Net cash of $61M
Net revenue of $17M decreased 12.1% YoY
14% YoY
reduction in operating expenses
LOUISVILLE, Colo., May 12, 2023
/PRNewswire/ - (TSX: CWEB) (OTCQX: CWBHF), Charlotte's Web
Holdings, Inc. ("Charlotte's Web" or the "Company"), the market
leader in full spectrum hemp extract wellness products, today
reported financial results for the first quarter ended March 31, 2023.
"In the first quarter, we maintained prudent cost controls to
balance softness in the CBD category due to the unregulated
environment. We successfully reduced operating expenses by 14% on a
year-over-year basis and ended the first quarter with a cash
balance of $61 million. This provides
ample working capital to support growth plans, including the launch
of ReCreate,™ our new NSF Certified for Sport® lifestyle brand,"
said Jessica Saxton, Chief Financial
Officer. "We continue to maintain healthy gross profit margins and
have improved our operating margins, despite a net revenue decline
of 12.1% year-over-year."
"On the regulatory front we were encouraged during the quarter
by increased activity in Washington,
D.C. including the reintroduction of bill H.R. 1629 for the
regulation of hemp CBD as dietary supplements. We are working with
Congressman Griffith to address the concerns of the FDA while
meeting the needs of the industry and the consumer,"
said Jacques Tortoroli, Chief Executive Officer of Charlotte's
Web. "We are supporting federal and state legislative initiatives
to help advance a comprehensive U.S. CBD regulatory framework
through our efforts in Washington
and anticipate further progress throughout this year. In parallel,
we have also established DeFloria LLC with AJNA BioSciences and BAT
to pursue a regulatory pathway with the U.S. Food and Drug
Administration ("FDA") for an investigative new drug."
ReCreate™ by Charlotte's Web
Subsequent to the end of
the first quarter, the Company launched a new lifestyle brand named
"ReCreate™". The first product under the new brand is a broad
spectrum CBD oil tincture "ReCreate Daily Edge" - the only broad
spectrum CBD oil to be NSF Certified for Sport®. ReCreate Daily
Edge was developed for the sports and cultural lifestyle pillars
that provide athletes and consumers with natural options to support
recovery from intense workouts, stay calm under pressure, and
maintain healthy sleep cycles and focus. The ReCreate brand will
also carry the iconic MLB logo and launch with MLB's base of
approximately 180 million fans. Beginning in the second half of
2023, future ReCreate products and formats will be launched,
including CBD formulations combined with functional botanical
wellness formulations for self-care and mental well-being. The
lifestyle brand targets cultural verticals of Millennials and
GenZers, who make up approximately 47% of a multi-billion-dollar
CBD market. ReCreate products have received early distribution
support from retail partners including Fresh Thyme, The Vitamin
Shoppe, and Southern Glazer's Wine & Spirits.
Botanical IND (Investigative New Drug)
On April 6, 2023, Charlotte's Web announced (Press
Release) the formation of DeFloria LLC ("DeFloria" or the "Entity")
with AJNA BioSciences PBC ("AJNA"), a botanical drug development
company focused on mental health and neurological disorders, and a
subsidiary of British American Tobacco PLC (LSE: BATS and NYSE:
BTI) ("BAT"). BAT holds an equity interest in the Entity in the
form of 200,000 preferred units following its $10 million investment and has the right to
participate in future equity issuances to maintain its pro rata
equity position. The Company and AJNA each hold 400,000 of the
Entity's voting common units. DeFloria was established to pursue a
botanical investigative new drug ("IND") through the FDA drug
development pathway for a botanical drug to target a neurological
condition. The novel botanical drug will be developed from certain
proprietary hemp genetics of Charlotte's Web. Renowned neurologist
Dr. Orrin Devinsky, Chief Medical
Advisor for AJNA, is leading the project. He was a principal
investigator for the development of a cannabis-based FDA approved
drug approved in 2018. AJNA has a pre-IND filed with the FDA on
behalf of DeFloria and is commencing its first set of phase I
clinical trials in summer of 2023.
