CV Sciences releases financial results for the first quarter of 2020.
CV Sciences, Inc. (OTCQB:CVSI), a preeminent supplier and manufacturer of hemp cannabidiol products, today announced its financial results for the quarter ended March 31, 2020.
We are pleased to have exceeded the high end of our first-quarter revenue guidance while navigating both ongoing industry challenges and the COVID-19 pandemic.Joseph Dowling, Chief Executive Officer of CV Sciences
First Quarter 2020 and Recent Operating Highlights
- Revenue of $8.3 million for the first quarter of 2020
- E-commerce sales to 24% of total net revenue, up from 15% for the first quarter of 2019;
- Launched updated +PlusCBD™ Oil website in January 2020 to enhance customer experience and drive increased e-commerce sales;
- Gross margin of 48.5% for the first quarter of 2020;
- Maintained strong total cash balance of $7.6 million at quarter-end with no debt; and
- Received notice of allowance from USPTO for proprietary CBD and nicotine formulation for the treatment of smokeless tobacco addiction.
"Over the past months, we have taken quick action to right-size our operations for the near-term industry outlook and to adapt our operations for the ever-changing operating environment created by the current global health crisis. Our production and distribution facilities continue to operate without interruption and our entire team of dedicated employees has risen to the challenge to ensure that we continue to deliver the highest quality hemp-derived CBD products on the market," stated Joseph Dowling, Chief Executive Officer of CV Sciences. "We remain confident in the long-term outlook for high-quality CBD products as we adapt to a challenging industry environment and the disruptions associated with COVID-19. Our enhanced focus on e-commerce has helped to mitigate the impact from a challenging retail environment and our plans for broadening our product line and vertical categories remain on track for 2020. We have right-sized our organization for the current industry environment and have taken swift cost reduction actions over the past few months. We have also taken the necessary actions to ensure we are prepared for additional industry or macroeconomic challenges. We have a significant amount of incremental opportunities to expand distribution, enter new categories and broaden our brand recognition. We have also worked to put in place the financial resources to navigate the near-term challenges of COVID-19 and the short-term challenges affecting the broader CBD market, and remain well-positioned as a leading brand in the hemp-derived CBD market. We have the infrastructure in place to support significant growth and the science and compliance capabilities to thrive in the evolving CBD market."
Dowling continued, "Our drug development business also achieved a key milestone this quarter, receiving a Notice of Allowance from the USPTO for our patent covering methods of treating smokeless tobacco addiction by administering pharmaceutical formulations containing CBD and nicotine. Our proprietary technology and intellectual property, the first-of-its-kind treatment for smokeless tobacco addiction, provides us with significant value and opportunities to commercialize a novel CBD-based pharmaceutical drug addressing a significant unmet medical need. The worldwide smokeless tobacco addiction treatment market is estimated at greater than $2 billion and provides another important long-term growth channel for our company, in addition to our consumer product segment."
Operating Results – First Quarter 2020 Compared to First Quarter 2019
Sales for the first quarter of 2020 were $8.3 million, a decrease of 45% from $14.9 million in the first quarter of 2019. First-quarter sales were impacted by increased market competition in the natural product category, the continued impact on retail customers as a result of the uncertain regulatory environment for CBD, and the impact from the current COVID-19 pandemic. The Company's retail store count increased to 5,799 stores nationwide as of March 31, 2020, up from 3,308 stores as of March 31, 2019.
The Company recognized an operating loss of $5.3 million in the first quarter of 2020, compared to an operating loss of $9.4 million in the prior year.
The Company had negative adjusted EBITDA for the first quarter of 2020 of $3.9 million, compared to adjusted EBITDA of $1.7 million for the first quarter of 2019.
To learn more about CV Sciences Inc, visit the company HQ here.
Disclaimer: Past performance is not an indicator of future performance.
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