SAN DIEGO, Calif. —
CV Sciences, Inc. (OTCQB:CVSI) (the “Company”, “CV Sciences”, “our”, “us” or “we”), a preeminent consumer wellness company specializing in hemp extracts and other proven science-backed, natural ingredients and products, today announced its financial results for the quarter ended June 30, 2023.
Second Quarter 2023 and Recent Financial and Operating Highlights
Generated revenue of $4.0 million for the second quarter 2023 compared to $4.1 million for second quarter 2022;
Recognized gross margin of 43.3% for the second quarter 2023 compared to 30.7% for the second quarter 2022 and a sequential improvement from 43.0% for the first quarter 2023;
Cash balance of $1.7 million at quarter end compared to $0.6 million at the end of 2022;
Generated cash flow from operations of $2.4 million in the first six months of 2023 compared to cash used in operations of $1.5 million in the first six months of 2022; cash flow from operations included employee retention credit (ERC) under the CARES Act for a total of $2.5 million;
Extinguished outstanding note payable;
Maintained 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;
Continued progress in e-commerce channel with 8% increase in subscription revenue during Q2;
Launched PlusCBD Reserve Collection Extra Gummies to support healthy sleep, faster recovery, deeper relaxation and a brighter mood; and
Continued to evaluate strategic opportunities, including consideration of an inbound or outbound merger, sale, acquisition or other options for the Company.
“We continue to increase our distribution network in the natural product retail channel. Our flagship PlusCBD brand continues to improve its number one position and gain market share in the natural product channel, and, with our portfolio of high-quality and proven products, we believe the Company is positioned for future growth,” stated Joseph Dowling, Chief Executive Officer of CV Sciences. “Our second quarter gross margins exceeded our expectations and we are encouraged by improvements we have made to reduce operating expenses. We have strengthened our balance sheet and continue to operate cost efficiently and plan to continue participating in the consolidation and brand contraction of the CBD market as we execute on our key strategic initiatives, and leverage core competitive advantages to drive long-term growth and shareholder value.”
Operating Results – Second Quarter 2023 Compared to Second Quarter 2022
Sales for second quarter 2023 were $4.0 million, a decrease of 4% from $4.1 million for the second quarter 2022. The decline is primarily due to lower number of units sold during the second quarter 2023 by 16%, partially offset by increases in average sales price per unit in the second half of 2022. We generated an operating loss $1.1 million in the second quarter of 2023, compared to an operating loss of $2.3 million in the second quarter 2022, mostly due to improved gross margins and lower operating expenses. The Company had negative adjusted EBITDA for the second quarter of 2023 of $1.2 million, compared to negative adjusted EBITDA of $1.8 million in the second quarter of 2022.
Conference Call and Webcast
The Company will host a conference call and webcast to discuss these results today at 10:00 am EDT/7:00 am PDT. The webcast of the conference call will be available on the Investor Relations section of the Company’s website at ir.cvsciences.com/news-events or directly at viavid.webcasts.com/starthere.jsp?ei=1627000&tp_key=3c5f3865ae. Investors interested in participating in the live call can also dial (877) 407-0784 from the U.S. or international callers can dial (201) 689-8560. A telephone replay will be available approximately three hours after the call concludes, and will be available through Monday, August 21, 2023, by dialing (844) 512-2921 from the U.S. or (412) 317-6671 from international locations, and entering confirmation code 13740404.
About CV Sciences, Inc.
CV Sciences, Inc. (OTCQB:CVSI) is a consumer wellness company specializing in hemp extracts and other proven, science-backed, natural ingredients and products, which 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 U.S. and are the top-selling brands of hemp extracts in the natural products market, according to SPINS, the leading provider of syndicated data and insights for the natural, organic and specialty products industry. CV Sciences follows all guidelines for Good Manufacturing Practices (GMP) and the Company’s products are processed, produced, and tested throughout the manufacturing process to confirm strict compliance with Company and regulatory standards and specifications. With a commitment to science, PlusCBD
product benefits in healthy people are supported by human clinical research data, in addition to three published clinical case studies available on PubMed.gov. PlusCBD
was the first hemp extract supplement brand to invest in the scientific evidence necessary to receive self-affirmed Generally Recognized as Safe (GRAS) status. CV Sciences, Inc. has primary offices and facilities in San Diego, California. The Company also operates a drug development program focused on developing and commercializing CBD-based novel therapeutics. Additional information is available from OTCMarkets.com or by visiting www.cvsciences.com.
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.
