Consolidated Net Revenues Increased 155% in
the Quarter, and Seeing Accelerated Sales Activity in Q4
HempFusion Wellness Inc. (TSX:CBD.U) (OTCQB:CBDHF)
(FWB:8OO) (“HempFusion” or the “Company”), a leading health and
wellness company offering premium probiotic supplements and
products containing CBD, today reported financial results for the
third quarter ended September 30, 2021. All dollar amounts are
stated in U.S. dollars. HempFusion will host a conference call and
webcast today at 8:30 a.m. Eastern Time to discuss Q3-2021
financial results. Please see the Conference Call Details section
of this news release for information about how to participate.
Third Quarter 2021 Financial
- Q3-2021 net revenue of $3.1 million increased 155% over the
$1.2 million reported in Q3-2020 and 154% versus Q2-2021.
- Excluding the recently completed acquisitions, HempFusion
revenue increased 31% versus Q3-2020 and 30% over the previous
quarter as the Company continues to make strong progress on its
retail distribution and ecommerce growth initiatives.
- Direct-To-Consumer (DTC) eCommerce sales of $971,911 increased
190% from $334,322 in Q2-2021.
- HempFusion stand-alone website-based sales increased 38.2%
versus the same period last year.
- Platform DTC sales including Amazon, Walmart and Tmall
increased 145% versus the same period last year.
- B2B net revenue increased 140% to $2.2 million in Q3-2021 from
$898,620 in Q2-2021 and 95% compared to $1.1 million in
- Gross profit was $1.3 million or 43% of net revenue versus 33%
in the prior year quarter, representing a 1,000 bps improvement
reflective of more effective inventory management, improvements in
managing production costs and higher margin sales contributions
from the two most recent acquisitions.
- Cash position at the end of the quarter was $5.4 million.
Third Quarter 2021 Business
- HempFusion completed both of the previously announced
acquisitions of Sagely Enterprises Inc. (“Sagely Naturals”) and
APCNA Holdings LLC (“Apothecanna”). These acquisitions greatly
expand the distribution footprint of the Company to over 15,000
locations, providing the opportunity to expand with ingestible
products in the future. The complementary product lines also
provide the combined entity with a broader coverage of
- The Company launched its highly anticipated CBD Gummy line in
early August 2021, utilizing HempFusion’s proprietary
broad-spectrum hemp extract. The gummies feature natural functional
ingredients and premium flavors, two popular consumer driven
trends. According to Brightfield Group, the CBD gummy market is set
to achieve $500 million in sales in 2021, up 44% from 2020, and is
expected to reach $1.8 billion in 2026.
- In June 2021, HempFusion launched its new EU compliant Probulin
Probiotics products in Boots Pharmacies in Ireland, establishing a
foundation for further opportunities and expansion in retailers
across Ireland, the United Kingdom and Europe. Boots Ireland is
part of the Retail Pharmacy International Division of one of the
world’s largest purchasers of prescription drugs and many other
health and well-being products, with one of the largest retail
footprints in the world.
- In early June 2021, HempFusion launched its sixth distribution
channel, Private Label. The Company secured a 10 SKU private label
deal with a leading national publicly traded grocery retailer. The
initial order for approximately $250,000 was shipped in July 2021.
The Company anticipates this particular account to generate in
excess of $500,000 for 2021 and approximately $1 million or more in
- HempFusion’s eCommerce business is growing. New customer
acquisition increased online by 69.7% over Q1, 2021. Not only did
online increase for both Probulin and HempFusion but traffic also
increased by 46.1% over Q1, 2021. Probulin’s average conversion
rate has remained very strong and consistent at 3.2%.
- In May 2021, HempFusion announced an exclusive partnership with
two-time Olympic Gold Medalist and five-time World Champion,
Kaillie Humphries. HempFusion CBD and Probulin Probiotics will be
Ms. Humphries’ exclusive sponsors in their respective categories
through February’s Olympic Games in Beijing 2022 where she is the
front-runner for gold for Team USA in both the Two-woman Bobsled
and the newly introduced Women’s Monobob.
- Closed oversubscribed, upsized US$2.94 million strategic
Events Subsequent to End of Third
- Launched ingestible and topical CBD products into another top
15 US supermarket chain in the Southeast United States.
HempFusion’s OTC Pain Relief Cream will be added to approximately
400 stores and HempFusion’s Ingestible and Topical CBD products
will now be available in 75 targeted stores.
- Launched ingestible and topical CBD products into nearly 50
locations of a major Arizona grocer.
- HempFusion’s wholly-owned subsidiary, Sagely Naturals, launched
four SKUs of OTC topical pain relief products exclusively into a
Top 10 US publicly listed Food, Drug & Mass (“FDM”) retailer in
over 1,100 stores to start.
- Received approval for five Probulin products by the UAE’s
Ministry of Health and signed a distribution agreement with a key
pharmacy chain in the Middle East that has over 1,200
- The Company appointed Maria Leal as Chief Financial
“Our recent acquisitions, combined with continued product
development within the Company, have positioned HempFusion to be a
leading player in the health and wellness industry,” said Dr. Jason
Mitchell, HempFusion’s Co-Founder and Chief Executive Officer. “Our
strong brand portfolio is leading to continued retail wins, strong
ecommerce growth and is driving significant growth in our total
company revenue, as reflected by the 155% growth rate this past
quarter. Coming out of the quarter we have seen continued strength,
with October preliminary net sales of $1.4 million. We expect this
momentum to continue as we move through the always important
holiday sales period. We remain confident in our ability to meet or
exceed our revenue guidance for 2022 of $20 to $25 million and
expect our profitability and cash burn to improve significantly
throughout 2022,” continued Dr. Mitchell.
for the three months ended September 30, 2021
U.S. $ millions, except per share data Three
months ended September 30,
Other expenses (income)
Net loss and comprehensive loss
Loss per common share - basic and diluted
September 30, 2021
December 31, 2021
Cash and cash equivalents
Consolidated net revenue for the three months ended September
30, 2021 increased 155% year-over-year to $3.1 million.
DTC e-commerce net sales increased 692% year-over-year to
$971,911 reflecting the addition of the recently completed
acquisitions of Apothecanna and Sagely Naturals, increased
marketing efforts, a targeted DTC team, and targeted digital
Consolidated B2B net revenue increased 95% to $2.2 million in Q3
2021 driven by the addition of Apothecanna and Sagely Naturals,
along with HempFusion’s new line of CBD gummies and private label
sales launched in September. HempFusion maintains a leadership
position in retailers across the United States, including the #1 in
sales by dollar volume and unit sales in one of the top five
largest FDM channel retailers.
International sales decreased by 47% to $109,793 in Q3 2021
mainly as a result of COVID-related issues that were transitory in
Gross profit of $1.3 million improved to 43% of revenue compared
to $0.4 million or 32.6% of revenue in Q3-2020. The improvement in
gross profit margins was primarily attributed to the addition of
higher margin sales from acquisitions and increased DTC sales,
along with improvements in inventory and supply chain management.
These efforts continue to see improvements, and the Company
anticipates gross profit margins will continue to improve as the
revenue mix continues to shift towards DTC channels.
Operating expenses were $7.5 million, an increase of 14%
year-over-year from $7.0 million. The increase in expenses was
primarily attributed to acquisition related expenses, as well as
marketing and digital expenses. Going forward, we expect certain
one-time costs associated with integrating the acquisitions, such
as severance and legal costs will not continue.
The Company used $4.8 million of cash in operations during the
third quarter of 2021 compared to $7.0 million of cash used in
operations during the third quarter of 2020. The Company's cash and
working capital at September 30, 2021 were $5.4 million and $3.2
million, respectively, compared to $9.3 million and negative $3.9
million as of December 31, 2020. The Company continues to see
improvements in its monthly cash flow and expects the monthly cash
burn to continue to decrease through the remainder of 2021 and
During the quarter, the Company paid $1.6 million to satisfy the
remaining purchase consideration for Probulin and $2.4 million
related to the acquisition of Sagely Naturals. Both are one-time
cash outlays that will not continue moving forward.
Conference Call Details
HempFusion will host a conference call and webcast today at 8:30
a.m. Eastern Time to discuss Q3-2021 financial results.
