cbdMD (YCBD)

Marty Sumichrast Chairman and Co CEO
Mark Elliott CFO and COO
Scott Fortune Roth Capital Partners
Paul Cooney Joseph Gunnar
Michael Lavery Piper Sandler
Pablo Zuanic Cantor Fitzgerald
Bill Sutherland Benchmark
Paul Bornstein Black Diamond
Daby Carreras Spartan Capital
Steve Emerson Emerson Investments
Call transcript
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Good afternoon. And welcome to the cbdMD Second Quarter Fiscal 2020 Earnings Call and Update. Today, the company issued a press release that provided an overview of its second quarter results, which followed the filing of its report on Form 10-Q. Today’s conference is being recorded and will be available online at cbdmd.com in accordance with cbdMD’s retention policies. All participants on this call will be in a listen-only mode. Instructions] [Operator

I Elliott, to Officer. the go time, over the Mark, now ahead. Mark to company’s would this turn like conference please At Chief Financial

Mark Elliott

Fiscal for and cbdMD you Christy, Conference all Thanks, Second thank Quarter XXXX Earnings Call. joining

have we Sumichrast. On and Chairman also call Co-CEO, our the today, Marty

overview a Following the summary the an quarterly Safe and business, financial Marty statement, our Harbor of then provide results. will of I’ll provide

up open call questions. the Following that, we’ll for

to for May speak statements or intend our the the on SEC’s with www.sec.com. of and amended Litigation plans on at constitute to company’s September as various call on date, the XXXX, would occur provisions cautions remarks in of We’d for subject statements these or about our of and the today’s can that not forward-looking XXXX. as circumstances and conference like cbdMD from the forward-looking cause to and everyone XX, of to forward-looking statements report XXXX risks date. purposes www.cbdmd.com expectations, may statements Any actual differ does Form on remind year under the that company’s future filings described to reviewed SEC, the other Monday, Reform SEC, are annual cbdMD website results has ended XX-K prospects Safe be which this all of Harbor website these filed and made only Private that with any events at uncertainties update Securities XX, forward-looking reflect today’s those risks that materially indicated, after including Act

Sumichrast. to like Chairman I’d to call that, turn and Co-CEO, over Marty Marty? With the

Marty Sumichrast

today's stay at on employees of we listening and remote afternoon manufacturing Carolina all who Covid-XX are North March, workforce call we home closed everyone to pandemic about update affected was quarter, the let started altered thanks vendors. of secure order And temporarily the talk In instituted how implemented, to our and company schedules to When our business. early at in you. office, second thank health we in our this facilities. work help has our our Mark, measures me .Before those on corporate our warehouse take and at

took happy to finished inventory, if production, chain as production build raw steps were allowing at maintain to additional also to to as interruptions not inventory has We purchase increase our items say happened. which point goods to up I'm well material this happen us thereby supply

XX risen make operational. business while fully short, had past to we team our changes the challenge have In and the has during open days, to our significant and logistical remained has

instituted We result containment aware immediately from our are our of BXB today rigorous to to also positive our necessary Covid-XX. The remarkable. online employees Along of sales. safety departments have brick-and-mortar shifted the plan measures, not retail quite direct-to-consumer that are we report across all we who tested of been taking as sales any with cost has and happy a resources

what about and discuss talk post first are an April, our company's month. to our decided in don't we normally we now I've While in unprecedented results impacted time therefore like operations look mid-quarter, Covid to full

sales April First from quarter, line gone our sales our in sales have of March meaning monthly were overall with effectively all, ending down. our in not

XX% margin, gross fiscal we in going or very sales sales up are profit from where tracking of seeing sales higher healthy blend overall XXXX. Second, This course at of helped at us shift XX%, now direct-to-consumer we our a can which maintain we believe overall our overall maintain XX% are in has significant forward. a online

from our in approximately in expenses April have operating the prior reduced XX% overall our dramatic, most and average quarter. monthly Third been

our others reduction operational this such effect direct certain the but cancellation from pandemic. of by brought Covid-XX trade spends, direct shows, on result cost of environment changing and the is of as Some travel

decrease changes loss point result showing also these of April, is a seeing we we XX% the approximate through an net are May. we ago. as cross all as from in our carry in few operations midway are months in that And The from just

caused requires are XXXX the our we flow and While achieve perhaps by our us that target the the of positive confident a remain by uncertainty withdraw on based sooner. XXXX of pandemic end what guidance to will financial we cash fiscal experiencing, we

absent XXst, dramatic profitability we impact have March get Covid-XX. addition we overall million to improvement unforeseen cash our any from In financial to hand $XX.X with the believe in on operating cushion us approximately in more XXXX results, of at and enough than

like brands debt and in locked many bed to to an operate retailer no direct-to-consumer truly to embarked all long-term smaller are of survive who at arrangements shakeout. business choosing earlier able infrastructure when because that hundreds strengthening competitors drowning simply Despite would I generate that have maintaining no for was our made model, jumped year big-box business such believe now year strategy. becoming online am CBD we of saying, of our instead I strategic sales had thankful last these January our to horrific allowed space so a capitalized see regulation. initiatives as of fully a which almost I and are industry paying have debt, us that the the and they XXXX who times, needed this view into towards and be in record industry-wide competition in cost we on we XXXX, way bold, year a not on would decisions pivot said variable with are