Q1 2023 Financial Review
The following table sets forth selected financial information
for the periods indicated.
|
|
Three Months Ended,
March 31,
|
U.S. $ millions, except
per share data
|
|
2023
|
|
2022
|
|
|
|
|
|
Revenue
|
|
$17.0
|
|
$19.4
|
Cost of goods
sold
|
|
7.1
|
|
7.6
|
Gross profit
|
|
9.9
|
|
11.8
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
17.5
|
|
20.4
|
Operating
loss
|
|
(7.6)
|
|
(8.6)
|
|
|
|
|
|
Other income (expense),
net
|
|
(0.7)
|
|
(0.1)
|
Change in fair value of
financial instruments
and other
|
|
5.4
|
|
0.1
|
Net loss
|
|
$(2.9)
|
|
$(8.6)
|
Net loss per common
share, basic and diluted
|
|
$(0.02)
|
|
$(0.06)
|
Consolidated net revenue for the first quarter ended
March 31, 2023, was $17.0 million, a decrease of 12.1% from
$19.4 million in the first quarter of
2022. The decrease was primarily due to lower oil tincture sales
volume and related product mix for the periods. Gross profit was
$9.9 million, or 58.3% of revenue, as
compared to gross profit of $11.8
million, or 60.5% of revenue, in the first quarter of 2022.
Excluding inventory provisions, gross margins were comparable at
approximately 60% in the first quarter of both 2022 and
2023.
Business-to-business ("B2B") retail net revenue was $5.7 million, a decrease of 7.7% year-over-year
from $6.2 million in Q1 2022. The
decrease was primarily due to comparable product mix for the
periods, including a consumer preference shift from higher priced
oil tinctures, to lower unit-priced gummies and topical products,
which more than offset distribution gains, particularly in the
Natural Channel. On a comparative basis, Q1 2022 included
significant relative expansion following the passing of Assembly
Bill 45 in California in Q4 2021,
while there was not a similar positive regulatory event supporting
Q1 2023. New B2B distribution partners in grocery, natural, and pet
retail were added in late 2022; however, require time to materially
increase sales. On May 1, 2023,
Charlotte's Web announced a new partnership with Phillips Pet Food
& Supplies, America's largest distributor in the pet specialty
retail channel, covering more than 6,000 retailers representing
more than 14,000 retail locations. B2B sales contributed 34% of the
Company's total net revenue in Q1 2023.
In the US, Charlotte's Web holds the number one market share
position in the CBD market relative to retail dollars based on
market share data from leading third-party analysts such as Nielsen
Company (US), LLC, SPINS, LLC, and Brightfield Group.
Direct-to-consumer ("DTC") net revenue through the Company's
webstore was $11.3 million, a
decrease of 14.2% from $13.1 million
in Q1 2022. The decrease was attributable to lower traffic to the
Company's webstore. The Company is seeing a category-wide decrease
in consumers searching for CBD wellness solutions and continuing to
shift from higher cost tinctures to gummies. E-commerce conversion
rates remain strong at 11.7%, consistent with our historical
conversion rates based on total site traffic. DTC sales
contributed 66% of the Company's total net revenue in Q1 2023.
Charlotte's Web maintains the largest e-commerce business in the
CBD industry. E-commerce is the CBD industry's largest sales
channel representing approximately 37% of total annual industry
sales. Later this year, the Company is launching initiatives to
increase online traffic to broaden demographic exposure, with
partners such as MLB and improve consumer experience on our
platform.
|
|
Three Months
Ended
|
|
|
|
March
31,
|
|
|
2023
|
|
2022
|
|
Total Revenue - U.S.
$ millions
|
|
$17.0
|
|
$19.4
|
|
Direct-to-consumer
("DTC")
|
|
$11.3
|
|
$13.1
|
|
Business-to-business
("B2B")
|
|
$5.7
|
|
$6.2
|
|
Total selling, general and administrative expenses in the
quarter were $17.5 million, a 14.0%
reduction from $20.4 million in Q1
2022. The reduction reflects actions taken in 2022 to improve
operating efficiencies and reduce personnel and marketing expenses
to better align with current revenues. This was partially offset by
an increase in the amortization expense related to MLB assets and
convertible debenture discounts of approximately $2.1 million.
