Operating Expenses improved
31.5%
Cash increase over Q1 of 2022
DENVER, Aug. 9, 2022
/CNW/ - (TSX: CWEB) (OTCQX: CWBHF), Charlotte's Web Holdings, Inc. ("Charlotte's Web" or the "Company"), the market
leader in full-spectrum hemp extract wellness products, today
reported financial results for the second quarter ended
June 30, 2022.
"Net revenues for the second quarter of $18.9 million were $5.3
million lower year-over-year, reflecting lower comparable
retail shipments and lower traffic to our e-commerce site,
partially offset by modestly higher conversion rates," said
Jacques Tortoroli, Chief Executive
Officer. "The quarter also included a $0.9
million returns reserve related to a specific customer.
Before the impact of the returns reserve, total net revenues for
the quarter were comparable to Q1 of this year.''
"While we are disappointed with the second quarter revenue, we
achieved significant distribution and customer wins consistent with
our growth priorities to expand our coverage in existing channels
and enter new verticals. Charlotte's Web products are now available for
employer wellness programs through our recent partnership with SBM
Ltd.; and in significantly more pharmacies through a new national
distributor, giving us increased availability in the industry's
largest channel after e-commerce. These new business wins did not
contribute to our second quarter performance but will increasingly
contribute to growth opportunities moving forward. At the same
time, we continued building our international footprint by entering
a distribution agreement with a strategic partner for Greater China," added Mr. Tortoroli.
On the International regulatory front, Charlotte's Web "Original Formula" CBD
oil has been placed on the Foods Standards Agency list of
products allowed to be sold in the U.K. Charlotte's Web is the only substantially
vertically integrated US company with a full-spectrum hemp extract
to have passed the validation phase and advance to the safety
assessment phase in the United
Kingdom. Recently, regulatory progress was also made in
Canada, where the Scientific
Advisory Committee for Health Canada unanimously agreed CBD is
"safe and tolerable for short-term use", and recommended
hemp CBD products should be considered for mainstream retail
availability.
"We're also focused on improving operating cash flow as we
progress through the second half of the year. Operating expenses
were down over 31.5% year-over-year in the second quarter. In July,
we further lowered our staffing levels and administration expenses.
In aggregate, our focus on right-sizing our business is bringing
operating expenses below $70M on an
annualized run rate," added Mr. Tortoroli.
Q2-2022 Financial Review
For the three-month period ended June
30, 2022, net revenue was $18.9
million, a decrease of 21.8% versus $24.2 million in Q2-2021. The decrease was
primarily due to lower comparable customer shipments, consumer
shift to lower priced formats, a return reserve as well as lower
comparable online traffic.
Direct-to-consumer ("DTC") eCommerce net revenue was
$13.3 million, a decrease of
$2.4 million or 15.3% due to lower
year-over-year traffic, partially offset by increased conversion
rates which improved 1.9 percentage points to 15.6%. Charlotte's Web maintains the largest
e-commerce business in the CBD industry; and e-commerce represents
the largest channel in the industry with an approximate 40% market
share according to the Brightfield Group
Business-to-business ("B2B") net revenue was $5.6 million after a $0.9
million returns reserves. This was $2.9 million, or 33.9%, lower year-over-year
primarily due to lower comparable shipments to some of the
Company's largest retail customers. Charlotte's Web holds the number one share
position across major retail channels including food/drug/mass
retail, natural grocery & vitamin retailers, and e-commerce,
based on market share data from leading third-party analysts such
as The Nielsen Company (total xAOC), SPINS (SPINS Total US), and
Brightfield Group, respectively.
Gross profit was $9.3M, or 49.4%
of revenue versus $15.8 million and
65.5% of revenue respectively in Q2-2021. The decrease was
primarily related to lower net revenue including a $0.9 million customer return reserve, and
$1.9 million of inventory provisions.
Excluding the return reserve and inventory provisions, gross profit
was 61.0% of revenue.
Total selling, general and administrative ("SG&A") expenses
of $17.3 million improved 31.5%
year-over-year due to a $7.9 million
reduction versus Q2-2021. The improvement reflects lower employee
headcount and compensation, and increased operating efficiencies
resulting from actions implemented year-to-date.
