cbdMD(US:YCBD)2019-08-15 01:58Financial Data and Key Metrics Changes - Total net sales for the third quarter were $8.44 million, up 42% from the previous quarter [10][14] - Year-over-year sales increased over 500%, with comparative sales from the June 2018 quarter at approximately $1.6 million [10] - Gross profit as a percentage of net sales was 63%, consistent with the previous quarter [14] - Operating expenses were approximately $13.3 million, including a $2.1 million non-cash impairment charge [14][16] - The company recorded a net loss of $27.7 million or $1.19 per share for the quarter [17] Business Line Data and Key Metrics Changes - The product segment accounted for 99.5% of total net sales, with gross sales for the quarter at $9.7 million [14] - E-commerce sales contributed 60% of total sales, while retail brick-and-mortar sales accounted for 40% [22] - Approximately 39,000 new e-commerce customers were added, a 31% increase from the previous quarter [22] Market Data and Key Metrics Changes - The company secured placements in over 3,000 retail locations, up from 600 at the beginning of the year [23] - Significant growth in the travel retail market was noted, with partnerships established for distribution in Europe [24] Company Strategy and Development Direction - The company aims to grow into one of the most successful CBD brands in the U.S. [9] - Future revenue guidance estimates annual net sales of $24 million to $26 million for fiscal year 2019 and $80 million to $90 million for fiscal year 2020 [28] - The company plans to reduce marketing investments as a percentage of net sales from 50% to approximately 20% by the end of calendar 2021 [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving future revenue milestones, citing a strong team and effective marketing strategies [37][39] - The company is optimistic about the pet product line, expecting to expand significantly in retail locations [55] - Regulatory updates include seeking GMP certification and exploring GRAS applications with the FDA [12] Other Important Information - The company raised $13.8 million in equity capital to fund growth initiatives [12] - A significant non-cash contingent liability charge of $21.5 million was recorded due to the increase in the market price of common stock [16][17] Q&A Session Summary Question: How does the company decide on internet sales and sponsorship proposals? - The company evaluates both the overall visibility from sponsorships and the return on investment through analytics [32] Question: What gives the company confidence in its revenue guidance? - Confidence stems from a strong team, effective marketing, and repeat purchases from customers [37] Question: Can the company discuss some of the retailers involved? - The company is in discussions with large national chains but prefers to finalize deals before naming them [42][43] Question: Is the company prepared to supply large retail accounts? - The company has arrangements in place to ensure sufficient supply for large-scale orders [47][51] Question: What is the outlook for the pet product line? - The company leads the industry in the number of SKUs for pet products and anticipates significant growth [55][56]