CV Sciences, Inc. Reports First Quarter 2024 Financial Results
First Quarter 2024 and Recent Financial and Operating Highlights
- Generated revenue of
$4.0 million for first quarter 2024 compared to$4.1 million for the first quarter 2023 and a sequential improvement from$3.8 million for the fourth quarter 2023; - Recognized gross margin of 46.3% for first quarter 2024 compared to 43.0% for the first quarter 2023 and a sequential improvement from 45.8% for the fourth quarter 2023;
- Cash balance of
$0.7 million at quarter end compared to$1.3 million at the end of 2023; - 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
About
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.
Contact Information
ir@cvsciences.com
CV SCIENCES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands, except per share data) |
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Three Months Ended
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2024 |
|
|
2023 |
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||
Product sales, net |
|
$ |
4,002 |
|
|
$ |
4,148 |
|
Cost of goods sold |
|
|
2,149 |
|
|
|
2,366 |
|
Gross profit |
|
|
1,853 |
|
|
|
1,782 |
|
|
|
|
|
|
|
|
||
Operating expenses: |
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|
|
|
|
|
||
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 |
|
|
|
|
|
|
|
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||
Other expense, net |
|
|
2 |
|
|
|
56 |
|
Income (loss) before income taxes |
|
|
(622) |
|
|
|
5,706 |
|
Income tax expense |
|
|
6 |
|
|
|
— |
|
Net income (loss) |
|
$ |
(628) |
|
|
$ |
5,706 |
|
|
|
|
|
|
|
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||
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) |
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|
2023 |
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Assets |
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Current assets: |
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|
|
|
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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 |
|
|
|
|
340 |
|
|
|
342 |
|
Other assets |
|
|
244 |
|
|
|
296 |
|
Total assets |
|
$ |
8,466 |
|
|
$ |
9,200 |
|
|
|
|
|
|
|
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Liabilities and stockholders' equity (deficit) |
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|
|
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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 |
|
|
|
|
|
|
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||
Commitments and contingencies |
|
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|
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||
|
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Stockholders' equity (deficit) |
|
|
|
|
|
|
||
Preferred stock, par value
of
31, 2024 and |
|
|
— |
|
|
|
— |
|
Common stock, par value
161,679 shares issued and outstanding as of 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) |
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Three Months Ended
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|
2024 |
|
|
2023 |
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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 |
|
|
|
|
|
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FINANCING ACTIVITIES |
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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 |
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|
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Supplemental cash flow disclosures: |
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Interest paid |
|
$ |
4 |
|
|
$ |
3 |
|
Income taxes paid |
|
$ |
6 |
|
|
$ |
— |
|
Supplemental disclosure of non-cash transactions: |
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|
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Services paid with common stock |
|
$ |
62 |
|
|
$ |
— |
|
CV SCIENCES, INC. NON-GAAP FINANCIAL MEASURES (UNAUDITED) |
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We prepare our consolidated financial statements in accordance with generally accepted accounting principles for |
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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. |
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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. |
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A reconciliation from our GAAP net income (loss) to non-GAAP net loss for the quarter ended |
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Three Months Ended
|
|
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|
|
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) |
|
|
|
|
|
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Shares used to calculate diluted EPS - GAAP and non-GAAP |
|
|
163,075 |
|
|
|
152,104 |
|
____________________ |
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(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. |
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(2) Represents benefit from reversal of accrued payroll tax associated with RSU release to founder in 2019. |
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(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): |
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|
|
Three Months Ended
|
|
|||||
|
|
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) |
|
____________________ |
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(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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