CV Sciences reported second quarter 2018 financial results.

Growth and Profitability Driven by Key Financial Performance Metrics, including Record GAAP Net Income of $3.2 Million.

“CV Sciences delivered strong financial results for the second quarter of 2018, including our second consecutive quarter of profitability. We also reported record key performance metrics that include triple-digit year-over-year revenue growth and double-digit sales growth on a sequential quarterly comparison. To date, we have been able to successfully execute our planned strategy of aggressively and consistently growing our sales distribution channels, further penetrate the market and increase our market share within the natural products industry.”
— Joseph Dowling, CV Science’s CEO

Operating Highlights

  • Record Sales of $12,349,000, an increase of 203% compared to Q2 2017
  • Record Gross Profit of $9,060,000, an increase of 219% compared to Q2 2017
  • Record GAAP Net Income of $3,186,000, an improvement of $4,178,000 compared to Q2 2017
  • Record Adjusted EBITDA $3,806,000, an improvement of $4,087,000 compared to Q2 2017
  • Increased Retail Channel Distribution to 1,968 Stores as of June 30, 2018, an 11% sequential increase over the Company’s retail store count for the first quarter of 2018
  • 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.

Financial Highlights

  • Record Sales of $20,419,000, an increase of 160% compared to the first six months of 2017
  • Record Gross Profit of $14,622,000, an increase of 177% compared to the first six months of 2017
  • GAAP Net Income of $3,805,000, an improvement of $8,582,000 compared to the first six months of 2017
  • Record Adjusted EBITDA of $5,628,000, an improvement of $6,099,000 compared to the first six months of 2017
  • Cash Flow from Operations of $5,369,000, with a cash balance increase of $3,344,000 during Q2 2018

Sales for Q2 2018 were $12.3 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 53% sequential quarterly increase from $8.1 million reported for Q1 2018. The Company’s natural product retail channel now includes 1,968 locations nationwide.

Gross profit for Q2 2018 was $9.1 million and demonstrates the Company’s ability to expand sales while maintaining strong gross margins. Adjusted EBITDA for Q2 2018 was $3.8 million and shows strong operating leverage from the Company’s significant investment in inventory, product development, systems, marketing and distribution.

“Our operating performance is driven by the strength of our market-leading PlusCBD™ product line, which today is #No. 1 in the hemp CBD product category in the natural products retail channel. In every aspect, we set new performance records and laid the groundwork for future expansion as the health and wellness markets continue to embrace CBD commercialisation and standardisation.”
— Joseph Dowling, CV Sciences’s CEO

Outlook

CV Sciences continues to impress. They are simply sticking all the boxes. They overcame the SEC lawsuit that was creating an overhang on the share price, are riding on the wave of improved legislation in the Hemp Industry, and with their upcoming NASDAQ listing, should continue to see improved shareholder performance. The stock hit an all-time high this week and we continue to be extremely bullish on their prospects for growth.

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