To participate in the call, please dial 877-545-0320. For
international callers, please dial 973-528-0016. Use Entry Code:
To join the webcast, please visit:
An archived audio webcast will be available for 90 days
following the original broadcast.
One of a select few CBD companies who are today fully prepared
to meet or exceed expected FDA guidance, HempFusion Wellness Inc.
is a leading health and wellness company whose family of premium
consumer brands include HempFusion™, Sagely Naturals™,
Apothecanna™, and Probulin Probiotics™, one of the fastest-growing
probiotics companies in the United States according to SPINs
Utilizing the power of whole-food hemp nutrition, the HempFusion
family of brands’ product portfolio comprises 112 SKUs including
USDA Organic Certified Tinctures, proprietary FDA Drug Listed
Over-The-Counter (OTC) Topicals, probiotic supplements and skin
care products, a Doctor/Practitioner line, a White Label division
and more. With a strong focus on research and development,
HempFusion Wellness has 43 products under development.
Available from approximately 18,000 US retail locations across
all 50 states, HempFusion Wellness products are also available in
China, Mexico, Ireland, United Kingdom, United Arab Emirates, South
Korea and Canada and may be purchased online from each brand’s
website, The Probulin Store on Amazon.com, Alibaba’s Tmall.com, the
world’s largest cross-border online marketplace, and a multitude of
additional e-commerce sites.
For more information, visit www.hempfusion.com. Follow HempFusion on Twitter,
Facebook and Instagram.
This news release contains forward-looking statements and
forward-looking information within the meaning of Canadian
securities legislation (collectively, “forward-looking
statements“) that relate to HempFusion’s current expectations
and views of future events. Any statements that express, or involve
discussions as to, expectations, beliefs, plans, objectives,
assumptions or future events or performance (often, but not always,
through the use of words or phrases such as “will likely result”,
“are expected to”, “expects”, “will continue”, “is anticipated”,
“anticipates”, “believes”, “estimated”, “intends”, “plans”,
“forecast”, “projection”, “strategy”, “objective” and “outlook”)
are not historical facts and may be forward-looking statements and
may involve estimates, assumptions and uncertainties which could
cause actual results or outcomes to differ materially from those
expressed in such forward-looking statements. No assurance can be
given that these expectations will prove to be correct and such
forward-looking statements included in this news release should not
be unduly relied upon. These statements speak only as of the date
of this news release. In particular and without limitation, this
news release contains forward-looking statements relating to the
continued growth of the Company’s international business and
revenue, continued improvement of the Company’s gross profit
margin, the Company’s plans to accelerate sales, DTC sales
expectations and continued shift of the revenue mix towards DTC
channels, anticipated growth of the Company’s private label
division, including private label orders from the noted leading
national publicly traded grocery retailer, expansion opportunities
for the Company’s ingestible products and the Company’s other
plans, focus and objectives. Forward-looking statements are based
on a number of assumptions and are subject to a number of risks and
uncertainties, many of which are beyond HempFusion’s control, which
could cause actual results and events to differ materially from
those that are disclosed in or implied by such forward-looking
statements. Such risks and uncertainties include, but are not
limited to, the impact and progression of the COVID-19 pandemic and
other factors set forth under “Cautionary Note Regarding
Forward-Looking Statements” and “Risk Factors” in the annual
information form of the Company dated March 31, 2021 and available
under the Company’s profile on SEDAR at www.sedar.com. HempFusion
undertakes no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as may be required by law. New factors emerge
from time to time, and it is not possible for HempFusion to predict
all of them or assess the impact of each such factor or the extent
to which any factor, or combination of factors, may cause results
to differ materially from those contained in any forward-looking
statement. Any forward-looking statements contained in this news
release are expressly qualified in their entirety by this
Neither the TSX nor its Regulation Services Provider (as that
term is defined in the policies of the TSX) accepts responsibility
for the adequacy or accuracy of this release.
version on businesswire.com: https://www.businesswire.com/news/home/20211115005423/en/
Investor Relations: Eric Balshin +1 437-826-9911
Company Contact: Jason Mitchell, N.D. Chief Executive Officer
and Director firstname.lastname@example.org
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