Now CBD a company its sales out public a as in we When the market industry us, intensity. the in in pure-play leaders. shake enter magnified upon now XXXX, of the CBD the fraction this our Covid-XX of is December pandemic is were

in companies than Now but America, CBD we we CBD less are have the biggest America. of one only of the recognizable in two XX-months, most also not in brands

at quarter This is over remain the pleased gross $X.X increase XX% net for XX% announce to strong I'm of said the quarterly XXXX. cbdMD year-to-date. in the year. same million that our And fiscal reported profit a quarter last With second margins sales

for the Our March million million of sales, overall $X.X our XX% year's of e-commerce XX% total direct-to-consumer quarter was from net quarter. or $X.X or the an fiscal increase sales prior

our year brick-and-mortar sales were or or an $X.X million our net XX% prior of net BXB sales, six increase or sales year's of the XX% were $XX.X of the XX% total or e-commerce $X.X from Our an period. ending XXX% the prior sales, million months quarters. increase Direct-to-consumer $X.X from million million of total March for

increase or total from of were period. prior or sales brick-and-mortar of million million XX% year BXB XXX% Our $X.X the $X.X sales, net an

profitability Protection an weeks we which forgiven offering previously ago completed equity received million being from financed on and discussed, we a coupled the to January As million confident operate based and significant in the are be $XX.X Paycheck a are loan with criteria future cash we with could together Program a met, we cushion. fully reduction a burn, significant few operating $X.X again in

continue grow sales digital have over to to of marketing to various a online e-commerce that month. drive We the XXX,XXX continues programs. number subscribers, every use will active Currently, we

our our amount of brands. business, the brick-and-mortar the we carry stores grow to retail currently who On side continue BXB of

to doors, wholesale We increase X,XXX as are international in is now to see last increase over we pleased selling markets. retail are X,XXX retail over sales international of our announce to an an our reach currently we now quarter since doors in that customers continue and XX

which are Covid-XX we be levels. a months, quickly the pre believe will affected While overall next we vaccine BXB to has Covid point distribution brick-and-mortar pandemic XX at discovered during our to channels, BXB that hopeful will that brick-and-mortar to XX return

we XXXX, invested build-out facility. development, acquiring XX,XXX well building physical as assets our foot full-scale square brand with our the calendar in During as brand heavily manufacturing infrastructure of

distribution headquarters. logistics and Our XX,XXX warehouse center foot foot our XX,XXX and square square

to in R&D continue of and We our for to highest products. and testing ensure quality all invest the safety

voted firm Sleep as for America's respectively. rewarded the online Media the Year XX,XXX prestigious recently study of Our award that topical voted PM award commitment Topical of in research products, Kantar Product Sleep winner organized an the participated best innovation CBD our product voters in were and XXXX honored independent February of the the This cbdMD is largest in to two as Free and CBD we categories Group. quality our selling Aid by consumer was Aid

brand named satisfaction, CBD industry most one and a in the cbdMD today. the market. cbdMD users. of pet Brightfield of the conducted our domestic and XX was now product topical as brands as two cbdMD X,XXX unaided Top XX beauty. pleased the highest CBD Brightfield by CBD cbdMD of a comprehensive in trusted highest Paw a solidify ranked market our overall products the significant a in dynamic with of as March Dietary that And sit International of skincare for Group X terms any booming Top of and in good pet in the which the in NSF was added These of ranked awareness entered market consists development announce and the two and analytics in dogs, as achievements CBD, We line industry-leading and for the also are consumer Supplements brands the survey the to to in product CBD XXXX we brands horses CBD than registration. cats in tailwind brand prestigious We manufacturing research of offering atop Top firm accolades CBD also animal November categories, brands predictive field Paw that XXXX, more by CBD process saw our bright consumer GMP where well group industry,

new Petsmart XX-year plan leader many retailers venture pet joint operating premium and sold presented a CBD pawscbd.com. exciting at by large pet rich announced store This brand channels our distribution long-standing natural Paw and big-box in also start food such pet history independent Petco. with building the success with with such for as online us currently channels Halo, is as recently a a holistic has opportunities brand foods

and CBD in X,XXX to retail Our grooming a over goal salons for be veterinary is paws this clinics year. stores

