CV Sciences reports slight decline in sales, but improvements in losses

CV Sciences (OTCQB: CVSI) announced its financial results for the fourth quarter and year ended Dec. 31, 2023. Revenue fell slightly to $3.8 million from $3.9 million in the fourth quarter of 2022. Sales dropped by 7% sequentially.

CV Sciences said that the total number of units sold during the quarter slightly increased, offset by decreases in average sales price per unit.

The company generated an operating loss of $900,000 in the quarter, compared to an operating loss of $2.1 million in the same period the prior year, mostly due to improved gross margins, lower operating expenses, and lower intangible assets impairment charges.

Full-year results

Sales for 2023 dropped 1.2% to $16 million from $16.2 million in 2022. The decline was attributed to lower B2C sales of $400,000 because of lower average order value. B2B sales increased by $200,000 or 1.5% to $9.2 million in 2023.

The total number of units sold during 2023 decreased by 6.7%, partially offset by increases in average sales price per unit.

The company said it generated operating income of $3.4 million in fiscal 2023, compared to an operating loss of $6.8 million, mostly due to the reversal of accrued payroll tax of $6.2 million, improved gross margins, and lower operating expenses.

“In a challenging environment, our revenues stayed flat at $16 million in FY23 compared to prior year. Our 44.3% gross margin in FY23 is significantly improved from 34.2% in FY22,” CEO Joseph Dowling said. “Our 2023 progress demonstrates our continuous commitment to innovation and cost-efficient execution as we move closer to profitability and positive cash flow.”

Dowling noted that the CBD category continues to consolidate, but that CV Sciences has increased market share in “key sales channels, including the natural product retail channel.”

“We will continue to focus our resources on new product development, as evidenced by our pet line expansion with our recent launch of pet chews for hip and joint health and calming care,” he continued. “During FY23, with the acquisition of Cultured Foods, we launched our transition to a global health and wellness company that will use M&A as a vehicle to leverage the strengths and assets of our company.”

CV Sciences ended the year with $1.3 million of cash compared to $600,000 at the end of 2022. Cash generated by operations during the year ended 2023 was $2.3 million, a significant improvement from the same period a year ago, which had cash usage of $1.9 million.