YOY Net Sales Increased 22% to Record $12.3
Million
YOY e-Commerce Direct-to-Consumer Sales Jump
41% to Record $9.7 Million
Pet Brand, Paw CBD, YOY Net Sales Up
83%
Gross Profit Margin Hits All Time High of 72
%
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
https://www.webcaster4.com/Webcast/Page/2206/39768
Webcast Replay Expiration:
Wednesday, February 9, 2022
Participant Numbers:
Toll Free: 888-506-0062 International:
973-528-0011
Entry code (not required): 117414
Replay Number:
Toll Free: 877-481-4010 International:
919-882-2331 Replay Passcode: 39768
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.
CONDENSED CONSOLIDATED BALANCE
SHEETS
DECEMBER 31, 2020 AND
SEPTEMBER 30, 2020
(Unaudited)
December 31,
September 30,
2020
2020
Assets
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
Inventory prepaid
336,362
288,178
Prepaid software
-
174,308
Prepaid equipment deposits
-
40,197
Prepaid sponsorship
1,069,600
1,203,300
Prepaid expenses and other current
assets
1,496,721
902,979
Total current assets
37,375,449
23,712,252
Other assets:
Property and equipment, net
3,084,321
3,183,487
Operating lease assets
6,547,278
6,851,357
Deposits for facilities
766,708
790,708
Intangible assets, net
21,635,000
21,635,000
Goodwill
54,669,997
54,669,997
Total other assets
86,703,304
87,130,549
Total assets
$ 124,078,753
$ 110,842,801
CONDENSED CONSOLIDATED BALANCE
SHEETS
DECEMBER 31, 2020 AND
SEPTEMBER 30, 2019
(continued)
(Unaudited)
December 31,
September 30,
2020
2020
Liabilities and shareholders'
equity
Current liabilities:
Accounts payable
$ 2,174,529
$ 2,850,421
Deferred revenue
22,440
45,141
Accrued expenses
2,301,154
2,724,779
Operating leases – current portion
1,242,608
1,159,098
Paycheck Protection Program loan,
current
portion
939,826
854,000
Note payable
56,573
55,639
Total current liabilities
6,737,130
7,689,078
Long term liabilities:
Long term liabilities
-
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
24,700,000
16,200,000
Deferred tax liability
563,000
895,300
Total long term liabilities
31,621,977
23,971,675
Total liabilities
38,359,107
31,660,753
cbdMD, Inc. shareholders' equity:
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
Total liabilities and shareholders'
equity
$ 124,078,753
$ 110,842,801
cbdMD, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED
DECEMBER 31, 2020 AND 2019
Three months
Three months
Ended
Ended
December 31,
2020
December 31,
2019
Gross Sales
$
13,131,946
$
10,412,491
Allowances
(803,643
)
(264,255
)
Total Net Sales
12,328,303
10,148,236
Cost of sales
3,430,274
3,700,537
Gross Profit
8,898,028
6,447,699
Operating expenses
10,657,973
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)
10,730,665
Benefit for income taxes
332,000
2,240,300
Net (Loss) Income from continuing
operations
(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
Net (Loss) Income attributable to
cbdMD, Inc.
common shareholders
$
(9,495,671
)
$
12,863,029
Net (Loss) Income per share:
Basic earnings per share
$
(0.18)
$
0.46
Diluted earnings per share
(0.18)
0.45
Weighted average number of shares
Basic:
52,130,870
27,720,356
Weighted average number of shares
Diluted:
52,130,870
28,553,856
cbdMD, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
FOR THE THREE MONTHS ENDED
DECEMBER 31, 2020 AND 2019
(Unaudited)
Three months
Three
months
Ended
Ended
December 31,
2020
December
31,
2019
Net (Loss) Income
$
(9,395,621)
$
12,929,763
Comprehensive (Loss) Income
(9,395,621)
12,929,763
Preferred dividends
(100,050)
(66,734
)
Comprehensive (Loss) Income
attributable to
cbdMD, Inc. common shareholders
$
(9,495,671
)
$
12,863,029
cbdMD, INC.
CONDENSED CONSOLIDATED
STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED
DECEMBER 31, 2020 AND 2019
(unaudited)
Three Months Ended December
31,
Three Months Ended December
31,
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 ended December 31,
2020
Three Months ended December 31,
2019
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210209006076/en/
PR:
5W Public Relations cbdMD@5wpr.com (212) 999-5585
Investors:
cbdMD, Inc. John Weston Director of Investor Relations
John.Weston@cbdMD.com (704) 249-9515
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