CV Sciences Reports Record Third Quarter Sales & Gross Profits
Ryan Allway
November 12th, 2018
News
CV Sciences, Inc. (OTCQB:CVSI) (the “Company”, “CV Sciences”, “our” or “we”), announced today its financial results for the third quarter ended September 30, 2018.
Third Quarter 2018 Financial and Operating Highlights
- Record Sales of $13,600,000, an increase of 143% compared to Q3 2017
- Record Gross Profit of $9,945,000, an increase of 149% compared to Q3 2017
- Record GAAP Net Income of $3,295,000, an improvement of $3,885,000 compared to Q3 2017
- Record Adjusted EBITDA of $4,128,000, an improvement of $3,253,000 compared to Q3 2017
- Increased Retail Channel Distribution to 2,093 Stores as of June 30, 2018, a 6% sequential increase over the Company’s retail store count for the second quarter of 2018
- Achieved industry’s first hemp extract self-affirmed Generally Recognized as Safe (GRAS) status for its hemp-derived CBD gold extract product line
- Launched new category of PlusCBD Oil™ Gummies to its existing line of industry leading hemp extract products to address increased industry and consumer demand for CBD infused products
- Continued Progress in Drug Development Division including preclinical progress with CVSI-007, the Company’s patent-pending synthetic-based cannabidiol, which will be co-administered with nicotine to provide treatment options for smokeless tobacco use and addiction, currently a multibillion-dollar market with no currently FDA-approved drugs available to help patients.
First Nine Months of 2018 Financial Highlights
- Record Sales of $34,020,000, an increase of 153% compared to the first nine months of 2017
- Record Gross Profit of $24,567,000, an increase of 165% compared to the first nine months of 2017
- GAAP Net Income of $7,100,000, an improvement of $12,467,000 compared to the first nine months of 2017
- Record Adjusted EBITDA of $9,796,000, an improvement of $10,267,000 compared to the first nine months of 2017
- Cash Flow from Operations of $9,926,000, with a cash balance increase of $3,800,000 during Q3 2018
Sales for Q3 2018 were $13.6 million, demonstrating the Company’s continued organic expansion into all sales channels including the natural product retail, wholesale and direct-to-consumer channels. This is a 10% sequential quarterly increase from $12.3 million reported for Q2 2018. The Company’s natural product retail channel now includes 2,093 locations nationwide. CV Sciences continues developing new sales channels and is encouraged by the strength of its branded products as evidenced by SPINS® Scan data, which positions the Company as the #l selling hemp CBD product line in the natural products retail channel.
Gross profit for Q3 2018 was $9.9 million and demonstrates the Company’s ability to expand sales while maintaining strong gross margins.
Adjusted EBITDA for Q3 2018 was $4.1 million and shows strong operating leverage from the Company’s significant investment in inventory, product development, systems, marketing and distribution.
“We are encouraged by our performance as we delivered another strong quarter, including our third consecutive quarter of profitability. This was led by initiatives that include accelerating our brand recognition and brand loyalty and growing sales distribution channels that have generated triple-digit year-over-year revenue growth and double-digit sales growth on a sequential quarterly comparison. The demand continues to respond strongly to our leading PlusCBD™ product line, #1 in the hemp CBD product category in the natural products retail channel and we believe this is just the beginning for the vast and nascent hemp CBD market. Most notably during the quarter, we earned the industry’s first self-affirmed Generally Recognized as Safe (GRAS) status for our Gold Formula product line, a move that shows our dedication to building consumer confidence, trust and safety of our products. In conjunction with that, our product innovation was on full display with the introduction of our new PlusCBD Oil™ Gummies in two flavors, Cherry Mango and Citrus Punch as additional factors for driving revenue,” stated Joseph Dowling, Chief Executive Officer of CV Sciences.
Mr. Dowling added, “Our drug development program is making steady progress in advancing our proprietary lead drug candidate – CVSI-007 – which addresses the multibillion dollar smokeless tobacco use and addiction market. We continue to make progress with our pre-clinical program, anticipating filing an Investigational New Drug application in 2019. We are confident that our continued growth and profitability will allow us to initially pursue our drug development plans without the need for additional outside capital in the near term. Given the industry’s robust growth momentum, we believe we have the right strategies in place and remain committed to achieve a strong 2018 finish.”
