CV Sciences, Inc. Reports Third Quarter 2020 Financial Results
November 05, 2020 at 16:05 PM EST
SAN DIEGO, Nov. 05, 2020 (GLOBE NEWSWIRE) -- CV Sciences, Inc. (OTCQB:CVSI) (the “Company”, “CV Sciences”, “our”, “us” or “we”), a preeminent supplier and manufacturer of hemp cannabidiol (CBD) products, today announced its financial results for the quarter ended September 30, 2020.
Third Quarter 2020 and Recent Operating Highlights
“We are pleased to deliver a return to modest sequential revenue growth during the third quarter and have been active with our product and business development activities. We are aggressively driving innovation to accelerate new product and category development. We have also enhanced our e-commerce activities, redesigning our CV Sciences website to support consumer sales of our growing immunity line and are actively working with new potential distribution partners and e-commerce retailers to broaden distribution. We remain confident in the long-term outlook for CBD and continue to support all efforts to drive industry-wide science and regulatory-support while leading with our industry-leading quality products,” stated Joseph Dowling, Chief Executive Officer of CV Sciences. “We are developing distribution for our recent launch of Happy LaneTM, and continue to believe there is a significant opportunity in the convenience store channel for this value-priced brand. We expanded our offering in the immunity category, announced the launch of our pet line and have further new offerings slated for launch in the fourth quarter. I could not be more pleased with how the entire CV Sciences team has aggressively driven our growth efforts amid the daily challenges of the COVID-19 pandemic. While future hurdles are difficult to forecast given the current environment, I am confident in our team’s ability to adapt and continue to execute our key business strategies. Our focus remains on driving growth and shareholder value through our emphasis on quality, innovation, distribution expansion and category leadership.”
Operating Results - Third Quarter 2020 Compared to Third Quarter 2019
The Company recognized an operating loss of $3.2 million in the third quarter of 2020, compared to an operating loss of $1.8 million in the prior year.
The Company had negative adjusted EBITDA for the third quarter of 2020 of $2.3 million, compared to negative adjusted EBITDA of $0.9 million for the third quarter of 2019.
Conference Call and Webcast
About CV Sciences, Inc.
CV Sciences, Inc. (OTCQB:CVSI) operates two distinct business segments: a consumer product division focused on manufacturing, marketing and selling plant-based dietary supplements and CBD products to a range of market sectors; and a drug development division focused on developing and commercializing CBD-based novel therapeutics. The Company’s PlusCBD™ products are sold at more than 6,200 retail locations throughout the U.S. and it is the top-selling brand of hemp-derived CBD in the natural products market, according to SPINS, the leading provider of syndicated data and insights for the natural, organic and specialty products industry. CV Sciences follows all guidelines for Good Manufacturing Practices (GMP) and the Company’s products are processed, produced, and tested throughout the manufacturing process to confirm strict compliance with company standards and specifications. With a commitment to science, PlusCBD™ product benefits in healthy people are supported by human clinical research data, in addition to three published clinical case studies available on PubMed.gov. PlusCBD™ was the first hemp CBD supplement brand to invest in the scientific evidence necessary to receive self-affirmed Generally Recognized as Safe (GRAS) status. CV Sciences, Inc. has primary offices and facilities in San Diego, California. Additional information is available from OTCMarkets.com or by visiting www.cvsciences.com.
Forward Looking Statements
CV SCIENCES, INC.
We prepare our condensed consolidated financial statements in accordance with generally accepted accounting principles for the United States (GAAP). The non-GAAP financial measures such as net income and loss per share and Adjusted EBITDA included in this press release are different from those otherwise presented under GAAP. We use non-GAAP measures internally to evaluate our performance and make financial and operational decisions that are presented in a manner that adjusts from their equivalent GAAP measures or that supplement the information provided by our GAAP measures. The non-GAAP financial measures exclude non-cash compensation expense for stock options and other non-recurring items. When evaluating the performance of our business and developing short and long-term plans, we do not consider share-based compensation charges. Although share-based compensation is necessary to attract and retain quality employees, our consideration of share-based compensation places its primary emphasis on overall shareholder dilution rather than the accounting charges associated with such grants. Because of the varying availability of valuation methodologies and subjective assumptions, we believe that the exclusion of share-based compensation allows for more accurate comparison of our financial results to previous periods. In addition, we believe it useful to investors to understand the specific impact of the application of the fair value method of accounting for share-based compensation on our operating results.
Adjusted EBITDA is defined by us as EBITDA (net income (loss) plus depreciation expense, amortization expense, interest and income tax expense (benefit), further adjusted to exclude certain non-cash expenses and other adjustments as set forth below. We use Adjusted EBITDA because we believe it more clearly highlights trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures, since Adjusted EBITDA eliminates from our results specific financial items that have less bearing on our core operating performance.
We use Adjusted EBITDA in communicating certain aspects of our results and performance, including in this press release, and believe that Adjusted EBITDA, when viewed in conjunction with our GAAP results and the accompanying reconciliation, can provide investors with greater transparency and a greater understanding of factors affecting our financial condition and results of operations than GAAP measures alone. In addition, we believe the presentation of Adjusted EBITDA is useful to investors in making period-to-period comparison of results because the adjustments to GAAP are not reflective of our core business performance.
A reconciliation from our GAAP net loss to non-GAAP net income (loss) for the three and nine months ended September 30, 2020 and 2019 is detailed below:
A reconciliation from our net loss to Adjusted EBITDA, a non-GAAP measure, for the three months ended September 30, 2020 and 2019 is detailed below:
A reconciliation from our net loss to Adjusted EBITDA, a non-GAAP measure, for the nine months ended September 30, 2020 and 2019 is detailed below: