cbdMD Generates $5.1 Million in Revenue, Positive Earnings
February 13, 2025 4:10 PM EST | Source: cbdMD
Charlotte, North Carolina--(Newsfile Corp. - February 13, 2025) - (NYSE American: YCBD) (NYSE American: YCBDpA), one of the nation's leading and most highly trusted and recognized CBD companies, and operator of the leading CBD brands cbdMD and Paw CBD, along with its new functional mushroom brand ATRx Labs today announced our financial results for the first quarter of fiscal year ended December 31, 2024.
The Company started fiscal 2025 with a historic quarter, achieving sequential revenue growth, positive net income and, although a loss from operations, the first ever quarter of positive non-GAAP Adjusted EBITDA. The Company generated Net Income of $15,000, an approximate $1 million improvement from the prior year.
"We are really proud of our team's performance for the quarter. The hard work over the last year is paying off and this quarter's results are an indication of the earnings potential under our new cost structure," said Ronan Kennedy, CEO and CFO of cbdMD.
In addition to announcing its financial results, the Company also filed a preliminary proxy statement for its 2025 annual meeting, scheduled April 10, 2025. Shareholders of record as of February 18, 2025 will be eligible to vote. The proxy statement includes a proposal to convert the Series A Preferred and all accrued dividends into common stock.
Highlights for the First Quarter of Fiscal 2025 and Notable Business Updates
- The Company launched Herbal Oasis, a new ready-to-drink hemp derived beverage brand, entering the fastest growing segment in the industry.
- The remaining balances of the Company's convertible Notes were converted to common stock during January 2025 and the Company is debt free, excluding liabilities incurred in the ordinary course of business and accrued dividends.
Financial Highlights from our First Quarter of Fiscal Year 2025:
- Net sales totaled $5.1 million in the first quarter of fiscal 2025 or a decrease of 19.1% compared to $5.3 million in fiscal 2024. Sequentially, revenue was up 12% from the fourth quarter of fiscal 2024.
- Our gross profit held flat year over year and totaled 66% for the first quarter of fiscal 2025.
- Our loss from operations was $80,000 in the first quarter of fiscal 2025 as compared to a loss of $1.1 million in the prior year comparative period.
- Net Income before preferred dividends totaled $15,000 in the first quarter of fiscal 2025 as compared to a loss of $996,000 in the prior year period.
- Our non-GAAP adjusted EBITDA profit from operations in the first quarter of fiscal 2025 was approximately $214,000 compared to our Adjusted EBITDA loss from operations in fiscal 2023 of approximately $695,000. This is the first time since we have been public that we have generated positive Adjusted EBITDA from the business.
- Net loss attributable to common shareholders for the first quarter of fiscal 2025 was approximately $0.98 million or a loss of $0.22 per share as compared to a net loss for the first quarter of fiscal 2024 of approximately $2.0 million, or $0.67 per share. The improvement in fiscal 2025 was principally attributable to ongoing management's efforts on profit improvement.
- At December 31, 2024, we had a working capital deficit of approximately ($2.8) million and cash on hand of approximately $2.0 million as compared to a working capital deficit of approximately ($2.2) million and cash on hand of approximately $2.4 million at September 30, 2024. Excluding $5.7 million and $4.7 million of respective accrued Series A dividend payments, adjusted net working capital totaled $2.8 million and $2.4 million for the respective periods.
- We reported direct to consumer (DTC) net sales of $4.0 million or 77% of total net sales in the first quarter of fiscal 2025, a decrease of $0.47 million, or 11% from the first quarter of fiscal 2024.
- We reported wholesale net sales of $1.1 million or 23% of total net sales in the first quarter of fiscal 2025, an increase of $0.2 million, or 22% from the first quarter from fiscal 2024.
We will host a conference call at 4:20 p.m., Eastern Time, on Thursday, February 13, 2025, to discuss our December 31, 2024, first quarter of fiscal 2025 financial results and business progress.