Financial highlights for the three and nine months ended September 30, 2018 and 2017 are presented below:
| For the three months ended September 30, | YOY Change | ||||||||||||
| Financial Highlights | 2018 | 2017 | $ | % | |||||||||
| GAAP Measures: | |||||||||||||
| Product sales, net | $ | 13,600,000 | $ | 5,591,000 | $ | 8,009,000 | 143 | % | |||||
| Gross profit | 9,945,000 | 3,998,000 | 5,947,000 | 149 | % | ||||||||
| Gross profit % | 73.1 | % | 71.5 | % | |||||||||
| Net income | 3,295,000 | (590,000 | ) | 3,885,000 | n/m | ||||||||
| Non-GAAP Measure (unaudited): | |||||||||||||
| EBITDA | $ | 3,656,000 | $ | (442,000 | ) | $ | 4,098,000 | n/m | |||||
| Adjusted EBITDA | 4,128,000 | 875,000 | 3,253,000 | 372 | % | ||||||||
| For the nine months ended September 30, | YOY Change | ||||||||||||
| 2018 | 2017 | $ | % | ||||||||||
| GAAP Measures: | |||||||||||||
| Product sales, net | $ | 34,020,000 | $ | 13,437,000 | $ | 20,583,000 | 153 | % | |||||
| Gross profit | 24,567,000 | 9,275,000 | 15,292,000 | 165 | % | ||||||||
| Gross profit % | 72.21 | % | 69.03 | % | |||||||||
| Net income | 7,100,000 | (5,367,000 | ) | 12,467,000 | n/m | ||||||||
| Cash generated from operating activities | 9,926,000 | 647,000 | 9,279,000 | 1434 | % | ||||||||
| Non-GAAP Measure (unaudited): | |||||||||||||
| EBITDA | $ | 7,866,000 | $ | (4,851,000 | ) | $ | 12,717,000 | n/m | |||||
| Adjusted EBITDA | 9,796,000 | 404,000 | 9,392,000 | n/m | |||||||||
| n/m – calculation not meaningful | |||||||||||||
Balance Sheet and Liquidity Highlights
As of September 30, 2018, the Company had unrestricted cash of $10.3 million and total cash of $11.0 million. During the quarter ended September 30, 2018, the Company increased its total cash position by $3.8 million. Stockholders’ equity increased to approximately $25.8 million as of June 30, 2018.
Non-GAAP Financial Measures
CV Sciences focuses on Adjusted EBITDA to evaluate its operating performance and financial position. Adjusted EBITDA is defined as EBITDA (net income [loss], minus interest income, plus interest expense, income tax expense, depreciation and amortization), further adjusted to exclude certain non-cash expenses and other adjustments as set forth below. CV Sciences management presents Adjusted EBITDA because we consider it an important measure of performance and it is a meaningful financial metric in assessing operating performance from period to period by excluding certain items that management believes are not representative of the Company’s core business, such as certain non-cash items and other adjustments. The Company believes that Adjusted EBITDA, viewed in addition to, and not in lieu of, our reported results in accordance with Generally Accepted Accounting Principles (“GAAP”), provides useful information to investors regarding the Company’s performance.
Adjusted EBITDA is a non-GAAP measure and does not purport to be an alternative to net income (loss) as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. The term “Adjusted EBITDA” is not defined under GAAP, and Adjusted EBITDA is not a measure of net income (loss), operating income or any other performance measure derived in accordance with GAAP. Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. CV Sciences management compensates for these limitations by relying primarily on GAAP results and using Adjusted EBITDA as supplemental information.
