furthermore, the addition of the Bikas pharmacy distribution network was a successful bolt-on acquisition, setting the stage for subsequent strategic moves such as the acquisitions of the Pelofarm and Pharmatrade networks. Additionally, we intensified efforts in our R&D division by hiring top talent across various disciplines, including prominent scientists, and investing in cutting-edge AI drug repurposing through Cloudscreen. This has led to significant progress, including the filing of patents for our obesity product and a drug targeting CNS cancers.

These are just a few examples of initiatives that originated in 2023, making us optimistic about the future. Importantly, the positive momentum from 2023 has carried into 2024, reinforcing our confidence that we are on the right path toward sustained profitability. Moving forward, we will focus on continuing to deliver organic growth and accelerating the integration of our acquisitions."

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)​

		Years Ended December 31,
		2023				2022
(in $)
GAAP - Figures
REVENUE			53,376,874				50,347,652
GROSS PROFIT			4,349,569				5,956,957
TOTAL OPERATING EXPENSES			(26,180,786	)			(13,430,993	)
GAIN (LOSS) FROM OPERATIONS			(21,831,217	)			(7,474,036	)
TOTAL OTHER INCOME (EXPENSE), NET			3,288,563				(5,581,284	)
NET GAIN (LOSS)			(18,542,654	)			(13,830,371	)
NON-GAAP Figures*
ADJUSTED EBITDA			(603,232	)			268,624
ADJUSTED NET INCOME (LOSS)			(806,849	)			(2,615,488	)

(*) See "Definitions of Non-GAAP Measures" and "Reconciliation of Non-GAAP Measures" sections herein for an explanation and reconciliations of non-GAAP measures used throughout this release.

Definitions of Non-GAAP Measures

We collect and analyze operating and financial data to evaluate the health of our business and assess our performance. In addition to Revenue, Income (Loss) from Operations and Net Income (Loss) under GAAP, we use: EBITDA, Adjusted EBITDA, and Adjusted Net Income (Loss). We have included these non-GAAP financial measures because they are key measures used by our management to evaluate our operating performance. Accordingly, we believe that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management team and Board of Directors. Our calculation of these non-GAAP financial measures may differ from similarly titled non-GAAP measures, if any, reported by our peer companies. These non-GAAP financial measures should not be considered in isolation from, or as substitutes for, financial information prepared in accordance with GAAP.

Adjusted EBITDA

We define Adjusted EBITDA as Income (Loss) before Income Taxes, excluding (i) depreciation and amortization expense, (ii) interest income (expense), (iii) non-cash interest expense, (iv) stock-based compensation expense, (v) non-recurring and extraordinary items (vi) other income (expense), net, (vii) gain (loss) on equity investments, net, (viii) gain on extinguishment of debt, (ix) change in fair value of derivative liability (x) foreign currency transaction, net, and (xi) prior years bad debt allowances.

We have included Adjusted EBITDA because it is a key measure used by our management team to evaluate our operating performance, generate future operating plans, and make strategic decisions. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management team and Board of Directors. In addition, it provides a useful measure for period-to-period comparisons of our business, as it removes the effect of certain non-cash expenses and non-recurring and extraordinary items.

Adjusted EBITDA has limitations as a financial measure, should be considered as supplemental in nature, and is not meant as a substitute for the related financial information prepared in accordance with GAAP.

Adjusted Net Income (Loss)

We define Adjusted Net Income (Loss) as Adjusted EBITDA (see above) adding provision for income taxes and deducting interest expense.

Adjusted Net Income has limitations as a financial measure, should be considered as supplemental in nature, and is not meant as a substitute for the related financial information prepared in accordance with GAAP.

Reconciliation of Non-GAAP Measures

Adjusted EBITDA & Adjusted Net Income (Loss)

The following table presents reconciliations of Adjusted EBITDA & Adjusted Net Income (Loss) to the most directly comparable GAAP financial measure for each of the periods indicated.

