cbdMD(US:YCBD)2021-02-10 02:43Financial Data and Key Metrics Changes - The company reported record net sales of $12.3 million for the quarter ended December 31, 2020, representing a year-over-year growth of 22% and a sequential increase of 5% [10][33] - Gross profit margins reached a record high of 72%, up from 64% in the prior year [10][35] - The operating loss was approximately $1.76 million, a significant improvement from a loss of $6.11 million in the prior year [36] - Non-GAAP adjusted operating loss decreased to $523,000 from $5 million in the first quarter of fiscal 2020 [37][38] - Cash and cash equivalents increased to $28.8 million, up from $14.8 million as of September 30, 2020 [41][44] Business Line Data and Key Metrics Changes - E-commerce sales hit a record high of $9.7 million, a 41% year-over-year increase, representing approximately 78% of total revenue [33] - The wholesale business generated $2.6 million in net sales, down from $3.2 million in the comparative quarter, attributed to the impact of COVID-19 on brick-and-mortar retailers [34] Market Data and Key Metrics Changes - The company ranks as one of the most visited CBD websites globally, according to SimilarWeb [8] - The customer retention rate increased over the prior quarter, driven by efforts to re-engage existing customers [20] - The average order value declined to just over $90, with a median purchase frequency of 39 days [21] Company Strategy and Development Direction - The company plans to expand into new product categories, including the launch of cbdMD Botanicals, targeting the beauty and skincare market [9][29] - The focus remains on direct-to-consumer e-commerce, which has shown significant growth [11] - The company aims to maintain gross profit margins between 65% and 70% while expanding its product portfolio and marketing efforts [35][44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in gaining market share in the global CBD market and achieving positive non-GAAP adjusted operating income during the fiscal year [13] - The company is optimistic about the recovery of brick-and-mortar sales as larger retailers begin to reopen [49] - The management highlighted the importance of regulatory compliance and has engaged a former FDA official to oversee upcoming audits [14][15] Other Important Information - The company has made significant strides in international expansion, particularly in the Caribbean and Mexico [30] - cbdMD has received multiple awards for product quality and consumer satisfaction, reinforcing its brand reputation [27][28] Q&A Session Summary Question: Growth and Cash Utilization - A participant inquired about quarter-over-quarter growth and how the company plans to utilize its $28 million in cash for future growth [48] - Management responded that direct-to-consumer business remains strong, and they are focusing on smaller retailers while preparing for larger retailers' return [49][51] Question: Botanicals and New Demographics - The participant asked about the growth potential of the new Botanicals line targeting the female demographic [55] - Management indicated that marketing efforts are focused on this demographic and expressed optimism about retailer interest in the new product line [56][57]