A reconciliation from the Company’s GAAP results to Adjusted EBITDA, a non-GAAP measure, for the three and nine months ended September 30, 2018 and 2017 is detailed below:
| For the three months ended September 30, | For the nine months ended September 30, | ||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||
| Net income (loss) | $ | 3,294,973 | $ | (589,983 | ) | $ | 7,100,217 | $ | (5,366,946 | ) | |||
| Interest income | – | – | – | 7 | |||||||||
| Interest expense | 30,556 | 108,203 | 150,386 | 371,678 | |||||||||
| Provision for income taxes | 200,000 | – | 240,000 | – | |||||||||
| Amortization of purchased intangible assets | 8,850 | 8,850 | 26,550 | 26,550 | |||||||||
| Depreciation of property & equipment | 121,911 | 30,897 | 349,121 | 117,744 | |||||||||
| EBITDA | 3,656,290 | (442,033 | ) | 7,866,274 | (4,850,967 | ) | |||||||
| EBITDA Adjustments: | |||||||||||||
| Stock-based compensation expense (1) | 237,882 | 1,328,096 | 1,634,184 | 3,072,224 | |||||||||
| Common stock issued for professional services (2) | 233,751 | – | 295,326 | – | |||||||||
| Gain on derivative liability (3) | – | (10,987 | ) | – | (248,875 | ) | |||||||
| Royalty buy-out (4) | – | – | – | 2,432,000 | |||||||||
| Total EBITDA Adjustments | 471,633 | 1,317,109 | 1,929,510 | 5,255,349 | |||||||||
| Adjusted EBITDA | $ | 4,127,923 | $ | 875,076 | $ | 9,795,784 | $ | 404,382 | |||||
| (1) | Represents stock-based compensation expense related to stock options and stock grants awarded to employees, consultants and non-executive directors based on the grant date fair value using the Black-Scholes valuation model. |
| (2) | Represents common stock issued for professional services. |
| (3) | Represents the gain on changes in derivative liabilities. |
| (4) | Represents the share-based royalty buy-out associated the CanX acquisition. |
For further discussion of the Company’s financial results for the three and nine months ended September 30, 2018, please refer to the Company’s consolidated financial statements and related Management’s Discussion and Analysis, which can be found at www.cvsciences.com or on EDGAR at www.sec.gov/edgar/searchedgar/webusers.htm in the Company’s Quarterly Report on Form 10-Q as filed with the U.S. Securities and Exchange Commission on November 7, 2018.
Management to Host Financial Results Conference Call
The Company is scheduled to host a conference call to discuss its third quarter 2018 results on Wednesday, November 7, 2018 at 1:15 p.m. PDT/4:15 p.m. EDT.
CV Sciences’ Chief Executive Officer, Joseph Dowling, will lead the call to provide an operational and financial summary of the third quarter and year-to-date results for 2018. Interested parties may access the live webcast by visiting: https://ir.cvsciences.com/.
Participants may also access the listen-only audio call by dialing 1-877-407-8293 (United States) or 1-201-689-8349 (International). If you are unable to participate in the call at this time, a replay will be available for 14 days starting on November 7, 2018, at approximately 7:30 p.m. PT/10:30 p.m. ET. To access the replay, please dial 1-877-660-6853 in the U.S. and 1-201-612-7415 for international callers. The conference ID# is 13684643.
About CV Sciences, Inc.
CV Sciences, Inc. (OTCQB:CVSI) operates two distinct business segments: a drug development division focused on developing and commercializing novel therapeutics utilizing synthetic CBD; and, a consumer product division focused on manufacturing, marketing and selling plant-based CBD products to a range of market sectors. CV Sciences, Inc. has primary offices and facilities in Las Vegas, Nevada and San Diego, California. Additional information is available from OTCMarkets.com or by visiting www.cvsciences.com.
This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.
About Ryan Allway
Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.
Search CannabisFN
Press Coverage
Psychedelics Index
Top Videos
Rob is the co-founding President of Pelorus Equity Group and has more than 18 years of experience in the real estate finance industry. Since the formation of Pelorus in 2010, he has raised more than $175,000,000 in secured real estate transactions. Rob’s primary role at Pelorus Equity Group is the development of strategic alliances with […]
Watch CFN Media’s exclusive three part interview with Paul Rosen, one of the most active and diversified investors in the emerging cannabis industry. Paul gives his insights on the global cannabis industry and discusses his new endeavors. Become a CFN Media Client Paul Rosen is a noted career entrepreneur and management consultant. Over the last […]
Isodiol produces 99% Pure, Natural, Pharmaceutical Grade CBD. Isodiol and its team of collaborators are a group of companies that together grow, harvest, and process hemp on an industrial scale for the extraction of cannabidiol (CBD) to the highest available purity for worldwide distribution. From the largest source of farmed hemp, to wide-scale extraction and […]
Christina Lake Cannabis Corp. is a licensed producer of cannabis under the Cannabis Act.