Our a are and include CBD sponsorship in partnerships Viacom. as and and multibillion wholly subsidiary MMA, owned Fitness partners the such Lifetime in class of dollar first such industry influencer Bellator

cbdMD since products to expanding and agreement channels, consumers a THC Lifetime the on X Lifetime announce include throughout with importance will Lifetime their well-being and to every website feel through to our of CBD an One Lifetime where fitness if are pleased and products with website day. health products to CBD online that the in incredible their facilities one both partner e-commerce number Lifetime provided club among is significant. line Lifetime opportunity in XXX our the are e-commerce robust this that search October offer sales nationwide is began base indicated introduced exclusive us retail approximately research partnership are the shop the is of of free in that membership We plus term their indication CBD We our focused targeted who XXXX. laser demand be on sales active the to and each was by that of cbdMD of confident potential members, million of Lifetime directly provides

as We well get their of Lifetime their spas are to coaches in in million our and as the and fitness serving hands excited X members. cafes products nutritionists all

represents cbdMD perfect team of cbdMD some and our wellness biggest roster the Lifetime commitment fit a sports. to with in most their of athletes notable health respective individuals includes and since our

Our CBD making. a brand which consumer are data a Lifetime trusted like cbdMD decision THC products regarding dominant in factor purchase leading free is and is suggests is

announce expectation respect for that the regulatory the our guidance was to for of regulatory to CBD, CBD XXXX. half Covid-XX, would climate with Finally, the in FDA prior first it

the is Now restart guidance through House XXXX in our currently FDA possibly of America release of that end HRXXXX fast like to working the sooner way that its which its tracking the business hope would an economy, CBD effort Representatives. government by by in would enacting we legislation hopefully the is

me financial review let call results. recent Mark the to over Now turn most to our

Mark Elliott

XXst fiscal you, Marty. our a which basis, second total start March brief $X.X net to going quarter GAAP summary On with GAAP approximately were ended I'm XXXX sales of of our results. million. a the based Thank for

said Marty XX% the a for increase As period was this year-over-year.

net approximately increase same year-over-year March the our December, ended over sales XXXX. net based months which the of XXX% six in a the and acquisition the $XX.Xmillion. sales pre upon Again brand For a XXX% this were acquisition is XXst, we late post increase and acquired period

And came XXXX. of prior compared have Gross the XX.X% for with for fiscal three our and of and months at have the prior XX.X% the still been profit period. for period. in and did would the as comparative XX% ended line to projections. sales percentage adjustment was second to an ended six year net XX% six March We with a profit for inventory in compared gross months quarter that our XX% XXXX This March XX% comparative is for the year in

the very profit net we gross XXXX, XX% of During between maintain healthy a our balance expect sales margin. percentage fiscal of as to and XX%

expenses use of were of million quarter operating the March $XXX,XXX cash approximately was million the which was Our for a expense. quarter. The non-cash $XX.X for approximately result $X.X

year-to-date a year-to-date. were $XX.X cash which $X.X is Our in non-cash $X.X million results operating approximately approximately This million expense. expenses of use for million

our discussed operating As were our as loss in in approximately indicated. operations our April earlier, XX% by Marty costs the in has a prior average from reduced from which monthly dramatic quarter, in reduction resulted

for social fiscal Wages million and key were in quarter and operating million March the part $X.X the building brand all ending and major expenses the which of for fiscal marketing, media $X.X Expenses advertising, Our visibility. of quarter of as million year-to-date, the XXst of year-to-date. $X.X creating follows. events approximately for for strategy $X.X million the and period direct are

for approximately year-to-date. and million Our sponsorships were $X.X quarter the $X.X million fiscal

And Marty are Affiliate commitments previously, to in and As marketing, mentioned established leveraging of activating $XXX,XXX sponsorships. ongoing managing advertising and we quarter area. our and fiscal for transitioning now brand commissions future $XXX,XXX this with and year-to-date. we expense XXXX, in the our are foundation

merchant will as transactions the and the fiscal in we now million April. for for are as were us quarter But effective has $X.X $XXX,XXX We had and process year-to-date processing sales reduced industry fees we getting predominantly our this fees matured be also online. which

approximately of and third-party we including and quarter and items media warehouse information process. use for technology, third-party fiscal the $XXX,XXX investor services $XXX,XXX specialty for as professional year-to-date relations, certification Our providers lab

accounting We insurance risk fiscal industry stock our and and and adjust fiscal SEC million our fiscal of $XXX,XXX and $XXX,XXX we CBD related the and for Our quarter all rents to $X.X quarter laboratory year-to-date. company. public stock and for $XXX,XXX for and exposure business expense to legal a services quarter had includes the $XXX,XXX the finally, And business This and of legal for compensation accounting acquired facilities. approximately year-to-date. warehouse approximately and office, of year-to-date to insurance non-cash $XXX,XXX as coverages fees in had related options the filings corporate approximately

