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    YCBD   US12482W1018

CBDMD, INC.

(YCBD)
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cbdMD :  cbdMD Reports Second Quarter Fiscal 2021 Results

05/12/2021 | 04:11pm EDT

 YOY Net Sales Increased 26% for the March 2021 Quarter Resulting in a Record Trailing Twelve Month Net Sales Of Over $46.4 Million

Company Expects Q1 Fiscal 2022 Net Sales to Range from $15.5 million to $16.25 million

cbdMD, Inc. (NYSE American: YCBD, YCBDpA), one of the nation’s leading and most highly trusted and recognized cannabidiol (CBD) brands, today announced its financial results and its business highlights for its second quarter and six months ended March 31, 2021.

Financial highlights for the Quarter Ended March 31, 2021:

  • Net sales of $11.8 million for the second quarter of fiscal 2021 increased by 26% year-over-year from $9.4 million in the second quarter of fiscal 2020 for a record high for the March quarter.
  • Gross profit margin for the second quarter of fiscal 2021 remained strong at approximately 69%, down slightly from 71% in the prior year’s second quarter.
  • E-commerce direct-to-consumer net sales were $8.4 million, an increase of 23.3% from the prior year’s second fiscal quarter.
  • Wholesale (including brick and mortar retail customers) net sales were $3.4 million, an increase of 31.3% from the prior year’s second fiscal quarter.
  • Paw CBD (our award-winning CBD pet brand) had net sales of $1.4 million, an increase of 84% from the prior year’s second fiscal quarter.
  • Quarterly operating expenses for the second quarter of fiscal 2021 remained relatively constant as compared to the second quarter of fiscal 2020 at $12.3 million.
  • Loss from operations decreased by 25.6% to $4.1 million for the second quarter of fiscal 2021 compared to $5.6 million from the prior year’s second fiscal quarter.
  • Non-GAAP adjusted operating loss decreased by 44% to $2.7 million, compared to $4.9 million from the prior year’s quarter, and for the six months ending March 31, 2021, our non-GAAP adjusted operating loss decreased by 67% to $3.3 million compared to $9.9 million for the prior year’s period.
  • Net loss attributable to common shareholders for the second quarter of fiscal 2021 was approximately $13.1 million, or ($0.24) per share, as compared to net income of approximately $14.8 million, or $0.41 per share from the prior year’s second fiscal quarter. Our net loss attributable to common shareholders was principally attributable to an increase of approximately $8.9 million in the non-cash contingent liability which is associated with earnout shares which may be issued under the terms of the December 2018 acquisition of Cure Based Development (which owned the cbdMD brand).
  • As of March 31, 2021, we had working capital of approximately $27.9 million and cash on hand of approximately $23.7 million as compared to working capital of approximately $16.0 million and cash on hand of approximately $14.8 million at September 30, 2020.

Business highlights since the start of the second quarter of fiscal 2021 include:

  • Entered Global Beauty and Skincare Market with the launch of cbdMD Botanicals.
  • Successfully implemented NetSuite as our new ERP.
  • Launched cbdMD Therapeutics subsidiary to advance cannabinoid science and clinical studies.
  • Hired Dr. Sibyl Swift, Former FDA to Co-Chair cbdMD Therapeutics.
  • Invested an additional $750,000 (total investment of $1 million) into ADRA Acquisition Corporation (SPAC), prior to its successful IPO of $115,000,000 (NYSE American:ADRA).
  • Renewed our NSF certification and underwent the US Hemp Authority audit, receiving our seal of approval on May 10, 2021.
  • Developed new merchant processing relationships, expected cost savings starting third quarter of fiscal 2021.
  • Expanded our portfolio of TV commercials to include Paw CBD and developed a new TV campaign that launched April 1, 2021.
  • Continued to strengthen our portfolio of strategic athlete and sponsorship programs, including Professional rally driver megastar Ken Block.
  • Signed an exclusive sponsorship agreement to be the Official CBD Partner of the NOBULL CrossFit Games.
  • Signed a sponsorship agreement with Master Champion and 9 Time PGA Tour Winner, Patrick Reed, who is now on Team cbdMD.
  • Won 2021 Product of the Year Awards for cbdMD’s CBD Gummies and Paw CBD’s CBD Hard Chews for Dogs.

“We continue to build upon our success and develop our science and infrastructure, which we believe will drive shareholder value and separate our brands from our competition. We believe that our proven ability to innovate our marketing as well as deliver award winning products to our consumers will achieve significant and lasting market brand recognition and consumer acceptance for our cbdMD, Paw CBD and cbdMD Botanicals brands,” said Martin Sumichrast, Chairman and Co-CEO of cbdMD, Inc.

cbdMD, Inc. will host a conference call at 4:15 p.m., Eastern time, on Wednesday, May 12, 2021, to discuss the company’s first quarter fiscal 2021 financial results and business progress.