Lower operating expenses supported a reduced operating loss of
$7.6 million for the first quarter of
2023, an improvement of $1.0 million,
or 12.1%, as compared to an operating loss of $8.6 million in Q1 2022.
Total change in fair value of financial instruments and other
for the three months ended March 31,
2023, was $5.4 million,
primarily due to a revaluation of the fair value of the Company's
debt and interest rate conversion. Net loss for the first quarter
was $2.9 million, or ($0.02) per share on a basic and diluted basis,
as compared to a net loss of $8.6
million, or ($0.06) per share,
on a basic and diluted basis in Q1 2022.
Adjusted EBITDA1 loss for the first quarter of 2023
was $3.3 million, an improvement of
$2.0 million, or 57.7% as compared to
an Adjusted EBITDA loss of $5.3
million for the first quarter of 2022.
Balance Sheet and Cash Flow
Net cash used from operations, for the three months ended
March 31, 2023, was $6.1 million as compared to $4.7 million in Q1 2022. The first quarter of
2023 included rights fee payments to MLB which did not occur in the
prior year period.
The Company's cash and working capital as of March 31, 2023, were $60.8
million and $78.5 million
respectively, compared to $67.0
million and $82.3 million at
December 31, 2022, respectively.
Consolidated Financial Statements and Management's Discussion
and Analysis
The Company's audited consolidated financial
statements and accompanying notes for the three months ended
March 31, 2023 and 2022 and related
management's discussion and analysis of financial condition and
results of operations ("MD&A") are reported in the Company's
10-Q filing on the Securities and Exchange Commission website at
www.sec.gov and on SEDAR at www.sedar.com, and will be available on
the Investor Relations section of the Company's website at
https://investors.charlottesweb.com.
Conference Call
Management will host a conference call
to discuss the Company's 2023 first quarter at 10:00 a.m. ET on May 12,
2023. There are three ways to join the call:
There are three ways to join the call:
- Register and enter your phone number at
https://emportal.ink/3nhInAl to receive an instant automated call
back, or
- Dial 1-416-764-8659 or 1-888-664-6392 approximately 10 minutes
before the conference call and provide confirmation number
59487501, or
- Listen to the live webcast online.
A recording of the call will be available through May 19, 2023. To listen to a replay of the
earnings call please dial 1-416-764-8677 or 1-888-390-0541 and
provide conference replay ID 487501. A webcast of the call will
also be accessible through the investor relations section of the
Company's website for an extended period of time.
Subscribe to Charlotte's Web investor news.
About Charlotte's Web Holdings, Inc.
Charlotte's Web Holdings, Inc., a Certified B Corporation
headquartered in Denver, is the
market leader in innovative hemp extract wellness products under a
family of brands that includes Charlotte's Web™, CBD Medic™, and
CBD Clinic™. Charlotte's Web whole-plant CBD extracts come in
full-spectrum and broad-spectrum (THC-free) options, including
ReCreate™ by Charlotte's Web, the world's only broad-spectrum CBD
certified NSF for Sport®, which is the official CBD of Major League
Baseball©. Founded by the seven Stanley
Brothers, Charlotte's Web ignited the CBD industry when the
brothers came to global prominence with the coverage of a young
girl's astounding reaction to their hemp extract. Their advocacy
changed laws, public perception, and research around the vast
health potential of plant-based solutions. The Stanleys built their
business with the mission to bring botanical options to health
seekers worldwide. Charlotte's Web branded premium quality products
start with proprietary hemp genetics that are American farm-grown
using organic and regenerative cultivation practices. The Company's
hemp extracts have naturally occurring botanical compounds
including cannabidiol ("CBD"), CBC, CBG, terpenes, flavonoids, and
other beneficial compounds. The Company's CW Labs R&D division
advances hemp science at a center of excellence in Louisville, Colorado. Charlotte's Web product
categories include CBD oil tinctures (liquid products) CBD gummies
(sleep, stress, exercise recovery), CBD capsules, CBD topical
creams and lotions, as well as CBD pet products for dogs.
Through its substantially vertically integrated business model,
Charlotte's Web maintains stringent control over product quality
and consistency with 20+ product lot testing for quality assurance.
Charlotte's Web products are distributed to retailers and health
care practitioners throughout the U.S.A, and online through the Company's
website at www.charlottesweb.com.
© Major League Baseball
trademarks and copyrights are used with permission of Major League
Baseball. Visit MLB.com.
|
Shares of Charlotte's Web trade on the Toronto Stock Exchange
(TSX) under the symbol "CWEB" and are quoted in U.S. Dollars in
the United States on the OTCQX
under the symbol "CWBHF". As of March 31,
2023, Charlotte's Web had 152,432,914 Common Shares
outstanding.
Forward-Looking Information
In the interest of providing the shareholders and potential
investors of Charlotte's Web Holdings, Inc. with information about
the Company, certain information provided herein constitutes
forward-looking statements or information (collectively,
"forward-looking statements") within the meaning of applicable
securities laws. Forward-looking statements are typically
identified by words such as "may", "will", "should", "could",
"anticipate", "expect", "project", "estimate", "forecast", "plan",
"intend", "target", "believe" and similar words suggesting future
outcomes or statements regarding an outlook. Although these
forward-looking statements are based on assumptions the Company
considers to be reasonable based on the information available on
the date such statements are made, such statements are not
guarantees of future performance and readers are cautioned against
placing undue reliance on forward-looking statements. By their
nature, these statements involve a variety of assumptions, known
and unknown risks and uncertainties, and other factors which may
cause actual results, levels of activity, and achievements to
differ materially from those expressed or implied by such
statements. The forward-looking statements contained in this press
release are based on certain assumptions and analysis by management
of the Company in light of its experience and perception of
historical trends, current conditions and expected future
development and other factors that it believes are
appropriate.
Specifically, this press release contains forward-looking
statements relating to, but not limited to: activities relating to,
and sponsorship of, legislation to advance regulatory framework;
anticipated consumer trends and corresponding product innovation;
anticipated future financial results; the conversion of the
convertible debenture held by BAT; international expansion
activities and strategy, including the Company's strategic alliance
with Tilray and the availability of the Company's products through
Tilray's distribution network in Canada; sales volume, product, channel and
international expansion plans; growth of the Company's market share
position; the impact of the Company's partnership with the MLB on
the health and wellness of its players and fans; the impact of the
Company's new distribution partners on sales; the
ratification of legislative changes in Colorado and other states; the Company's
ability to increase online traffic and demographic exposure through
new products and marketing; anticipated new marketing partners; the
impact of certain activities on the Company's business and
financial condition; suggested regulatory developments; and the
Company's anticipated trajectory, long-term growth expectations and
shareholder value creation.
The material factors and assumptions used to develop the
forward-looking statements herein include, but are not limited to,
the following: the impact of the COVID-19 pandemic; the regulatory
climate in which the Company currently operates and may in the
future operate; successful sales of the Company's products; the
success of sales and marketing activities; there will be no
significant delays in the development and commercialization of the
Company's products, including in relation to supply chain
disruptions; outcomes from R&D activities; ability for the
Company to leverage R&D and brand recognition for product
sales; the Company's ability to deal with adverse growing
conditions (due to pests, disease, fungus, climate or other
factors) in a timely and cost-effective manner; there will be no
significant reduction in the availability of qualified and
cost-effective human resources; new products will continue to be
added to the Company's portfolio; demand for the Company's products
will grow in the foreseeable future; there will be no significant
barriers to the acceptance of the Company's products in the market,
including in international markets; the Company will be able to
maintain compliance with applicable contractual and regulatory
obligations and requirements; there will be adequate liquidity
available to the Company to carry out its operations and business
plans; the Company will have sufficient capital to pursue its sales
volume, product, channel and international expansion; and products
do not develop that would render the Company's current and future
product offerings undesirable and the Company is otherwise able to
minimize the impact of competition and keep pace with changing
consumer preferences.
