EX-99.1 2 ycbd_ex991.htm PRESS RELEASE ycbd_ex991
  Exhibit 99.1
  
cbdMD Reports First Quarter Fiscal 2021 Results
 
YOY Net Sales Increased 22% to Record $12.3 Million
 
YOY e-Commerce Direct-to-Consumer Sales Jump 41% to Record $9.7 Million
 
Pet Brand, Paw CBD, YOY Net Sales Up 83%
 
Gross Profit Margin Hits All Time High of 72 %
 
February 9, 2021, 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 for its first quarter ended December 31, 2020.
 
Financial Highlights for the Quarter Ended December 31, 2020:
 
●
Our net sales for the first quarter of fiscal 2021 increased by 22% year-over-year to a record of $12.3 million from $10.1 million from the prior year’s quarter.
 
●
Our gross profit margin for the quarter increased to 72.2% from 63.5% in the prior year’s quarter.
 
●
We reported record quarterly E-commerce, direct-to-consumer, net sales of $9.7 million, an increase of $2.8 million, or 41%, from the prior year’s quarter and 13% sequential quarterly growth.
 
●
Our CBD pet brand, Paw CBD, reported in net sales in quarter increased 83%, to $1.5 million compared to $820,000 from the prior year’s quarter.
 
●
Our quarterly operating expenses decreased by 15% YOY to $10.7 million from $12.6 million from the prior year’s quarter, a sequential quarterly decrease of 2%.
 
●
Our loss from operations decreased by 71% to $1.8 million compared to $6.1 million from the prior year’s quarter.
 
●
Our non-GAAP adjusted operating loss decreased by 90% to $523,841, compared to $5.0 million from the prior year’s quarter.
 
●
Our net loss attributable to common shareholders for the quarter was approximately $9.5 million, or ($0.18) per share, as compared to net income of approximately $12.9 million, or $0.45 per share from the prior year’s quarter. Our net loss attributable to common shareholders was principally attributable to an increase of approximately $8.5 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).
 
●
At December 31, 2020, we had working capital of approximately $30.6 million and cash on hand of approximately $28.8 million as compared to working capital of approximately $16.0 million and cash on hand of approximately $14.8 million at September, 2020. Our working capital position was bolstered during the quarter following our receipt of approximately $15.8 million in net proceeds from our December 2020 sale of shares of our 8.0% Series A Cumulative Convertible Preferred Stock in a firm commitment underwritten public offering.
 
cbdMD, Inc. will host a conference call at 4:15 p.m., Eastern time, on Tuesday, February 9, 2021, to discuss the company’s first quarter fiscal 2021 financial results and business progress.
 
 
 
 
CONFERENCE CALL DETAILS
 
Title:
cbdMD First Quarter 2021 Earnings Call
Event Date:
Tuesday, February 9, 2021 - 4:15 PM Eastern Time
Event Link:
Webcast URL https://www.webcaster4.com/Webcast/Page/2206/39768
Webcast Replay Expiration:
Wednesday, February 9, 2022
 
Participant Numbers:
Toll Free: 888-506-0062International: 973-528-0011
Entry code (not required): 117414
Replay Number:
Toll Free: 877-481-4010International: 919-882-2331Replay Passcode: 39768 
About cbdMD, Inc.
 
cbdMD, Inc. is one of the leading, most highly trusted, and most recognized cannabidiol (CBD) brands, whose current products include CBD tinctures, CBD capsules, CBD gummies, CBD topicals, CBD bath bombs and CBD pet products. To learn more about cbdMD and our comprehensive line of over 130 SKUs of U.S. produced, Non-THC1 CBD products, please visit www.cbdMD.com, follow cbdMD on Instagram and Facebook, or visit one of the 6,000 retail outlets that carry cbdMD and Paw CBD products.
 
1 Non-THC is defined as below the level of detection using validated scientific analytical tools.
 
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. 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 December 31, 2020 as filed with the SEC on February 9, 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.
 
Contacts
 
PR: 
5W Public Relations
cbdMD@5wpr.com 
(212) 999-5585
 
Investors:
 
cbdMD, Inc. 
John Weston
Director of Investor Relations
John.Weston@cbdMD.com 
(704) 249-9515
 
 
 
 
cbdMD, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2020 AND SEPTEMBER 30, 2020
 
 
 
 
(Unaudited)
 
 
 
 
 
 
December 31,
 
 
September 30,
 
 
 
