HempFusion Reports Q1, 2021 Financial Results
HempFusion Wellness Inc. (CBDHF) reported a strong first quarter 2021 with consolidated revenue increasing 7.6% to $983,496 compared to $913,646 in Q4-2020. Direct-to-consumer (DTC) sales surged 59.3% to $244,255. However, B2B net revenue dipped 2.8%. The company reported a gross profit of $280,205, representing 28.5% of net revenue. Operating expenses rose 42.9% to $6,306,703 due to IPO-related costs. Despite challenges from COVID-19, international sales rebounded, totaling $75,994. The company ended the quarter with a robust cash position of $17,074,030.
- Consolidated revenue increased 7.6% to $983,496.
- DTC sales rose 59.3% to $244,255.
- International sales increased to $75,994 from nil.
- Gross profit of $280,205 represents 28.5% of net revenue.
- Strong cash position of $17,074,030 supports future growth.
- B2B net revenue decreased 2.8% to $739,241.
- Operating expenses increased 42.9% to $6,306,703.
HempFusion Wellness Inc. (TSX:CBD.U) (OTCQX:CBDHF) (FWB:8OO) (“HempFusion” or the “Company”), an industry leader in full spectrum cannabidiol (CBD) hemp extract wellness products and probiotics, today reported financial results for the first quarter ended March 31, 2021. All dollars are stated in US Dollars.
Q1-2021 Financial Highlights
-
Consolidated revenue increased
7.6% to$983,496 from$913,646 in Q4-2020 -
DTC sales increased
59.3% to$244,255 from$153,305 in Q4-2020 -
B2B net revenue decreased
2.8% to$739,241 from 760,341 in Q4-2020 -
International sales increased to
$75,994 from nil in Q4-2020 -
Gross profit of
$280,205 or28.5% of net revenue -
Operating expenses were
$6,306,703 , an increase of42.9% from$4,414,792 in Q1-2020, primarily attributed to IPO related expenses as well as marketing and digital related expenses -
Strong cash position ending the quarter at
$17,074,030
Q1-2021 Business Highlights
-
Completed a
$17 million initial public offering (IPO) and commenced trading on the Toronto Stock Exchange (the “TSX”), becoming the first U.S.-based CBD and wellness products company to list directly on the TSX (senior board). - Became the No. 2 most recognized CBD brand in America according to Brightfield Group
- As of the end of January 2021, NielsenIQ data rank HempFusion as the No. 1 in product sales and units sold in one of the largest food/drug/mass (“FDM”) retailers
- Successfully launched and continue to lead the category in the fifth-largest retailer in the FDM channel
-
E-Commerce success has shown a
62% increase in on-line traffic with a significant increase in conversion including a shift from16.8% on-line sales in Q4-2020 as a percent of net revenue to24.8% in Q1-2021 -
The Company launched the Probulin store on Amazon and early 2021 traction is encouraging. Consolidated net revenue for the three months ended March 31, 2021 increased
7.6% quarter-over-quarter to$983,496 versus$913,646 in Q4-2020. Direct to consumer (“DTC”) e-commerce net revenue increased59.3% reflecting increased marketing efforts, a targeted DTC team and targeted digital promotions. -
Not only did sales increase for both Probulin and HempFusion but the traffic has increased by
62% in Q1 2021 versus Q4 2020 with a conversion rate increase for Probulin of2.1% to3.2% and current conversion rate for HempFusion of3.4% . E-commerce accounted for24.8% of net revenue in the first quarter of 2021 versus16.8% for Q4, 2020. HempFusion's Probulin has seen10% or greater month-over-month growth since launching on Amazon. - Officially launched Probulin on the world's largest e-commerce platform, Alibaba's Tmall Global, with HempFusion CBD following in a subsequent Q2 event
- Submitted dossier to the United Kingdom's Regulatory Food Safety Agency
"With nearly all international business paused due to COVID throughout 2020 and Q1 2021, and with slower than expected reopenings, the Company still achieved an incremental QoQ growth of
"We remain committed to developing new revenue channels and have entered additional countries including China, Ireland, and the United Kingdom, and we are excited with subsequent quarterly events in which new purchase orders were received, showing early signs of the return of international business. These international POs have the potential to drive millions in revenue. We are working feverishly to accelerate sales through organic channels and the continued pursuit of M&A opportunities; early indications have Q2 shaping up to be our best quarter yet," continued Dr. Mitchell.
