CV Sciences, Inc. (PNK:CVSI) Q4 2023 Earnings Call Transcript March 28, 2024

CV Sciences, Inc. isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Greetings. Welcome to CV Sciences' Fourth Quarter and Year-End 2023 Conference. At this time, all participants are in listen-only mode. The question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded. At this time, I'll turn the call over to Brendan Hawkins. Mr. Hawkins, you may now begin your presentation.

Brendan Hawkins: Thank you, and good morning, everyone. With us today with prepared remarks are CV Sciences' Chief Executive Officer, Joseph Dowling; and Joerg Grasser, Chief Financial Officer. After the prepared remarks, we will take questions from the analyst community. I'd like to remind you that on today's call, management's prepared remarks may contain forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may cause the actual results to differ materially from those anticipated by CV Sciences at this time. When used in this call, the words anticipate, should, could, estimate, intend, expect, believe, potential, will, project and similar expressions as they relate to CV Sciences are as such forward-looking statements.

Finally, please note that on today's call, management will refer to non-GAAP financial measures in which CV Sciences excludes certain expenses from its GAAP financial results. Please refer to the CV Sciences press release from earlier today for a full reconciliation of its non-GAAP performance measures to the most comparable GAAP financial measures. This morning, the company issued a press release announcing its financial results. Participants on this call who may not have already done so, may wish to look at the press release as the company provides a summary of the results on this call. The press release may be found at cvsciences.com. I'd like to now turn the call over to CV Sciences' Chief Executive Officer, Mr. Joseph Dowling. Joe?

A biopharmaceutical research lab with a team of scientists working on immunomodulatory therapies.

Joseph Dowling: Good morning, everyone. Thank you for joining our call. This morning, we issued a press release reporting results for our fourth quarter and for the full year ended December 31, 2023. We are very pleased with our Q4 and full year results as we continue to drive revenue through product innovation and operating the business cost efficiently as we move closer to profitability and cash flow positive. We recently completed our acquisition of Cultured Foods, a plant-based food company located in Poland, which spearheaded our transition to a global health and wellness company. Also, we continue to evaluate and pursue additional M&A opportunities that will allow us to leverage our strengths and assets. Over the last several years, we have built an efficient and cost-effective consumer products platform.

Significant highlights during 2023 included. We generated revenue of $16 million for fiscal 2023 compared to $16.2 million for 2022, basically flat year-over-year revenue in a very challenging environment. Our gross margin of 44.3% for the fiscal year 2023 improved significantly from 34.2% for 2022. We further established our number one position as the top-selling hemp extract brand in the natural product retail sales channel with a market share of 25% according to SPINS, the leading provider of syndicated data and insights for the natural, organic and specialty products industry. Our strong product innovation efforts continued during 2023 with numerous product launches, including our reserve collection, extra gummies and softgels in Q1, our new daily balance line of THC-free gummies and softgels also in Q1.

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