CHARLOTTE, N.C.--(BUSINESS WIRE)--cbdMD, Inc. (NYSE American: YCBD, YCBDpA), one of the nation’s leading and most highly trusted and recognized cannabidiol (CBD) brands, today announced its financial results for its first quarter ended December 31, 2020.
Financial Highlights for the Quarter Ended December 31, 2020:
- Our net sales for the first quarter of fiscal 2021 increased by 22% year-over-year to a record of $12.3 million from $10.1 million from the prior year’s quarter.
- Our gross profit margin for the quarter increased to 72.2% from 63.5% in the prior year’s quarter.
- We reported record quarterly E-commerce, direct-to-consumer, net sales of $9.7 million, an increase of $2.8 million, or 41%, from the prior year’s quarter and 13% sequential quarterly growth.
- Our CBD pet brand, Paw CBD, reported in net sales in quarter increased 83%, to $1.5 million compared to $820,000 from the prior year’s quarter.
- Our quarterly operating expenses decreased by 15% YOY to $10.7 million from $12.6 million from the prior year’s quarter, a sequential quarterly decrease of 2%.
- Our loss from operations decreased by 71% to $1.8 million compared to $6.1 million from the prior year’s quarter.
- Our non-GAAP adjusted operating loss decreased by 90% to $523,841, compared to $5.0 million from the prior year’s quarter.
- Our net loss attributable to common shareholders for the quarter was approximately $9.5 million, or ($0.18) per share, as compared to net income of approximately $12.9 million, or $0.45 per share from the prior year’s quarter. Our net loss attributable to common shareholders was principally attributable to an increase of approximately $8.5 million in the non-cash contingent liability which is associated with earnout shares which may be issued under the terms of the December 2018 acquisition of Cure Based Development (which owned the cbdMD brand).
- At December 31, 2020, we had working capital of approximately $30.6 million and cash on hand of approximately $28.8 million as compared to working capital of approximately $16.0 million and cash on hand of approximately $14.8 million at September, 2020. Our working capital position was bolstered during the quarter following our receipt of approximately $15.8 million in net proceeds from our December 2020 sale of shares of our 8.0% Series A Cumulative Convertible Preferred Stock in a firm commitment underwritten public offering.
cbdMD, Inc. will host a conference call at 4:15 p.m., Eastern time, on Tuesday, February 9, 2021, to discuss the company’s first quarter fiscal 2021 financial results and business progress.
CONFERENCE CALL DETAILS
Title: |
cbdMD First Quarter 2021 Earnings Call |
Event Date: |
Tuesday, February 9, 2021 - 4:15 PM Eastern Time |
Event Link: |
Webcast URL
|
Webcast Replay Expiration: |
Wednesday, February 9, 2022 |
Participant Numbers: |
Toll Free: 888-506-0062
Entry code (not required): 117414 |
Replay Number: |
Toll Free: 877-481-4010
|
About cbdMD, Inc.
cbdMD, Inc. is one of the leading, most highly trusted, and most recognized cannabidiol (CBD) brands, whose current products include CBD tinctures, CBD capsules, CBD gummies, CBD topicals, CBD bath bombs and CBD pet products. To learn more about cbdMD and our comprehensive line of over 130 SKUs of U.S. produced, THC-free1 CBD products, please visit www.cbdMD.com, follow cbdMD on Instagram and Facebook, or visit one of the 6,000 retail outlets that carry cbdMD and Paw CBD products.
1 THC-free is defined as below the level of detection using validated scientific analytical tools.
Forward-Looking Statements
This press release contains certain forward-looking statements that are based upon current expectations and involve certain risks and uncertainties within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements can be identified by the use of words such as ''should,'' ''may,'' ''intends,'' ''anticipates,'' ''believes,'' ''estimates,'' ''projects,'' ''forecasts,'' ''expects,'' ''plans,'' and ''proposes.'' These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. You are urged to carefully review and consider any cautionary statements and other disclosures, including the statements made under the heading "Risk Factors" in cbdMD, Inc.'s Annual Report on Form 10-K for the fiscal year ended September 30, 2020 as filed with the Securities and Exchange Commission (the "SEC") on December 22, 2020, Item 1A. Risk Factors, contained in our Quarterly Report on Form 10-Q for the period ended December 31, 2020 as filed with the SEC on February 9, 2021 and our other filings with the SEC. All forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, many of which are generally outside the control of cbdMD, Inc. and are difficult to predict. cbdMD, Inc. does not undertake any duty to update any forward-looking statements except as may be required by law. The information which appears on our websites and our social media platforms, including, but not limited to, Instagram and Facebook, is not part of this press release.
Non-GAAP Financial Measures
This press release includes a financial measure that excludes the impact of certain items and therefore has not been calculated in accordance with U.S. generally accepted accounting principles ("GAAP"). cbdMD, Inc. has included adjusted loss from operations because management uses this measure to assess operating performance in order to highlight trends in our business that may not otherwise be apparent when relying on financial measures calculated in accordance with GAAP. The adjusted operating loss has not been prepared in accordance with GAAP. This non-GAAP financial measure should not be considered as an alternative to, or more meaningful than, net loss from operations as an indicator of our operating performance. Further, this non-GAAP financial measure, as presented by cbdMD, Inc., may not be comparable to similarly titled measures reported by other companies. cbdMD, Inc. has attached to this press release a reconciliation of this non-GAAP financial measure to its most directly comparable GAAP financial measure.
cbdMD, INC. |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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DECEMBER 31, 2020 AND SEPTEMBER 30, 2020 |
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(Unaudited) |
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December 31, |
|
September 30, |
2020 |
2020 |
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Assets |
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Current assets: |
|||||||||||
Cash and cash equivalents |
$ 28,763,812 |
$ 14,824,644 |
|||||||||
Accounts receivable |
1,021,554 |
911,482 |
|||||||||
Accounts receivable – discontinued operations |
|
|
|
|
|
|
24,717 |
|
447,134 |
||
Marketable securities |
|
|
|
|
|
|
29,181 |
|
26,472 |
||
Investment other securities |
|
|
|
|
|
|
250,000 |
|
250,000 |
||
Deposits |
|
|
|
|
|
|
|
|
- |
|
40,198 |
Inventory |
4,383,501 |
4,603,360 |
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Inventory prepaid |
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|
|
|
|
|
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|
336,362 |
|
288,178 |
Prepaid software |
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- |
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174,308 |
||||
Prepaid equipment deposits |
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- |
|
40,197 |
||||
Prepaid sponsorship |
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|
|
|
1,069,600 |
|
1,203,300 |
||||
Prepaid expenses and other current assets |
1,496,721 |
902,979 |
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Total current assets |
37,375,449 |
23,712,252 |
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Other assets: |
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Property and equipment, net |
3,084,321 |
3,183,487 |
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Operating lease assets |
|
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6,547,278 |
|
6,851,357 |
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Deposits for facilities |
|
|
|
|
|
|
766,708 |
|
790,708 |
||
Intangible assets, net |
21,635,000 |
21,635,000 |
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Goodwill |
|
|
|
|
|
|
|
54,669,997 |
|
54,669,997 |
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Total other assets |
86,703,304 |
87,130,549 |
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Total assets |
$ 124,078,753 |
$ 110,842,801 |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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DECEMBER 31, 2020 AND SEPTEMBER 30, 2019 |
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(continued) |
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(Unaudited) |
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December 31, |
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September 30, |
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2020 |
|
2020 |
Liabilities and shareholders' equity |
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Current liabilities: |
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Accounts payable |
$ 2,174,529 |
$ 2,850,421 |
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Deferred revenue |
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22,440 |
|
45,141 |
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Accrued expenses |
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2,301,154 |
|
2,724,779 |
|
Operating leases – current portion |
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1,242,608 |
|
1,159,098 |
|
Paycheck Protection Program loan, current portion |
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|
|
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|
939,826 |
|
854,000 |
|
Note payable |
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|
|
|
|
|
|
56,573 |
|
55,639 |
|
Total current liabilities |
6,737,130 |
7,689,078 |
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Long term liabilities: |
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Long term liabilities |
|
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|
|
|
- |
|
264,367 |
|||
Note payable |
|
|
|
|
|
153,957 |
|
- |
|||
Paycheck Protection Program loan |
|
|
|
|
|
516,274 |
