CV Sciences, Inc. Reports Third Quarter 2024 Financial Results
Rhea-AI Summary
CV Sciences reported Q3 2024 financial results with revenue of $3.9 million, down 5% from Q3 2023's $4.1 million. Gross margin improved to 46.0% compared to 45.1% in Q3 2023. The company maintained a cash balance of $1.0 million and secured financing of $0.9 million from Streeterville. Notable developments include the launch of +PlusHLTH™, a cannabinoid-free supplement line, and expansion of pet product offerings. B2B sales declined 9% due to state CBD regulations. The company reported an operating loss of $0.3 million and negative adjusted EBITDA of $75,000, showing improvement from Q3 2023.
Positive
- Gross margin improved to 46.0% from 45.1% year-over-year
- Reduced operating loss to $0.3M from $0.4M in Q3 2023
- Improved adjusted EBITDA loss to $75,000 from $0.4M in Q3 2023
- Secured $0.9M in financing from Streeterville
- Maintained #1 position in hemp extract brand sales in natural product retail channel
Negative
- Revenue declined 5% year-over-year to $3.9M
- B2B sales decreased 9% due to regulatory challenges
- Total unit sales decreased by 7.9%
- Cash balance decreased to $1.0M from $1.3M at end of 2023
- Continued operating losses and negative EBITDA
News Market Reaction 1 Alert
On the day this news was published, CVSI declined 6.36%, reflecting a notable negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
Third Quarter 2024 and Recent Financial and Operating Highlights
- Generated revenue of
$3.9 million $4.1 million $4.0 million - Recognized gross margin of
46.0% for third quarter 2024 compared to45.1% for the third quarter 2023 and47.0% for the second quarter 2024; - Cash balance of
$1.0 million $1.3 million - Launched +PlusHLTH™, an all-new line of cannabinoid-free supplements delivering targeted formulations for optimized health, improved performance and increased vitality. Launched in Q3 and free of cannabinoids, our initial collection of +PlusHLTH™ innovative supplements includes: CLARITY, a cognitive enhancer, PEACE, for help with occasional stress, and RESHAPE, for metabolism support;
- 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;
- Created additional opportunities for incremental growth by launching additional pet chews for hip and joint health and calming care chews;
- Entered into a financing with Streeterville for net proceeds of
$0.9 million - Recognized an adjusted EBITDA loss of
$75,000
"We are pleased with our third 2024 results. Revenues for our core business remained stable around the
Operating Results - Third Quarter 2024 Compared to Third Quarter 2023
Sales for third quarter 2024 were
Conference Call and Webcast
The Company will host a conference call and webcast to discuss these results today at 10:00 am ET/7:00 am PT. The webcast of the conference call will be available on the Investor Relations section of the Company's website at https://ir.cvsciences.com/news-events or directly at https://viavid.webcasts.com/starthere.jsp?ei=1695466&tp_key=e08c31edf2. Those interested in participating in the live call can also dial (877) 407-0784 from the
About CV Sciences, Inc.
CV Sciences, Inc. (OTCQB:CVSI) is a consumer wellness company specializing in nutraceuticals and plant-based foods. The Company's hemp extracts and other proven, science-backed, natural ingredients and products are sold through a range of sales channels from B2B to B2C. The Company's +PlusCBD™ branded products are sold at select retail locations throughout the
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. CV Sciences does not undertake any obligation to publicly update any forward-looking statements, except as required by applicable law. As a result, investors should not place undue reliance on such forward-looking statements.