CONFERENCE CALL DETAILS

 

Title:

cbdMD Second Quarter 2021 Earnings Call

Event Date:

Wednesday, May 12, 2021 - 4:15 PM Eastern Time

Event Link:

Webcast URL
https://www.webcaster4.com/Webcast/Page/2206/41216

Webcast Replay Expiration:

Thursday, May 12, 2022

 

Participant Numbers:

Toll Free: 888-506-0062
International: 973-528-0011

Entry code (not required): 233626

Replay Number:

Toll Free: 877-481-4010
International: 919-882-2331
Replay Passcode: 41216

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. 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.

1 THC-free is defined as below the level of detection using validated scientific analytical methods.

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 by the use of 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 and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including, but not limited to, our ability to achieve our first quarter fiscal 2022 net sales guidance. 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, 2020 as filed with the Securities and Exchange Commission (the "SEC") on December 22, 2020, Item 1A. Risk Factors, contained in our Quarterly Report on Form 10-Q for the period ended March 31, 2021 as filed with the SEC on May 12, 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.

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.

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

MARCH 31, 2021 AND SEPTEMBER 30, 2020

 

(Unaudited)

 

March 31,

September 30,

2021

2020

Assets

 

Current assets:

 

Cash and cash equivalents

$

23,711,600

$

14,824,644

Accounts receivable

 

1,848,465

 

911,482

Accounts receivable – discontinued operations

 

22,217

 

447,134

Marketable securities

 

32,034

 

26,472

Investment other securities

 

1,000,000

 

250,000

Inventory

 

4,331,545

 

4,603,360

Inventory prepaid

 

478,629

 

288,178

Prepaid software

 

-

 

174,308

Prepaid sponsorship

 

1,777,304

 

1,203,300

Prepaid expenses and other current assets

 

1,544,541

 

983,374

Total current assets

 

34,746,335

 

23,712,252

Other assets:

 

Property and equipment, net

 

2,976,904

 

3,183,487

Operating lease assets

 

6,240,059

 

6,851,357

Deposits for facilities

 

789,583

 

790,708

Intangible assets, net

 

21,635,000

 

21,635,000

Goodwill

 

54,669,997

 

54,669,997

Total other assets

 

86,311,543

 

87,130,549

Total assets

$

121,057,878

$

110,842,801

CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 2021 AND SEPTEMBER 30, 2020
(continued)
 
(Unaudited)

March 31,

 

September 30,

2021

 

2020

Liabilities and shareholders' equity
 
Current liabilities:
Accounts payable

$

2,835,236

 

$

2,850,421

 

Accrued expenses

 

1,729,594

 

 

2,769,920

 

Operating leases – current portion

 

1,213,891

 

 

1,159,098

 

Paycheck Protection Program loan, current portion

 

1,027,403

 

 

854,000

 

Note payable

 

57,522

 

 

55,639

 

Total current liabilities

 

6,863,646

 

 

7,689,078

 

 
Long term liabilities:
Long term liabilities

 

-

 

 

264,367

 

Note payable

 

139,215

 

 

-

 

Paycheck Protection Program loan

 

428,697

 

 

602,100

 

Operating leases - long term portion

 

5,414,751

 

 

6,010,208

 

Contingent liability

 

22,300,000

 

 

16,200,000

 

Deferred tax liability

 

27,000

 

 

895,000

 

Total long term liabilities

 

28,309,663

 

 

23,971,675

 

 
Total liabilities

 

35,173,309

 

 

31,660,753

 

 
cbdMD, Inc. shareholders' equity:
Preferred stock, authorized 50,000,000 shares, $0.001
par value, 2,800,000 and 500,000 shares issued and outstanding, respectively

 

2,800

 

 

500

 

Common stock, authorized 150,000,000 shares, $0.001
par value, 56,337,787 and 52,130,870 shares issued and outstanding, respectively

 

56,338

 

 

52,131

 

Additional paid in capital

 

155,780,222

 

 

126,517,784

 

Accumulated deficit

 

(69,954,791

)

 

(47,388,367

)

Total cbdMD, Inc. shareholders' equity

 

85,884,569

 

 

79,182,048

 

 
 
Total liabilities and shareholders' equity

$

121,057,878

$

110,842,801

 

cbdMD, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2021 and 2020
 
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
March 31, March 31, March 31, March 31,

2021

2020

2021

2020

 
Gross Sales

$

12,457,386

 

$

9,703,800

 