|
602,100 |
|||
Operating leases - long term portion |
|
|
|
|
|
5,688,746 |
|
6,010,208 |
|||
Contingent liability |
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|
24,700,000 |
|
16,200,000 |
|||
Deferred tax liability |
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|
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|
563,000 |
|
895,300 |
|||
Total long term liabilities |
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|
31,621,977 |
|
23,971,675 |
|||
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Total liabilities |
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|
38,359,107 |
|
31,660,753 |
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cbdMD, Inc. shareholders' equity: |
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Preferred stock, authorized 50,000,000 shares, $0.001 par value, 2,800,000 and 500,000 shares issued and outstanding, respectively |
2,800 |
500 |
|||||||||
Common stock, authorized 150,000,000 shares, $0.001 par value, |
|||||||||||
52,130,870 and 52,130,870 shares issued and outstanding, respectively |
52,131 |
52,131 |
|||||||||
Additional paid in capital |
142,548,752 |
126,517,784 |
|||||||||
Accumulated deficit |
(56,884,037) |
(47,388,367) |
|||||||||
Total cbdMD, Inc. shareholders' equity |
85,719,646 |
79,182,048 |
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|
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|
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||
Total liabilities and shareholders' equity |
$ 124,078,753 |
$ 110,842,801 |
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cbdMD, INC. |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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FOR THE THREE MONTHS ENDED DECEMBER 31, 2020 AND 2019 |
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Three months |
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Three months |
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Ended |
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Ended |
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||
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December 31, 2020 |
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|
December 31, 2019 |
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Gross Sales |
|
|
$ |
13,131,946 |
|
|
$ |
10,412,491 |
|
Allowances |
|
|
|
(803,643 |
) |
|
|
(264,255 |
) |
Total Net Sales |
|
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|
12,328,303 |
|
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|
10,148,236 |
|
Cost of sales |
|
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|
3,430,274 |
|
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|
3,700,537 |
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Gross Profit |
|
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|
8,898,028 |
|
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|
6,447,699 |
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Operating expenses |
|
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|
10,657,973 |
|
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|
12,560,297 |
|
(Loss) from operations |
|
|
|
(1,759,945 |
) |
|
|
(6,112,598 |
) |
Realized and Unrealized gain (loss) on marketable & other securities |
|
|
|
542,710 |
|
|
|
(62,010 |
) |
(Increase) decrease of contingent liability |
|
|
|
(8,500,000) |
|
|
|
16,898,006 |
|
Interest (expense) income |
|
|
|
(10,386 |
) |
|
|
7,267 |
|
Income (loss) before provision for income taxes |
|
|
|
(9,727,621) |
|
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|
10,730,665 |
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Benefit for income taxes |
|
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|
332,000 |
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|
2,240,300 |
||
Net (Loss) Income from continuing operations |
|
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|
(9,395,621) |
|
|
|
12,970,965 |
|
Net (Loss) from discontinued operations, net of tax (Note 13) |
|
|
|
- |
|
|
|
(41,202 |
) |
Net (Loss) Income |
|
|
|
(9, 395,621) |
|
|
|
12,929,763 |
|
Preferred dividends |
|
|
|
100,050 |
|
|
|
66,734 |
|
|
|
|
|
|
|
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|
|
|
Net (Loss) Income attributable to cbdMD, Inc. common shareholders |
|
|
$ |
(9,495,671 |
) |
|
$ |
12,863,029 |
|
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Net (Loss) Income per share: |
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Basic earnings per share |
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$ |
(0.18) |
|
$ |
0.46 |
||
Diluted earnings per share |
|
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|
(0.18) |
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|
0.45 |
|
Weighted average number of shares Basic: |
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52,130,870 |
|
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|
27,720,356 |
|
Weighted average number of shares Diluted: |
|
|
52,130,870 |
|
|
|
28,553,856 |
|
|
cbdMD, INC. |
||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) |
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FOR THE THREE MONTHS ENDED DECEMBER 31, 2020 AND 2019 |
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(Unaudited) |
