CV Sciences Inc OTCMKTS: CVSI operates two distinct business segments: a consumer product division focused on manufacturing, marketing and selling hemp-based CBD products to a range of market sectors; and a drug development division focused on developing and commercializing novel
therapeutics utilizing CBD. The Company’s PlusCBD Oil is the top-selling brand of hemp-derived CBD on the market, according to SPINS, the leading provider of syndicated data and insights for the natural, organic and specialty products industry. CV Sciences, Inc. has primary offices and facilities in San Diego, California and Las Vegas, Nevada.
CV Sciences Inc OTCMKTS: CVSI On May 08, 2019 announced its financial results for the quarter ended March 31, 2019. “We continued to expand retail distribution of the PlusCBD OilTM brand and drive sales growth during the first quarter. We generated 85% revenue growth over prior year, achieving another record quarter, with strong gross margin performance,” stated Joseph Dowling, Chief Executive Officer of CV Sciences. “The
PlusCBD OilTM brand is now available in over 3,300 stores nationwide, including national food, drug and mass merchandiser accounts. As anticipated, since the passage of the 2018 Farm Bill, we have seen
significant interest in the hemp-derived CBD category across retailers and channels, and we are in discussions with multiple retailers for new retail placements. We are making the investments across the organization to position ourselves to capitalize on the growing retailer and consumer demand. Our drug development program remains on track and we continue to anticipate filing an Investigational New Drug application in late 2019 / early 2020. We have the brand, the people and the unique business model focused on both consumer products and drug development to maximize our opportunity in the rapidly growing hemp CBD industry.”
Operating Results – First Quarter 2019 Compared to First Quarter 2018
Sales for the first quarter of 2019 were $14.9 million, an increase of 85% from $8.1 million in the first quarter of 2018. First quarter sales growth reflects the Company’s continued organic expansion into all sales channels, including food drug and mass, natural product retail, wholesale and direct-to-consumer channels. The Company’s retail store count increased to 3,308 stores nationwide at March 31, 2019, up from 2,238 stores as of December 31, 2018.
The Company recognized an operating loss of $9.4 million in the first quarter of 2019, compared to an operating income of $0.7 million in the first quarter of the prior year. The operating loss is primarily related to additional stock-based compensation and payroll expense associated with the retirement of the Company’s founder and former President and Chief Executive Officer.
As reported under U.S. generally accepted accounting principles (GAAP), first quarter 2019 net loss was $9.4 million, compared with a GAAP net income of $0.6 million in the same period in 2018. Diluted net loss per share was $0.10 for the first quarter of 2019 compared to a diluted net income per share of $0.01 for the same period in 2018.
Non-GAAP net income for the first quarter of 2019 was $1.5 million, or $0.01 per diluted share based on weighted average shares outstanding of 115.6 million. This compares with non-GAAP net income of $1.7 million or $0.02 per diluted share based on weighted average shares outstanding of 95.6 million for the same period in 2018.
Adjusted EBITDA for the first quarter of 2019 was $1.7 million or 11.3% of net revenue, compared to$1.8 million or 22.6% of net revenue, in the first quarter of 2018.
First Quarter 2019 Financial and Operating Highlights
· Record revenue of $14.9 million for the first quarter of 2019, an increase of 85% over the same quarter in 2018;
· Strong gross margin of 70.8% compared to gross margin of 68.9% in the first quarter of 2018
· Retail distribution increased to 3,308 stores as of March 31, 2019, a 48% increase from December 31, 2018;
· Expanded retail presence into the food, drug and mass channel and are in active discussions for further expansion of the PlusCBD OilTM brand; and
· Generated $0.8 million of cash from operations, with cash balance increasing to $13.6 million at quarter end.