cbdMD Reports Fiscal Year Net Sales Increased 6.2% To Record $44.5 Million
12/17/2021 - 04:10 PM
CHARLOTTE, N.C. --(BUSINESS WIRE)--
cbdMD, Inc. (NYSE American: YCBD, YCBDpA) , one of the nation’s leading and most highly trusted and recognized CBD companies, and operator of three of the leading CBD brands -- its flagship brand cbdMD , its animal health brand Paw CBD and its beauty and skincare brand cbdMD Botanicals, -- today announced its financial results for the fourth quarter and fiscal year ended September 30, 2021 .
“Next week is the three-year anniversary of our company entering the CBD industry with the acquisition of Cure Based Development , the owner of our flagship brand, cbdMD. It’s also the three-year anniversary of the passage of the Farm Bill, which de-criminalized CBD in the US. In three short years we have grown from an unknown start-up brand competing against thousands of other CBD brands, outpacing the pack to firmly positioned at the top of CBD industry, with our three leading brands,” said Chairman and co-CEO, Martin A. Sumichrast .
“According to the Brightfield Group , the US CBD market experienced its most challenging year in 2021, with year-over-year growth rates expected to be nearly flat at 2.5% . Despite this anemic industry growth, cbdMD was able to outpace the industry average and record fiscal 2021 net sales of over 6% and gross sales of over 10% as compared to fiscal 2020. We were able to maintain our product pricing and firm up our product purchasing which resulted in an increase to our gross profit margin to a record high of 67% in fiscal 2021, from 63% in 2020. While our fiscal 2021 loss from operations was $19.6 million 6% . However, slower than anticipated sales in the second half of our fiscal year, our increased marketing costs in the first half of the fiscal year, (which have now been reduced), coupled with our investment into our therapeutics division, resulted in a GAAP operating loss for the fiscal 2021. While we are now seeing an increase in consumer demand as we enter our fiscal 2022 year and are optimistic that calendar 2022 will return to higher sales growth rates as our new products reach our customers and new distribution channels become available, we are withdrawing our previously announced sales guidance for the current quarter ending December 31, 2021 . With that said, looking forward, our goal is to continue to outpace the overall industry growth, increase our market share, and achieve positive adjusted EBITDA. For more information about how we intend to achieve these goals, please listen to our earnings call this afternoon,” said Mr. Sumichrast .
Financial Highlights for Fiscal 2021:
Net sales increased by 6% year-over-year to a record of $44.5 million $41.8 million
Our gross profit margin increased to 67% in fiscal 2021 from 63% in fiscal 2020. Our non-GAAP adjusted gross margin totaled 19.6% for fiscal 2021, as compared to 67.7% for fiscal 2020.
Our loss from operations was $19.6 million $17.5 million
Our non-GAAP adjusted loss from operations in fiscal 2021 was approximately $13.6 . million, compared to our non-GAAP adjusted loss from operations in fiscal 2020 of approximately $11.5 million
Net loss attributable to common shareholders for fiscal 2021 was approximately $25.9 million $0.41 per share, as compared to a net income for fiscal 2020 of approximately $12.2 million $0.28 per share. The decrease in fiscal 2021 was principally attributable to an increase of approximately $6.7 million December 2018 acquisition of Cure Based Development (which owned the cbdMD brand).
At September 30, 2021 , we had working capital of approximately $29.6 million $26.4 million $16.0 million $14.8 million September 30, 2020 .
We reported record e-commerce, direct to consumer (DTC) net sales of $32.9 million 74.2% of total net sales in fiscal 2021, an increase of $2.5 million 8% increase from fiscal 2020.
Our CBD pet brand, Paw CBD, reported $5.7 million 27% increase in fiscal 2021, as compared to $4.5 million
For the Quarter Ended September 30, 2021 :
Our net sales for the fourth quarter of fiscal 2021 decreased by 16% year-over-year to $9.8 million $11.7 million
Our gross profit margin for the quarter increase to 58.6% in the fourth quarter of fiscal 2021 from 54.4% in the fourth quarter of fiscal 2020.
Our loss from operations was approximately $7.0 million $4.5 million
Our non-GAAP adjusted operating loss was approximately $4.8 million $1.2 million
We reported fourth quarter fiscal 2021 e-commerce, direct to consumer (DTC) net sales of $7.2 million 15% decrease from $8.6 million
Our pet brand, Paw CBD, reported approximately $1.2 million 25% compared to $1.6 million
cbdMD, Inc. will host a conference call at 4:15 p.m., Eastern Time , on Friday, December 17, 2021 , to discuss the company’s September 30, 2021 , fourth quarter and fiscal year-end financial results and business progress.
CONFERENCE CALL DETAILS
Friday, December 17, 2021 , 4:15 p.m. Eastern Time
Domestic:
1-888-506-0062
International:
1-973-528-0011
Teleconference Replay dial in – Available through Saturday, January 15, 2022
Domestic:
1-877-481-4010
International:
1-919-882-2331
Replay Passcode:
43904
Webcast Link/Webcast Replay link- available through Friday, December 17, 2022 :
https://www.webcaster4.com/Webcast/Page/2206/43904
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 as well as our new Full Spectrum 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.
