cbdMD, Inc. (YCBD) on Q2 2021 Results - Earnings Call Transcript
Operator: Good afternoon. Welcome to the cbdMD, Inc. March 31, 2021, Second Quarter Fiscal 2021 Earnings Call and Update. This afternoon, the company issued a press release that provided an overview of its second quarter fiscal 2021 results, which followed the filing of its quarterly report on Form 10-Q. Today's conference call is being recorded and will be available online at cbdmd.com in accordance with cbdMD's retention policies. . At this time, I would like to turn the conference over to Ronan Kennedy, the company's Chief Financial Officer and Chief Operating Officer. Ronan, please go ahead. Ronan Kennedy: Thank you, Catherine, and thank you all for joining the cbdMD's March 31, 2021 second quarter of fiscal 2021 earnings call and update. On the call today, we also have our Chairman and Co-CEO Marty Sumichrast. Following the safe harbor, Marty will provide an overview of our business, then I'll provide a summary of the quarter financial results. Following that, we'll open up the call for questions. Martin Sumichrast: Thank you very much, Ronan, and good afternoon, everyone. We appreciate you joining us today. We are very excited about the long-term vision to be the leading global CBD consumer brand and company. Despite the impact to our business from the COVID-19 pandemic and the duration and magnitude of the lockdowns that were greater than we initially anticipated, we believe that our responsiveness and our ability to make adjustments to our business has allowed us to successfully deliver the largest fiscal Q2 net sales in our history. cbdMD increased its year-over-year net sales in Q2 by 26% to $11.8 million, while virtually maintaining almost a 70% gross profit margin. This growth rate was exceptional considering our March quarter net sales have historically been impacted by seasonality. I want to thank our team for their hard work and dedication to keeping the health and safety of our employees a top priority, while also delivering these results. We believe our business is at the precipice of more significant growth. We believe substantial net sales growth is achievable in the near term-based on anticipated launch of a variety of new products, new partnerships and sponsorships, new channels of distribution and new international markets. We're excited about the long-term potential to grow our core U.S. business and increase our wholesale footprint as the FDM channel opens up to CBD products, particularly our ingestible line. Ronan Kennedy: Thank you, Marty, and welcome, everybody. On a GAAP basis, total net sales for the second quarter of fiscal 2021 hit another all-time high of $11.8 million or a 26% year-over-year increase and a seasonal sequential dip of 4%. For the 6 months ending March 2021, we reported total sales of $24.1 million, a 24% increase compared to $19.5 million in the same period of last fiscal year. Our quarterly e-commerce business generated sales of $8.4 million in the second quarter of fiscal 2021, a 23% year-over-year increase. E-commerce for the quarter represented approximately 71% of our total net sales. For the 6 months ending March 31, 2021, e-commerce generated $18.1 million of net sales compared to $13.7 million for the comparative prior fiscal year period, representing 75% of our total net sales. We remain focused on our non-GAAP operating KPIs associated with our direct-to-consumer business and saw an average order value, retention rates and web traffic strengthened toward the end of the quarter and into April. Our wholesale business generated $3.4 million of net sales for the second quarter of fiscal 2021 as compared to $2.6 million for the comparative quarter in fiscal 2020. Martin Sumichrast: Well, thank you, Ronan. With that, I'd like to open up the line for any Q&A. Catherine? Operator: .With no questions in the queue, this does conclude our conference call for today. Thank you so much for your participation. End of Q&A:
cbdMD, Inc. (AMEX:YCBD) Faces Financial Challenges Despite Revenue Growth
- Earnings per share (EPS) of -$1.90 missed the estimated -$1.60, indicating substantial losses.
- Revenue increased to $4.75 million from $4.3 million year-over-year, showing growth despite missing estimates.
- Negative price-to-earnings (P/E) ratio and low price-to-sales ratio highlight the market's modest valuation of the company's sales.
cbdMD, Inc. (AMEX:YCBD) is a prominent player in the CBD industry, known for its wide range of CBD products. Despite its reputation, the company faces financial challenges, as evidenced by its recent earnings report. On May 15, 2025, YCBD reported an earnings per share (EPS) of -$1.90, which was lower than the estimated EPS of -$1.60. This indicates that the company is currently experiencing losses.
The company's actual revenue for the second quarter of fiscal 2025 was approximately $4.75 million, falling short of the estimated $5.14 million. However, as highlighted by Seeking Alpha, cbdMD did report a revenue increase to $4.75 million, up from $4.3 million in the same period last year. This growth suggests that while the company is struggling to meet expectations, it is still managing to increase its sales year-over-year.
cbdMD's financial difficulties are further underscored by its negative price-to-earnings (P/E) ratio of approximately -0.0052. This ratio indicates that the company is currently experiencing losses, as it reflects the relationship between the company's stock price and its earnings per share. Additionally, the company's price-to-sales ratio is extremely low at 0.00016, suggesting that the market values its sales very modestly.
The enterprise value to sales ratio stands at 0.157, reflecting a relatively low valuation compared to its sales. This metric is used to assess a company's total value in relation to its sales, and a low ratio can indicate that the market does not have high expectations for the company's future growth. Furthermore, the enterprise value to operating cash flow ratio is negative at -1.471, highlighting challenges in generating positive cash flow from operations.
Despite these challenges, cbdMD has made efforts to improve its financial position. The company has significantly reduced its operating loss from $1.5 million to $480,000, showcasing effective expense management and positive outcomes from recent strategic initiatives. Additionally, cbdMD completed a major restructuring of its capital structure, including a Series A Preferred Conversion, which is expected to further support its trend towards profitability.
cbdMD, Inc. (NYSE American: YCBD) Quarterly Earnings Insight
- Projected Earnings: cbdMD is expected to report an EPS of -$0.45 for the upcoming quarter, indicating a potential decline from the previous quarter's EPS of -$0.15.
