CV Sciences, Inc. Reports First Quarter 2021 Financial Results

SAN DIEGO, May 13, 2021 (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 March 31, 2021.

First Quarter 2021 and Recent Operating Highlights

• Revenue of $4.8 million for first quarter of 2021, compared to $8.3 million for the first quarter of 2020;
• Gross margin of 48.7% for first quarter of 2021, improved from 48.5% for the first quarter of 2020;
• Improved total cash balance of $5.7 million at quarter end, compared to $4.5 million at year end;
• Total retail distribution of more than 7,300 stores as of March 31, 2021, an increase from 5,799 stores as of March 31, 2020;
• Launched ProCBD™, a full product line of clinical strength products supported by clinical research and available exclusively through health practitioners;
• Launched PlusCBD^™ Calm and Sleep, two flavorful gummies that support healthy stress responses and sleep cycles for people getting back to their normal routines; and
• Entered into a partnership with Alkemist Labs to support the National Institute of Standards and Technology's Cannabis Quality Assurance program.
  

“We continued to make progress on our strategic priorities during the first quarter and are encouraged by recent trends, including vaccination programs and reopening of the economy. Our digital platform investment is driving customer engagement and improving metrics as well as resulting in sequential B2C revenue growth. We continue to broaden store distribution in the FDM channel, knowing that the shelf space and relationships represent an important future revenue source. We are starting to see slight improvement in the overall retail environment and continue to see significant potential in the Convenience channel. We are pleased with results from new product introductions including our immunity and pet line products, both of which launched in 2020, targeting some of the fastest growing CBD markets. Our January launch of ProCBD™, a line of clinical strength products targeting health practitioners and natural, plant-based alternatives has also been well received. Just this week, we launched PlusCBD™ Calm and Sleep, two flavorful gummies that support healthy stress response and sleep cycles for people getting back to their normal routines. Quality and innovation remain key points of differentiation for CV Sciences, and we anticipate further strategic product introductions during 2021. The recently announced partnership with Alkemist Labs is further evidence of our leadership position in product safety, quality and customer trustworthiness. We remain optimistic about the potential for positive regulatory development in our industry for 2021, and believe the Company is well positioned financially and strategically to deliver long-term value for our shareholders," stated Joseph Dowling, Chief Executive Officer of CV Sciences.

Operating Results - First Quarter 2021 Compared to First Quarter 2020
Sales for first quarter of 2021 were $4.8 million, a decrease of 41% from $8.3 million in the first quarter of 2020. Current quarter sales were impacted by the ongoing COVID-19 pandemic and increased market competition, which is largely due to the uncertain regulatory environment for CBD. First quarter sales of 2020 were partially impacted by COVID-19. The Company's products were sold in 7,346 retail stores nationwide as of March 31, 2021, up from 5,799 stores as of March 31, 2020.

The Company recognized an operating loss of $3.1 million in the first quarter of 2021, compared to an operating loss of $5.3 million in the first quarter of 2020.

The Company had negative adjusted EBITDA for the first quarter of 2021 of $2.3 million, compared to negative adjusted EBITDA of $3.9 million in the first quarter of 2020.

Conference Call and Webcast
The Company will host a conference call and webcast to discuss these results today at 4:30 pm EDT/1:30 pm PDT. The webcast of the conference call will be available on the Investor Relations section of the Company's website at https://ir.cvsciences.com/news-events or directly at http://public.viavid.com/index.php?id=144697. Investors interested in participating in the live call can also dial (877) 407-0784 from the U.S. or international callers can dial (201) 689-8560. A telephone replay will be available approximately two hours after the call concludes, and will be available through Thursday, May 20, 2021, by dialing (844) 512-2921 from the U.S. or (412) 317-6671 from international locations, and entering confirmation code 13719303.

About CV Sciences, Inc.
CV, or Curriculum Vitae, is Latin for "course of life", and science is the pursuit of truth. CV Sciences: our name is our mission --improving quality of life through nature and science.

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 7,300 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
This press release may contain certain forward-looking statements and information, as defined within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and is subject to the Safe Harbor created by those sections. This material contains statements about expected future events and/or financial results that are forward-looking in nature and subject to risks and uncertainties. Such forward-looking statements by definition involve risk and uncertainties.

Contact Information

Investor Contact:
ICR
Reed Anderson
646-277-1260
reed.anderson@icrinc.com

Media Contact:
ICR
Cory Ziskind
646-277-1232
cory.ziskind@icrinc.com

CV SCIENCES, INC.
CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share data)

CV SCIENCES, INC.
CONDENSED BALANCE SHEETS (UNAUDITED)
(in thousands, except per share data)

CV SCIENCES, INC.
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)

CV SCIENCES, INC.
NON-GAAP FINANCIAL MEASURES (UNAUDITED)

We prepare our condensed 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. 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, and interest expense, minus income tax benefit and interest income), 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 loss for the three months ended March 31, 2021 and 2020 is detailed below (in thousands, except per share data):

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A reconciliation from our net loss to Adjusted EBITDA, a non-GAAP measure, for the three months ended March 31, 2021 and 2020 is detailed below (in thousands):

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