$

25,520,568

 

$

20,116,291

 

Allowances

 

(658,775

)

 

(304,764

)

 

(1,393,654

)

 

(569,019

)

Total Net Sales

 

11,798,611

 

 

9,399,036

 

 

24,126,914

 

 

19,547,272

 

Cost of sales

 

3,643,127

 

 

2,732,076

 

 

7,073,402

 

 

6,432,613

 

 
Gross Profit

 

8,155,484

 

 

6,666,960

 

 

17,053,512

 

 

13,114,659

 

 
Operating expenses

 

12,323,207

 

 

12,267,637

 

 

22,981,180

 

 

24,827,934

 

(Loss) from operations

 

(4,167,723

)

 

(5,600,677

)

 

(5,927,668

)

 

(11,713,275

)

Realized and Unrealized gain (loss) on marketable and other securities, including impairments
2,852 (813,152

)

545,562 (875,162

)

(Increase) decrease of contingent liability

 

(8,871,000

)

 

21,261,994

 

 

(17,371,000

)

 

38,160,000

 

Interest (expense) income

 

(10,603

)

 

35,607

 

 

(20,990

)

 

42,875

 

Income (loss) before provision for income taxes

 

(13,046,474

)

 

14,883,772

 

 

(22,774,096

)

 

25,614,438

 

 
Benefit for income taxes

 

536,000

 

 

-

 

 

868,000

 

 

2,240,300

 

Net (Loss) Income from continuing operations

 

(12,510,474

)

 

14,883,772

 

 

(21,906,096

)

 

27,854,738

 

Net (Loss) from discontinued operations, net of tax (Note 14)

 

-

 

 

-

 

 

-

 

 

(41,202

)

Net (Loss) Income

 

(12,510,474

)

 

14,883,772

 

 

(21,906,096

)

 

27,813,536

 

Preferred dividends

 

560,280

 

 

100,016

 

 

660,330

 

 

166,750

 

 
Net (Loss) Income attributable to cbdMD, Inc. common shareholders

$

(13,070,754

)

$

14,783,756

 

$

(22,566,426

)

$

27,646,786

 

 
Net (Loss) Income per share:
Basic earnings per share

 

(0.24

)

 

0.41

 

 

(0.43

)

 

0.76

 

Diluted earnings per share

 

(0.24

)

 

0.40

 

 

(0.43

)

 

0.74

 

Weighted average number of shares Basic:

 

53,471,607

 

 

36,503,005

 

 

52,793,872

 

 

36,503,005

 

Weighted average number of shares Diluted:

 

53,471,607

 

 

36,336,505

 

 

52,793,872

 

 

37,336,505

 

 
cbdMD, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2021 AND 2020
(Unaudited)
 
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
March 31, March 31, March 31, March 31,

2021

2020

2021

2020

 
Net (Loss) Income

$

(12,510,474

)

$

14,883,772

 

$

(21,906,096

)

$

27,813,536

 

Comprehensive (Loss) Income

 

(12,510,474

)

 

14,883,772

 

 

(21,906,096

)

 

27,813,536

 

 
Preferred dividends

 

(560,280

)

 

(100,016

)

 

(660,330

)

 

(116,750

)

Comprehensive (Loss) Income attributable to cbdMD, inc. common shareholders

$

(13,070,754

)

$

14,783,756

 

$

(22,566,426

)

$

27,696,786

 

 
cbdMD, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED MARCH 31, 2021 AND 2020
(unaudited)
 
Six Months Six Months
Ended Ended
March 31, March 31,

2021

2020

 
 
Cash flows from operating activities:
Net (Loss) Income

$

(21,906,096

)

$

27,813,536

 

Adjustments to reconcile net (income) loss to net
cash used by operating activities:
Stock based compensation

 

451,527

 

 

972,225

 

Restricted stock expense

 

547,140

 

 

138,000

 

Issuance of stock / warrants for service

 

155,695

 

 

28,250

 

Impairment on discontinued operations asset

 

-

 

 

38,002

 

Depreciation and amortization

 

473,324

 

 

287,457

 

Other than temporary impairment other securities and other accounts receivable

 

-

 

 

760,000

 

Increase/(Decrease) in contingent liability

 

17,371,000

 

 

(38,160,000

)

Realized and unrealized loss of Marketable and other securities

 

(5,562

)

 

115,162

 

Merchant reserve settlement

 

-

 

 

132,657

 

Termination benefit

 

352,279

 

 

-

 

Non-cash lease expense

 

611,298

 

 

585,020

 

Changes in operating assets and liabilities:
Accounts receivable

 

(936,983

)

 

763,303

 

Deposits

 

1,125

 

 