- Revenue Trends: Anticipated revenue for the quarter is around $4.81 million, slightly down from $5.17 million in the previous quarter.
- Financial Health: Despite a projected revenue dip, cbdMD ended the fiscal year with a stronger cash position and reduced its net loss by $19.1 million year over year.
cbdMD, Inc. (NYSE American: YCBD) is a well-known company in the CBD industry, offering products under brands like cbdMD and Paw CBD. They have also ventured into the functional mushroom market with ATRx Labs. As a leader in the CBD market, cbdMD competes with other companies in the wellness and health sector, focusing on innovative and quality products.
YCBD is set to release its quarterly earnings on December 20, 2024, with Wall Street estimating an earnings per share (EPS) of -$0.45. This comes after the company reported an EPS of -$0.15 for the previous quarter, indicating a potential decline. Despite this, cbdMD has shown financial improvement, reducing its net loss by $19.1 million year over year.
The projected revenue for the upcoming quarter is approximately $4.81 million. In the previous quarter, cbdMD reported a revenue of $5.17 million, suggesting a slight decrease. The company ended the fiscal year with a stronger cash position, which may help offset the anticipated revenue dip.
cbdMD's gross profit for the last quarter was around $3.40 million, with a cost of revenue at $1.77 million. This indicates a healthy margin, although the operating income was a negative $382,028, showing an operating loss. The EBITDA was $1.06 million, reflecting the company's efforts to improve its financial health.
cbdMD, Inc. (NYSE American: YCBD) Quarterly Earnings Insight
- Projected Earnings: cbdMD is expected to report an EPS of -$0.45 for the upcoming quarter, indicating a potential decline from the previous quarter's EPS of -$0.15.
- Revenue Trends: Anticipated revenue for the quarter is around $4.81 million, slightly down from $5.17 million in the previous quarter.
- Financial Health: Despite a projected revenue dip, cbdMD ended the fiscal year with a stronger cash position and reduced its net loss by $19.1 million year over year.
cbdMD, Inc. (NYSE American: YCBD) is a well-known company in the CBD industry, offering products under brands like cbdMD and Paw CBD. They have also ventured into the functional mushroom market with ATRx Labs. As a leader in the CBD market, cbdMD competes with other companies in the wellness and health sector, focusing on innovative and quality products.
YCBD is set to release its quarterly earnings on December 20, 2024, with Wall Street estimating an earnings per share (EPS) of -$0.45. This comes after the company reported an EPS of -$0.15 for the previous quarter, indicating a potential decline. Despite this, cbdMD has shown financial improvement, reducing its net loss by $19.1 million year over year.
The projected revenue for the upcoming quarter is approximately $4.81 million. In the previous quarter, cbdMD reported a revenue of $5.17 million, suggesting a slight decrease. The company ended the fiscal year with a stronger cash position, which may help offset the anticipated revenue dip.
cbdMD's gross profit for the last quarter was around $3.40 million, with a cost of revenue at $1.77 million. This indicates a healthy margin, although the operating income was a negative $382,028, showing an operating loss. The EBITDA was $1.06 million, reflecting the company's efforts to improve its financial health.
cbdMD, Inc. Q2 Fiscal Year 2024 Financial Results Overview
- Significant revenue achievement: cbdMD reported revenue of approximately $4.38 billion, surpassing expectations.
- Challenges in earnings: The company faced a shortfall with an earnings per share (EPS) of -0.87, missing the anticipated -0.75.
- Strategic investments and optimism for future savings: Despite a slight increase in operational losses, cbdMD is optimistic about future financial health due to strategic investments and expense management.
cbdMD, Inc. (NYSE American: YCBD), a leader in the CBD industry, recently disclosed its financial outcomes for the second quarter of the fiscal year 2024, which ended on March 31, 2024. The company, renowned for its cbdMD and Paw CBD brands, has ventured into new territory with the launch of ATRx Labs, a line of functional mushroom products. This move signifies cbdMD's ambition to broaden its presence in the national retailer market, showcasing its adaptability and innovative spirit in a competitive landscape.
Despite facing challenges, as evidenced by a reported earnings per share (EPS) of -0.87, which fell short of the anticipated -0.75, cbdMD managed to surpass revenue expectations significantly. The company posted revenue of approximately $4.38 billion, a figure that starkly contrasts with the estimated $5.4 million, highlighting a substantial achievement in its financial performance. This discrepancy between earnings and revenue underscores the company's ability to generate sales while also pointing to areas where operational efficiencies could be improved.
The financial report also revealed a slight uptick in operational losses, from $1.4 million in the same quarter of the previous year to $1.5 million. Despite this, cbdMD's management remains optimistic, attributing the increase to strategic investments in the business, such as the introduction of ATRx Labs. The company's leadership believes that recent expense reductions will lead to significant savings in the latter half of the fiscal year, indicating a proactive approach to financial management and a focus on long-term growth.
cbdMD's statement, "Transformation is not always linear," reflects a realistic yet hopeful outlook on overcoming financial hurdles. The launch of ATRx Labs, coupled with strategic expense management, represents cbdMD's commitment to innovation and fiscal responsibility. By diversifying its product line and optimizing operational costs, the company aims to solidify its market position and improve its financial health in the future.
The announcement of these financial results was accompanied by the scheduling of a conference call aimed at discussing the company's financial performance and business progress. This call, accessible to both U.S./Canada and international participants, offers an opportunity for stakeholders to gain deeper insights into cbdMD's strategies and outlook. With a focus on transparency and engagement, cbdMD is positioning itself as a forward-thinking and resilient player in the CBD market.
