cbdMD, Inc. (NYSE American: YCBD, YCBD PR A) (the “Company”), a
leading cannabidiol (CBD) consumer brands company, reported today
its first fiscal 2020 quarter ended December 31, 2019 results, the
highlights of which were:
- The Company reported record net sales of $10,148,236, a
year-over-year quarterly increase of approximately 285% (which is
based upon the pre-acquisition and post-acquisition net sales of
the brand which the Company acquired in late December 2018).
- The Company reported its net sales for the quarter were
approximately 67% through its e-commerce channel and 33% through
its retail brick and mortar channel.
- The Company reported its gross profit margin as a percent of
net sales were 63.5% as compared to 64.4% in prior year same period
and an improvement from our last quarter ending September 30, 2019,
which was 56.7%.
- The Company reported a quarterly loss from operations of
$6,112,598, of which approximately $965,000 was non-cash items.
Total operating expenses related to marketing, advertising,
sponsorship and affiliate commissions were approximately $5 million
for the quarter, of which $1.2 million was an accelerated license
fee for the Life Time Fitness Agreement.
- The Company reported a $16,898,006 decrease in the Company’s
non-cash contingent liability and net income before provision for
income tax of $10,730,665.
- The Company reported net income for the first quarter of fiscal
2020 of $12,863,029 or $0.45 cents per diluted share.
- The Company reported $3,661,210 in cash at December 31, 2019,
which gave no effect to the subsequent follow-on firm commitment
common stock offering which resulted in approximately $16.9 million
of net proceeds on January 14, 2020.
“cbdMD is reporting another record quarter of revenue growth, we
are fully financed and expect to achieve cash flow breakeven by the
end of this fiscal year. In calendar 2019, our first full year of
CBD sales, we generated over $33 million in total net sales, which
was well ahead of our initial expectations of $20 million. We
believe that we have built two of the leading CBD brands in
America, cbdMD and Paw CBD. While our common share price has been
negatively impacted by the current investor sentiment in the
cannabis sector, we believe we are a bright spot in the overall
industry,” said Martin Sumichrast, Chairman and co-CEO of the
Company.
“We continue to drive online sales through the use of various
digital marketing tactics, athlete and major league partnerships,
and high traffic affiliate programs. Currently we have over 222,000
active e-commerce subscribers, an increase of over 10% since last
quarter. On the brick and mortar side of our business, we are
growing the amount of retail stores who currently carry our brands.
Our retail reach is now over 5,300 retail doors, an increase of
over 1,000 doors since last quarter and we have also increased our
international presence and are now currently selling to wholesale
customers in 16 international markets, up from 10 last quarter,”
continued Mr. Sumichrast.
“During calendar 2019, we invested heavily in brand development
and acquiring brand building assets as well as our physical
infrastructure with full scale manufacturing, distribution and
warehousing facilities. During calendar 2020, our focus is on
deploying and activating these assets while containing our overall
advertising and marketing costs. We continue to invest in R&D
and testing to ensure the safety and quality of our products. Every
batch of finished goods are tested with a full panel by an ISO
certified testing laboratory to ensure the quality and purity, as
well as to ensure we meet our label claims for potency, ” continued
Mr. Sumichrast.
“Our brands have also received leading brand recognition in the
CBD industry. In July, 2019, the Brightfield Group, one of the
leading predictive analytics and market research firms for the
legal CBD industry, named cbdMD a Top 10 domestic brand in two
booming categories, Topicals and Skincare/Beauty. In November 2019,
in a newly released survey conducted by Brightfield of more than
3,500 CBD users, cbdMD ranked the highest in terms of overall
consumer satisfaction as well as the highest in unaided consumer
awareness of any of the top 20 CBD brands. In the animal health
side of our business, Paw CBD was recently ranked by the
Brightfield Group as one of the top five brands in the animal CBD
market. Most recently, we announced a plan to start a joint venture
with holistic pet foods leader Halo, Purely for Pets® (“Halo®”), a
premium, natural pet food brand with a rich 30-year operating
history,” added Mr. Sumichrast.
CONFERENCE CALL DETAILS
Thursday, February 13, 2020, 4:15 p.m.
Eastern Time
Domestic:
1-844-602-0380
International:
1-862-298-0970
Replay dial in – Available through January
18, 2020
Domestic:
1-877-481-4010
International:
1-919-882-2331
Replay ID:
56986
Webcast Replay link – available through
March 18, 2020:
https://www.investornetwork.com/event/presentation/56986
About cbdMD, Inc.
cbdMD, Inc. (NYSE American: YCBD and NYSE American: YCBD PR A)
owns and operates the nationally recognized consumer cannabidiol
(CBD) brand cdbMD, whose current products include CBD gummies, CBD
tinctures, CBD topical, CBD bath bombs, CBD oils and CBD pet
products. cbdMD, Inc. is a nationally recognized consumer
cannabidiol (CBD) brand whose current products include CBD
tinctures, CBD gummies, CBD topicals, CBD bath bombs, and CBD pet
products. cbdMD is also the proud partner with the Big 3 Basketball
League, Barstool Sports, Bellator MMA, (a subsidiary of Viacom:
NASDAQ:VIA), Life Time Fitness and Nitro Circus. To learn more
about cbdMD, Inc. and our comprehensive line of over 100 SKU’s of
U.S. produced, THC-free CBD products, please visit: www.cbdmd.com
or follow cbdMD on Instagram and Facebook or visit one of the over
4,000 retail outlets that carry cbdMD products.
