CV Sciences, Inc. Reports First Quarter 2024 Financial Results
CV Sciences (OTCQB: CVSI) announced its first quarter 2024 financial results.
The company generated $4.0 million in revenue, a 2.6% rise from the previous quarter but a 4% year-over-year decline. Its gross margin improved to 46.3% compared to 43.0% in Q1 2023 and 45.8% in Q4 2023. However, the cash balance dropped to $0.7 million from $1.3 million at the end of 2023. The company reported a $0.6 million operating loss, partly due to decreased B2B sales, although B2C sales rose by 3%. The acquisition of Elevated Softgels was highlighted as a strategic move for future growth. CV Sciences remains the top-selling hemp extract brand in natural product retail channels.
- Sequential revenue increase to $4.0 million in Q1 2024.
- Gross margin improved to 46.3%, the best in the last 12 quarters.
- B2C sales rose by 3% to $1.8 million.
- Top-selling hemp extract brand in the natural product retail market.
- Acquisition of Elevated Softgels, enhancing product portfolio.
- Year-over-year revenue decline by 4%.
- Cash balance decreased to $0.7 million from $1.3 million.
- Total units sold decreased by 14.7%.
- Operating loss of $0.6 million compared to operating income of $5.8 million in Q1 2023.
- Negative adjusted EBITDA of $0.5 million.
First Quarter 2024 and Recent Financial and Operating Highlights
- Generated revenue of
$4.0 million $4.1 million $3.8 million - Recognized gross margin of
46.3% for first quarter 2024 compared to43.0% for the first quarter 2023 and a sequential improvement from45.8% for the fourth quarter 2023; - Cash balance of
$0.7 million $1.3 million - Further established number one position as top-selling hemp extract brand in the natural product retail sales channel, according to SPINS, the leading provider of syndicated data and insights for the natural, organic and specialty products industry;
- Expanded +PlusCBD™ Pet product offering with the launch of pet chews for hip and joint health and calming care chews;
- Acquired Elevated Softgels, a leading manufacturer of encapsulated softgels and tinctures for the supplement and nutrition industry, based in
Colorado ; and - Continued to build an efficient and cost effective consumer products platform and continue to evaluate inbound and outbound merger, sale, acquisition or other options for the Company.
"We are pleased with our first quarter 2024 results. Our revenues increased sequentially to
Operating Results - First Quarter 2024 Compared to First Quarter 2023
Sales for first quarter 2024 were
Conference Call and Webcast
The Company will host a conference call and webcast to discuss these results today at 10:00 am EDT/7:00 am PDT. The webcast of the conference call will be available on the Investor Relations section of the Company's website at https://ir.cvsciences.com/news-events or directly at https://viavid.webcasts.com/starthere.jsp?ei=1668608&tp_key=842142989f. Investors interested in participating in the live call can also dial (877) 407-0784 from the
About CV Sciences, Inc.
CV Sciences, Inc. (OTCQB:CVSI) is a consumer wellness company specializing in nutraceuticals and plant-based foods. The Company's hemp extracts and other proven, science-backed, natural ingredients and products are sold through a range of sales channels from B2B to B2C. The Company's +PlusCBD™ branded products are sold at select retail locations throughout the
Forward Looking Statements
This press release may contain certain forward-looking statements and information, as defined within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and is subject to the Safe Harbor created by those sections. This material contains statements about expected future events and/or financial results that are forward-looking in nature and subject to risks and uncertainties. Such forward-looking statements by definition involve risk and uncertainties. CV Sciences does not undertake any obligation to publicly update any forward-looking statements, except as required by applicable law. As a result, investors should not place undue reliance on such forward-looking statements.