this Development. acquisition contingent income for the This $XX a during other common and period end changes to turn quarter December of large non-cash non-cash the the $X.X million shares Residence Care the fiscal and XXXX; for in valuation Our a of of related a was value. value the the our million. contingent quarter issuance from This is each expense change. liability the of liability and another had liability XXXX of at a we result is first stock Under second The change in out period market income decline includes to The in primarily revalued in created the the approximately of merger. of price the change contingent by

from underwritten than related the the increased the income million million the issuances. to two, March. two measurement shares Development Care was end issuance $XX primarily Under $XX by This period for first and more issuance and shares offering at One the shareholder period of million change to equity merger. related of Residence driven at earn-out the shareholder to the for our equity addition, of $XX net XXst in In December January

for working as and of cash by was XXXX. $XX.X XXXX working compared $XX.X of $XX million cash this is calendar at $X.X of for XXth, exceeded target in approximately revenue September We approximately capital This the March million had capital million on XX%. XXXX. of cash As and hand XXst, measurement to million of period equivalents

from in XXXX to driver increased in the XXXX The XX% million. primary Our inventory. was increase the September XXth, as our assets assets of increase $XX.X current in and XXst, current of March increase cash

of liabilities As on made which manufacturing which were of for note a has up our The March million approximately accounts million long-term XXst, XXXX is the $XXX,XXX current payable. facility. is financing debt company total of company a $X.X $X.X equipment of

us for support deposits. implemented and the by indicated on liquidity things to we facilities that had to measures several believe We changing other Specific deferrals ensure business Covid-XX, sufficient measures following. the landlords our include Marty the with months. environment, we've with to will of temporary our among As next several use receive our the rent adjust negotiated allow security

our have payments vendors defer with to worked We needed. as

we online supply event We until have up suspended events ability indicated, in to sponsorship sales. as fulfill and Marty agreements affiliate the stability and sales we we our to levels in finally facilities. chains direct-to-consumer ensure to were And see our impacted. efforts inventory focus bulked shifted And our

and with that without fiscal continue reduce reduced we of business. anticipate expenditures the uncertainty, during prudent navigate have take believe will these to we on XXXX. steps to those expenses impact continue to having analyze can be reductions, taken negative the operating and we our we we And of As all because a significantly balance

In enacted of addition is Protection under on specified on for funds recently principal payroll. The our the to loan companies capital expenses April intent SBA. of the or bolster providing XX, Covid-XX established amount XXXX, with we Paycheck was PPP the a and the under CARES Program in which PPP pandemic business a the further ACT by $X,XXX,XXX purpose the focus the received working to certain by administered during support

SBA. As a qualifying business defined is the by

for as returning using this the on to fully proceeds are We to focus we primarily help operations. navigate maintain from loan our business our the payroll normal

turn back the Marty. now to over call like I'd that to With

Marty Sumichrast

Mark. Thanks

a for I'd line to Q&A, like the open few we make Before final observations.

growth dominant We've wellness. we've resources as the economic one with overall of a able now health brand recognition. still much are we've more been us industry's powerful with the maintain to and acquired looking to With downturn are everyday The across these increased important able all brand filled the challenging has years, comes this the of set to and most pandemic uncertainty times. sense with audience footprints, been others all experienced saturation aware confined Armed minimal constraints forward over an their and we and many well-being are the a entire limited past for than digital capitalize subpar enhance ways Covid-XX ever. As so been and and of as world. two we've with even course country online during while to heightened their fortunate stress push are homes alternative on to consumer of

this sales over could DTC and one wholesale BXB vital magnitude online mass anything has decision. e-commerce no right Although anticipate and the prioritizing of distribution proven

While many deals, of sale offered to online able we've conserve for and all orders collect our consignment of and BXB competitors have DTC extended and the majority terms deals. on wholesale cash been flow

the confident before. out weather side than Given storm other even we're stronger will the we that foundation the we've built, and come

With the open to that like line for I'd up Q&A.


[Operator Instructions]

We'll first Partners. Roth with our Scott take ahead. Please Fortune from question go Capital


thank and the kind guys you is standpoint Congratulations currently? pet on I you a channel, and that revenues from business of for a where know overall from the where real those bit looking you in questions. that the you're quick national of for expand afternoon. little are discussions Good pet, Yes, and penetration? trending can paw percentage going


and we we're to will tremendous April; able Well, with the right heavily we are then space. the about really attacking looking a box online marketplace now that best to see We're and as company. online actually we We trending of some to pet stores. is the increase. sales. into We're had pushing think in month of months right the now X% a few Paw. We online it in be at X% overall very Paw penetrate on is get side doing bigger of continuing to really our the But certifications overall one great