||||||||||
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Three months |
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Three months |
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|||
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Ended |
|
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Ended |
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|||
|
|
December 31, 2020 |
|
|
December 31, 2019 |
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|||
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|
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|
|||
Net (Loss) Income |
|
$ |
(9,395,621) |
|
|
$ |
12,929,763 |
|||
Comprehensive (Loss) Income |
|
|
(9,395,621) |
|
|
|
12,929,763 |
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||
|
|
|
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|
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Preferred dividends |
|
|
(100,050) |
|
|
|
(66,734 |
) |
||
Comprehensive (Loss) Income attributable to cbdMD, Inc. common shareholders |
|
$ |
(9,495,671 |
) |
|
$ |
12,863,029 |
|||
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cbdMD, INC. |
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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS |
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FOR THE THREE MONTHS ENDED DECEMBER 31, 2020 AND 2019 |
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(unaudited) |
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Three Months
|
|
Three Months
|
|||||
2020 |
|
2019 |
||||||
Cash flows from operating activities: |
||||||||
Net (Loss) Income |
|
(9,395,621 |
) |
$ |
12,929,763 |
|
||
Adjustments to reconcile net (income) loss to net |
||||||||
cash used by operating activities: |
||||||||
Stock based compensation |
|
248,894 |
|
|
542,574 |
|
||
Restricted stock expense |
|
15,279 |
|
|
138,000 |
|
||
Issuance of stock / warrants for service |
|
35,712 |
|
|
- |
|
||
Impairment on discontinued operations asset |
|
- |
|
|
38,002 |
|
||
Depreciation and amortization |
|
232,658 |
|
|
113,252 |
|
||
Increase/(Decrease) in contingent liability |
|
8,500,000 |
|
|
(16,898,006 |
) |
||
Realized and unrealized loss of marketable and other securities |
|
(542,709 |
) |
|
62,011 |
|
||
Termination benefit |
|
305,326 |
|
|
- |
|
||
Non-cash lease expense |
|
304,080 |
|
|
382,432 |
|
||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
|
(110,072 |
) |
|
755,515 |
|
||
Deposits |
|
24,000 |
|
|
(22,365 |
) |
||
Merchant reserve |
|
- |
|
|
106,590 |
|
||
Inventory |
|
219,859 |
|
|
(1,005,631 |
) |
||
Prepaid inventory |
|
(48,184 |
) |
|
(237,753 |
) |
||
Prepaid expenses and other current assets |
|
(310,268 |
) |
|
(100,803 |
) |
||
Accounts payable and accrued expenses |
|
(1,500,755 |
) |
|
454,490 |
|
||
Operating lease liability |
|
(237,952 |
) |
|
(318,758 |
) |
||
Note payable |
|
- |
|
|
268,115 |
|
||
Deferred revenue / customer deposits |
|
(22,701 |
) |
|
(7,339 |
) |
||
Collection on discontinued operations accounts receivable |
|
422,417 |
|
|
166,667 |
|
||
Deferred tax liability |
|
(332,000 |
) |
|
(2,240,300 |
) |
||
Cash used by operating activities |
|
(2,192,038 |
) |
|
(4,873,544 |
) |
||
Cash flows from investing activities: |
||||||||
Proceeds from sale of other investment securities |
|
540,000 |
|
|
- |
|
||
Purchase of property and equipment |
|
(93,294 |
) |
|
(555,674 |
) |
||
Cash provided (used) by investing activities |
|
446,706 |
|
|
(555,674 |
) |
||
Cash flows from financing activities: |
||||||||
Proceeds from issuance of preferred stock |
|
15,798,115 |
|
|
4,421,928 |
|
||
Note payable |
|
(13,564 |
) |
|
- |
|
||
Preferred dividend distribution |
|
(100,050 |
) |
|
(66,734 |
) |
||
Deferred issuance costs |
|
- |
|
|
45,368 |
|
||
Cash provided by financing activities |
|
15,684,500 |
|
|
4,400,562 |
|
||
Net increase (decrease) in cash |
|
13,939,168 |
|
|
(1,028,656 |
) |
||
Cash and cash equivalents, beginning of period |
|
14,824,644 |
|
|
4,689,966 |
|
||
Cash and cash equivalents, end of period |
$ |
28,763,812 |
|
$ |
3,661,310 |
|
||
| Supplemental Disclosures of Cash Flow Information: | ||||||||
Three Months
|
Three Months
|
|||||||
| Cash Payments for: | ||||||||
| Interest expense | $ |
3,672 |
|
$ |
8,221 |
|
||
| Non-cash financial activities: | $ |
254,950 |
|
$ |
178,513 |
|
||
| Warrants issued to underwriter | ||||||||
| cbdMD, Inc. | |||||
SUPPLEMENTAL FINANCIAL INFORMATION |
|||||
RECONCILIATION OF NON-GAAP ADJUSTED INCOME (LOSS) FROM OPERATIONS |
|||||
(Unaudited) |
|||||
GAAP (loss) from operations |
$ (1,759,945) |
$ (6,112,597) |
|||
Adjustments: |
|||||
Depreciation |
232,806 |
113,251 |
|||
Employee and director stock compensation (1) |
264,174 |
680,574 |
|||
Other non-cash stock compensation for services (2) |
35,713 |
91,069 |
|||
Accrual for severance |
403,412 |
- |
|||
Accrual / expenses for discretionary bonus |
300,000 |
222,500 |
|||
Non-GAAP adjusted (loss) from operations |
$ (523,841) |
$ (5,005,203) |
|||
(1) Represents non-cash expense related to options, warrants, restricted stock expenses that have been amortized during the period.
(2) Represents non-cash expense related to options, warrants, restricted stock expenses that have been amortized during the period.