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,
including, without limitation, statements made with respect to the
expansion of the consumer market for CBD products and our ability
to increase our market share, our limited operating history, our
ability to expand our business and significantly increase our
revenues, our ability to effectively leverage our brand
partnerships and sponsorships, our ability to effectively compete
in our market, our ability to achieve our net sales guidance, and
our ability to report profitable operations in the future. 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, 2019 as filed with the
Securities and Exchange Commission (the "SEC") 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.
cbdMD, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
DECEMBER 31, 2019 AND
SEPTEMBER 30, 2019
(Unaudited)
December 31,
September 30,
2019
2019
Assets
Current assets:
Cash and cash equivalents
$
3,661,310
$
4,689,966
Accounts receivable
670,182
1,425,697
Accounts receivable other
160,137
160,137
Accounts receivable – discontinued
operations
875,331
1,080,000
Marketable securities
136,527
198,538
Investment other securities
600,000
600,000
Deposits
28,365
6,850
Merchant reserve
412,979
519,569
Inventory
5,307,217
4,301,586
Inventory prepaid
1,141,211
903,458
Deferred issuance costs
16,828
93,954
Prepaid software
187,220
206,587
Prepaid equipment deposits
868,589
868,589
Prepaid expenses and other current
assets
808,275
688,104
Total current assets
14,874,171
15,743,035
Other assets:
Property and equipment, net
2,157,980
1,715,557
Operating lease assets
7,704,109
-
Deposits for facilities
755,383
754,533
Intangible assets, net
21,635,000
21,635,000
Goodwill
54,669,997
54,669,997
Total other assets
86,922,469
78,775,087
Total assets
$
101,796,640
$
94,518,122
cbdMD, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
DECEMBER 31, 2019 AND
SEPTEMBER 30, 2019
(continued)
(Unaudited)
December 31,
September 30,
2019
2019
Liabilities and shareholders'
equity
Current liabilities:
Accounts payable
$
3,625,073
$
3,021,271
Accrued expenses
531,958
681,269
Operating leases – short term
liabilities
1,044,611
-
Note payable
279,606
-
Customer deposit – related party
-
7,339
Total current liabilities
5,481,248
3,709,878
Long term liabilities:
Long term liabilities
-
363,960
Note payable
182,975
-
Operating leases - long term
liabilities
6,906,193
-
Contingent liability
33,701,994
50,600,000
Deferred tax liability
-
2,240,300
Total long term liabilities
40,791,162
53,204,260
Total liabilities
46,272,410
56,914,138
cbdMD, Inc. shareholders' equity:
Preferred stock, authorized 50,000,000
shares, $0.001 par value, 500,000 and 0 shares issued and
outstanding, respectively
500
-
Common stock, authorized 150,000,000
shares, $0.001 par value,
27,720,356 and 27,720,356 shares issued
and outstanding, respectively
27,720
27,720
Additional paid in capital
102,256,769
97,186,524
Accumulated deficit
(46,760,759
)
(59,610,260
)
Total cbdMD, Inc. shareholders'
equity
55,524,230
37,603,984
Total liabilities and shareholders'
equity
$
101,796,640
$
94,518,122
cbdMD, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED
DECEMBER 31, 2019 AND 2018
(Unaudited)
Three months
Three months
Ended
Ended
December 31,
2019
December 31,
2018
Sales
$
10,412,491
$
683,730
Sales related party
-
-
Total Gross Sales
10,412,491
683,730
Allowances
(264,255
)
(218,042
)
Net sales
10,148,236
465,687
Net sales related party
-
-
Total Net Sales
10,148,236
465,687
Cost of sales
3,700,537
165,492
Gross Profit
6,447,699
300,196
Operating expenses
12,560,297
1,391,812
Income (Loss) from
operations
(6,112,598
)
(1,091,617
)
Realized and Unrealized gain (loss) on
marketable securities
(62,010
)
-
Decrease of contingent liability
16,898,006
-
Interest income
7,267
37,686
Income (loss) before provision for
income taxes
10,730,665
(1,053,931
)
Benefit for income taxes
2,240,300
133,000
Net Income (Loss) from continuing
operations
12,970,965
(920,931
)
Net Loss from discontinued operations,
net of tax (Note 15)
(41,202
)
(1,268,111
)
Net Income (Loss)
12,929,763
(2,189,042
)
Net Loss attributable to non-controlling
interest from discontinued operations (Note 15)
-
(79,149
)
Preferred dividends
66,734
-
Net Income (Loss) attributable to
cbdMD, Inc. common shareholders
$
12,863,029
$
(2,109,893
)
Net Income (Loss) per share:
Basic earnings per share
$
0.46
$
(0.21
)
Diluted earnings per share
0.45
-
Weighted average number of shares
Basic:
27,720,356
10,052,960
Weighted average number of shares
Diluted:
28,553,856
10,052,960
cbdMD, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
FOR THE THREE MONTHS ENDED
DECEMBER 31, 2019 AND 2018
(Unaudited)
Three months
Three months
Ended
Ended
December 31,
2019
December 31,
2018
Net Income (Loss)
$
12,929,763
$
(2,189,042
)
Other Comprehensive Income:
Continued operations - Net Unrealized Gain
(Loss) on Marketable Securities, net of tax
-
-
Comprehensive Income (Loss)
12,929,763
(2,189,042
)
Comprehensive Income (loss) attributable
to non-controlling interest
-
(79,149
)
Preferred dividends
(66,734
)
-
Comprehensive Income (Loss)
attributable to cbdMD, Inc. common shareholders
$
12,863,029
$
(2,109,893
)
cbdMD, INC.