Contact Information
ir@cvsciences.com
CV SCIENCES, INC. | ||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | ||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||
Three months ended | Nine months ended | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
Product sales, net | $ | 3,865 | $ | 4,089 | $ | 11,821 | $ | 12,203 | ||||||||
Cost of goods sold | 2,087 | 2,246 | 6,330 | 6,860 | ||||||||||||
Gross profit | 1,778 | 1,843 | 5,491 | 5,343 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 29 | 40 | 93 | 111 | ||||||||||||
Selling, general and administrative | 2,090 | 2,240 | 6,942 | 7,154 | ||||||||||||
Benefit from reversal of accrued payroll taxes | — | — | — | (6,171) | ||||||||||||
Total operating expenses | 2,119 | 2,280 | 7,035 | 1,094 | ||||||||||||
Operating income (loss) | (341) | (437) | (1,544) | 4,249 | ||||||||||||
Other expense, net | 115 | 10 | 118 | 275 | ||||||||||||
Income (loss) before income taxes | (456) | (447) | (1,662) | 3,974 | ||||||||||||
Income tax expense | — | — | 6 | 3 | ||||||||||||
Net income (loss) | $ | (456) | $ | (447) | $ | (1,668) | $ | 3,971 | ||||||||
Weighted average common shares outstanding, basic and | 182,261 | 154,604 | 172,671 | 153,112 | ||||||||||||
Net income (loss) per common share, basic and diluted | $ | (0.00) | $ | (0.00) | $ | (0.01) | $ | 0.03 | ||||||||
CV SCIENCES, INC. | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) | ||||||||
(in thousands, except per share data) | ||||||||
September 30, | December 31, | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash | $ | 979 | $ | 1,317 | ||||
Accounts receivable, net | 422 | 431 | ||||||
Inventory | 5,020 | 5,655 | ||||||
Prepaid expenses and other | 327 | 535 | ||||||
Total current assets | 6,748 | 7,938 | ||||||
Property and equipment, net | 490 | 379 | ||||||
Right of use assets | 81 | 167 | ||||||
Intangibles, net | 103 | 78 | ||||||
Goodwill | 815 | 342 | ||||||
Other assets | 154 | 296 | ||||||
Total assets | $ | 8,391 | $ | 9,200 | ||||
Liabilities and stockholders' equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 1,886 | $ | 2,309 | ||||
Accrued expenses | 3,422 | 3,422 | ||||||
Operating lease liability - current | 92 | 130 | ||||||
Debt | 743 | 254 | ||||||
Total current liabilities | 6,143 | 6,115 | ||||||
Operating lease liability - net of current portion | — | 58 | ||||||
Deferred tax liability | 19 | 19 | ||||||
Other liabilities | 38 | 105 | ||||||
Total liabilities | 6,200 | 6,297 | ||||||
Commitments and contingencies | ||||||||
Stockholders' equity | ||||||||
Preferred stock, par value | — | — | ||||||
Common stock, par value | 18 | 16 | ||||||
Additional paid-in capital | 88,409 | 87,464 | ||||||
Accumulated deficit | (86,255) | (84,587) | ||||||
Accumulated other comprehensive income | 19 | 10 | ||||||
Total stockholders' equity | 2,191 | 2,903 | ||||||
Total liabilities and stockholders' equity | $ | 8,391 | $ | 9,200 | ||||
CV SCIENCES, INC. | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | ||||||||
(in thousands) | ||||||||
Nine months ended September 30, | ||||||||
2024 | 2023 | |||||||
OPERATING ACTIVITIES | ||||||||
Net income (loss) | $ | (1,668) | $ | 3,971 | ||||
Adjustments to reconcile net income (loss) to net cash flows provided by | ||||||||
Depreciation and amortization | 220 | 176 | ||||||
Stock-based compensation | 154 | 185 | ||||||
Amortization of debt discount | 117 | 112 | ||||||
Amortization of right of use assets | 86 | 80 | ||||||
Gain in fair value of contingent consideration liabilities | (188) | — | ||||||
Benefit from reversal of accrued payroll tax | — | (6,171) | ||||||
Other | 236 | 368 | ||||||
Change in operating assets and liabilities: | ||||||||
Accounts receivable, net | 19 | 103 | ||||||
Inventory | 689 | 834 | ||||||
Prepaid expenses and other | 208 | 2,778 | ||||||
Accounts payable and accrued expenses | (570) | (69) | ||||||
Net cash flows provided by (used in) operating activities | (697) | 2,367 | ||||||
INVESTING ACTIVITIES | ||||||||
Acquisition of business, net of cash acquired | (6) | — | ||||||
Net cash flows used in investing activities | (6) | — | ||||||
FINANCING ACTIVITIES | ||||||||
Proceeds from note payable | 900 | — | ||||||
Debt issuance costs related to note payable | (5) | — | ||||||
Repayment of note payable | (325) | (1,117) | ||||||
Repayment of unsecured debt | (203) | (218) | ||||||
Net cash flows provided by (used in) financing activities | 367 | (1,335) | ||||||
Effect of exchange rate changes on cash | (2) | — | ||||||
Net increase (decrease) in cash | (338) | 1,032 | ||||||
Cash, beginning of period | 1,317 | 611 | ||||||
Cash, end of period | $ | 979 | $ | 1,643 | ||||
Supplemental cash flow disclosures: | ||||||||
Interest paid | $ | 6 | $ | 4 | ||||
Income tax paid | $ | 6 | $ | — | ||||
Supplemental disclosure of non-cash transactions: | ||||||||
Services paid with common stock | $ | 92 | $ | 100 | ||||
Debt issuance cost for note payable | $ | (284) | $ | — | ||||
Working capital adjustment due from seller | $ | 34 | $ | — | ||||
Fair value of assets acquired, excluding cash | $ | 341 | $ | — | ||||
Goodwill on acquisition | 365 | — | ||||||
Common stock consideration | (700) | — | ||||||
Cash paid for acquisition | $ | 6 | $ | — | ||||
CV SCIENCES, INC.
