Release Date: May 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- CV Sciences Inc (CVSI, Financial) reported a sequential revenue increase from $3.8 million in Q4 2023 to $4 million in Q1 2024.
- The company achieved its highest gross margin in the last 12 quarters at 46.3% during Q1 2024.
- CV Sciences Inc (CVSI) successfully acquired Elevated Softgels, enhancing operational flexibility and potential cost efficiencies.
- The company maintained its number one position in the natural product retail channel and increased its market share.
- New product development continues to be a strong focus, with several launches planned for 2024 that are expected to drive organic growth.
Negative Points
- CV Sciences Inc (CVSI) experienced a year-over-year revenue decline of 4% from $4.1 million in Q1 2023 to $4 million in Q1 2024.
- Unit sales declined by 15% in Q1 2024 compared to the same period in 2023.
- The company reported an operating loss of $0.6 million in Q1 2024, a significant decrease from an operating income of $5.8 million in Q1 2023.
- Adjusted EBITDA also showed a loss of $0.5 million in Q1 2024, worsening from a $0.2 million loss in Q1 2023.
- CV Sciences Inc (CVSI) ended Q1 2024 with a reduced cash balance of $0.7 million, down from $1.3 million at the end of fiscal 2023.
Q & A Highlights
Q: Can you discuss the financial highlights for CV Sciences in Q1 2024?
A: Joseph Dowling, CEO - In Q1 2024, CV Sciences achieved a revenue of $4 million, a sequential improvement from $3.8 million in Q4 2023. The gross margin was 46.3%, marking the best in the last 12 quarters. The company also maintained its number one position in the natural product retail channel and increased its market share.
Q: What recent acquisitions has CV Sciences made, and what are their expected impacts?
A: Joseph Dowling, CEO - CV Sciences recently acquired Elevated Softgels, a Colorado-based manufacturer. This acquisition is expected to provide operational flexibility, allow for efficient capital use, and potentially significant cost efficiencies by insourcing production of key products.
Q: How is the company progressing with its M&A strategy?
A: Joseph Dowling, CEO - The company is actively reviewing M&A opportunities to increase revenue and cost efficiency. The recent acquisitions of Cultured Foods and Elevated Softgels are part of this strategy, aiming to increase scale and profitability necessary for listing on a major stock exchange.
Q: Could you provide insights into the new product developments at CV Sciences?
A: Joseph Dowling, CEO - CV Sciences plans to launch several new products in 2024, including multiactive ingredient products under the wellness line. These new products are expected to contribute significantly to the organic growth of the flagship +PlusCBD brand and other non-CBD products.
Q: What are the key financial metrics from Q1 2024 compared to the previous year?
A: Joerg Grasser, CFO - In Q1 2024, revenue was $4 million, slightly down by 4% from Q1 2023. The gross margin improved to 46.3% from 43% in Q1 2023. SG&A expenses were $2.4 million, up 13% from the previous year, primarily due to higher legal and professional fees.
Q: How is CV Sciences managing its cash flow and financial health?
A: Joerg Grasser, CFO - The company ended Q1 2024 with $0.7 million in cash, managing cash flow through improved collections and efficient inventory management. The focus remains on aligning cost structure with expected revenue to achieve positive operating cash flow in the second half of 2024.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