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 using 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. 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, 2021 as filed with the Securities and Exchange Commission (the "SEC ") on December 16, 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.
1 THC-free is defined as below the level of detection using validated scientific analytical methods.
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.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2021 AND SEPTEMBER 30, 2020
September 30 ,
September 30 ,
2021
2020
Assets
Current assets:
Cash and cash equivalents
$
26,411,424
$
14,824,644
Accounts receivable
1,113,372
911,482
Accounts receivable – discontinued operations
10,967
447,134
Marketable securities
33,351
26,472
Investment other securities
1,000,000
250,000
Inventory
5,021,867
4,603,360
Inventory prepaid
551,519
288,178
Prepaid software
-
174,308
Prepaid sponsorship
1,212,682
1,203,300
Prepaid expenses and other current assets
1,147,178
983,374
Total current assets
36,502,360
23,712,252
Other assets:
Property and equipment, net
2,561,574
3,183,487
Operating lease assets
5,614,960
6,851,357
Deposits for facilities
529,583
790,708
Intangible assets, net
23,003,929
21,635,000
Goodwill
56,670,970
54,669,997
Total other assets
88,381,016
87,130,549
Total assets
$
124,883,376
$
110,842,801
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2021 AND SEPTEMBER 30, 2020
(continued)
September 30 ,
September 30 ,
2021
2020
Liabilities and shareholders' equity
Current liabilities:
Accounts payable
$
2,978,914
$
2,850,421
Deferred revenue
2,727,612
-
Accrued expenses
1,151,150
2,769,920
Operating leases – current portion
-
1,159,098
Paycheck Protection Program loan, current portion
854,000
Note payable
59,470
55,639
Total current liabilities
6,917,146
7,689,078
Long term liabilities:
Long term liabilities
108,985
264,367
Paycheck Protection Program loan
-
602,100
Operating leases - long term portion
4,859,058
6,010,208
Contingent liability
9,856,000
16,200,000
Deferred tax liability
-
895,000
Total long term liabilities
14,824,043
23,971,675
Total liabilities
21,741,189
31,660,753
cbdMD, Inc. shareholders' equity:
Preferred stock, authorized 50,000,000 shares, $0.001
par value, 5,000,000 and 500,000 shares issued and outstanding, respectively
5,000
500
Common stock, authorized 150,000,000 shares, $0.001
par value, 57,783,340 and 52,130,870 shares issued and outstanding, respectively
57,783
52,131
Additional paid in capital
176,417,269
126,517,784
Accumulated deficit
(73,337,865
)
(47,388,367
)
Total cbdMD, Inc. shareholders' equity
103,142,187
79,182,048
Total liabilities and shareholders' equity
$
124,883,376
$
110,842,801
cbdMD, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED SEPTEMBER 30, 2021 and 2020
September 30 ,
September 30 ,
2021
2020
Gross Sales
$
47,332,085
$
43,172,778
Allowances
(2,851,322
)
(1,289,044
)
Total Net Sales
44,480,763
41,883,734
Cost of sales
14,495,063
15,514,727
Gross Profit
29,985,700
26,369,007
Operating expenses
49,601,690
43,950,862
(Loss) from operations
(19,615,990
)
(17,581,855
)
Realized and Unrealized gain (loss) on marketable and other securities, including impairments
546,878
(932,066
)
Gain on extinguishment of debt
1,466,113
-
Decrease (increase) of contingent liability
(6,687,439
)
29,780,000
Other income
29,479
-
Interest (expense) income
(28,930
)
39,877
Loss (income) before provision for income taxes
(24,289,889
)
11,305,956
Benefit for income taxes
895,000
1,345,300
Net (Loss) Income from continuing operations
(23,394,889
)
12,651,256
Net (Loss) from discontinued operations, net of tax (Note 14)
-
(48,983
)
Net (Loss) Income
(23,394,889
)
12,602,273
Preferred dividends
2,554,609
366,850
Net (Loss) Income attributable to cbdMD, Inc. common shareholders
$
(25,949,498
)
$
12,235,423
Net (Loss) Income per share:
Basic earnings per share
(0.47
)
0.28
Diluted earnings per share
(0.47
)
0.28
Weighted average number of shares Basic:
54,938,128
44,140,360
Weighted average number of shares Diluted:
-
45,171,674
cbdMD, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
FOR THE YEARS ENDED SEPTEMBER 30, 2021 and 2020
September 30 ,
September 30 ,
2021
2020
Net (Loss) Income
$
(23,394,889
)
$
12,602,273
Comprehensive (Loss) Income
(23,394,889
)
12,602,273
Preferred dividends
(2,554,609
)
(366,850
)
Comprehensive (Loss) Income attributable to cbdMD, inc. common shareholders
$