CONFERENCE CALL DETAILS
| Thursday February 13, 2025, 4:20 p.m. Eastern Time | ||
| USA/Canada: | 844-763-8274 | |
| International: | 647-484-8814 | |
| Teleconference Replay dial in: | ||
| USA/Canada: | 855-669-9658 | |
| International: | 412-317-0088 | |
| Replay Passcode: | 7970691 | |
| Webcast/Webcast Replay link- available through March 13, 2026: https://www.gowebcasting.com/13965 | ||
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, including NSF Certified for Sport® products, as well as our new Full Spectrum products. Our cbdMD brand currently includes high-grade, premium CBD products including CBD tinctures, CBD gummies, CBD topicals, CBD capsules, CBD bath bombs, CBD sleep aids and CBD drink mixes and an array of Farm Act compliant Delta 9 products. Our Paw CBD brand of pet products includes veterinarian-formulated products including tinctures, chews, topicals products in varying strengths, and our ATRx brand of natural functional mushroom support. To learn more about cbdMD and our comprehensive line of U.S. grown, THC-free1 CBD oil and Full Spectrum products as well as our other brands, please visit www.cbdmd.com, www.pawcbd.com, or ATRxlabs.com, follow cbdMD on Instagram and Facebook, or visit one of the thousands of retail outlets that carry cbdMD's products.
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 using 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. You are urged to carefully review and consider any cautionary statements, including but not limited to expectations on our ability to continue as a going concern, increasing our revenues, continued cost reductions, potential need for additional working capital, continued listing on the NYSE American, regaining compliance with NYSE American continued listing requirements, future profitability, development and sales of new products, 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, 2024 as filed with the Securities and Exchange Commission (the "SEC") on December 17, 2024, 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.
1 THC-free is defined as below the level of detection using validated scientific analytical methods.
No Offer or Solicitation
This press release is for informational purposes only and shall not constitute a solicitation of a proxy, consent or authorization with respect to the 2025 annual meeting. This communication may be deemed to be solicitation material in respect of the annual meeting proposals. In connection with the annual meeting proposals, the Company has filed a preliminary proxy statement with the SEC and intends to mail to shareholders a definitive proxy statement in connection with the solicitation of proxies for its annual meeting, and the Company may file other documents with the SEC regarding the proposals in the proxy statement. THE COMPANY'S SHAREHOLDERS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT AND OTHER RELEVANT MATERIALS WHEN THEY BECOME AVAILABLE CAREFULLY IN THEIR ENTIRETY, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY AND THE PROPOSALS.
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 EBITDA 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. 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. | ||||||
| CONSOLIDATED BALANCE SHEETS | ||||||
| DECEMBER 31, 2024 AND SEPTEMBER 30, 2024 | ||||||
| (unaudited) | ||||||
| December 31, | September 30, | |||||
| 2024 | 2024 | |||||
| Assets | ||||||
| Cash and cash equivalents | $ | 1,970,217 | $ | 2,452,553 | ||
| Accounts receivable | 1,272,846 | 983,910 | ||||
| Inventory | 2,116,136 | 2,365,187 | ||||
| Inventory prepaid | 356,819 | 159,006 | ||||
| Prepaid sponsorship | 7,126 | 21,754 | ||||
