For the first quarter of its fiscal 2022 the San Diego-based CBD product manufacturer reported revenue of $4.4 million, which represented an 8% decline from the $4.8 million it reported in the same period a year previously.
Cost cutting cuts losses
The company’s gross margin declined, too, from 32.4% in the fourth quarter of 2021 to 26% in the first quarter of 2022. But cost cutting helped the company raise its cash balance to $2.4 million at the end of the quarter, compared to the $1.4 million it had on had at the end of its fiscal 2021.
The company had embarked on an aggressive cost cutting course that saw combined R&D and SGA expenses decline from $5.4 million in the first quarter of 2021 to $2.6 million in the first quarter of 2022. As a result, even in light of the declining revenues and eroding margins, CV Sciences managed to trim its operating loss to $1.5 million in the quarter, down from a loss of $3.1 million from the same period a year previously.
CEO points to bright spots
Despite the less than thrilling earnings report, CEO Joseph Dowling said the results were in line with the company’s expectations and there were some bright spots to point to, one of which was the launch of a new OTC topical pain relief product.
“First quarter results met our expectations and we are encouraged by improvements in the retail channel including an increase in units shipped on a year over year basis, and a very strong consumer response to several new product launches during Q1” said Joseph Dowling, Chief Executive Officer. “Our new OTC products, along with our Reserve Collection and our Wellness Line of products are evidence of our strong pipeline, and demonstrate our ability to develop innovative products that address the need states of our customers. Our flagship brand PlusCBD continues to gain market share in the natural product channel.”
Despite the positive spin, stock traders have been bearish on the company for almost a year now. CV Sciences stock price has declined from 46 cents a share in June 2021 to about 6 cents a share today, representing an 84% decline year to date.