CONDENSED CONSOLIDATED
STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED
DECEMBER 31, 2019 AND 2018
(unaudited)
Three Months Ended December
31,
Three Months Ended December
31,
2019
2018
Cash flows from operating
activities:
Net income (loss)
$
12,929,763
$
(2,189,042
)
Adjustments to reconcile net income
(loss) to net
cash used by operating
activities:
Stock based compensation
542,574
143,673
Restricted stock expense
138,000
-
Impairment on discontinued operations
asset
38,002
-
Depreciation and amortization
113,252
64,414
Gain on settlement of Note
-
(20,000
)
Increase/(Decrease) in contingent
liability
(16,898,006
)
-
Realized and unrealized loss of marketable
securities
62,011
1,578,976
Non-cash lease expense
382,432
-
Non-cash consideration received for
services
-
(407,500
)
Changes in operating assets and
liabilities:
Accounts receivable
755,515
(113,629
)
Accounts receivable – related party
-
204,902
Other accounts receivable
-
(8,865
)
Note receivable
-
(6,000
)
Note receivable – related party
-
156,147
Deposits
(22,365
)
-
Merchant reserve
106,590
(25,090
)
Inventory
(1,005,631
)
(13,833
)
Prepaid inventory
(237,753
)
-
Prepaid expenses and other current
assets
(100,803
)
184,300
Marketable securities
-
174,327
Accounts payable and accrued expenses
454,490
(329,680
)
Operating lease liability
(318,758
)
-
Note payable
268,115
(308,627
)
Deferred revenue / customer deposits
(7,339
)
(114,375
)
Cash provided by discontinued
operations
166,667
-
Deferred tax liability
(2,240,300
)
(133,000
)
Cash used by operating activities
(4,873,544
)
(1,162,902
)
Cash flows from investing
activities:
Net cash used for merger
-
(1,177,669
)
Purchase of intangible assets
-
(79,999
)
Purchase of property and equipment
(555,674
)
(9,925
)
Cash used by investing activities
(555,674
)
(1,267,593
)
Cash flows from financing
activities:
Proceeds from issuance of common stock
-
6,356,997
Proceeds from issuance of preferred
stock
4,421,928
-
Preferred dividend distribution
(66,734
)
-
Deferred issuance costs
45,368
(177,521
)
Cash provided by financing activities
4,400,562
6,179,476
Net increase (decrease) in cash
(1,028,656
)
3,748,981
Cash and cash equivalents, beginning of
period
4,689,966
4,282,553
Cash and cash equivalents, end of
period
$
3,661,310
$
8,031,534
cbdMD, INC.
CONDENSED CONSOLIDATED
STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED
DECEMBER 31, 2019 AND 2018
(unaudited) (continued)
Supplemental Disclosures of Cash Flow
Information:
Three Months ended December
31,
Three Months Ended December
31,
2019
2018
Cash Payments for:
Interest expense
$
8,221
$
203
Non-cash financial activities:
Warrants issued to secondary selling
agent
$
178,513
$
86,092
Stock received for prior period services,
adjusted for other accounts receivable write down prior to
receipt
$
-
$
1,352,000
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200213005881/en/
Investors: John Weston Director of Investor Relations
john.weston@cbdmd.com 704-249-9515
cbdMD (AMEX:YCBD)
Historical Stock Chart
From Mar 2024 to Apr 2024
cbdMD (AMEX:YCBD)
Historical Stock Chart
From Apr 2023 to Apr 2024