Attached files
| file | filename |
|---|---|
| 8-K - CURRENT REPORT - cbdMD, Inc. | ycbd_8k.htm |
cbdMD Reports Second Quarter Fiscal 2021 Results
YOY Net Sales Increased 26% for the March 2021 Quarter
Resulting in a Record Trailing Twelve Month Net Sales Of Over $46.4
Million
Company Expects Q1 Fiscal 2022 Net Sales to Range from $15.5
million to $16.25 million
CHARLOTTE, NC—May 12, 2021—(Business Wire)-- 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 and
its business highlights for its second quarter and six months ended
March 31, 2021.
Financial highlights for the Quarter Ended March 31,
2021:
●
Net
sales of $11.8 million for the second quarter of fiscal 2021
increased by 26% year-over-year from $9.4 million in the second
quarter of fiscal 2020 for a record high for the March
quarter.
●
Gross
profit margin for the second quarter of fiscal 2021 remained strong
at approximately 69%, down slightly from 71% in the prior
year’s second quarter.
●
E-commerce
direct-to-consumer net sales were $8.4 million, an increase of
23.3% from the prior year’s second fiscal
quarter.
●
Wholesale
(including brick and mortar retail customers) net sales were $3.4
million, an increase of 31.3% from the prior year’s second
fiscal quarter.
●
Paw
CBD (our award-winning CBD pet brand) had net sales of $1.4
million, an increase of 84% from the prior year’s second
fiscal quarter.
●
Quarterly
operating expenses for the second quarter of fiscal 2021 remained
relatively constant as compared to the second quarter of fiscal
2020 at $12.3 million.
●
Loss
from operations decreased by 25.6% to $4.1 million for the second
quarter of fiscal 2021 compared to $5.6 million from the prior
year’s second fiscal quarter.
●
Non-GAAP
adjusted operating loss decreased by 44% to $2.7 million, compared
to $4.9 million from the prior year’s quarter, and for the
six months ending March 31, 2021, our non-GAAP adjusted operating
loss decreased by 67% to $3.3 million compared to $9.9 million for
the prior year’s period.
●
Net
loss attributable to common shareholders for the second quarter of
fiscal 2021 was approximately $13.1 million, or ($0.24) per share,
as compared to net income of approximately $14.8 million, or $0.41
per share from the prior year’s second fiscal quarter. Our
net loss attributable to common shareholders was principally
attributable to an increase of approximately $8.9 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).
●
As
of March 31, 2021, we had working capital of approximately $27.9
million and cash on hand of approximately $23.7 million as compared
to working capital of approximately $16.0 million and cash on hand
of approximately $14.8 million at September 30, 2020.
Business
highlights since the start of the second quarter of fiscal 2021
include:
●
Entered
Global Beauty and Skincare Market with the launch of cbdMD
Botanicals.
●
Successfully
implemented NetSuite as our new ERP.
●
Launched
cbdMD Therapeutics subsidiary to advance cannabinoid science and
clinical studies.
●
Hired
Dr. Sibyl Swift, Former FDA to Co-Chair cbdMD
Therapeutics.
●
Invested
an additional $750,000 (total investment of $1 million) into ADRA
Acquisition Corporation (SPAC), prior to its successful IPO of
$115,000,000 (NYSE American:ADRA).
●
Renewed
our NSF certification and underwent the US Hemp Authority audit,
receiving our seal of approval on May 10, 2021.
●
Developed
new merchant processing relationships, expected cost savings
starting third quarter of fiscal 2021.
●
Expanded
our portfolio of TV commercials to include Paw CBD and developed a
new TV campaign that launched April 1, 2021.
●
Continued
to strengthen our portfolio of strategic athlete and sponsorship
programs, including Professional rally driver megastar Ken
Block.
●
Signed an exclusive sponsorship agreement to be
the Official CBD Partner of the NOBULL CrossFit Games.
●
Signed
a sponsorship agreement with Master Champion and 9 Time PGA Tour
Winner, Patrick Reed, who is now on Team cbdMD.