(25,949,498
)
$
12,235,423
cbdMD, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED SEPTEMBER 30, 2021 AND 2020
September 30 ,
September 30 ,
2021
2020
Cash flows from operating activities:
Net (Loss) Income
$
(23,394,889
)
$
12,602,273
Adjustments to reconcile net (income) loss to net cash used by operating activities:
Stock based compensation
1,298,106
1,900,194
Restricted stock expense
1,626,613
138,000
Marketing stock amortization
871,390
-
Issuance of stock / warrants for service
97,720
338,400
Inventory and materials impairment
670,580
233,372
Impairment on discontinued operations asset
-
45,783
Depreciation and amortization
1,017,408
720,755
Other than temporary impairment other securities and other accounts receivable
-
760,000
Increase/(Decrease) in contingent liability
6,687,439
(29,780,000
)
Realized and unrealized loss of Marketable and other securities
(546,878
)
172,066
Merchant reserve settlement
-
132,657
Termination benefit
196,896
489,381
Extinguishment of Paycheck Protection Program Loan
(1,466,113
)
-
Non-cash lease expense
1,236,397
1,180,213
Changes in operating assets and liabilities:
Accounts receivable
(183,735
)
514,352
Deposits
261,125
(938,112
)
Merchant reserve
-
386,912
Inventory
(1,009,192
)
(535,146
)
Prepaid inventory
(263,341
)
615,280
Prepaid expenses and other current assets
525,670
645,796
Accounts payable and accrued expenses
(104,422
)
1,479,189
Operating lease liability
(1,159,097
)
(1,045,285
)
Deferred revenue / customer deposits
3,723
37,802
Collection on discontinued operations accounts receivable
436,167
587,083
Deferred tax liability
(895,000
)
(1,345,300
)
Cash used by operating activities
(14,093,433
)
(10,664,335
)
Cash flows from investing activities:
Proceeds from sale of other investment securities
540,000
-
Purchase of other investment securities
(750,000
)
(250,000
)
Purchase of DirectCBDOnline.com
(2,000,000
)
-
Purchase of property and equipment
(342,013
)
(1,320,095
)
Cash provided (used) by investing activities
(2,552,013
)
(1,570,095
)
Cash flows from financing activities:
Proceeds from issuance of common stock
-
16,766,106
Proceeds from issuance of preferred stock
30,938,386
4,421,928
Paycheck Protection Program Loan
-
1,456,100
Note payable
(151,551
)
29,629
Preferred dividend distribution
(2,554,609
)
(366,850
)
Deferred issuance costs
-
62,197
Cash provided by financing activities
28,232,226
22,369,110
Net increase (decrease) in cash
11,586,780
10,134,680
Cash and cash equivalents, beginning of period
14,824,644
4,689,966
Cash and cash equivalents, end of period
$
26,411,424
$
14,824,646
Supplemental Disclosures of Cash Flow Information:
2021
2020
Cash Payments for:
Interest expense
$
28,930
$
33,693
Non-cash financial activities:
Issuance of Contingent earnout shares:
$
13,520,000
$
4,620,000
Warrants issued to representative
$
499,587
$
524,113
cbdMD, Inc.
SUPPLEMENTAL FINANCIAL INFORMATION
RECONCILIATION OF NON-GAAP ADJUSTED INCOME (LOSS) FROM OPERATIONS
Three Months
Three Months
Year
Year
Ended
Ended
Ended
Ended
September 30 ,
September 30 ,
September 30 ,
September 30 ,
2021
2020
2021
2020
GAAP (loss) from operations
$
(7,012,702
)
$
(4,531,072
)
$
(19,615,990
)
$
(17,581,855
)
Adjustments:
Depreciation
297,552
221,360
1,017,408
720,754
Employee and director stock compensation (1)
1,100,362
537,943
3,149,688
1,985,803
Other non-cash stock compensation for services (2)
-
253,950
97,721
338,400
Inventory adjustment (3)
671,669
1,663,000
671,669
2,207,000
Write down of legacy accounts receivable (4)
-
102,000
-
102,000
Accrual for severance
-
489,381
703,022
489,381
Accrual / expenses for discretionary bonus
150,000
200,000
300,000
200,000
Non-GAAP adjusted (loss) from operations
$
(4,943,118
)
$
(1,263,437
)
$
(13,676,481
)
$
(11,538,517
)
(1)
Represents non-cash expense related to options, warrants, restricted stock expenses that have been amortized during the period.
(2)
Represents non-cash expense related to options, warrants, restricted stock expenses that have been amortized during the period.
(3)
Represents an operating expense related to inventory loss related to regulatory changes impacting labels and packaging and obsolete/expired inventory purchases during 2019/2020.
(4)
Write down of legacy accounts receivable.
View source version on businesswire.com : https://www.businesswire.com/news/home/20211216006040/en/
PR:
Robert Pettway
rpettway@cbdmd.com
Investors:
John Weston
john.weston@cbdmd.com
Source: cbdMD, Inc.