kind the an online you if marketing of just at slowing looking comment. switch you that from little things? And on cost? online that? and color So CBD Can you for And a more know provide and acquisition business out continuing advertising looking side. growth how acquired the side Thanks of to that spin kind a do on you I see here repeatable so down that of your you're are new online KPIs Okay. to business? user what's


look, of multi-billion X were us, Yes. figuring question that powerful out dollars of on spend had. going companies, part each strictly selling more talk was and ahead that is and the we taken And of them of out really the the I of was Two Lifetime with members. one back partnerships talked what just sort in mean of working a relationships being about a they're marketing the We and it's as did active what for really cut Lifetime big Bellator the and but a and maximize you about we've some was interesting. PR some to product with the a instead we of we've have sponsorships of spent of relationship, with of when going these the relationship. that's we've it million

site cbdMD into you a so lifetime going the are ecommerce platform back and I up Now start earlier, ads of the term think when with we're Lifetime product all in a the lot you and stores. e-commerce both getting product and facilities want in number of as the and to to and digital Lifetime people there. just everything see search We on walk their their opportunity running said enormous and now one loading is the facility but the and in

and them the be the we mainstream TV to working believe of first Same our relationships do could that. advertising we Bellator, mean always and TV is see is we're look, opportunity owned through I the thing enormous. We which by CBS. with first that. out the opportunity of Lifetime gates we're is is about Viacom the been we with So potential We've and talking to one on Bellator with think

incredibly now and so podcasts listening more even Our as been are people more are to podcasts which successful recently.

on investing our podcast. exceptional. been We're has return Our more

return and Rogan have excited about Barstool and different great investment through Joe podcasts. of really the of course We partners we're on those


or to SKUs? full is of portfolio little real are then able to And products quick, Okay, Lifetime that sell sounds of your last great. kind you


but start and with have very we're going Well, couldn't very be just different there's leadership pushing a topical to have at they're work that to wonderful are we opportunity, the we're the and SKUs, It's to the cohesive partner about tremendous us. to and be into than Lifetime. brands excited luckier really they opportunity the going with a for


with go question Gunnar. Paul ahead. Please Cooney from comes Our Joseph next


again Hey, home on Lifetime doing. like guys. be everything you're Congratulations especially --that The thing seems a a run. could it's

You talks me relationship little how could if guys? the I understand just was little on a generate about bit Bellator to little and a you you a help that for as wondering could more revenue as far


Paul. Thanks

Bellator through that been company CBD Bellator First parent tremendous is is of their really all, on directly at his Scott was year but happy the Scott President into Viacom were was mass of something really us in partner when difficult supporter We Coker, there's are we're a work we CBD partner CBD with little and think headway us exclusive very to of And two the is And little a CBS. has went and early a they became our Their that been which they and think in blossomed. CBS now bat to for media. the that there. and touchy. we that that Viacom into really make is the potential ours; regard. and that's or real helping Bellator team next now over potential Bellator into Traditionally over some a

TV one companies in the be the We of first mass think the out of pretty to is advertising. enormous space opportunity

June Bubba fights to big excited in. forward get this we're and you're in we're see so forward Bellator ready we and back fan go/ and excited fight look weekend. again into sports to see PAG coming I look We're We're know a America action. next to playing about and excited that the we to So in Paul


with to Lavery Next ahead. move we'll Please Michael go Piper Sandler.


how most things and just is traffic Good two marketing? Can a to on you of afternoon some the the growth of share? are And drive guess seemed much category bit and the new some to especially to you to the and consumer to own website. thank consumer of or how the more I'd love be gaining marketing the just I the you're have just what some sense understand but site what the be of little with levers do much your of working of -- how a to the finding on from is touched that effective you. And the many


big continue getting a growing on to repeat hit is focusing drive It's been we month really yet areas. its to We test think CBD still the we've we're places different every reach so expanding it's we've find and the is reach. whether infancy. at business. day so that whatever been to customer or is available customer, podcasts the market so a our steady continue pretty new into different but pockets doing we're industry pretty to is tapped that and plans. would we actively and audience -- that consistent a that be We And had athletic go say market look been really every our repeat we've think in and Well, different the continue certainly to we to I Right. and audience we able different expand areas. to different to we marketing to wider interesting whether mass it's on but different as

we showing high And ones ROI we're take can those return are that investment. to very a don't different I that an good of conscious assure adept advantage very And returns. everything you of invest into too on very want We show the that those on to spends. in we're but go our


next Pablo Our Cantor comes Fitzgerald. Zuanic from question Please with go ahead.


general. the Good a question category afternoon, in everyone and hello want Marty. to over ask I