●
Won
2021 Product of the Year Awards for cbdMD’s CBD Gummies and
Paw CBD’s CBD Hard Chews for Dogs.
“We continue to build upon our success and develop our
science and infrastructure, which we believe will drive shareholder
value and separate our brands from our competition. We believe that
our proven ability to innovate our marketing as well as deliver
award winning products to our consumers will achieve significant
and lasting market brand recognition and consumer acceptance for
our cbdMD, Paw CBD and cbdMD Botanicals brands,” said Martin
Sumichrast, Chairman and Co-CEO of cbdMD, Inc.
cbdMD, Inc. will host a conference call at 4:15 p.m., Eastern time,
on Wednesday, May 12, 2021, to discuss the company’s first
quarter fiscal 2021 financial results and business
progress.
CONFERENCE CALL DETAILS
|
Title:
|
cbdMD
Second Quarter 2021 Earnings Call
|
|
Event Date:
|
Wednesday,
May 12, 2021 - 4:15 PM Eastern Time
|
|
Event Link:
|
Webcast URL https://www.webcaster4.com/Webcast/Page/2206/41216
|
|
Webcast Replay Expiration:
|
Thursday,
May 12, 2022
|
|
|
|
|
Participant Numbers:
|
Toll
Free: 888-506-0062International: 973-528-0011
Entry
code (not required): 233626
|
|
Replay Number:
|
Toll
Free: 877-481-4010International: 919-882-2331Replay Passcode:
41216
|
About cbdMD, Inc.
cbdMD, Inc. is one of the leading and most highly trusted and most
recognized cannabidiol (CBD) brands with a comprehensive line of
U.S. produced, THC-free1
CBD products. Our cbdMD brand
currently includes over 130 SKUs of high-grade, premium CBD
products including CBD tinctures, CBD gummies, CBD topicals, CBD
capsules, CBD bath bombs, CBD bath salts, CBD sleep aids and CBD
drink mixes. Our Paw CBD brand of pet products includes over 45
SKUs of veterinarian-formulated products including tinctures,
chews, topicals products in varying strengths, and our CBD
Botanicals brand of beauty and skincare products features 15 SKUs,
including facial oil and serum, toners, moisturizers, clear skin,
facial masks, exfoliants and body care. To learn more about cbdMD
and their comprehensive line of U.S. grown,
THC-free1
CBD oil products, please visit
www.cbdmd.com, follow cbdMD on Instagram and Facebook, or visit
one of the 6,000 retail outlets that carry cbdMD
products.
1 THC-free is defined as
below the level of detection using validated scientific analytical
methods.
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, but not limited to, our ability to achieve our first
quarter fiscal 2022 net sales guidance. 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 March 31, 2021 as filed with the SEC on May 12, 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
|
|||||||||||
|
MARCH 31, 2021 AND SEPTEMBER 30, 2020
|
|
|
(Unaudited)
|
|
|
|
March 31,
|
September 30,
|
|
|
2021
|
2020
|
|
Assets
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
Cash
and cash equivalents
|
$23,711,600
|
$14,824,644
|
|
Accounts
receivable
|
1,848,465
|
911,482
|
|
Accounts
receivable – discontinued operations
|
22,217
|
447,134
|
|
Marketable
securities
|
32,034
|
26,472
|
|
Investment
other securities
|
1,000,000
|
250,000
|
|
Inventory
|
4,331,545
|
4,603,360
|
|
Inventory
prepaid
|
478,629
|
288,178
|
|
Prepaid
software
|
-
|
174,308
|
|
Prepaid
sponsorship
|
1,777,304
|
1,203,300
|
|
Prepaid
expenses and other current assets
|
1,544,541
|
983,374
|
|
Total current assets
|
34,746,335
|
23,712,252
|
|
|
|
|
|
Other
assets:
|
|
|
|
Property
and equipment, net
|
2,976,904
|
3,183,487
|
|
Operating
lease assets
|
6,240,059
|
6,851,357
|
|
Deposits
for facilities
|
789,583
|
790,708
|
|
Intangible
assets, net
|
21,635,000
|
21,635,000
|
|
Goodwill
|
54,669,997
|
54,669,997
|
|
Total other assets
|
86,311,543
|
87,130,549
|
|
|