Statements of Loss and Comprehensive Loss
The Below is from the Unaudited Condensed Interim Financial Statements for the Three Months Ended March 31, 2021 and 2020; Please Refer to the Complete Report, Including the Notes, Other Statements and Other Contents Therein.
Consolidated net revenue for the three months ended March 31, 2021 increased
Consolidated B2B net revenue decreased
International sales increased to
Gross profit of
Operating expenses were
Balance Sheet | Cash Position
The Below is from the Unaudited Condensed Interim Financial Statements for the Three Months Ended March 31, 2021 and 2020; Please Refer to the Complete Report, Including the Notes, Other Statements and Other Contents Therein.
The Company ended Q1-2021 with a strong cash position of
“In 2019, HempFusion (combined with Probulin on a pro forma basis with respect to 2019) achieved net revenue of
Conference Call
Management of the Company will host a conference call to discuss the Company's first quarter 2021 results at Monday, May 17, 2021 at 4:15 p.m., Eastern Time. To participate in the call, please dial 888-506-0062. For international callers, dial 973-528-0011. Use Participant Code: 795055. To join the webcast: https://www.webcaster4.com/Webcast/Page/2710/41342.
A replay will be available from the Investor Relations section of HempFusion’s website at HempFusion.com/corporate-information.
ABOUT HEMPFUSION
HempFusion is a leading health and wellness CBD Company utilizing the power of whole-food hemp nutrition. HempFusion distributes its family of brands, including HempFusion, Probulin Probiotics, Biome Research, and HF Labs, to approximately 4,000 retail locations across all 50 states of the United States and select international locations. Built on a foundation of regulatory compliance and human safety, HempFusion’s diverse product portfolio comprises 48 SKUs including tinctures, proprietary FDA Drug Listed Over-The-Counter (OTC) Topicals, Doctor/Practitioner Lines and more. With a strong focus on research and development, HempFusion has an additional 30 products under development. HempFusion is a board member of the US Hemp Roundtable, and HempFusion’s wholly-owned subsidiary, Probulin Probiotics, is one of the fastest-growing probiotics companies in the United States, according to SPINs reported data. HempFusion’s CBD products are based on a proprietary Whole Food Hemp Complex™ and are available in-store or by visiting HempFusion online at www.hempfusion.com or www.probulin.com.
Follow HempFusion on Twitter, Facebook and Instagram and Probulin on Twitter, Facebook and Instagram.
FORWARD-LOOKING STATEMENTS
This news release contains forward-looking statements and forward-looking information within the meaning of Canadian securities legislation (collectively, “forward-looking statements“) that relate to HempFusion’s current expectations and views of future events. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as “will likely result,” “are expected to,” “expects,” “will continue,” “is anticipated,” “anticipates,” “believes,” “estimated,” “intends,” “plans,” “forecast,” “projection,” “strategy,” “objective” and “outlook”) are not historical facts and may be forward-looking statements and may involve estimates, assumptions and uncertainties which could cause actual results or outcomes to differ materially from those expressed in such forward-looking statements. No assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. These statements speak only as of the date of this news release. In particular and without limitation, this news release contains forward-looking statements relating to the continued growth of the Company’s international business and revenue, the Company’s plans to accelerate sales, DTC sales expectations and the Company’s other plans, focus and objectives.
Forward-looking statements are based on a number of assumptions and are subject to a number of risks and uncertainties, many of which are beyond HempFusion’s control, which could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to, the impact and progression of the COVID-19 pandemic and other factors set forth under “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in the annual information form of the Company dated March 31, 2021 and available under the Company’s profile on SEDAR at www.sedar.com. HempFusion undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law. New factors emerge from time to time, and it is not possible for HempFusion to predict all of them or assess the impact of each such factor or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. Any forward-looking statements contained in this news release are expressly qualified in their entirety by this cautionary statement.
Neither the TSX nor its Regulation Services Provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this release.
HEMPFUSION WELLNESS INC
|
||||||
| For the three | For the three | |||||
| months ended | months ended | |||||
| March 31, | March 31, | |||||
2021 |
2020 |
|||||
| $ | $ | |||||
| Revenue, net of discounts | 983,496 |
|
977,379 |
|
||
| Cost of goods sold | 703,291 |
|
944,756 |
|
||
| Gross profit | 280,205 |
|
32,623 |
|
||
| Expenses | ||||||
| General and administrative | Note 14 | 2,655,134 |
|
2,176,528 |
|
|
| Sales and marketing | 3,651,569 |
|
2,238,264 |
|
||
| Total expenses | 6,306,703 |
|
4,414,792 |
|
||
| Net loss from operations | (6,026,498 |
) |
(4,382,169 |
) |
||
| Other (income) expenses | ||||||
| Other (income) | (102,465 |
) |
(65,268 |
) |
||
| Interest expense | 4,783 |
|
7,582 |
|
||
| Change in fair value of derivative liabilities | Note 10 | — |
|
(64,387 |
) |
|
| Gain on derecognition of derivative liabilities | (70,809 |
) |
— |
|
||
| Change in fair value of purchase consideration | Note 4 | (36,342 |
) |
177,275 |
|
|
| Total other (income) expenses | (204,833 |
) |
55,202 |
|
||
| Income tax (recovery) expense | — |
|
— |
|
||
| Net loss and comprehensive loss | (5,821,665 |
) |
(4,437,371 |
) |
||
| Loss per common share - basic and diluted | (0.05 |
) |
(0.04 |
) |
||
| Weighted average number of common shares - basic and diluted | 116,351,760 |
|
99,699,196 |
|
||
HEMPFUSION WELLNESS INC.
|
|||||
| March 31, | December 31, | ||||
2021 |
|
2020 |
|
||
| $ | $ (Audited) | ||||
| ASSETS | |||||
| Current | |||||
| Cash | 17,074,030 |
|
9,262,517 |
|
|
| Trade receivables | Note 5 | 341,026 |
|
457,058 |
|
| Inventory | Note 6 | 2,931,910 |
|
2,576,866 |
|
| Prepayments | Note 7 | 2,611,815 |
|
1,530,846 |
|
22,958,781 |
|
13,827,287 |
|
||
| Property and equipment | Note 8 | 309,975 |
|
303,162 |
|
| Right-of-use-assets | Note 9 | 211,003 |
|
225,589 |
|
| Prepayments - non current | Note 7 | 259,997 |
|
— |
|
| Total assets | 23,739,756 |
|
14,356,038 |
|
|
| LIABILITIES | |||||
| Current | |||||
| Accounts payable and accrued liabilities | 1,685,275 |
|
2,324,534 |
|
|
| Derivative liabilities | Note 10 | — |
|
13,975,514 |
|
| Lease obligations | Note 9 | 61,595 |
|
60,279 |
|
| Purchase consideration payable | Note 4 | 1,330,757 |
|
1,367,099 |
|
3,077,627 |
|
17,727,426 |
|
||
| Non-current | |||||
| Lease obligations | Note 9 | 149,408 |
|
165,310 |
|
| Total liabilities | 3,227,035 |
|
17,892,736 |
|
|
| SHAREHOLDERS' EQUITY | |||||
| Share capital | Note 10 | 57,383,871 |
|
45,002,867 |
|
| Warrant reserve | Note 10 | 17,412,878 |
|
1,572,556 |
|
| Contributed surplus | Notes 10 and 11 | 5,455,635 |
|
3,805,877 |
|
| Accumulated deficit | (59,739,663 |
) |
(53,917,998 |
) |
|
| Total equity | 20,512,721 |
|
(3,536,698 |
) |
|
| Total liabilities and shareholders' equity | 23,739,756 |
|
14,356,038 |
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20210517005906/en/
FAQ
What were HempFusion's revenue figures for Q1 2021?
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Did HempFusion experience any declines in revenue?
What is HempFusion's cash position at the end of Q1 2021?
How did operating expenses change in Q1 2021?