		Years Ended December 31,
(in $)		2023				2022
INCOME (LOSS) BEFORE INCOME TAXES			(18,542,654	)			(13,055,320	)
Adjustments (add back):
Depreciation and amortization expense			614,377				188,890
Interest income / (expense), net			203,617				2,109,061
Non-cash interest expense			-				1,619,838
EBITDA			(17,724,660	)			(9,137,531	)
Non-recurring and extraordinary items			4,128,741				1,907,431
Stock based compensation			498,279				24,401
Other income (expense), net			65,867				2,424,649
Gain (loss) on equity investments, net			(4,584	)			(1,676	)
Gain on extinguishment of debt			-				(1,004,124	)
Change in fair value of derivative liability			(3,384	)			20,257
Foreign currency transaction, net			(198,863	)			413,279
Bad Debt Allowances			11,850,788				5,621,938
Other provisions			784,584				-
ADJUSTED EBITDA			(603,232	)			268,624
Interest income / (expense), net			(203,617	)			(2,109,061	)
Provision for income taxes			-				(775,051	)
ADJUSTED NET INCOME			(806,849	)			(2,615,488	)

CONDENSED CONSOLIDATED BALANCE SHEET DATA

		December 31, 2023				September 30, 2023				December 31, 2022
(in $)
ASSETS
Cash & cash equivalents			3,833,195				2,360,604				20,749,683
Inventory			4,789,054				5,960,342				3,451,868
Accounts receivable, prepaid expenses and other current assets			27,131,193				37,353,753				31,360,404
Property and equipment, net			10,455,499				10,249,782				1,817,025
Goodwill and intangible assets, net			7,684,183				4,065,513				706,914
Loans receivable			7,903,378				7,762,888				8,448,272
Other noncurrent assets			4,218,309				3,772,497				1,504,455
TOTAL ASSETS			66,014,811				71,525,379				68,038,621
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses			12,309,890				12,825,486				10,615,053
Other current liabilities			3,487,353				3,023,875				4,341,557
Lines of credit			6,630,273				5,354,752				5,758,737
Notes payable			4,617,510				4,230,750				5,183,192
Other non-current and finance/lease liabilities			2,926,757				1,522,362				2,483,373
Stockholders' and mezzanine equity			36,043,028				44,568,154				39,656,709
TOTAL LIABILITIES AND STOCKHOLDERS'/MEZZANINE EQUITY			66,014,811				71,525,379				68,038,621

About Cosmos Health Inc.

Cosmos Health Inc. (NASDAQ:COSM), incorporated in 2009 in Nevada, is a diversified, vertically integrated global healthcare group. The Company owns a portfolio of proprietary pharmaceutical and nutraceutical brands, including Sky Premium Life®, Mediterranation®, bio-bebe® and C-Sept®. Through its subsidiary Cana Laboratories S.A., licensed under European Good Manufacturing Practices (GMP) and certified by the European Medicines Agency (EMA), it manufactures pharmaceuticals, food supplements, cosmetics, biocides, and medical devices within the European Union. Cosmos Health also distributes a broad line of pharmaceuticals and parapharmaceuticals, including branded generics and OTC medications, to retail pharmacies and wholesale distributors through its subsidiaries in Greece and the UK. Furthermore, the Company has established R&D partnerships targeting major health disorders such as obesity, diabetes, and cancer, enhanced by artificial intelligence drug repurposing technologies, and focuses on the R&D of novel patented nutraceuticals, specialized root extracts, proprietary complex generics, and innovative OTC products. Cosmos Health has also entered the telehealth space through the acquisition of ZipDoctor, Inc., based in Texas, USA. With a global distribution platform, the Company is currently expanding throughout Europe, Asia, and North America, and has offices and distribution centers in Thessaloniki and Athens, Greece, and in Harlow, UK. More information is available at www.cosmoshealthinc.com, www.skypremiumlife.com, www.cana.gr, www.zipdoctor.co, as well as LinkedIn and X.

Forward-Looking Statements

With the exception of the historical information contained in this news release, the matters described herein, may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements preceded by, followed by, or that otherwise, include the words "believes," "expects," "anticipates," "intends," "projects," "estimates," "plans" and similar expressions or future or conditional verbs such as "will," "should," "would," "may" and "could", are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing. These statements, involve unknown risks and uncertainties that may individually or materially impact the matters discussed, herein for a variety of reasons that are outside the control of the Company, including, but not limited to, the Company's ability to raise sufficient financing to implement its business plan, the Company's ability to regain compliance with Nasdaq listing requirements, the impact of the COVID-19 pandemic and the war in Ukraine, on the Company's business, operations and the economy in general, and the Company's ability to successfully develop and commercialize its proprietary products and technologies. Readers are cautioned not to place undue reliance on these forward- looking statements, as actual results could differ materially from those described in the forward-looking statements contained herein. Readers are urged to read the risk factors set forth in the Company's filings with the SEC, which are available at the SEC's website (www.sec.gov). The Company disclaims any intention or obligation to update, or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Investor Relations Contact:

BDG Communications
[email protected]
+44 207 0971 653

SOURCE: Cosmos Health Inc.

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