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8-K - CURRENT REPORT - cbdMD, Inc. | levb_8k.htm |
Exhibit 99.1
Level Brands, Inc. Reports Second Quarter EPS of $0.17
●
Total
Net Sales Up 119.6% for 2Q18 and 135.1% for 1H18
●
Gross
Profit as a Percentage of Net Sales Increased to 83.1% for 2Q18 and
80.1% for 1H18
●
Positive
Net Income of $1.4 Million in 2Q18, Up from Loss in Year Ago
Period
CHARLOTTE,
N.C.—May 16, 2018—(BUSINESS WIRE)--Level Brands, Inc.
(NYSE American: LEVB), an innovative marketing and licensing
company that provides bold, unconventional and socially responsible
branding for leading businesses, today announced financial and
operating results for its second quarter and six months ended March
31, 2018.
●
Total net sales
increased 119.6% and 135.1% to $3.1 million and $3.8 million,
respectively, for the three and six-month periods ended March 31,
2018.
●
Gross profit as a
percentage of net sales improved 11.4% to 83.1% for the three
months ended March 31, 2018. For the six-month period, gross profit
as a percentage of net sales improved 15.0% to 80.1%.
●
Net income
attributable to common shareholders improved 352.9% to $1.4 million
in the three months ended March 31, 2018. For the six-month period,
net income improved 122.8% to $271,469, up from a loss of $1.2
million in the prior-year period.
“We
are pleased to report strong operating results for the second
quarter and first half of fiscal year 2018,” stated Martin
Sumichrast, Chairman and CEO of Level Brands. “Our expansion
efforts in 2017 positioned Level Brands to capitalize on
opportunities in millennial men’s lifestyle markets and the
health and wellness arena for women and their families at every
age. Complimenting these efforts, we’ve built solid
capabilities related to brand management services, proven through
early successes with several key customers.”
Mr.
Sumichrast continued, “We believe that in working closely
with our Chairman Emeritus and Chief Brand Strategist, Kathy
Ireland, the Chair, CEO and Chief Designer of kathy ireland®
Worldwide, and leveraging the expertise and talent of the kathy
ireland ® Worldwide executive team, we have a competitive
advantage in securing strategic licenses and joint venture
partnerships for our brands, which positively impacts our ability
to continue to grow the portfolio of brands we manage and
represent,”
“We
believe leveraging the kathy ireland® Worldwide
“blueprint” for IP development allows us economies of
scale, which underpins our ability to bring virtually unlimited
products and services of quality through the appropriate
distribution channels to meet the demands of our targeted
customers. With current executed contracts encompassing products in
fashion, accessories, beverages, personal care, health care, and
spirits, which are already in development or available at brick and
mortar stores and online retailers, we believe we have the right
foundation to build upon to generate sustainable shareholder value
improvement in the quarters ahead,” concluded Mr.
Sumichrast.
SECOND QUARTER 2018 AND RECENT OPERATIONAL HIGHLIGHTS
●
Signed a 10-year,
multimillion-dollar cannabidiol (CBD) products license deal with
Isodiol International Inc. (CSE: ISOL) (OTCQB:ISOLF)(FSE: LB6A.F)
●
Launched first
three new CBD product categories as part of Isodiol license
agreement
●
Launched 100%
natural women’s personal care products into health food
stores with Damiva and kathy ireland® Worldwide
●
Partnered with BMG,
a multinational record label and the world’s fourth-largest
music-publishing company, to launch new record label with three
project deal
●
Signed a five-year
licensing deal with Dynasty Group USA, one of the largest
American-owned manufacturers of high-quality, cruelty-free cosmetic
brushes
●
Opened corporate
office and design studio in Los Angeles
SECOND QUARTER AND SIX MONTHS 2018 FINANCIAL RESULTS
Total
net sales for the three and six months ended March 31, 2018 were
$3,081,000 and $3,769,000, respectively increases of 119% and 135%
over prior periods. Net sales for the licensing division for the
three and six months ended March 31, 2018 increased 221.6% and
225.9%, respectively, as compared to the three and six months ended
March 31, 2017. Net sales for the entertainment division for the
three and six months ended March 31, 2018 increased 59.6% and
427.8%, respectively, as compared to the three and six months ended
March 31, 2017. Net sales for the professional products division
for the three and six months ended March 31, 2018 decreased 92.1%
and 89.8%, respectively, as compared to the three and six months
ended March 31, 2017, primarily driven by a change in strategy
which is still in transition.