(22,365

)

Merchant reserve

 

-

 

 

106,590

 

Inventory

 

271,815

 

 

(2,270,110

)

Prepaid inventory

 

(190,451

)

 

386,149

 

Prepaid expenses and other current assets

 

44,408

 

 

649,308

 

Accounts payable and accrued expenses

 

(1,366,373

)

 

849,113

 

Operating lease liability

 

(540,664

)

 

(496,834

)

Note payable

 

-

 

 

175,124

 

Deferred revenue / customer deposits

 

(41,418

)

 

(7,339

)

Collection on discontinued operations accounts receivable

 

424,917

 

 

250,000

 

Deferred tax liability

 

(868,000

)

 

(2,240,300

)

Cash used by operating activities

 

(5,151,019

)

 

(9,147,052

)

 
Cash flows from investing activities:
Proceeds from sale of other investment securities

 

(750,000

)

 

-

 

Purchase of property and equipment

 

(226,542

)

 

(1,796,346

)

Cash provided (used) by investing activities

 

(976,542

)

 

(1,796,346

)

 
Cash flows from financing activities:
Proceeds from issuance of common stock

 

-

 

 

16,771,756

 

Proceeds from issuance of preferred stock

 

15,798,115

 

 

4,421,928

 

Note payable

 

(123,268

)

 

-

 

Preferred dividend distribution

 

(660,330

)

 

(166,750

)

Deferred issuance costs

 

-

 

 

62,197

 

Cash provided by financing activities

 

15,014,517

 

 

21,089,131

 

Net increase (decrease) in cash

 

8,886,956

 

 

10,145,733

 

Cash and cash equivalents, beginning of period

 

14,824,644

 

 

4,689,966

 

Cash and cash equivalents, end of period

$

23,711,600

 

$

14,835,699

 

 
Supplemental Disclosures of Cash Flow Information:
 
Six Months Six Months
Ended Ended
March 31, March 31,

2021

2020

 
Cash Payments for:
Interest expense

$

7,117

 

$

17,097

 

 
Non-cash financial activities:
Issuance of Contingent earnout shares:

$

11,271,000

 

$

-

 

Warrants issued to representative

$

254,950

 

$

524,113

 

 
cbdMD, Inc.
SUPPLEMENTAL FINANCIAL INFORMATION
RECONCILIATION OF NON-GAAP ADJUSTED INCOME (LOSS) FROM OPERATIONS
 
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
March 31, March 31, March 31, March 31,

2021

2020

2021

2020

 
 
(Unaudited)
 
GAAP (loss) from operations

$

(4,167,723

)

$

(5,600,677

)

$

(5,927,668

)

$

(11,721,275

)

Adjustments:
Depreciation

 

240,517

 

 

174,205

 

 

473,323

 

 

287,457

 

Employee and director stock compensation (1)

 

825,833

 

 

435,301

 

 

1,090,007

 

 

1,115,875

 

Other non-cash stock compensation for services (2)

 

33,358

 

 

55,479

 

 

69,071

 

 

146,548

 

Accrual for severance

 

299,610

 

 

-

 

 

703,022

 

 

-

 

Accrual / expenses for discretionary bonus

 

-

 

 

-

 

 

300,000

 

 

222,500

 

Non-GAAP adjusted (loss) from operations

$

(2,768,405

)

$

(4,935,692

)

$

(3,292,245

)

$

(9,948,895

)

(1)

Represents non-cash expense related to options and restricted stock expenses that have been amortized during the period.

(2)

Represents non-cash expense related to restricted stock expenses that have been amortized during the period.

 


© Business Wire 2021
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Financials (USD)
Sales 2021 50,2 M - -
Net income 2021 -26,0 M - -
Net cash 2021 19,6 M - -
P/E ratio 2021 -5,73x
Yield 2021 -
Capitalization 152 M 152 M -
EV / Sales 2021 2,64x
EV / Sales 2022 2,29x
Nbr of Employees 165
Free-Float 63,7%
Chart CBDMD, INC.
Duration : Period :
cbdMD, Inc. Technical Analysis Chart | MarketScreener
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Technical analysis trends CBDMD, INC.
Short TermMid-TermLong Term
TrendsBearishBearishNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 3
Last Close Price 2,58 $
Average target price 5,42 $
Spread / Average Target 110%
EPS Revisions
Managers and Directors
Martin A. Sumichrast Chairman & Co-Chief Executive Officer
Raymond Scott Coffman President, Co-Chief Executive Officer & Director
T. Ronan Kennedy Chief Operating & Financial Officer
Sibyl Swift Vice President-Scientific & Regulatory Affairs
Bakari Sellers Independent Director
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