The Company's forward-looking statements are subject to risks
and uncertainties pertaining to, among other things, the adverse
impact of the COVID-19 pandemic to the Company's operations, supply
chain, distribution chain, and to the broader market for the
Company's products; revenue fluctuations; nature of government
regulations (both domestic and foreign); economic conditions; loss
of key customers; retention and availability of executive talent;
competing products; common share price volatility; loss of
proprietary information; product acceptance; internet and system
infrastructure functionality; information technology security;
available capital to fund operations and business plans; crop risk;
international and political considerations; regulatory changes; and
including but not limited to those risks and uncertainties
discussed under the heading "Risk Factors" in the Company's Annual
Report on Form 10-K for the year ending December 31, 2022 available on
www.sec.gov and www.sedar.com,
and other risk factors contained in other filings with the
Securities and Exchange Commission available on
www.sec.gov and filings with Canadian securities
regulatory authorities available on
www.sedar.com. The impact of any one risk,
uncertainty, or factor on a particular forward-looking statement is
not determinable with certainty as these are interdependent, and
the Company's future course of action depends on management's
assessment of all information available at the relevant
time.
Except as required by applicable law, the Company assumes no
obligation to publicly update or revise any forward-looking
statements made, whether as a result of new information, future
events, or otherwise. All forward-looking statements, whether
written or oral, attributable to the Company or persons acting on
the Company's behalf, are expressly qualified in their entirety by
these cautionary statements.
(1) Non-GAAP Measures
The press release contains
non-GAAP measures, including EBITDA and Adjusted EBITDA.
Please refer to the section in the tables captioned "Non-GAAP
Measures" below for additional information and a reconciliation to
GAAP for all Non-GAAP metrics.
CHARLOTTE'S WEB
HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
(unaudited)
|
|
|
|
|
|
|
March
31,
|
|
March
31,
|
|
2023
|
|
2022
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
60,781
|
|
$
66,963
|
Accounts receivable,
net
|
2,578
|
|
1,847
|
Inventories,
net
|
25,573
|
|
26,953
|
Employee retention
credit receivable
|
4,261
|
|
—
|
Prepaid expenses and
other current assets
|
7,944
|
|
7,998
|
Total current
assets
|
101,137
|
|
103,761
|
Property and equipment,
net
|
27,962
|
|
29,330
|
License and media
rights
|
25,041
|
|
26,871
|
Operating lease
right-of-use assets, net
|
16,025
|
|
16,519
|
SBH purchase option and
other derivative assets
|
2,715
|
|
3,620
|
Intangible assets,
net
|
1,559
|
|
1,771
|
Other long-term
assets
|
1,532
|
|
5,770
|
Total assets
|
$
175,971
|
|
$
187,642
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
3,707
|
|
$
4,018
|
License and media
rights payable - current
|
10,510
|
|
7,759
|
Accrued and other
current liabilities
|
6,138
|
|
7,344
|
Lease obligations –
current
|
2,268
|
|
2,306
|
Total current
liabilities
|
22,623
|
|
21,427
|
Convertible
debenture
|
38,426
|
|
37,421
|
Lease obligations –
noncurrent
|
17,364
|
|
17,905
|
License and media
rights payable - noncurrent
|
15,921
|
|
20,383
|
Derivative and other
long-term liabilities
|
6,738
|
|
13,001
|
Total
liabilities
|
101,072
|
|
110,137
|
Commitments and
contingencies (note 7)
|
|
|
|
Shareholders'
equity:
|
|
|
|
Common shares, nil par
