cbdMD (YCBD)

Ronan Kennedy Chief Financial Officer and Chief Operating Officer
Marty Sumichrast Chairman and Co-Chief Executive Officer
Sibyl Swift Vice President-Scientific & Regulatory Affairs
Mike Pfeffer Oppenheimer
Call transcript
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Welcome to cbdMD’s December 31, 2021 First Quarter Earnings Call and Update. This afternoon, the company issued a press release that provided an overview of its first quarter 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, along with our earnings press release covering our financial results and non-GAAP presentation and reconciliation at cbdmd.com in accordance with cbdMD's retention policies. All participants on this call will be in a listen-only mode. The call will be followed by a question-and-answer session. would Kennedy, to Officer the Operating I over the and time, Officer. Ronan to company's this now turn like conference Chief At Chief Financial go please Ronan, ahead.

Ronan Kennedy

cbdMD's thank and call for Catherine. quarter update. you you, XXXX first And joining Thank the December XX, earnings all

well of call as Scientific Affairs. we and Marty today, Swift, Sibyl the our Chairman Regulatory Dr. On Co-CEO, our and have Sumichrast; as Vice President

provide update an Swift Following the overview our quarterly the Marty Safe for Dr. an Harbor financial business, will summary climate will regulatory will provide I provide on statement, current then results. and of of CBD a the

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Marty Sumichrast

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Sibyl Swift

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Ronan Kennedy

GAAP for first sales XXXX the quarter Thank net from prior and year's a were XX% everyone. decrease first fiscal million, welcome of $X.X you, Sibyl total. Total quarter

E-commerce the business direct-to-consumer total million Our fiscal first XXXX, quarterly a quarterly year-over-year in e-commerce first represented quarter. the of net of decrease. generates sales for XX% sales our of XX% $X.X quarter

XXXX. million Our quarter $X.X net XX% to the sales fiscal million comparative as for down compared the first first wholesale business of in generated $X.X for quarter,

to XXXX. gross decreased fiscal the inventory profit an XX.X% to charge. GAAP margin first XXX,XXX is XX.X% the partly first quarter This in from in of due quarter Our non-cash

As slower we and moving rationalize product several expiring lines.

adjusted gross in as the totaled compared our our declines, Excluding is product from lower leverage and in prior manufacturing on year. changes This to profit XX% as revenue this well non-GAAP based XX.X% year-over-year charge mix. as operating decline the

in operating Year-over-year Our up increase amortization stock million, depreciation from first the non-cash year. million compensation in expenses totaled by well $XX.X of increased $XXX,XXX of expenses $XX.X operating $XXX,XXX in comprised non-cash quarter as expense. for fiscal $XXX,XXX as XXXX prior and the increase

$X.X prior Our commission of leading operating expense expenses a increase marketing, increased million year-over-year total the XX% quarter. to and sponsorship fiscal or $XXX,XXX from

Goodwill the million $X.X increases by able of as $XX.X million our loss the prior million compared charges intangibles is the to profit. operating first operations period. Excluding end as over $XXX,XXX non-cash were sponsorship of year-over-year. a The Overall, at reduce marketing $X.X and decline commission drop year gross quarter loss expenses, due from fiscal to as remaining GAAP in primarily the non-cash and quarter in expenses a to and well impairment totaled from $XX.X we XXXX, of our for million

contingent the non-GAAP in and loss XXXX operating operating adjusted Our AdBack the million in The non-GAAP a non-cash XXXX, stock adjustment of Cure include to XXXX, of our on statement of adjusted of in $X.X million Based for in XXXX $XXX,XXX X consolidated fiscal our quarter million acquisition non-GAAP fiscal non-GAAP loss we depreciation XXXX operating at of million of first as first Development. by prior in operating $XXX,XXX the including attributed despite and resulting first to $XX.X $X.X to expenses period fiscal quarter related drop gross for gain September a the decline to as December expense, in of quarter profit, related expenses. to compared Other operating XXXX. quarter over in to an income increase $XXX,XXX revenue reduced the primarily the Goodwill well from quarter, December of and increase trade adjusted impairment income operating an the fiscal year as expense name revenue. Sequentially, charge non-GAAP corresponding the first $X.X operating inventory quarter loss XXXX non-cash expenses liability is loss million for non-cash of the our our

in of under balance from time and the During earnout valuation XXX,XXX consolidated earnout shares booked XXX,XXX for market the the the liability XXX,XXX liability non-cash the of total decrease or of during results out capital period decrease the of remaining from resulting were the $X.X $X.XX end primarily on in – contingent quarter period of shares to $X.XX in price the the of contingent terms a additional issuance, reclassified million valuation to share. of XXX,XXX The in December we corresponding revalued at sheet. the third gain to paid the we The acquisition. At quarter. a are the liability change our stock common contingent issued the per

operations, cash. from – loss $X the acquisitions and $X.X of equivalents million changes coming and During XXXX, and approximately XXXX, of in non-GAAP paid working million, approximately September non-GAAP adjusted dividend approximately balance and compared main cash capital. used XXX,XXX $XX.X the we of We million in cash $XX.X on The $XX.X XX, first working cash from of utilized $X.X of cash with of XX, capital equipment capital our million quarter of included component XXXX. working million had operating fiscal million million and of our equivalents $XX.X of approximately as to cash property December

Our current from December assets decreased XX% of $XX.X as to approximately million. September XXXX XXst,

on which the of company XXXX As total has is is $X.X equipment The million XXX,XXX million were million abilities approximately December $X.X accounts accrued XX, approximately manufacturing expenses. facility. of and payable, $X.X current for financing company's our notes

we cut their our current alluded to did of can't Marty the base. steps must prosperity, the As take Several structure rightsize cost we to generate our but initiatives anticipated return. necessary marketing away to earlier, our revenue not

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Marty Sumichrast

Thank that With you, I'd open Q&A. line to Ronan. like Catherine, up the for


[Operator You question Pfeffer coming a have Mike with from Instructions] Oppenheimer.

Your line is live.

Mike Pfeffer

Hi, part this hopeful cost announced with question for cost the is filing, long expenses how into the be will to this in about the you're second then guys citizens With outcome? you the reduction of regard of question measures could talk fit regard will is this the to take accomplishing you And Dr. Swift. Thanks. and this? petition how to of implementing does legal that terms in process

Sibyl Swift

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Mike Pfeffer

you Thank


for conference questions conclude Thank much that no our participation. your you for in does With the so further queue call today.