2020
 
 
2020
 
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
  Cash and cash equivalents
 $28,763,812 
 $14,824,644 
  Accounts receivable
  1,021,554 
  911,482 
  Accounts receivable – discontinued operations
  24,717 
  447,134 
  Marketable securities
  29,181 
  26,472 
  Investment other securities
  250,000 
  250,000 
  Deposits
  - 
  40,198 
  Inventory
  4,383,501 
  4,603,360 
  Inventory prepaid
  336,362 
  288,178 
  Prepaid software
  - 
  174,308 
  Prepaid equipment deposits
  - 
  40,197 
  Prepaid sponsorship
  1,069,600 
  1,203,300 
  Prepaid expenses and other current assets
  1,496,721 
  902,979 
Total current assets
  37,375,449 
  23,712,252 
 
    
    
Other assets:
    
    
  Property and equipment, net
  3,084,321 
  3,183,487 
  Operating lease assets
  6,547,278 
  6,851,357 
  Deposits for facilities
  766,708 
  790,708 
  Intangible assets, net
  21,635,000 
  21,635,000 
  Goodwill
  54,669,997 
  54,669,997 
Total other assets
  86,703,304 
  87,130,549 
 
    
    
Total assets
 $124,078,753 
 $110,842,801 
 
 
 
 
CONDENSED CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2020 AND SEPTEMBER 30, 2019
(continued)
 
 
 
(Unaudited)
 
 
 
 
 
 
December 31,
 
 
September 30,
 
 
 
2020
 
 
2020
 
Liabilities and shareholders' equity
 
 
 
 
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
  Accounts payable
 $2,174,529 
 $2,850,421 
  Deferred revenue
  22,440 
  45,141 
  Accrued expenses
  2,301,154 
  2,724,779 
  Operating leases – current portion
  1,242,608 
  1,159,098 
  Paycheck Protection Program loan, current portion
  939,826 
  854,000 
  Note payable
  56,573 
  55,639 
Total current liabilities
  6,737,130 
  7,689,078 
 
    
    
Long term liabilities:
    
    
  Long term liabilities
  - 
  264,367 
  Note payable
  153,957 
  - 
  Paycheck Protection Program loan
  516,274 
  602,100 
  Operating leases - long term portion
  5,688,746 
  6,010,208 
  Contingent liability
  24,700,000 
  16,200,000 
  Deferred tax liability
  563,000 
  895,300 
Total long term liabilities
  31,621,977 
  23,971,675 
 
    
    
Total liabilities
  38,359,107 
  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,
    
    
52,130,870 and 52,130,870 shares issued and outstanding, respectively
  52,131 
  52,131 
Additional paid in capital
  142,548,752 
  126,517,784 
Accumulated deficit
  (56,884,037)
  (47,388,367)
Total cbdMD, Inc. shareholders' equity
  85,719,646 
  79,182,048 
 
    
    
 
    
    
Total liabilities and shareholders' equity
 $124,078,753 
 $110,842,801 
 
 
 
 
cbdMD, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER 31, 2020 AND 2019
 
 
 
Three months
 
 
Three months
 
 
 
Ended
 
 
Ended
 
 
 
December 31,
2020
 
 
December 31,
2019
 
 
 
 
 
 
 
 
Gross Sales
 $13,131,946 
 $10,412,491 
 Allowances
  (803,643)
  (264,255)
Total Net Sales
  12,328,303 
  10,148,236 
   Cost of sales
  3,430,274 
  3,700,537 
 
    
    
   Gross Profit
  8,898,028 
  6,447,699 
 
    
    
     Operating expenses
  10,657,973 
  12,560,297 
  (Loss) from operations
  (1,759,945)
  (6,112,598)
    Realized and Unrealized gain (loss) on marketable & other securities
  542,710 
  (62,010)
     (Increase) decrease of contingent liability
  (8,500,000)
  16,898,006 
   Interest (expense) income
  (10,386)
  7,267 
  Income (loss) before provision for income taxes
  (9,727,621)
  10,730,665 
 
    
    
  Benefit for income taxes
  332,000 
  2,240,300 
   Net (Loss) Income from continuing operations
  (9,395,621)
  12,970,965 
     Net (Loss) from discontinued operations, net of tax (Note 13)
  - 
  (41,202)
     Net (Loss) Income
  (9, 395,621)
  12,929,763 
  Preferred dividends
  100,050 
  66,734 
 
    
    
Net (Loss) Income attributable to cbdMD, Inc. common shareholders
 $(9,495,671)
 $12,863,029 
 
    
    
Net (Loss) Income per share:
    
    
  Basic earnings per share
 $(0.18)
 $0.46 
  Diluted earnings per share
  (0.18)
  0.45 
 Weighted average number of shares Basic:
  52,130,870 
  27,720,356 
 Weighted average number of shares Diluted:
  52,130,870 
  28,553,856 
 
 
 
 
cbdMD, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
FOR THE THREE MONTHS ENDED DECEMBER 31, 2020 AND 2019
(Unaudited)
 
 
 