NON-GAAP FINANCIAL MEASURES (UNAUDITED)
We prepare our consolidated financial statements in accordance with generally accepted accounting principles for
Adjusted EBITDA is defined by us as EBITDA (net income (loss) plus depreciation, amortization, interest, and income tax expense, less interest income, 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.
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.
A reconciliation from our GAAP net income (loss) to non-GAAP net loss for the three and nine months ended September 30, 2024 and 2023 is detailed below (in thousands, except per share data):
Three months ended | Nine months ended | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
Net income (loss) - GAAP | $ | (456) | $ | (447) | $ | (1,668) | $ | 3,971 | ||||||||
Stock-based compensation (1) | 87 | 32 | 154 | 185 | ||||||||||||
Professional fees associated with legal dispute (2) | 80 | — | 773 | — | ||||||||||||
Benefit from reversal of accrued payroll tax (3) | — | — | — | (6,171) | ||||||||||||
Note discount and interest expense (4) | 115 | — | 118 | 112 | ||||||||||||
Net loss - non-GAAP | $ | (174) | $ | (415) | $ | (623) | $ | (1,903) | ||||||||
Diluted EPS - GAAP | $ | (0.00) | $ | (0.00) | $ | (0.01) | $ | 0.03 | ||||||||
Stock-based compensation (1) | — | — | — | — | ||||||||||||
Professional fees associated with legal dispute (2) | — | — | 0.01 | — | ||||||||||||
Benefit from reversal of accrued payroll tax (3) | — | — | — | (0.04) | ||||||||||||
Note discount and interest expense (4) | — | — | — | — | ||||||||||||
Diluted EPS - non-GAAP | $ | (0.00) | $ | (0.00) | $ | (0.00) | $ | (0.01) | ||||||||
Shares used to calculate diluted EPS - GAAP and non- | 182,261 | 154,604 | 172,671 | 153,112 | ||||||||||||
(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 legal and other professional expenses incurred during 2024 associated with the legal dispute with founder. | ||||
(3) | Represents benefit from reversal of accrued payroll tax associated with RSU release to founder in 2019. | ||||
(4) | Represents amortization of OID/debt issuance costs and interest expense for notes payable. | ||||
A reconciliation from our net income (loss) to Adjusted EBITDA, a non-GAAP measure, for the three and nine months ended September 30, 2024 and 2023 is detailed below (in thousands):
Three months ended | Nine months ended | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
Net income (loss) | $ | (456) | $ | (447) | $ | (1,668) | $ | 3,971 | ||||||||
Depreciation expense | 93 | 58 | 223 | 176 | ||||||||||||
Amortization expense | 6 | — | 15 | — | ||||||||||||
Interest expense (income) | 115 | (4) | 118 | 61 | ||||||||||||
Income tax expense | — | — | 6 | 3 | ||||||||||||
EBITDA | (242) | (393) | (1,306) | 4,211 | ||||||||||||
Stock-based compensation (1) | 87 | 32 | 154 | 185 | ||||||||||||
Professional fees associated with legal dispute (2) | 80 | — | 773 | — | ||||||||||||
Benefit from reversal of accrued payroll tax (3) | — | — | — | (6,171) | ||||||||||||
Adjusted EBITDA | $ | (75) | $ | (361) | $ | (379) | $ | (1,775) | ||||||||
(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 legal and other professional expenses incurred during 2024 associated with the legal dispute with founder. | ||||
(3) | Represents benefit from reversal of accrued payroll tax associated with RSU release to founder in 2019. | ||||
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SOURCE CV Sciences, Inc.
FAQ
What was CV Sciences (CVSI) revenue in Q3 2024?
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How much financing did CV Sciences secure in Q3 2024?
What new products did CV Sciences launch in Q3 2024?