Cost of
sales as a percentage of net sales was 16.9% and 19.9% in the three
and six months ended March 31, 2018, respectively, as compared to
28.3% and 34.9% in the three and six months ended March 31, 2017,
respectively. Cost of sales in our licensing division was 6.9% and
9.3% of its net sales for the three and six months ended March 31,
2018, respectively, as compared to 11.6% for both the three and six
months ended March 31, 2017, respectively. In our entertainment
division, cost of sales was 77.2% and 39.2% of its net sales for
the three and six months ended March 31, 2018, respectively, as
compared to 59.7% for both the three and six months ended March 31,
2017, respectively. In our professional products division, cost of
sales was 408.8% and 238.2% of its net sales for the three and six
months ended March 31, 2018, respectively, as compared to 79.4% and
80.1% in the three and six months ended March 31, 2017,
respectively.
Our
operating expenses were approximately $2,625,000 and $1,683,000 for
the six months ended March 31, 2018 and 2017, an increase of
$942,000 or 55.9%. For the three months ended March 31, 2018 and
2017 the operating expenses were $937,000 and $1,082,000 a decrease
of $145,000 or 13.4%. The overall increases were primarily driven
by increased staffing and marketing expenses related to the growth
of the company from one segment to three and becoming a public
entity. Operating expenses in the licensing division were
approximately $363,000 and $694,000 for the three and six months
ended March 31, 2018, respectively as compared to $151,000 for both
the three and six months ended March 31, 2017, an increase of
139.6% and 358.1%, respectively. Operating expenses in the
entertainment division were approximately $218,000 and $508,000 for
the three and six months ended March 31, 2018, respectively as
compared to $135,000 for both the three and six months ended March
31, 2017, an increase of 61.3% and 275.2%, respectively. Operating
expenses in the professional products division were approximately
$168,000 and $473,000 for the three and six months ended March 31,
2018, respectively, as compared to $457,000 and $953,000 for the
three and six months ended March 31, 2017, a decrease of 64.4% and
52%, respectively.
Net
income attributable to common shareholders improved 352.9% to
$1,404,397 in the three months ended March 31, 2018. For the
six-month period, net income improved 122.8% to $271,469, up from a
loss of $1,189,716 million in the prior-year period. Earnings per
share for the three and six months ended was $0.17 and $0.04 as
compared to a loss per share of $0.13 and $0.31.
We had
cash on hand of $6,711,399 and working capital of $11,960,365 at
March 31, 2018 as compared to cash on hand of $284,246 and working
capital of $2,170,154 at September 30, 2017. Our current assets
increased 229% at March 31, 2018 from September 30, 2017, and our
current liabilities decreased 114.4% at March 31, 2018 from
September 30, 2017.
CONFERENCE CALL DETAILS
Wednesday, May
16, 2018, 9:00 a.m. Eastern Time
Domestic:
1-877-451-6152
International:
1-201-389-0879
Conference
ID: Level
Brands
Replay – Available through May 30, 2018
Domestic:
1-844-512-2921
International:
1-412-317-6671
Conference
ID: 3680081
About Level Brands, Inc. (www.LevelBrands.com)
Level
Brands creates bold, unconventional and socially responsible
branding for leading businesses. With a focus on corporate brand
management and consumer products marketing art, beauty, fashion,
health & wellness including the beverage space, entertainment,
and real estate. Licensed brand marketing is at the core of the
Level Brand businesses: Ireland Men One or I'M1, for millennial men
and the women who love them; Encore Endeavor One or EE1, corporate
brand management and producer of experiential entertainment events
and products across multiple platforms; kathy ireland® Health
& Wellness; Beauty & Pin-Ups, Level Brands' hair care and
disruptive women's products brand.
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 our
material dependence on our relationship with kathy ireland®
Worldwide, our limited operating history, our ability to expand our
business and significantly increase our revenues and our ability to
report profitable operations in future periods, among others. You
are urged to carefully review and consider any cautionary
statements and other disclosures, including the statements made
under the heading "Risk Factors" in Level Brands, Inc.'s Annual
Report on Form 10-K for the fiscal year ended September 30, 2017 as
filed with the Securities and Exchange Commission (the "SEC") on
December 26, 2017 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 Inuvo and are difficult to
predict. Level Brands, Inc. does not undertake any
duty to update any forward-looking statements except as may be
required by law.
Contact:
Investors:
RedChip
Companies
Paul
Kuntz, 407-644-4256, ext. 105
paul@redchip.com