I'm other e-commerce behaving but seen category consumer flat During how say down, actually like an up. grocery good And down grows e-commerce CVS indulgence categories We've are somewhat is a compared growth goes category lot that seen down that your there think -- point reloading CBD numbers surprised as me. so we've stores; were are the behaving XX, and Covid, view understand was Web From I they Covid. here. punch, trying was during of my e-commerce up just to I significant quarter-on-quarter sales of of a of DNC go [Indiscernible] right. five because and which lot was to Charlotte's is

BXB talked Or And have competition grocery side, just were traffic shops that is or that vape XX% because the closed in declined then again of Covid. it times to is it significant at about the many the during on before? really grocery stores chain is because less up been items we've so the

and brand brand to and the your sequential seeing aren't the e-commerce? So we very Thank category us terms in in result metrics then view you. are the investments course about just all continuous understand Why some good. of that you've the growth which given of trying I'm given maybe color


Yes. big We handle brick-and-mortar paid opposed to I'll first. I look, go us. brand big off for the mean I path little to of has chose the stores a retailers the lot -- sales think of the which

Now stores when that hit, being said have lot a been closed. of smaller the Covid

open saw had pharmacies that So we of whether But pockets smaller a to the in sales we of compound remained it's did we saw and in stores. unable some see increase lot a the downtick significant the the open. We that. other or lot were of retailers simply downtick that places smaller a stay of so to a

uptick it's online and the that nice don't your is. it answer indulgence, very a we whether think question to On saw so I first an

is have something that consistently. I think you people, take to CBD remember

into gets basis. once, system something something works that that consistent your not on into take your and a It's is you

think I their go so online. going when to were stores they people couldn't And

brands really telling carried lot I think and saying are by are but don't finally for CBD which consumers asking of sort I've in were fly-by-night of CBD now this not when that look of now I think in are of Covid starting to lot up with brands been stores CBD accelerated. lot presence, something for of things us the these just because sort a wayside XXXX smaller is, retailers is brands people that's now the that year seen real the And for are And a for. last space. to brands that's have bottle other a any national we're that the now We've popped what going a a while that the go anymore. quite easy looking these thing our being that are in is

the and want at combination product -- in and wellness looking consumers a to a health and that they a health so CBD now think want they I at believe And wellness buy of looking true in. to as they can brand product

the and most country. brands trusted We top of are in brands one the

on they're they shelves are when for looking their in us the to So consumers looking stores. and walk carry us

time I it's of the a before stores us up back I some to playing think of to well again. is think and start matter open just

to to meanwhile, it. come a stores back. up going expect back. bit these seeing It's come time the and In We a about but and data really sales increasing business the you our of humming lot as open know, we're online for we're expect brick-and-mortar to it's and to very take little of the that is we positive really

matters. brand I think, as do we're that but -- said So we

sales forward. And brand. going the of ultimately drive that have I We will the cbdMD think


Okay. you just that. for ask, Can I thank

Just two quick follow-up.

your I if So idea which but guidance guiding year. to but to end by you've right. sales sales being get want versus there's cash to positive that guess the remain put is flat? don't I flat, EBITDA April second the but talked the about and that good. the possible your XX% the full I no flattish about flow Is of or March for guidance, e-commerce you words sales to year XX% And in related the that you quarter for positive talked for of know flat mouth, compared being

way the on June growth versus e-commerce accelerated, the in you must sequentially us December. be March Obviously, numbers is worsen. gave accelerating have on apparent based continues is So after e-commerce but to the that need flat quarter hand interpret the other to

to color the second of If I remain a on end you what year. can and cash sales also a then deliver here positive or cadence if Thanks. said. if flat you give can quarter guidance that just from on characterize some And flow


our in in million Yes. positive. to modest think flow I of a it right the trend sales mean, margins because direction. online the to I we get continued our that We bump we've continue cash to by XX%. take be reduce with first trying much we to the to cut and very, sales had to very with operating of conservative in QX month say going we're growth, on been a look, burned expenses $XX if it's don't We quarter. sales mean about call able

even spend that get now marginally take year So hold talking we and the it's not you're flow XX% are between you're the now sales end and going about consistent of it and of breakeven much increase to down to cash margin. on when if $XXX,XXX to tight north month call our to to a

sales as quarter. -- expect say formula. a well. and will little it's about neutral So up, up I'm we conservative an trying although retail pick I we be we're picks bit of uptick complicated And it's we're continue a as this and really seeing talk to about not optimistic that as And

we're continue So cost containment we've to what done the is that's what to going and and key that's do.


