LANGHORNE, PA — Nexgel Inc (NASDAQ: NXGL), a leading corporation in the health and wellness industry, reported an impressive rise in revenue for their fourth quarter and annual performance of the fiscal year ending December 31, 2023. Adam Levy, Nexgel’s CEO, highlighted the company’s success and rapid growth throughout the year.
Nexgel’s year-over-year revenue growth in 2023 mushroomed by nearly 100% primarily due to their branded products and contract manufacturing. The extraordinary financial performance has been partly attributed to the company’s expansion of its operational infrastructure and the securing of strategic partnerships with multi-billion-dollar corporations alongside key strategic investments.
Strategic partnerships and acquisitions have played a significant role in the company’s success story in 2023. The privately-owned skincare company, Kenkoderm, has become part of Nexgel’s portfolio. This acquisition expands Nexgel’s health and wellness consumer products offering. Kenkoderm’s focus on relieving symptoms of psoriasis further diversifies Nexgel’s product catalog.
In a joint venture, Nexgel acquired a 50% interest in the converting and packaging business of CG Converting and Packaging LLC. In a significant move, CG Converting and Packaging inked a new supply agreement with global biopharmaceutical giant, Abbvie (NYSE: ABBV). The deal sees CG Converting and Packaging become a supplier of gel pads for Abbvie’s Rapid Acoustic Pulse device, currently under investigation for improving the appearance of cellulite.
Underscoring the global reach of Nexgel’s operations, the company announced another major partnership with STADA Arzneimittel AG, a European leader in consumer health. The agreement will enable the distribution and commercialization of consumer health OTC products in North America in 2024.
To support the expected surge in product demand and continued growth of branded products, Nexgel embarked on a 12,000 sq. ft. expansion of the CG Converting and Packaging facility in Texas.
The company’s financial highlights illuminate a strong upward trajectory. For the year ending December 31, 2023, revenue totaled $4.1 million, an incredible leap of $2 million, or 99.7%, in comparison to $2 million for the year ending December 31, 2022.
For the fourth quarter of 2023, revenues soared to $1.1 million, a 110% increase from the fourth quarter the previous year. This demonstrates the sustained financial momentum throughout the year, driven by successful collaborations and strategic investments.
Gross profit margins also showed positive growth. For 2023, gross profit margin stood at 15.2%, a boost from 12.5% in 2022. The 2023 fourth quarter gross profit margin was 14.6%, displaying the company’s financial savvy.
A closer look at Nexgel’s financial health revealed the reduction of significant financial baggage. In 2022, Nexgel eliminated approximately $3.5 million in convertible notes, reducing interest expense from $1.3 million in 2022 to less than $20,000 as of December 31, 2023.
Although the year ended with a $3.2 million net loss, this figure stands in stark contrast to the $4.7 million net loss for the same period the year prior. This fall in the net loss is a testament to Nexgel’s commitment to managing its operations more efficiently.
Looking ahead to the first quarter of 2023, the company has projected a first-quarter revenue of $1.25 million, a figure expected to mirror a full quarter of revenue contribution from the Kenkoderm acquisition. An additional $1 million registered direct offering led by insiders closed shortly after December 31, 2023, bolstering the company’s financial standing.
Ultimatly, Nexgel’s record year stands as a model for how strategic partnerships, acquisitions, and operational expansion can drive substantial revenue growth. The company’s future prospects look bright as they solidify their position as a major player in the health and wellness industry. Watchers of the industry are bound to be eagerly anticipating what Nexgel’s next strategic move might be.
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