Contact Information
ir@cvsciences.com
CV SCIENCES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands, except per share data) | ||||||||
Three Months Ended March 31, | ||||||||
2024 | 2023 | |||||||
Product sales, net | $ | 4,002 | $ | 4,148 | ||||
Cost of goods sold | 2,149 | 2,366 | ||||||
Gross profit | 1,853 | 1,782 | ||||||
Operating expenses: | ||||||||
Research and development | 36 | 35 | ||||||
Selling, general and administrative | 2,437 | 2,156 | ||||||
Benefit from reversal of accrued payroll taxes | — | (6,171) | ||||||
Total operating expenses | 2,473 | (3,980) | ||||||
Operating income (loss) | (620) | 5,762 | ||||||
Other expense, net | 2 | 56 | ||||||
Income (loss) before income taxes | (622) | 5,706 | ||||||
Income tax expense | 6 | — | ||||||
Net income (loss) | $ | (628) | $ | 5,706 | ||||
Weighted average common shares outstanding, basic and diluted | 163,075 | 152,104 | ||||||
Net income (loss) per common share, basic and diluted | $ | (0.00) | $ | 0.04 | ||||
CV SCIENCES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands, except per share data) | ||||||||
March 31, | December 31, 2023 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash | $ | 662 | $ | 1,317 | ||||
Accounts receivable, net | 507 | 431 | ||||||
Inventory | 5,756 | 5,655 | ||||||
Prepaid expenses and other | 426 | 535 | ||||||
Total current assets | 7,351 | 7,938 | ||||||
Property and equipment, net | 319 | 379 | ||||||
Right of use assets | 139 | 167 | ||||||
Intangibles, net | 73 | 78 | ||||||
Goodwill | 340 | 342 | ||||||
Other assets | 244 | 296 | ||||||
Total assets | $ | 8,466 | $ | 9,200 | ||||
Liabilities and stockholders' equity (deficit) | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 2,460 | $ | 2,309 | ||||
Accrued expenses | 3,248 | 3,422 | ||||||
Operating lease liability - current | 134 | 130 | ||||||
Debt | 117 | 254 | ||||||
Total current liabilities | 5,959 | 6,115 | ||||||
Operating lease liability - net of current portion | 23 | 58 | ||||||
Deferred tax liability | 19 | 19 | ||||||
Other liabilities | 103 | 105 | ||||||
Total liabilities | 6,104 | 6,297 | ||||||
Commitments and contingencies | ||||||||
Stockholders' equity (deficit) | ||||||||
Preferred stock, par value of March 31, 2024 and December 31, 2023; no shares outstanding as of March 31, 2024 and December 31, 2023 | — | — | ||||||
Common stock, par value 161,679 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively | 16 | 16 | ||||||
Additional paid-in capital | 87,556 | 87,464 | ||||||
Accumulated deficit | (85,215) | (84,587) | ||||||
Accumulated other comprehensive income | 5 | 10 | ||||||
Total stockholders' equity (deficit) | 2,362 | 2,903 | ||||||
Total liabilities and stockholders' equity (deficit) | $ | 8,466 | $ | 9,200 | ||||
CV SCIENCES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands) | ||||||||
Three Months Ended March 31, | ||||||||
2024 | 2023 | |||||||
OPERATING ACTIVITIES | ||||||||
Net income (loss) | $ | (628) | $ | 5,706 | ||||
Adjustments to reconcile net income (loss) to net cash flows provided by (used in) operating activities: | ||||||||
Depreciation and amortization | 63 | 59 | ||||||
Stock-based compensation | 30 | 118 | ||||||
Note discount and interest expense | — | 100 | ||||||
Benefit from reversal of accrued payroll tax | — | (6,171) | ||||||
Non-cash lease expense | 28 | 26 | ||||||
Other | 108 | 59 | ||||||
Change in operating assets and liabilities: | ||||||||
Accounts receivable, net | (70) | 102 | ||||||
Inventory | (102) | 37 | ||||||
Prepaid expenses and other | 109 | 1,087 | ||||||
Accounts payable and accrued expenses | (56) | (148) | ||||||
Net cash flows provided by (used in) operating activities | (518) | 975 | ||||||
FINANCING ACTIVITIES | ||||||||
Repayment of note payable | (50) | (764) | ||||||
Repayment of unsecured debt | (86) | (108) | ||||||
Net cash flows provided by (used in) financing activities | (136) | (872) | ||||||
Effect of exchange rate changes on cash | (1) | — | ||||||
Net change in cash | (655) | 103 | ||||||
Cash, beginning of period | 1,317 | 611 | ||||||
Cash, end of period | $ | 662 | $ | 714 | ||||