|
|
|
Total assets
|
$121,057,878
|
$110,842,801
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||||||||||
|
MARCH 31, 2021 AND SEPTEMBER 30, 2020
|
|||||||||||
|
(continued)
|
|
|
(Unaudited)
|
|
|
|
March 31,
|
September 30,
|
|
|
2021
|
2020
|
|
Liabilities and shareholders' equity
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$2,835,236
|
$2,850,421
|
|
Accrued
expenses
|
1,729,594
|
2,769,920
|
|
Operating
leases – current portion
|
1,213,891
|
1,159,098
|
|
Paycheck
Protection Program loan, current portion
|
1,027,403
|
854,000
|
|
Note
payable
|
57,522
|
55,639
|
|
Total current liabilities
|
6,863,646
|
7,689,078
|
|
|
|
|
|
Long
term liabilities:
|
|
|
|
Long
term liabilities
|
-
|
264,367
|
|
Note
payable
|
139,215
|
-
|
|
Paycheck
Protection Program loan
|
428,697
|
602,100
|
|
Operating
leases - long term portion
|
5,414,751
|
6,010,208
|
|
Contingent
liability
|
22,300,000
|
16,200,000
|
|
Deferred
tax liability
|
27,000
|
895,000
|
|
Total long term liabilities
|
28,309,663
|
23,971,675
|
|
|
|
|
|
Total liabilities
|
35,173,309
|
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, 56,337,787 and 52,130,870 shares issued and outstanding,
respectively
|
56,338
|
52,131
|
|
Additional
paid in capital
|
155,780,222
|
126,517,784
|
|
Accumulated
deficit
|
(69,954,791)
|
(47,388,367)
|
|
Total cbdMD, Inc. shareholders' equity
|
85,884,569
|
79,182,048
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders' equity
|
$121,057,878
|
$110,842,801
|
|
cbdMD, INC.
|
|||||||||
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|||||||||
|
FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2021 and
2020
|
|
|
Three Months
|
Three Months
|
Six Months
|
Six Months
|
|
|
Ended
|
Ended
|
Ended
|
Ended
|
|
|
March 31,
|
March 31,
|
March 31,
|
March 31,
|
|
|
2021
|
2020
|
2021
|
2020
|
|
|
|
|
|
|
|
Gross
Sales
|
$12,457,386
|
$9,703,800
|
$25,520,568
|
$20,116,291
|
|
Allowances
|
(658,775)
|
(304,764)
|
(1,393,654)
|
(569,019)
|
|
Total Net Sales
|
11,798,611
|
9,399,036
|
24,126,914
|
19,547,272
|
|
Cost
of sales
|
3,643,127
|
2,732,076
|
7,073,402
|
6,432,613
|
|
|
|
|
|
|
|
Gross Profit
|
8,155,484
|
6,666,960
|
17,053,512
|
13,114,659
|
|
|
|
|
|
|
|
Operating
expenses
|
12,323,207
|
12,267,637
|
22,981,180
|
24,827,934
|
|
(Loss) from
operations
|
(4,167,723)
|
(5,600,677)
|
(5,927,668)
|
(11,713,275)
|
|
Realized
and Unrealized gain (loss) on marketable and other securities,
including impairments
|
2,852
|
(813,152)
|
545,562
|
(875,162)
|
|
(Increase)
decrease of contingent liability
|
(8,871,000)
|
21,261,994
|
(17,371,000)
|
38,160,000
|
|
Interest
(expense) income
|
(10,603)
|
35,607
|
(20,990)
|
42,875
|
|
Income (loss) before provision for income taxes
|
(13,046,474)
|
14,883,772
|
(22,774,096)
|
25,614,438
|
|
|
|
|
|
|
|
Benefit
for income taxes
|
536,000
|
-
|
868,000
|
2,240,300
|
|
Net (Loss) Income from continuing operations
|
(12,510,474)
|
14,883,772
|
(21,906,096)
|
27,854,738
|
|
Net (Loss) from discontinued operations, net of tax (Note
14)
|
-
|
-
|
-
|
(41,202)
|
|
Net (Loss) Income
|
(12,510,474)
|
14,883,772
|
(21,906,096)
|
27,813,536
|
|
Preferred dividends
|
560,280
|
100,016
|
660,330
|
166,750
|
|
|
|
|
|
|
|
Net (Loss) Income attributable to cbdMD, Inc. common
shareholders
|
$(13,070,754)
|
$14,783,756
|
$(22,566,426)
|
$27,646,786
|
|
|
|
|
|
|
|
Net (Loss) Income per share:
|
|
|
|
|
|
Basic
earnings per share
|
(0.24)
|
0.41
|
(0.43)
|
0.76
|
|
Diluted
earnings per share
|
(0.24)
|
0.40
|
(0.43)
|
0.74
|
|
Weighted
average number of shares Basic:
|
53,471,607
|
36,503,005
|
52,793,872
|
36,503,005
|
|
Weighted
average number of shares Diluted:
|
53,471,607
|
36,336,505
|
52,793,872
|
37,336,505
|
|
cbdMD, INC.
|
||||||||||
|
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(LOSS)
|
||||||||||
|
FOR THE THREE AND SIX MONTHS ENDED DMARCH 31, 2021 AND
2020
|
||||||||||
|
(Unaudited)
|
|
|
Three Months
|
Three Months
|
Six Months
|
Six Months
|
|
|
Ended
|
Ended
|
Ended
|
Ended
|
|
|
March 31,
|
March 31,
|
March 31,
|
March 31,
|
|
|
2021
|
2020
|
2021
|
2020
|
|
|
|
|
|
|
|
Net
(Loss) Income
|
$(12,510,474)
|
$14,883,772
|
$(21,906,096)
|
$27,813,536
|
|
Comprehensive
(Loss) Income
|
(12,510,474)
|
14,883,772
|
(21,906,096)
|
27,813,536
|
|
|
|
|
|
|
|
Preferred
dividends
|
(560,280)
|
(100,016)
|
(660,330)
|
(116,750)
|
|
Comprehensive (Loss) Income attributable to cbdMD, inc. common
shareholders
|
$(13,070,754)
|
$14,783,756
|
$(22,566,426)
|
$27,696,786
|
|
cbdMD, INC.
|
|
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
|
|
FOR THE SIX MONTHS ENDED MARCH 31, 2021 AND 2020
|
|
(unaudited)
|
|
|
Six Months
|
Six Months
|
|
|
Ended
|
Ended
|
|
|
March 31,
|
March 31,
|
|
|
2021
|
2020
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
Net
(Loss) Income
|
$(21,906,096)
|
$27,813,536
|
|
Adjustments to reconcile net (income) loss to net
|
|
|
|
cash used by operating activities:
|
|
|
|
Stock
based compensation
|
451,527
|
972,225
|
|
Restricted
stock expense
|
547,140
|
138,000
|
|
Issuance
of stock / warrants for service
|
155,695
|
28,250
|
|
Impairment
on discontinued operations asset
|
-
|
38,002
|
|
Depreciation
and amortization
|
473,324
|
287,457
|
|
Other
than temporary impairment other securities and other accounts
receivable
|
-
|
760,000
|
|
Increase/(Decrease)
in contingent liability
|
17,371,000
|
(38,160,000)
|
|
Realized
and unrealized loss of Marketable and other securities
|
(5,562)
|
115,162
|
|
Merchant
reserve settlement
|
-
|
132,657
|
|
Termination
benefit
|
352,279
|
-
|
|
Non-cash
lease expense
|
611,298
|
585,020
|
|
Changes in operating assets and liabilities:
|
|
|
|
Accounts
receivable
|
(936,983)
|
763,303
|
|
Deposits
|
1,125
|
(22,365)
|
|
Merchant
reserve
|
-
|
106,590
|
|
Inventory
|
271,815
|
(2,270,110)
|
|
Prepaid
inventory
|
(190,451)
|
386,149
|
|
Prepaid
expenses and other current assets
|
44,408
|
649,308
|
|
Accounts
payable and accrued expenses
|
(1,366,373)
|
849,113
|
|
Operating
lease liability
|
(540,664)
|
(496,834)
|
|
Note
payable
|
-
|
175,124
|
|
Deferred
revenue / customer deposits
|
(41,418)
|
(7,339)
|
|
Collection
on discontinued operations accounts receivable
|
424,917
|
250,000
|
|
Deferred
tax liability
|
(868,000)
|
(2,240,300)
|
|
Cash
used by operating activities