| Prepaid expenses and other current assets | 637,559 | 406,674 | ||||
| Total current assets | 6,360,703 | 6,389,084 | ||||
| Other assets: | ||||||
| Property and equipment, net | 511,915 | 454,268 | ||||
| Operating lease assets | 1,209,338 | 85,817 | ||||
| Deposits for facilities | 62,708 | 62,708 | ||||
| Intangible assets, net | 2,698,313 | 2,889,580 | ||||
| Investment in other securities, noncurrent | 700,000 | 700,000 | ||||
| Total other assets | 5,182,274 | 4,192,373 | ||||
| Total assets | $ | 11,542,977 | $ | 10,581,457 | ||
| CONSOLIDATED BALANCE SHEETS | ||||||
| DECEMBER 31, 2024 AND SEPTEMBER 30, 2024 | ||||||
| (continued) | ||||||
| December 31, | September 30, | |||||
| 2024 | 2024 | |||||
| Liabilities and shareholders' equity | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 1,161,133 | $ | 1,541,108 | ||
| Accrued expenses | 775,946 | 632,674 | ||||
| Accrued dividends | 5,671,500 | 4,671,000 | ||||
| Deferred revenue | 527,438 | 503,254 | ||||
| Operating leases - current portion | 671,765 | 98,696 | ||||
| Convertible notes, at fair value | 362,021 | 1,171,308 | ||||
| Total current liabilities | 9,169,803 | 8,618,040 | ||||
| Long term liabilities: | ||||||
| Operating leases - long term portion | 591,583 | - | ||||
| Total long term liabilities | 591,583 | - | ||||
| Total liabilities | 9,761,386 | 8,618,040 | ||||
| cbdMD, Inc. shareholders' equity: | ||||||
| Preferred stock, authorized 50,000,000 shares, $0.001 | ||||||
| par value, 5,000,000 and 500,000 shares issued and outstanding, respectively | 5,000 | 5,000 | ||||
| Common stock, authorized 150,000,000 shares, $0.001 | ||||||
| par value, 5,543,124 and 3,939,057 shares issued and outstanding, respectively | 5,543 | 3,939 | ||||
| Additional paid in capital | 184,832,130 | 184,029,565 | ||||
| Comprehensive other expense | (7,777 | ) | (7,189 | ) | ||
| Accumulated deficit | (183,053,305 | ) | (182,067,898 | ) | ||
| Total cbdMD, Inc. shareholders' equity | 1,781,591 | 1,963,417 | ||||
| Total liabilities and shareholders' equity | $ | 11,542,977 | $ | 10,581,457 |
| cbdMD, INC. | ||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||
| FOR THE THREE MONTHS ENDED DECEMBER 31, 2024 and 2023 | ||||||
| (unaudited) | ||||||
| December 31, | December 31, | |||||
| 2024 | 2023 | |||||
| Gross Sales | $ | 5,113,476 | $ | 5,375,630 | ||
| Allowances | - | (225) | ||||
| Total Net Sales | 5,113,476 | 5,375,405 | ||||
| Cost of sales | 1,712,867 | 1,817,907 | ||||
| Gross Profit | 3,400,609 | 3,557,498 | ||||
| Operating expenses | 3,486,881 | 4,623,333 | ||||
| Loss from operations | (86,272 | ) | (1,065,835 | ) | ||
| Decrease of contingent liability | - | 69,752 | ||||
| Increase in fair value of convertible debt | 89,963 | - | ||||
| Interest (expense) income | 11,404 | (418 | ) | |||
| Income (loss) before provision for income taxes | 15,095 | (996,501 | ) | |||
| Net Income (loss) | 15,095 | (996,501 | ) | |||
| Preferred dividends | 1,000,501 | 1,000,501 | ||||
| Net Loss available to cbdMD, Inc. common shareholders | $ | (985,406 | ) | $ | (1,997,002 | ) |
| Net Loss per share: | ||||||
| Basic and diluted earnings per share | $ | (0.22 | ) | $ | (0.67 | ) |
| Weighted average number of shares Basic and Diluted: | 4,552,067 | 2,960,945 | ||||
| cbdMD, INC. | ||||||
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||||
| FOR THE THREE MONTHS ENDED DECEMBER 31, 2024 and 2023 | ||||||
| (unaudited) | ||||||
| December 31, | December 31, | |||||
| 2024 | 2023 | |||||
| Net Income (loss) | $ | 15,095 | $ | (996,501) | ||
| Comprehensive Income (loss) | 15,095 | (996,501) | ||||
| Preferred dividends | (1,000,501 | ) | (1,000,501 | ) | ||
| Comprehensive Loss attributable to cbdMD, inc. common shareholders | $ | (985,406 | ) | $ | (1,997,001 | ) |
| cbdMD, INC. | ||||||
| CONSOLIDATED STATEMENT OF CASH FLOWS | ||||||
| FOR THE THREE MONTHS ENDED DECEMBER 31, 2024 and 2023 | ||||||
| (unaudited) | ||||||
| December 31, | December 31, | |||||
| 2024 | 2023 | |||||
| Cash flows from operating activities: | ||||||
| Net Income (loss) | $ | 15,095 | $ | (996,501) | ||
| Adjustments to reconcile net loss to net | ||||||
| cash used by operating activities: | ||||||
| Stock based compensation | - | 1,772 | ||||
| Restricted stock expense | 2,007 | 689 | ||||
| Issuance of stock for services | 82,250 | - | ||||
| Intangibles amortization | 191,267 | 172,842 | ||||
| Depreciation | 106,740 | 110,864 | ||||
| Decrease in contingent liability | - | (69,752 | ) | |||
| Increase in fair value of convertible debt | (89,963 | ) | - | |||
| Amortization of operating lease asset | 41,131 | 290,459 | ||||
| Changes in operating assets and liabilities: | ||||||
| Accounts receivable | (288,936 | ) | 67,169 | |||
| Deposits | - | 6,505 | ||||
| Inventory | 249,051 | 498,577 | ||||
| Prepaid inventory | (197,813 | ) | (5,575 | ) | ||
| Prepaid expenses and other current assets | (216,256 | ) | (195,850 | ) | ||
| Accounts payable and accrued expenses | (236,770 | ) | 142,292 | |||
| Operating lease liability | - | (311,661 | ) | |||
| Deferred revenue / customer deposits | 24,248 | 182,290 | ||||
| Cash used by operating activities | (317,949 | ) | (105,880 | ) | ||
| Cash flows from investing activities: | ||||||
| Purchase of property and equipment | (164,387 | ) | (184,635 | ) | ||
| Cash (used) provided by investing activities | (164,387 | ) | (184,635 | ) | ||
| Cash flows from financing activities: | ||||||
| Note payable | - | (2,501 | ) | |||
| Cash used by financing activities | - | (2,501 | ) | |||
| Net decrease in cash | (482,336 | ) | (293,016 | ) | ||
| Cash and cash equivalents, beginning of period | 2,452,553 | 1,797,860 | ||||
| Cash and cash equivalents, end of period | $ | 1,970,217 | $ | 1,504,844 | ||
| Supplemental Disclosures of Cash Flow Information: | ||||||
| 2024 | 2023 | |||||
| Cash Payments for: | ||||||
| Interest expense | $ | - | $ | 11,614 | ||
| Non-cash financing/investing activities: | ||||||
| Issuance of shares for conversion of debt and accrued interest | $ | 718,490 | $ | - | ||
| Issuance of share for services | $ | 82,250 | $ | - | ||
| Change in lease asset | $ | 1,164,652 | $ | - | ||
| Preferred dividends accrued but not paid | $ | 1,000,501 | $ | 1,000,501 | ||
| cbdMD, Inc. | ||||||
| SUPPLEMENTAL FINANCIAL INFORMATION | ||||||
| FOR THE THREE MONTHS ENDED DECEMBER 31, 2024 and 2023 | ||||||
| (unaudited) | ||||||
| Three months | Three months | |||||
| Ended | Ended | |||||
| December 31, | December 31, | |||||
| 2024 | 2023 | |||||
| GAAP loss from operations | $ | (86,272 | ) | $ | (1,065,835 | ) |
| Adjustments: | ||||||
| Depreciation & Amortization (1) | 298,007 | 283,706 | ||||
| Employee and director stock compensation (2) | 3,082 | 16,542 | ||||
| Mergers and Acquisitions and financing transaction expenses (3) | - | 67,599 | ||||
| Non-GAAP adjusted income (loss) from operations | $ | 214,817 | $ | (697,988 | ) | |
(1) Represents depreciation of property, plant and equipment and amortization of the Company's intangible assets.
(2) Represents non-cash expense related to options, warrants, restricted stock expenses that have been amortized during the period.
(3) Represents expenses incurred in relation to M&A and financing activities during the quarter ended December 31, 2023.
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