Debra Borchardt
CV Sciences Inc. (OTCQB: CVSI) saw fourth-quarter sales fall 22% compared to a year ago, due to strong competition and continued supply chain challenges.
The company announced its financial results for the year and quarter that ended Dec. 31, 2022.
CV Sciences reported that sales increased 3% sequentially in the fourth quarter to $3.9 million versus $3.8 million in the third quarter of 2022. The company said it generated cash flow from operations of $200,000 in the fourth quarter of 2022, resulting in the best quarterly operating cash results since the second quarter of 2019.
Full-Year Sales
CV Sciences also reported that it had sales of $16.2 million for the fiscal year 2022, which was down 19% from $20 million in 2021. The company said that the drop in sales was due to lower sales in its retail channel, mostly a result of reduced sales to independent natural product retailers and FDM accounts.
“The total number of units sold during 2022 decreased by 22%, partially offset by increases in average sales price per unit in the second half of 2022,” the company said in a statement. “In addition, our revenue in 2022 was negatively impacted by supply chain challenges with certain contract manufacturers.”
CV Sciences also stated that it continues to look at strategic opportunities like a merger, sale, or acquisition.
“We are focused on building for the future with several key initiatives, including: introduction of new exciting products; growing our existing sales channels; pursuing new sales channels including international opportunities; and continue to operate our business cost efficiently,” CEO Joseph Dowling said. “Our fourth-quarter positive operating cash results of $0.2 million exceeded our expectations, and we are encouraged by improvements we have made to reduce operating expense.
“In addition, we received very positive consumer response from our most recent new product launches. Our product quality and innovation team helped broaden our business in 2022,” Dowling continued. “We believe our recently launched Reserve Collection and 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.”
Cash is Low
The company did manage to reduce its operating loss to $6.8 million in 2022, compared to an operating loss of $18.4 million in the prior year, mostly due to reductions in its selling, general, and administrative expenses. The company had a negative adjusted EBITDA for fiscal 2022 of $6.1 million, compared to a negative adjusted EBITDA of $10.0 million in 2021.
In addition, the company reduced its operating expenses by 54% to $12.4 million for the fiscal year 2022 compared to $27.1 million for 2021. However, it may have run our of runway as the cash balance is only $0.6 million at year-end compared to $1.4 million at the end of 2021.
