cbdMD Reports Second Quarter Fiscal 2021 Results

YOY Net Sales Increased 26% for the March 2021 Quarter Resulting in a Record Trailing Twelve Month Net Sales Of Over $46.4 Million

Company Expects Q1 Fiscal 2022 Net Sales to Range from $15.5 million to $16.25 million

cbdMD, Inc. (NYSE American: YCBD, YCBDpA), one of the nation’s leading and most highly trusted and recognized cannabidiol (CBD) brands, today announced its financial results and its business highlights for its second quarter and six months ended March 31, 2021.- ADVERTISEMENT –

Financial highlights for the Quarter Ended March 31, 2021:

• Net sales of $11.8 million for the second quarter of fiscal 2021 increased by 26% year-over-year from $9.4 million in the second quarter of fiscal 2020 for a record high for the March quarter.
• Gross profit margin for the second quarter of fiscal 2021 remained strong at approximately 69%, down slightly from 71% in the prior year’s second quarter.
• E-commerce direct-to-consumer net sales were $8.4 million, an increase of 23.3% from the prior year’s second fiscal quarter.
• Wholesale (including brick and mortar retail customers) net sales were $3.4 million, an increase of 31.3% from the prior year’s second fiscal quarter.
• Paw CBD (our award-winning CBD pet brand) had net sales of $1.4 million, an increase of 84% from the prior year’s second fiscal quarter.
• Quarterly operating expenses for the second quarter of fiscal 2021 remained relatively constant as compared to the second quarter of fiscal 2020 at $12.3 million.
• Loss from operations decreased by 25.6% to $4.1 million for the second quarter of fiscal 2021 compared to $5.6 million from the prior year’s second fiscal quarter.
• Non-GAAP adjusted operating loss decreased by 44% to $2.7 million, compared to $4.9 million from the prior year’s quarter, and for the six months ending March 31, 2021, our non-GAAP adjusted operating loss decreased by 67% to $3.3 million compared to $9.9 million for the prior year’s period.
• Net loss attributable to common shareholders for the second quarter of fiscal 2021 was approximately $13.1 million, or ($0.24) per share, as compared to net income of approximately $14.8 million, or $0.41 per share from the prior year’s second fiscal quarter. Our net loss attributable to common shareholders was principally attributable to an increase of approximately $8.9 million in the non-cash contingent liability which is associated with earnout shares which may be issued under the terms of the December 2018 acquisition of Cure Based Development (which owned the cbdMD brand).
• As of March 31, 2021, we had working capital of approximately $27.9 million and cash on hand of approximately $23.7 million as compared to working capital of approximately $16.0 million and cash on hand of approximately $14.8 million at September 30, 2020.

Business highlights since the start of the second quarter of fiscal 2021 include:

• Entered Global Beauty and Skincare Market with the launch of cbdMD Botanicals.
• Successfully implemented NetSuite as our new ERP.
• Launched cbdMD Therapeutics subsidiary to advance cannabinoid science and clinical studies.
• Hired Dr. Sibyl Swift, Former FDA to Co-Chair cbdMD Therapeutics.
• Invested an additional $750,000 (total investment of $1 million) into ADRA Acquisition Corporation (SPAC), prior to its successful IPO of $115,000,000 (NYSE American:ADRA).
• Renewed our NSF certification and underwent the US Hemp Authority audit, receiving our seal of approval on May 10, 2021.
• Developed new merchant processing relationships, expected cost savings starting third quarter of fiscal 2021.
• Expanded our portfolio of TV commercials to include Paw CBD and developed a new TV campaign that launched April 1, 2021.
• Continued to strengthen our portfolio of strategic athlete and sponsorship programs, including Professional rally driver megastar Ken Block.
• Signed an exclusive sponsorship agreement to be the Official CBD Partner of the NOBULL CrossFit Games.
• Signed a sponsorship agreement with Master Champion and 9 Time PGA Tour Winner, Patrick Reed, who is now on Team cbdMD.
• Won 2021 Product of the Year Awards for cbdMD’s CBD Gummies and Paw CBD’s CBD Hard Chews for Dogs.

“We continue to build upon our success and develop our science and infrastructure, which we believe will drive shareholder value and separate our brands from our competition. We believe that our proven ability to innovate our marketing as well as deliver award winning products to our consumers will achieve significant and lasting market brand recognition and consumer acceptance for our cbdMD, Paw CBD and cbdMD Botanicals brands,” said Martin Sumichrast, Chairman and Co-CEO of cbdMD, Inc.

cbdMD, Inc. will host a conference call at 4:15 p.m., Eastern time, on Wednesday, May 12, 2021, to discuss the company’s first quarter fiscal 2021 financial results and business progress.

CONFERENCE CALL DETAILS