CV Sciences, Inc. Reports First Quarter 2019 Financial Results

GlobeNewswire - Posted 4 years ago

Record quarterly revenue

Increased retail distribution by over 1,000 stores

LAS VEGAS, May 08, 2019 (GLOBE NEWSWIRE) -- CV Sciences, Inc. (CVSI) ("CV Sciences" or the “Company”) announced today its financial results for the quarter ended March 31, 2019.

First Quarter 2019 Financial and Operating Highlights

  • Record revenue of $14.9 million for the first quarter of 2019, an increase of 85% over the same quarter in 2018;
  • Strong gross margin of 70.8% compared to gross margin of 68.9% in the first quarter of 2018
  • Retail distribution increased to 3,308 stores as of March 31, 2019, a 48% increase from December 31, 2018;
  • Expanded retail presence into the food, drug and mass channel and are in active discussions for further expansion of the PlusCBD Oilâ„¢ brand; and
  • Generated $0.8 million of cash from operations, with cash balance increasing to $13.6 million at quarter end.

“We continued to expand retail distribution of the PlusCBD Oil™ brand and drive sales growth during the first quarter. We generated 85% revenue growth over prior year, achieving another record quarter, with strong gross margin performance,” stated Joseph Dowling, Chief Executive Officer of CV Sciences. “The PlusCBD Oil™ brand is now available in over 3,300 stores nationwide, including national food, drug and mass merchandiser accounts. As anticipated, since the passage of the 2018 Farm Bill, we have seen significant interest in the hemp-derived CBD category across retailers and channels, and we are in discussions with multiple retailers for new retail placements. We are making the investments across the organization to position ourselves to capitalize on the growing retailer and consumer demand. Our drug development program remains on track and we continue to anticipate filing an Investigational New Drug application in late 2019 / early 2020. We have the brand, the people and the unique business model focused on both consumer products and drug development to maximize our opportunity in the rapidly growing hemp CBD industry.”

Operating Results - First Quarter 2019 Compared to First Quarter 2018
Sales for the first quarter of 2019 were $14.9 million, an increase of 85% from $8.1 million in the first quarter of 2018. First 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 3,308 stores nationwide at March 31, 2019, up from 2,238 stores as of December 31, 2018.

The Company recognized an operating loss of $9.4 million in the first quarter of 2019, compared to an operating income of $0.7 million in the first quarter of the prior year. The operating loss is primarily related to additional stock-based compensation and payroll expense associated with the retirement of the Company's founder and former President and Chief Executive Officer.

As reported under U.S. generally accepted accounting principles (GAAP), first quarter 2019 net loss was $9.4 million, compared with a GAAP net income of $0.6 million in the same period in 2018. Diluted net loss per share was $0.10 for the first quarter of 2019 compared to a diluted net income per share of $0.01 for the same period in 2018.

Non-GAAP net income for the first quarter of 2019 was $1.5 million, or $0.01 per diluted share based on weighted average shares outstanding of 115.6 million. This compares with non-GAAP net income of $1.7 million or $0.02 per diluted share based on weighted average shares outstanding of 95.6 million for the same period in 2018.

Adjusted EBITDA for the first quarter of 2019 was $1.7 million or 11.3% of net revenue, compared to $1.8 million or 22.6% of net revenue, in the first quarter of 2018.

Conference Call and Webcast
The Company will host a conference call and webcast to discuss these results today at 4:30 pm EDT/1:30 pm PDT. The webcast of the conference call will be available on the Investor Relations section of the Company's web site at and at 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 two hours after the call concludes and will be available through Wednesday, May 15, 2019, by dialing (844) 512-2921 from the U.S. or (412) 317-6671 from international locations, and entering confirmation code 13690537.

About CV Sciences, Inc.
CV Sciences, Inc. (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 and Las Vegas, Nevada. Additional information is available from or by visiting

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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.

Contact Information
Investor Contact:
Scott Van Winkle
[email protected]

Media Contact:
Cory Ziskind
[email protected]

(in thousands, except per share data)

  For the three months ended March 31,
  2019   2018
Product sales, net $ 14,911   $ 8,071
Cost of goods sold 4,352   2,509
Gross Profit 10,559   5,562
Operating expenses:      
Research and development 1,342   154
Selling, general and administrative 18,595   4,740
  19,937   4,894
Operating Income (Loss) (9,378)   668
Interest expense 6   49
Income (loss) before provision for income taxes (9,384)   619
Provision for income taxes —    —
Net Income (Loss) $ (9,384)   $ 619
Weighted average common shares outstanding      
Basic   95,168     90,513
Diluted 95,168   95,636
Net income (loss) per common share      
Basic $ (0.10)   $ 0.01
Diluted $ (0.10)   $ 0.01

(in thousands, except per share data)

  March 31,
  December 31,
Current assets:      
Cash $ 13,638     $ 12,684  
Restricted cash —     251  
Accounts receivable, net 3,771     3,340  
Inventory 7,900     7,132  
Prepaid expenses and other 8,367     2,059  
Total current assets 33,676     25,466  
Inventory 771     1,418  
Property & equipment, net 2,730     2,844  
Operating lease assets 3,997     —  
Intangibles, net 3,792     3,801  
Goodwill 2,788     2,788  
Other assets 637     585  
Total assets $ 48,391     $ 36,902  
Liabilities and stockholders' equity      
Current liabilities:      
Accounts payable $ 938     $ 1,245  
Accrued expenses 9,499     2,673  
Operating lease liability - current 634     —  
Notes payable, net 273     474  
Total current liabilities 11,344     4,392  
Operating lease liability 4,668     —  
Deferred rent —     1,329  
Deferred tax liability 1,065     1,065  
Other liabilities 437     —  
Total liabilities 17,514     6,786  
Commitments and contingencies      
Stockholders' equity      
Preferred stock, par value $0.0001; 10,000 shares authorized; no shares issued and outstanding —     —  
Common stock, par value $0.0001; 190,000 shares authorized, 98,479 and 94,940 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively 10     9  
Additional paid-in capital 65,278     55,134  
Accumulated deficit (34,411 )   (25,027 )
Total stockholders' equity 30,877     30,116  
Total liabilities and stockholders' equity $ 48,391     $ 36,902  

(in thousands)

  For the three months ended
March 31,
  2019   2018
Net income (loss) $ (9,384 )   $ 619  
Adjustments to reconcile net income (loss) to net cash flows provided by operating activities:      
Depreciation and amortization 177     119  
Amortization of beneficial conversion feature of convertible debts —     13  
Stock-based compensation 2,091     1,036  
Stock-based compensation associated with employment settlement 7,857     —  
Bad debt expense 25     3  
Noncash lease expense 124     —  
Change in operating assets and liabilities:      
Accounts receivable (456 )   235  
Inventory (121 )   509  
Prepaid expenses and other current assets (551 )   94  
Accounts payable and accrued expenses 999     (1,062 )
Deferred rent —     88  
  Net cash provided by operating activities 761     1,654  
Purchase of equipment (54 )   (138 )
Tenant improvements to leasehold real estate —     (71 )
Net cash flows used in investing activities (54 )   (209 )
Repayment of convertible debt in cash —     (300 )
Repayment of unsecured debt in cash (201 )   (49 )
Proceeds from exercise of stock options 197     —  
Net cash flows used in financing activities (4 )   (349 )
Net increase in cash and restricted cash 703     1,096  
Cash and restricted cash, beginning of period 12,935     2,792  
Cash and restricted cash, end of period $ 13,638     $ 3,888  
Supplemental cash flow disclosures:      
Interest paid $ 6     $ 34  
Taxes paid $ 4     $ —  

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