Three months
 
 
Three months
 
 
 
Ended
 
 
Ended
 
 
 
December 31,
2020
 
 
December 31,
2019
 
 
 
 
 
 
 
 
Net (Loss) Income
 $(9,395,621)
 $12,929,763 
  Comprehensive (Loss) Income
  (9,395,621)
  12,929,763 
 
    
    
Preferred dividends
  (100,050)
  (66,734)
Comprehensive (Loss) Income attributable to cbdMD, Inc. common shareholders
 $(9,495,671)
 $12,863,029 
 
    
    
 
 
 
 
 
 
cbdMD, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED DECEMBER 31, 2020 AND 2019
(unaudited)
 
 
 
Three Months Ended December 31,
 
 
Three Months Ended December 31,
 
 
 
2020
 
 
2019
 
Cash flows from operating activities:
 
 
 
 
 
 
Net (Loss) Income
 $(9,395,621)
 $12,929,763 
Adjustments to reconcile net (income) loss to net
    
    
  cash used by operating activities:
    
    
  Stock based compensation
  248,894 
  542,574 
  Restricted stock expense
  15,279 
  138,000 
  Issuance of stock / warrants for service
  35,712 
  - 
  Impairment on discontinued operations asset
  - 
  38,002 
  Depreciation and amortization
  232,658 
  113,252 
  Increase/(Decrease) in contingent liability
  8,500,000 
  (16,898,006)
  Realized and unrealized loss of marketable and other securities
  (542,709)
  62,011 
Termination benefit
  305,326 
  - 
  Non-cash lease expense
  304,080 
  382,432 
Changes in operating assets and liabilities:
    
    
  Accounts receivable
  (110,072)
  755,515 
  Deposits
  24,000 
  (22,365)
  Merchant reserve
  - 
  106,590 
  Inventory
  219,859 
  (1,005,631)
  Prepaid inventory
  (48,184)
  (237,753)
  Prepaid expenses and other current assets
  (310,268)
  (100,803)
  Accounts payable and accrued expenses
  (1,500,755)
  454,490 
  Operating lease liability
  (237,952)
  (318,758)
  Note payable
  - 
  268,115 
  Deferred revenue / customer deposits
  (22,701)
  (7,339)
  Collection on discontinued operations accounts receivable
  422,417 
  166,667 
  Deferred tax liability
  (332,000)
  (2,240,300)
Cash used by operating activities
  (2,192,038)
  (4,873,544)
 
    
    
Cash flows from investing activities:
    
    
   Proceeds from the sale of other investment securities
  540,000 
  - 
   Purchase of property and equipment
  (93,294)
  (555,674)
Cash provided (used) by investing activities
  446,706 
  (555,674)
 
    
    
Cash flows from financing activities:
    
    
   Proceeds from issuance of preferred stock
  15,798,115 
  4,421,928 
   Note payable
  (13,564)
  - 
   Preferred dividend distribution
  (100,050)
  (66,734)
   Deferred issuance costs
  - 
  45,368 
Cash provided by financing activities
  15,684,500 
  4,400,562 
Net increase (decrease) in cash
  13,939,168 
  (1,028,656)
Cash and cash equivalents, beginning of period
  14,824,644 
  4,689,966 
Cash and cash equivalents, end of period
 $28,763,812 
 $3,661,310 
 
Supplemental Disclosures of Cash Flow Information:
 
 
 
Three Months ended December 31,
 
 
Three Months Ended December 31,
 
 
 
2020
 
 
2019
 
 
 
 
 
 
 
 
Cash Payments for:
 
 
 
 
 
 
    Interest expense
 $3,672 
 $8,221 
 
    
    
Non-cash financial activities:
 
    
    
Warrants issued to underwriter
 $254,950 
 $178,513 
 
 
 
 
cbdMD, Inc.
 
SUPPLEMENTAL FINANCIAL INFORMATION
 
RECONCILIATION OF NON-GAAP ADJUSTED INCOME (LOSS) FROM OPERATIONS
 
 
(Unaudited)
 
GAAP (loss) from operations
 $(1,759,945)
 $(6,112,597)
Adjustments:
    
    
Depreciation
  232,806 
  113,251 
Employee and director stock compensation (1)
  264,174 
  680,574 
Other non-cash stock compensation for services (2)
  35,713 
  91,069 
Accrual for severance
  403,412 
  - 
Accrual / expenses for discretionary bonus
  300,000 
  222,500 
Non-GAAP adjusted (loss) from operations
 $(523,841)
 $(5,005,203)
 
(1)
Represents non-cash expense related to options, warrants, restricted stock expenses that have been amortized during the period.
(2)
Represents non-cash expense related to options, warrants, restricted stock expenses that have been amortized during the period.