SAN DIEGO, Aug. 06, 2019 (GLOBE NEWSWIRE) — CV Sciences, Inc. (OTCQB:CVSI) ("CV Sciences" or the "Company") announced today its financial results for the quarter ended June 30, 2019.
Second Quarter 2019 and Recent Financial and Operating Highlights
- Record revenue of $16.9 million for the second quarter of 2019, an increase of 36% over the same quarter in 2018;
- 14 consecutive quarters of sequential revenue growth;
- Gross margin improved to 70.9% from 70.8% in the first quarter of 2019;
- Retail distribution increased to 4,591 stores as of June 30, 2019, a 39% increase from March 31, 2019;
- Broadened retail presence into the food, drug and mass channel and in active discussions for further expansion of the PlusCBD™ Oil brand;
- Generated $2.7 million of cash from operations, with total cash balance increasing to $15.7 million at quarter end;
- Dismissal of class action suit which was originally filed in 2014;
- Announced planned 500% increase in production capacity with addition of new 45,500 square foot facility;
- Initiated domestic sourcing efforts, committing to more than 500 acres of U.S. Hemp Production to support future sales;
- A first of its type randomized controlled clinical trial utilizing PlusCBD™ Oil was published demonstrating it can improve sleep, help reduce appetite and enhance the quality of life in humans; and
- PlusCBD™ Oil used in first study examining clinical benefit of CBD for patients with PTSD.
"We generated 13% sequential and 36% year-over-year revenue growth during the second quarter, driven by significant distribution gains across both new national food, drug and mass (FDM) channel retailers and broadly across our channels of distribution. Year to date, we have more than doubled the number of retail doors where PlusCBD™ Oil products are carried and continue to enjoy a strong pipeline of new distribution opportunities."
– Joseph Dowling, Chief Executive Officer of CV Sciences.
"We have seen a positive response to the innovation we have developed this year, including nine new products launched year to date. We have further innovation scheduled for introduction during the second half of the year and believe there is a significant opportunity to expand our offering within existing retailers, particularly as the FDM channel further develops. To support our anticipated growth, we recently announced a 500% increase in our production capacity."
"We are particularly encouraged by the regulatory developments we have seen at the state level during the last few months. While there remains ambiguities that continue to impact the CBD landscape on a state by state basis, we have seen positive legislation passed, or in the late stages of passage, in key states across the country. Recent successes in California, Texas and Ohio are just a few examples of the state by state legislative developments that are expanding and strengthening the long-term CBD marketplace. We remain highly confident in the long-term growth of hemp-based CBD and will continue to lead the industry in quality, innovation and both regulatory adherence and support as the market develops," Dowling continued.
Operating Results – Second Quarter 2019 Compared to Second Quarter 2018
Sales for the second quarter of 2019 were $16.9 million, an increase of 36% from $12.3 million in the second quarter of 2018. Second quarter sales growth reflects the Company's continued organic expansion into all sales channels, including food drug and mass, natural product retail, wholesale and direct-to-consumer channels. The Company's retail store count increased to 4,591 stores nationwide at June 30, 2019, up from 3,308 stores as of March 31, 2019.
The Company recognized operating income of $1.3 million in the second quarter of 2019, compared to $3.3 million in the second quarter of the prior year. The decline in operating income is primarily related to additional investment in sales, marketing and R&D activities.
As reported under U.S. generally accepted accounting principles (GAAP), second quarter 2019 net income was $1.2 million, compared with a GAAP net income of $3.2 million in the same period in 2018. Net income in the second quarter of 2019 was impacted by increased R&D, additional management resources and marketing activities to leverage future growth. Diluted net income per share was $0.01 for the second quarter of 2019 compared to a diluted net income per share of $0.03 for the same period in 2018.
Non-GAAP net income for the second quarter of 2019 was $3.4 million, or $0.03 per diluted share based on weighted average shares outstanding of 120.9 million. This compares with non-GAAP net income of $3.6 million or $0.03 per diluted share based on weighted average shares outstanding of 112.5 million for the same period in 2018.
Adjusted EBITDA for the second quarter of 2019 was $3.6 million or 21.1% of net revenue, compared to $3.8 million or 31.1% of net revenue, in the second quarter of 2018.
About CV Sciences, Inc.
CV Sciences, Inc. (OTCQB:CVSI) operates two distinct business segments: a consumer product division focused on manufacturing, marketing and selling hemp-based CBD products to a range of market sectors; and a drug development division focused on developing and commercializing novel therapeutics utilizing CBD. The Company's PlusCBD™ Oil is the top-selling brand of hemp-derived CBD on the market, according to SPINS, the leading provider of syndicated data and insights for the natural, organic and specialty products industry. CV Sciences, Inc. has primary offices and facilities in San Diego, California.
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