value; unlimited shares authorized as of March 31,
2023 and December 31, 2022, respectively; 152,432,914 and
152,135,026
shares issued and outstanding as of March 31, 2023 and December
31,
2022
|
1
|
|
1
|
Additional paid-in
capital
|
325,737
|
|
325,431
|
Accumulated
deficit
|
(250,839)
|
|
(247,927)
|
Total shareholders'
equity
|
74,899
|
|
77,505
|
Total liabilities and
shareholders' equity
|
$
175,971
|
|
$
187,642
|
CHARLOTTE'S WEB
HOLDINGS, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS
(in thousands, except share and per share
amounts)
|
|
|
|
Three Months
Ended
March 31,
(unaudited)
|
|
2023
|
|
2022
|
|
|
|
|
Revenue
|
$
17,010
|
|
$
19,356
|
Cost of goods
sold
|
7,093
|
|
7,643
|
Gross profit
|
9,917
|
|
11,713
|
|
|
|
|
Selling, general, and
administrative expenses
|
17,513
|
|
20,355
|
Operating
loss
|
(7,596)
|
|
(8,642)
|
|
|
|
|
Other (expense) income,
net
|
(698)
|
|
(84)
|
Change in fair value of
financial instruments and other
|
5,382
|
|
100
|
Loss before provision
for income taxes
|
(2,912)
|
|
(8,626)
|
Income tax
expense
|
|
|
—
|
Net loss
|
$
(2,912)
|
|
$
(8,626)
|
Net loss per common
share, basic and diluted
|
$
(0.02)
|
|
$
(0.06)
|
Weighted-average shares
used in computing net loss per share, basic and
diluted
|
152,314,150
|
|
144,990,224
|
CHARLOTTE'S WEB HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS'
EQUITY
(in thousands, except share
amounts)
(unaudited)
|
|
|
Common
Shares
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Deficit
|
|
Total
Shareholders'
Equity
|
|
Shares
|
|
Amount
|
|
|
|
Balance—December 31, 2022
|
152,135,026
|
$
|
1
|
$
|
325,431
|
$
|
(247,927)
|
$
|
77,505
|
Common shares issued
upon vesting of restricted share
units, net of withholding
|
297,888
|
|
—
|
|
(69)
|
|
|
|
(69)
|
Share-based
compensation
|
—
|
|
—
|
|
375
|
|
—
|
|
375
|
Net loss
|
|
|
—
|
|
|
|
(2,912)
|
|
(2,912)
|
Balance—March 31,
2023
|
152,432,914
|
$
|
1
|
|
325,737
|
$
|
(250,839)
|
$
|
74,899
|
|
|
|
|
|
|
|
|
|
|
Balance—December 31, 2021
|
144,659,964
|
$
|
1
|
$
|
319,059
|
$
|
(188,614)
|
$
|
130,446
|
Common shares issued
upon vesting of restricted share
|
77,193
|
|
—
|
|
(45)
|
|
—
|
|
(45)
|
Harmony Hemp contingent
equity compensation
|
169,045
|
|
—
|
|
165
|
|
—
|
|
165
|
ATM program issuance
costs
|
239,500
|
|
—
|
|
(2)
|
|
—
|
|
(2)
|
Share-based
compensation
|
—
|
|
—
|
|
1,214
|
|
—
|
|
1,214
|
Net loss
|
—
|
|
—
|
|
—
|
|
(8,626)
|
|
(8,626)
|
Balance—March 31,
2022
|
145,145,702
|
$
|
1
|
$
|
320,391
|
$
|
(197,240)
|
$
|
123,152
|
CHARLOTTE'S WEB HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
(in thousands)
|
|
|
Three Months
Ended
March 31,
(unaudited)
|
|
2023
|
|
2022
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
Net loss
|
$
(2,912)
|
|
$
(8,626)
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
Depreciation and
amortization
|
3,792
|
|
2,078
|
Change in fair value
of financial instruments
|
(5,351)
|
|
(100)
|
Convertible debenture
accrued interest
|
697
|
|
—
|
Changes in
right-of-use assets
|
493
|
|
636
|
Share-based
compensation
|
375
|
|
1,379
|
Allowance for credit
losses
|
326
|
|
—
|
Other non-cash
expense
|
442
|
|
84
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts receivable,
net
|
(1,212)
|
|
2,228
|
Inventories,
net
|
1,187
|
|
(979)
|
Prepaid expenses and
other current assets
|
480
|
|
1,313
|
License and media
rights
|
(2,000)
|
|
—
|
Operating lease
obligations
|
(925)
|
|
(644)
|
Accounts payable,
accrued and other liabilities
|
(1,098)
|
|
(2,797)
|
Other operating assets
and liabilities, net
|
(367)
|
|
749
|
Net cash used in
operating activities
|
(6,073)
|
|
(4,679)