Shale, Next Investor. we'll move to David Private


exciting an It's us sticking those guys. last on so. who or have for of Hi, for the Congratulations especially amazing year around quarter. been

affected to be branding. forward source in ahead. a And your previous you from you it correctly cutting better to looking suspended think most curious didn't? I that what general Absolutely, if think of and mentioned to extent sponsorships if kind off why of sales. So days major of are heard that didn't, And you what even it you learned I'm you lessons


first to expect in that's don't all the April we okay. didn't program look so okay, held to anybody what's that's we middle said, to Yes. hold, sports happen we very perform be we know the We we out went I Covid having a March, we hit large right, and of mean, one we great the look, that things When of so of sports our said in our on everybody's and in are question. a athletes sports May expect anybody -- as right. to month didn't forward because of to who but compensating for then we and going in and everybody pushed and

PAG You start but going going got example. which start not They're to up great is with the again like up fans. to a they're

it's different going what like. with that to have and were knows look we You really nobody dealing leagues

we brand. that and of see with the the same drive athlete have another we we and We Lifetime do position no to what engage athletes sports at membership kind we see can perform do their believe we've taken we because because those have it's can with and we're like an of have fans; back it's XX,XXX in ROI come see we re with So an athlete front the see thing we Bellator we that that pull. our thing looking can to athletes fans. But one we of as how a handful perform

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We have brand the now.

it's question return so And doing. partners a it's sales we're sales that investment. now and through now get my on on. so we're And now that's brand and a opinion focusing of what in what so right building And of best question our and is that's

I went to I the said did. think to did of learn in job the last that year. company great if We leading a are brand. as a So of leading lessons the from the we We not back brands one pack really the was

have brands leading revenue, significant Paw, We financial cbdMD two both company and with in strength. a significant

we dollars. maximizing so what all profitability But very we're And did. proud we that's on what getting generate have to of our And focus to bottom-line to of we're and now relationships doing.

your answers that hope So question.


is opportunity crisis so Sure, it answer. does. good I Every appreciate an it.


clarity. Crisis brings


ahead. Bill we'll Please go Next move to Benchmark. Sutherland with


with Mark, that international happened hi. Thanks what's What looking Marty. like? and


we With international Well, said, as Covid is would being it's impacted interesting; have brand the thing expect. has obviously, the you strong. because that so

in large didn't months that We the rep distributors want and six Asia in really have brand some the even that something Europe have ago we to on agenda.

XX of that process that to, of were we've kind selling think the or just in right we're XX so And countries now picked XX, different we're working but up we that and things looking and of from up like legs very being we're of operations of it a looking got cost expensive setting it that. instead some internationals at view at point so

partners. track on a distribute to expect I for aside cbdMD And this confident that finding internationally. so Covid tremendous through thing is to and it's on pretty partners tuned. we're the us back those stay And do get year so think better a brand thing there's the we that demand



the actually guys the went you quarter? revenues break of did out March and So how April the part first to in relative


Well, and of down, of the way. very shift big sales first our far in we entered go say in middle talk shocking up would look didn't off was heavily be as the is online. our this, trended I I our you this it, And would line, Covid as, we month the Bill, Margins dramatic post and stayed it Covid because Mark and can that you inched other think think online. or we mean can which even quarter. send the about strong did We to send I did when towards first you April get very

with the that reduction we've a April was month to in getting couple best bottom breakeven. to line operating pretty You dramatic expenses, got in ever such close had and huge

as soon profitability there. to as down next is keeping is that push increasing get in to to possible business costs get or goal the looks May marching And also that. to quarter and and our so in blend the keep and us trend The of we having good right up, going over are and continuing two


what rate just this the moved to. kind of is got curious was you've at that Right. that run you've I point


below don't to Well, what did we be the we're going quarter. in think first we

pretty it put feel We confident way. Let's that exceed that we'll it. or meet


That's bigger January, you months in so presume I impressive have because -- I know February


but -- in million $X.X happen. can that so in May June that March did Bill, optimist not more the and eternal it's looking and an target certainly we I'm But, because of it's What we're anything Yes. at middle


as Is centers? we -- as as they Lifetime Are their the opening of far speak? status what's


XXX out -- they opening their they're just they're to what for I other great and team. that have. absolutely, to look of they're opening a states furloughed difficult. the facilities. people. and dedicated They're normal open up, That's an that. to was side feel close supporting is them. are. all and The they're they're incredible got mean we're in people just phenomenal it I XX,XXX be confident getting on to management is the Yes. Their back And -- I depending just whole back going to very it I know I'm And partner different to getting and life through some I we, know laws team come


many supply me how I curious turns were assume how do Last they're about I stocked know to is and be level just a spenders going point? to normal quickly. it was to or the this kind inventory. forward at of going up, one open. I you on feel is moving Yes. they you be getting chain going of back for


see we that's see we And there. prepare to feel turn do obviously, the for the various happen. was believe I with as keep supply And watch good inventory think now what and going is to that level Mark. up reason might going we've really that I that. was the to right no, aspects Yes, we we're that happen ramped our no worked Bill, see to chain. what preparation Yes, of with what about to it's with to that continue of

continue in to us this in we're again think there. unless expect to they're process as there's I move nothing a I indicates So But at position time that that a now. continue changes right that something good forward. we normal manufacturing


now balance of with. What's life extract now? their other rate as materials as the right that you raw and far guys What's pricing work that ability The like?


