Q3 2025 Synergy CHC Corp Earnings Call
Good morning everyone and thank you for participating. In today's conference, call to discuss, Synergy CHC corporations Financial results, for the third quarter ended, September 30th 2025,
Joining us today is our synergies, CEO, Jack, Roth CFO, Jamie Fickett and Greg robas with investor relations.
Following their remarks, we'll open the call for analyst questions.
Before we go further, I would like to turn the call over to Mr. Robles as he reads the company's Safe Harbor statement. Greg, please go ahead.
Thanks Carmen. Good morning and thanks for joining our conference. Call to discuss our third quarter, 2025 Financial results. I'd like to remind everyone that this call is available for replay and Via a live webcast, that will be posted on our investor relations website at investors synergy chc.com.
The information on this call contains forward-looking statements. These statements are often characterized by terminology such as believe. Hope May anticipate expect will and other similar expressions.
Forward-looking statements are not guarantees of future performance. In the actual results may be materially different from the results implied by forward-looking statements.
Factors that could cause results to differ materially from those implied. Herein include, but are not limited to those factors. Disclosed in the company's SEC, filings under the caption risk, factors the information on this call speaks only as of today's date and the company. Disclaims, any duty to update the information provided here in
now, I would like to turn the call over to the CEO of synergy Jack Ross Jack.
Thank you Greg. Good morning everyone. Thank you for joining us today to discuss synergies performance for the third quarter of 2025
We are pleased to report.
Our 11th consecutive quarter of profitability, reflecting our continued operational, discipline and focused execution.
Revenue gross profit and income from operations. Increased year-over-year underscoring the strength of our platform as we scale across new categories and geographies.
Before we get into the financial results, let me touch on a few key developments across our business.
During the third quarter, we made important leadership additions to support our expanding operations.
First, we welcome Theresa Thompson to our Board of Directors. Theresa spent nearly four decades at Costco Wholesale, including 29 years as a pharmacy OTC buyer, where she oversaw the vitamins and supplement categories across all U.S. warehouses.
Her insights and category experience will be invaluable as we scale, Focus Factor brand globally and strengthen our supplement strategy.
We also uh added Bob Anderson as our new director of direct store distribution, otherwise, known as DSD Bob is over 20 years, experience in the beverage industry and he will be responsible for building and optimizing our Nationwide direct to store distribution for our beverage division.
With this.
Extensive experience. We expect to be signing new distribution Partners, continually and rapidly.
International retail footprint.
During the third quarter.
We secured several Major Distribution wins that significantly expands our retail, availability to our functional Beverages and shops.
Looking at our domestic expansion EG of America the 6 largest convenience store chain in the US.
will launch our focus and energy beverages over 1600, high, traffic locations, nationwide, and Q4 of this year,
The role of meaningfully increases our visibility and convenience Channel and strengthens our position in the fast growing functional, beverage category.
Additionally, wake for and food group. The largest retailer owned Cooperative in the US will carry 5, focus, and energy screws, uh, Energy skus across 365, retail locations.
On a regional front.
We announced new Partnerships with ilabas 1 of the Premier, beverage distributors in the Southeast us who will distribute our Beverages and brain health shots over 5,000, grocery convenience and Specialty retailers across Alabama. We also signed an agreement with Atlantic importing company. A leading New England based distributor to expand our beverage footprint across Massachusetts, Connecticut and Rhode Island.
These partnerships reflect strong validation from top-tier retailers and distributors.
Who see the opportunity for the focus Factor beverage, um, to lead, uh, the clean energy and brain health, beverage segment as we continue to expand our bearish business. Our Focus remains on disciplined execution, brand awareness, and ensuring the availability of products in key markets, that drive both volume and profitability.
Turning to the supplement business, we continue to strengthen our momentum in this category as well.
Focus Factor has recently been named the number 1 pharmacies supplement for 202526 by the pharmacy times. This underscores the confidence pharmacists place in our brand and our mission to deliver meaningful cognitive support to our consumers.
In the U.S., our supplement business expands with Kroger, one of America's largest supermarkets, operating in 35 states. Kroger will launch three SKUs for the Focus Factor supplement across 1,600 of its 2,800 locations, beginning in April of 2026. In Canada, Uniprix, one of Quebec's largest pharmacy networks, will introduce the supplements across 300 stores starting in February of 2026. Together, these launches expand our core brand presence across.
Groceries and Pharmacy channels reinforcing. Our dual strategy of growing our supplements and beverages Under The Trusted Focus Factor Banner
We also continued our International expansion. We have now received our first round of purchase orders. From Costco Mexico for the focus Factor supplements which will ship in December in the Q4.
Also, our management team, some of our management team is going to buy next week to meet with our licensed and partner, and attend the Middle East, organic natural products Expo, which will provide key contacts as we continue to develop our International footprint.
Before passing the call over to Jamie to cover the financial results, I'd like to briefly touch touch on the public offering. We closed in August, we raised 4.4 million of equity Capital, which provides us with additional working capital to support our retail rollouts.
Inventory, build up in production and marketing initiatives. This Capital enhances our flexibility to meet Rising demand and invest in our continued growth.
Overall, uh, the results. Reflect another strong quarter of execution, meaningful progress across both the beverage and supplement business with new retail authorizations, expanded distribution Partnerships. Experienced leadership teams being added leadership, type leadership, people being added to our team,
Synergy is well positioned to accelerate growth through the remainder of 25, and in the 26.
With that, I'll turn the call over to our Chief Financial Officer. Jamie Fickett. Jamie
Thank you, Jack. I'll now review our financial results.
Increasing gross margin was primarily driven by a favorable shift in product mix.
Operating expenses for the third quarter were $4.4 million compared to $3.7 million in the year-ago quarter. The increase in operating expenses was primarily due to incremental costs associated with being a public company and the added cost of launching our beverage division.
Income from operations was 1.28 Million up. 28.1 211.8% from 1.05 million compared to the third quarter of 2024
Net income for the third quarter was 125.3 thousand compared to 783.6 thousand in the year ago quarter.
Earnings per share for the third quarter was 1 cent per diluted share compared to 11 cents per diluted share in the year ago quarter adjusted ibida per share. For the third quarter was 15 cents per diluted share compared to 18 cents per diluted share in the year ago quarter these decreases are due to other income in the same period last year and higher expenses this year to launch the beverage division.
Ibida. For the third quarter was 31.313% compared to 1.33 million in the third quarter of 2024 adjusted ibida. For the third quarter was 1.52 Million up 13.4% compared to 1.34 million and the third quarter of 2024.
Moving to our balance sheet, as of September 30th 2025 we had cash and cash equivalents of 1 million compared to 687.90 as of December. 31st 2024.
Inventory was 2.1 million. At the end of the third quarter, compared to 1.7 million at December, 31st 2024. And we also have an increase in our prepaid deposits of nearly 2 million largely due to an increase in deposits on inventory for our growing beverage division.
At September 30th 2025, we have a working capital surplus of 16.68 million compared to a working capital deficit of 1.12 million as of December 31st 2024.
For the 9 months ended September 30, 2025, our cash used in operating activities was $3.21 million compared to cash used in operating activities of $1.38 million at September 30, 2024. The increase primarily reflects higher prepaid expenses for deposits on inventory and continued reductions in accounts payable and accrued liabilities.
Now, I will turn the call back to the operator.
Thank you, ma'am. And now we will open the Q&A session. If you have a question, please press star, 1 1, 1, 1 on your telephone, and wait for your name to be announced.
To withdraw, your question, press *11 again.
Our first question will come from the line of Sean mawan with Roth Capital Partners, please proceed.
Morning, Jack gang morning, Jimmy, I have a couple of questions. Um, can you give us some sense of what contribution there was in the quarter from the beverages?
So, in the current quarter, um, a a third quarter is 159,000 of Beverage Revenue.
Okay, that's helpful. Um, now and that might explain or tie into the next question, which is, can you give me a little bit more, um, caller on the Dynamics of the product mix? I mean, specifically like what is the highest margin Revenue source and how high is that in order for the for the Blended average to come out? You know pretty high. I think this is the highest you've seen in a while, right?
Yeah. So our in our supplement business, we actually took a price increase to our our Costco business, um, of 11%, which, you know, I think, you know, our gross margin, uh, our gross margin on our supplements, you know, on gross revenues about 75 before. So, you know, it obviously increased, um, that way and, and our, our net
Um, our gross Nets about 11% of the difference. So, um, you know, we basically took about 11%, uh, increase in half of our business.
Okay, uh, yeah. What I said it was the highest 15 in a while I meant factoring in the RTD anyway. Uh, last question is the GNA, um, that you reported in the quarter indicative of what, we should expect to see, kind of on an ongoing rate or, you know, giving some of the executive additions that you've made and you highlighted um, at the top of the call, as well as some others. Uh, will the kind of fourth quarter or an ongoing rate be higher than what we see in the third quarter?
Sort of um, we'll call added a secondary strategy to our our beverage rollout. So um, you know, with with the um sale of we'll call Papi to Pepsi in the sale of Aulani to Celsius. It really opened up, we'll call a lot of holes in the DSD networks. Meaning, you know, Poppy and ilani are going back to Pepsi Distribution and we got very fortunate timings everything in life. And the, you know, the DSD networks, the beer guys, um, you know, have opened up a lot of holes in their distribution, um, Network. So you know, 2 things. Obviously, we expect, you know, to have a, you know, an All-State strategy in our our DSD Network very quickly, um, as we're signing these rapidly and you'll you'll read about some more next week and the week after and the week after. Um, but but more importantly, to support those guys, um, on the DSD side we will be also adding human.
Capital sales people, um, and service people to support those DSD Distributors to bring on, we'll call Regional, um, Regional retailers. So, um, little shift there, where you know, the opportunity presented itself with, you know, you know, holes in the DSC distribution coming available, which should help us accelerate, um, our Arty business. Uh, a lot quicker than we thought in the convenience store side. So, um,
So there will be some long way to say there will be some some added, uh, human capital. Um, you know, in the fourth quarter and first quarter and second quarter as we expand that that, uh, Allstate DSD distribution.
Okay, thank you.
Thank you so much. At this time, this concludes our Q&A session. I would like to turn the call back over to Mr. Jack Ross for closing remarks.
Thank you Carmen. Um, in closing, um, just a few final comments. Uh, we currently have over 3 million cans of drink inventory. Now, in stock, um, from our Capital raise in August, uh, with more production, um, being done as we speak. Um, We are continuing that key employees throughout our organization to build out our sales network.
2025 has been a foundational year for synergy.
Um, between refinancing our debt out to 2029 raising Equity to support our balance sheet and growth and signing many key distribution partners and retailers. We feel that the team is positioned the company. Well, for an exciting 2026, we thank everyone for joining the call today and we look forward to, um, speaking with everyone again, in March. When we, when we announced our our year end results. Thank you.
And ladies and gentlemen, this does conclude today's conference, you may disconnect your lines at this time. Thank you for your participation.