|
Cash flows from
investing activities:
|
|
|
|
Other investing
activities
|
(40)
|
|
(271)
|
Net cash used in
investing activities
|
(40)
|
|
(271)
|
Cash flows from
financing activities:
|
|
|
|
Other financing
activities
|
(69)
|
|
(47)
|
Net cash used in
financing activities
|
(69)
|
|
(47)
|
Net decrease in cash
and cash equivalents
|
(6,182)
|
|
(4,997)
|
Cash and cash
equivalents —beginning of period
|
66,963
|
|
19,494
|
Cash and cash
equivalents —end of period
|
$
60,781
|
|
$
14,497
|
|
|
|
|
Non-cash
activities:
|
|
|
|
Non-cash purchases of
property and equipment
|
$
—
|
|
$
(67)
|
(1) Non-GAAP Measures – EBITDA and Adjusted
EBITDA
Earnings before interest, taxes, depreciation, and
amortization ("EBITDA") is not a recognized performance measure
under U.S. GAAP. The term EBITDA consists of net loss and
excludes interest, taxes, depreciation, and amortization.
Adjusted EBITDA also excludes other non-cash items such as changes
in fair value of financial instruments (Mark-to-Market),
Share-based compensation, and impairment of assets. These non-GAAP
financial measures should be considered supplemental to, and not a
substitute for, our reported financial results prepared in
accordance with GAAP. The non-GAAP financials measures do not
have a standardized meaning prescribed under U.S. GAAP and
therefore may not be comparable to similar measures presented by
other issuers. The primary purpose of using non-GAAP
financial measures is to provide supplemental information that we
believe may be useful to investors and to enable investors to
evaluate our results in the same way we do. We also present the
non-GAAP financial measures because we believe they assist
investors in comparing our performance across reporting periods on
a consistent basis, as well as comparing our results against the
results of other companies, by excluding items that we do not
believe are indicative of our core operating performance.
Specifically, we use these non-GAAP measures as measures of
operating performance; to prepare our annual operating budget; to
allocate resources to enhance the financial performance of our
business; to evaluate the effectiveness of our business strategies;
to provide consistency and comparability with past financial
performance; to facilitate a comparison of our results with those
of other companies, many of which use similar non-GAAP financial
measures to supplement their GAAP results; and in communications
with our board of directors concerning our financial performance.
Investors should be aware, however, that not all companies define
these non-GAAP measures consistently.
Adjusted EBITDA for the three and three months ended
March 31, 2023, and 2022 is as
follows:
Charlotte's Web
Holdings, Inc.
|
Statement of
Adjusted EBITDA
|
(In
Thousands)
|
|
|
|
Three Months
Ended
|
|
|
|
March
31,
|
|
|
|
(unaudited)
|
U.S. $
Thousands
|
|
|
2023
|
2022
|
|
|
|
|
|
Net loss
|
|
|
$
(2,912)
|
$
(8,626)
|
|
|
|
|
|
Depreciation of
property and
equipment and amortization of
intangibles
|
|
|
3,792
|
2,078
|
Interest (income)
expense
|
|
|
799
|
19
|
Income tax
expense
|
|
|
-
|
-
|
EBITDA
|
|
|
1,679
|
(6,529)
|
|
|
|
|
|
Stock Comp
|
|
|
375
|
1,379
|
Mark-to-market
financial instruments
|
|
(5,382)
|
(100)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
$ (3,328)
|
$ (5,250)
|
|
|
|
|
|
Certain prior year amounts in the table above have been
conformed to the current year presentation in accordance with how
the Company is defining the EBITDA and Adjusted EBITDA calculation
at March 31, 2023
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SOURCE Charlotte's Web Holdings, Inc.