|
(5,151,019)
|
(9,147,052)
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
Proceeds
from sale of other investment securities
|
(750,000)
|
-
|
|
Purchase
of property and equipment
|
(226,542)
|
(1,796,346)
|
|
Cash
provided (used) by investing activities
|
(976,542)
|
(1,796,346)
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
Proceeds
from issuance of common stock
|
-
|
16,771,756
|
|
Proceeds
from issuance of preferred stock
|
15,798,115
|
4,421,928
|
|
Note
payable
|
(123,268)
|
-
|
|
Preferred
dividend distribution
|
(660,330)
|
(166,750)
|
|
Deferred
issuance costs
|
-
|
62,197
|
|
Cash
provided by financing activities
|
15,014,517
|
21,089,131
|
|
Net
increase (decrease) in cash
|
8,886,956
|
10,145,733
|
|
Cash
and cash equivalents, beginning of period
|
14,824,644
|
4,689,966
|
|
Cash and cash equivalents, end of period
|
$23,711,600
|
$14,835,699
|
|
Supplemental Disclosures of Cash Flow Information:
|
|
|
|
|
|
|
|
|
Six Months
|
Six Months
|
|
|
Ended
|
Ended
|
|
|
March 31,
|
March 31,
|
|
|
2021
|
2020
|
|
|
|
|
|
Cash
Payments for:
|
|
|
|
Interest
expense
|
$7,117
|
$17,097
|
|
|
|
|
|
Non-cash
financial activities:
|
|
|
|
Issuance
of Contingent earnout shares:
|
$11,271,000
|
$-
|
|
Warrants
issued to representative
|
$254,950
|
$524,113
|
|
cbdMD, Inc.
|
|
|
|
|
|
SUPPLEMENTAL FINANCIAL INFORMATION
|
|
|
|
|
|
RECONCILIATION OF NON-GAAP ADJUSTED INCOME (LOSS) FROM
OPERATIONS
|
|
|
|
|
|
|
Three Months
|
Three Months
|
Six Months
|
Six Months
|
|
|
Ended
|
Ended
|
Ended
|
Ended
|
|
|
March 31,
|
March 31,
|
March 31,
|
March 31,
|
|
|
2021
|
2020
|
2021
|
2020
|
|
|
|
|
|
|
|
|
|
|
||
|
(Unaudited)
|
|
|
||
|
|
|
|
|
|
|
GAAP (loss) from operations
|
$(4,167,723)
|
$(5,600,677)
|
$(5,927,668)
|
$(11,721,275)
|
|
Adjustments:
|
|
|
|
|
|
Depreciation
|
240,517
|
174,205
|
473,323
|
287,457
|
|
Employee
and director stock compensation (1)
|
825,833
|
435,301
|
1,090,007
|
1,115,875
|
|
Other
non-cash stock compensation for services (2)
|
33,358
|
55,479
|
69,071
|
146,548
|
|
Accrual
for severance
|
299,610
|
-
|
703,022
|
-
|
|
Accrual
/ expenses for discretionary bonus
|
-
|
-
|
300,000
|
222,500
|
|
Non-GAAP adjusted (loss) from operations
|
$(2,768,405)
|
$(4,935,692)
|
$(3,292,245)
|
$(9,948,895)
|
(1) Represents non-cash expense related to options and restricted
stock expenses that have been amortized during the
period.
(2) Represents non-cash expense related to restricted stock
expenses that have been amortized during the period.
Contacts
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