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We have purchase. maintained to continued a nice have down has supply that come as we

it. have we So

we'll can So on and that what's do we'll happening continue that price again watch with the we to point fulfill and continue it. to


Next we Please Bornstein with go Black move Diamond. to ahead. Paul


the the up of Yes. there. Hi, has from competitiveness trying margins, the question There a my improvement of low understand But products marketplace. team and it's ramping margin company a is to on out that nice are management good online. start cut lot focus that nice and expenses

some can that. any for building out increases your of on trying current stay sales sensitivity or good consumer but to you to levels of I'm You're had get the you understand in of brand kind price products. And you just price the them pricing a that


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product that it's keep Yes. the, leveraging been out acquire on rolled to perspective make continue things I that's site. brand there built or auto-ship so visibility we did product that visible, said like things we that what it's that as the to would out we prior we're now from our the the earlier, we're Paul, capabilities as easier going so online it and just to add one doing

that looking we should helping be at when them? a would believe of campaigns want there's take be quality The promote that that and understand still things They really And just big those other we things to sets definitely we they're then aspect continue apart. in done understand looking competitors they to focused Obviously, on products. the consumer content them us that at that what education various because wants. the What's about the we've product. aspects

consumers So I we're are the big towards the things and those targeted are that think having. that really are sales helping direct-to-consumer driving doing online that we're


of since to gives products out lot a name-brand it and that little you on worked because seems up it you've consumer real the Well, like there's digest. Yes. a the edge built therefore

through got you've the and So now. you're narrow door inside

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you. Okay, thank


move A we'll Graves, Investor. Greg to next And Private


Gentlemen site? Thank retail fulfillment your when Is used as e-commerce about them How something as sale. e-commerce assume their ship you a on sell they to that you. a center I would site. stream, their directly through if Lifetime facility that's comes something for




we'll to Capital. move Carreras And next Daby Spartan with


about It's has of John. understand. increase big How're very the was just income $XX in and looking is I impressive the sales me, pumped. of story. you To how but amazing. is is growth million hear X,XXX% that Hope, is at real Hi, me? million it's trailing X,XXX an Good. at. you loss one I'm guys? very, what Keeps I'm net going, everything? % I'm loving Hello. Hi it it. $XX guys, very to know looking of XX-months huge it that can


question And from ahead. Emerson our Emerson Investments. with Please comes last go Steve


you the customers? virus strength much to strength. perhaps on sales customer? much how and repeat of internet monthly a are does bring if to cost to customer? Congratulations And it on bringing a long market could, surviving you How new average the your stay how And or does customer


well, Steve, thanks.

the us repeat people account. log our know, website opposed with that our situation and guests in an you customers to as is as in sometimes As have

but healthy what can account, certainly to are the but So I little sometimes improving accurate customer we bit it's track, a course we're working out is difficult what repeat figure and we seeing that. on think very of and

seeing as new we is the acquire again this market that that to enter spends, we've found built now our obviously were a year and spending getting can proven as, last of that changed marketing that new we that to we're As sort lot customers now we channels advertise more We returns. far brand; area.

just instance of Some tremendous us. these podcasts for doing are for

We channels strategies to proven for us. are that those continue success push on

where in and we've now says still want with goal So we've just crisis flow of making working are in healthy and has earlier But while I that it that the give to we the that very realign revenue of towards middle managed a the the to you have we're as and clarity. how I will think to tell marketing turn. you brings get that right I And back that remains budget hard because don't cash been, cut is done that to number six sort breakeven. one with weeks of we caller the overall

look reductions impacted the a say taken it to Covid really in and and directly trade doing shows. cost Those at not happy even as not things. we've of traveling. cost said we're significant operating like are of though I operating of those kinds reductions We're a some we've we're that had lot So

of continues but to that fields, Some revenue maintain. we're are sponsorship happy making to we the in are see choices and and them look that marketing our

next think. flat the month, I I to I you middle in if you March sitting mean of probably thought would and would tell ask had I the we be here didn't I was me, would

from a So consistent I'm month as was we quarter. happy very that April look the first

an now continue and mean I looking that achievement. itself little show to was we May in stronger hopeful think incredible June looks May will that I are at strength. bit and we are

feel really good So I decisions that's feel and enough we where capital. made really the have positive are at about that we've and we

We have million over PPP. got we from then $XX and million $X.X

we flexible are structure and able the in with I So a get be really spot and in marketing good be cost most to think are to for a short side term. to we the profitability, debt no part on the variable the able


participation. call now our And day. does that conclude you today. your with may wonderful in the further Have no for disconnect. for much queue, And you questions conference so Thank a