Supplemental cash flow disclosures: | ||||||||
Interest paid | $ | 4 | $ | 3 | ||||
Income taxes paid | $ | 6 | $ | — | ||||
Supplemental disclosure of non-cash transactions: | ||||||||
Services paid with common stock | $ | 62 | $ | — | ||||
CV SCIENCES, INC. NON-GAAP FINANCIAL MEASURES (UNAUDITED) | ||||||||
We prepare our consolidated financial statements in accordance with generally accepted accounting principles for | ||||||||
Adjusted EBITDA is defined by us as EBITDA (net income (loss) plus depreciation, amortization, interest, and income tax expense, further adjusted to exclude certain non-cash expenses and other adjustments as set forth below. We use Adjusted EBITDA because we believe it more clearly highlights trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures, since Adjusted EBITDA eliminates from our results specific financial items that have less bearing on our core operating performance. | ||||||||
We use Adjusted EBITDA in communicating certain aspects of our results and performance, including in this press release, and believe that Adjusted EBITDA, when viewed in conjunction with our GAAP results and the accompanying reconciliation, can provide investors with greater transparency and a greater understanding of factors affecting our financial condition and results of operations than GAAP measures alone. In addition, we believe the presentation of Adjusted EBITDA is useful to investors in making period-to-period comparison of results because the adjustments to GAAP are not reflective of our core business performance. | ||||||||
A reconciliation from our GAAP net income (loss) to non-GAAP net loss for the quarter ended March 31, 2024 and 2023 is detailed below (in thousands, except per share data): | ||||||||
Three Months Ended March 31, | ||||||||
2024 | 2023 | |||||||
Net income (loss) - GAAP | $ | (628) | $ | 5,706 | ||||
Stock-based compensation (1) | 30 | 118 | ||||||
Benefit from reversal of accrued payroll tax (2) | — | (6,171) | ||||||
Note discount and interest expense (3) | — | 100 | ||||||
Net loss - non-GAAP | $ | (598) | $ | (247) | ||||
Diluted EPS - GAAP | $ | (0.00) | $ | 0.04 | ||||
Stock-based compensation (1) | — | — | ||||||
Benefit from reversal of accrued payroll tax (2) | — | (0.04) | ||||||
Note discount and interest expense (3) | — | — | ||||||
Diluted EPS - non-GAAP | $ | (0.00) | $ | (0.00) | ||||
Shares used to calculate diluted EPS - GAAP and non-GAAP | 163,075 | 152,104 | ||||||
____________________ | ||||||||
(1) Represents stock-based compensation expense related to stock options awarded to employees and non-executive directors based on the grant date fair value using the Black-Scholes valuation model. | ||||||||
(2) Represents benefit from reversal of accrued payroll tax associated with RSU release to founder in 2019. | ||||||||
(3) Represents amortization of OID/debt issuance costs and interest expense for convertible notes payable and notes payable. | ||||||||
A reconciliation from our net income (loss) to Adjusted EBITDA, a non-GAAP measure, for the quarter ended March 31, 2024 and 2023 is detailed below (in thousands): | ||||||||
Three Months Ended March 31, | ||||||||
2024 | 2023 | |||||||
Net income (loss) | $ | (628) | $ | 5,706 | ||||
Depreciation expense | 59 | 59 | ||||||
Amortization expense | 4 | — | ||||||
Interest expense | 2 | 56 | ||||||
Income tax expense | 6 | — | ||||||
EBITDA | (557) | 5,821 | ||||||
Stock-based compensation (1) | 30 | 118 | ||||||
Benefit from reversal of accrued payroll tax (2) | — | (6,171) | ||||||
Adjusted EBITDA | $ | (527) | $ | (232) | ||||
____________________ | ||||||||
(1) Represents stock-based compensation expense related to stock options awarded to employees and non-executive directors based on the grant date fair value using the Black-Scholes valuation model. | ||||||||
(2) Represents benefit from reversal of accrued payroll tax associated with RSU release to founder in 2019. | ||||||||
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SOURCE CV Sciences, Inc.
FAQ
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