CV Sciences, Inc. ( CVSI ) , a San Diego-based company specializing in hemp extracts, nutraceuticals and plant-based foods announced its financial results Tuesday for the quarter ended March 31, 2024. The company reported a slight decline in its first-quarter revenue, generating $4 million compared to $4.1 million in the same quarter last year. 

Q1 2024 Financial Highlights

Revenue was $4 million, compared to $4.1 million for Q1 2023.

Net loss was $0.6 million, compared to a net income of $5.7 million for the same quarter last year.

Adjusted EBITDA loss was $0.5 million, compared to the loss of $0.2 million for Q1 2023.

Gross profit was $1.9 million, compared to the $1.8 million for the same quarter last year.

Despite the revenue decline, the company experienced a sequential increase from $3.8 million in the last quarter of 2023. The company’s gross margin improved significantly, recording 46.3% in Q1 2024, up from 43.0% in Q1 2023.

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B2C Gains Offset B2B Declines Amid Operational Hurdles

However, the company saw a decrease in business-to-business (B2B) sales, primarily due to a lower average order value, which contributed to a 4% overall sales decrease year-over-year. On a positive note, business-to-consumer (B2C) sales increased by 3% to $1.8 million. Despite selling fewer units, the company managed to improve its average sales price per unit by 11.8%, attributed to a favorable product and channel mix.

Operational challenges led to an operating loss of $0.6 million, a significant shift from the operating income of $5.8 million in Q1 2023, mostly due to a reversal of accrued payroll tax. The adjusted EBITDA also showed a negative outcome of $0.5 million, compared to a smaller loss of $0.2 million last year.

CEO Outlook

“We are pleased with our first quarter 2024 results. Our revenues increased sequentially to $4 million in the first quarter 2024 in a challenging environment. Our 46.3% gross margin in the first quarter 2024 is our best gross margin in the last 12 quarters,” said Joseph Dowling, CEO of CV Sciences ( CVSI ).

“Our first quarter 2024 progress demonstrates our continuous commitment to innovation and cost-efficient execution as we move closer to profitability and positive cash flow. We are thrilled that Elevated Softgels and its employees are joining CV Sciences ( CVSI ) as another milestone in our transition to a global health and wellness company. Our immediate plan is to increase the existing business of Elevated Softgels to further leverage its existing capacity. In addition, we intend to in-source production of certain of our key products,” Dowling added.

Acquisition Of Elevated Softgels

In addition to its quarterly financials, CV Sciences ( CVSI ) announced the completion of its acquisition of Elevated Softgels a nutraceutical manufacturer known for its flexible production capabilities and GMP-certified facilities. The acquisition, valued at up to $1 million involves cash, stock shares, and potential future payments based on performance. This strategic move is expected to enhance CV Sciences’ production capabilities and speed to market for new products.

"The acquisition synergies should allow us to leverage our key assets including our relationships with other hemp and supplement companies to drive long-term growth and shareholder value,” Dowling explained.

CVSI Price Action

CVSI's shares were trading 3.59% lower at $0.051 per share at the time of this writing around 1:30 PM ET Tuesday.