Network Partners
About CFN Media Group
CFN Enterprises Inc. (OTCQB: CNFN) owns and operates CFN Media Group, the premier agency and financial media network reaching executives, entrepreneurs and consumers worldwide. Through its proprietary content creation, video library, and distribution via www.CannabisFN.com, CFN has built an extensive database of cannabis interest, assisting many of the world’s largest cannabis firms and CBD brands to build awareness and thrive. For more information, please visit www.cfnenterprisesinc.com.
Disclaimer: Matters discussed on this website contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. CFN Media Group, which owns CannabisFN, is not registered with any financial or securities regulatory authority and does not provide nor claims to provide investment advice or recommendations to readers of this release. CFN Media Group, which owns CannabisFN, may from time-to-time have a position in the securities mentioned herein and will increase or decrease such positions without notice. The Information contains forward-looking statements, i.e. statements or discussions that constitute predictions, expectations, beliefs, plans, estimates, or projections as indicated by such words as "expects", "will", "anticipates", and "estimates"; therefore, you should proceed with extreme caution in relying upon such statements and conduct a full investigation of the Information and the Profiled Issuer as well as any such forward-looking statements. Any forward looking statements we make in the Information are limited to the time period in which they are made, and we do not undertake to update forward looking statements that may change at any time; The Information is presented only as a brief "snapshot" of the Profiled Issuer and should only be used, at most, and if at all, as a starting point for you to conduct a thorough investigation of the Profiled Issuer and its securities and to consult your financial, legal or other adviser(s) and avail yourself of the filings and information that may be accessed at www.sec.gov, www.pinksheets.com, www.otcmarkets.com or other electronic sources, including: (a) reviewing SEC periodic reports (Forms 10-Q and 10-K), reports of material events (Form 8-K), insider reports (Forms 3, 4, 5 and Schedule 13D); (b) reviewing Information and Disclosure Statements and unaudited financial reports filed with the Pink Sheets or www.otcmarkets.com; (c) obtaining and reviewing publicly available information contained in commonlyknown search engines such as Google; and (d) consulting investment guides at www.sec.gov and www.finra.com. You should always be cognizant that the Profiled Issuers may not be current in their reporting obligations with the SEC and OTCMarkets and/or have negative signs at www.otcmarkets.com (See section below titled "Risks Related to the Profiled Issuers, which provides additional information pertaining thereto). For making specific investment decisions, readers should seek their own advice and that of their own professional advisers. CFN Media Group, which owns CannabisFN, may be compensated for its Services in the form of cash-based and/or equity-based compensation in the companies it writes about, or a combination of the two. For full disclosure, please visit: https://www.cannabisfn.com/legal-disclaimer/. A short time after we acquire the securities of the foregoing company, we may publish the (favorable) information about the issuer referenced above advising others, including you, to purchase; and while doing so, we may sell the securities we acquired. In addition, a third-party shareholder compensating us may sell his or her shares of the issuer while we are publishing favorable information about the issuer. Except for the historical information presented herein, matters discussed in this article contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. CFN Media Group, which owns CannabisFN, is not registered with any financial or securities regulatory authority, and does not provide nor claims to provide investment advice or recommendations to readers of this release. CFN Media Group, which owns CannabisFN, may from time to time have a position in the securities mentioned herein and will increase or decrease such positions without notice. For making specific investment decisions, readers should seek their own advice and that of their own professional advisers. CFN Media Group, which owns CannabisFN, may be compensated for its Services in the form of cash-based and/or equity- based compensation in the companies it writes about, or a combination of the two. For full disclosure please visit: https://www.cannabisfn.com/legal-disclaimer/.
Copyright © Accelerize Inc. · All Rights Reserved · Privacy Policy · Legal Disclaimer