An operating loss of $7.9 million
in the second quarter of 2022 was $1.9
million higher than Q2-2021. The increased loss was
primarily attributable to lower net revenues, higher return
reserves and increased inventory provisions, which were offset by
significantly reduced operating expenses. The net loss for the
quarter was $7.9 million, or
($0.05) per share on a basic and
diluted basis, compared to a net loss of $5.9 million, or ($0.04) per share on a basic and diluted basis in
Q2-2021.
Adjusted EBITDA1 loss for the second quarter of 2022
was $5.4 million as compared to an
Adjusted EBITDA loss of $5.1 million
in Q2-2021.
Balance Sheet and Cash
Flow
Net cash used from operations for the six month period ended
June 30, 2022 was $4.3 million as compared to $16.2 million for the same period in 2021.
The Company's cash and working capital as at June 30, 2022, were $14.8
million and $64.6 million,
respectively, compared to $19.5
million and $75.6 million as
at December 31, 2021.
Recent Changes
Mr. Thomas Lardieri, former
Senior Vice President of Finance at ViacomCBS, Inc., will be
appointed to Charlotte's Web Board
of Directors, effective August 10,
2022. Mr. Lardieri will serve as the Audit Committee
Chairperson and on the Corporate Governance Committee. He replaces
outgoing Director, Tim Saunders, who
has resigned from his position on the Board of Directors, effective
August 10, 2022, to enter retirement
and spend more time with family. The Charlotte's Web family extends its gratitude
to Mr. Saunders and welcomes Mr. Lardieri.
Consolidated Financial Statements
and Management's Discussion and Analysis
The Company's unaudited condensed consolidated Balance Sheets as
of June 30, 2022 and December 31, 2021 and the unaudited condensed
consolidated Statements of Operations, Shareholders' Equity, and
Cash Flows and accompanying notes for the second quarter ended
June 30, 2022 and 2021 and related
management's discussion and analysis of financial condition and
results of operations ("MD&A") are reported in the Company's
10Q filing on the Securities and Exchange Commission website at
www.sec.gov and on SEDAR at www.sedar.com, and will be available on
the Investor Relations section of the Company's website at
https://investors.charlottesweb.com.
Conference Call
Management will host a conference call to discuss the Company's
2022 second quarter results at 10:00 a.m.
ET on August 9, 2022. To
participate in the call, please dial 1-416-764-8659 or
1-888-664-6392 approximately 10 minutes before the conference call
and provide confirmation number 48399638 or listen to the live
webcast online.
A recording of the call will be available through August 16, 2022. To listen to a replay of
the earnings call please dial 1-416-764-8677 or 1-888-390-0541 and
provide conference replay ID 399638. A webcast of the call will
also be accessible through the investor relations section of
the Company's website for an extended period of
time.
About Charlotte's Web Holdings, Inc.
Charlotte's Web Holdings, Inc.,
a Certified B Corporation headquartered in Denver, is the market leader in innovative
hemp extract wellness products under a family of brands which
includes Charlotte's Web™, CBD
Medic™, CBD Clinic™, and Harmony Hemp™. Charlotte's Web branded premium quality
products start with proprietary hemp genetics that are American
farm -grown using organic and regenerative cultivation practices.
The Company's hemp extracts have naturally occurring
botanical compounds including cannabidiol ("CBD"), CBC, CBG,
terpenes, flavonoids, and other beneficial
compounds. The Company's CW Labs R&D division advances
hemp science at two centers of excellence in Louisville, Colorado, and the Hauptmann
Woodward Research Institute at the University
at Buffalo, part of the State
University of New York (SUNY)
network. Web product categories include full-spectrum hemp CBD oil
tinctures (liquid products), CBD gummies (sleep, stress, exercise
recovery), CBD capsules, CBD topical creams and lotions, as well as
CBD pet products for dogs. Through its vertically integrated
business model, Charlotte's Web
maintains stringent control over product quality and consistency
with 20+ product lot testing for quality assurance. Charlotte's Web products are distributed to
more than 15,000 retail, over 8,000 health care practitioners, and
online through the Company's website at
https://www.charlottesweb.com/.
Charlotte's Web was founded by
the seven Stanley Brothers with a
mission to unleash the healing powers of botanicals through
compassion and science, benefiting the planet and all who live upon
it. Charlotte's Web is a socially
and environmentally conscious company and is committed to using
business as a force for good and a catalyst for innovation. The
Company weighs sound business decisions with consideration for how
its efforts affect employees, customers, the environment, and
diverse communities. The rate the Company pays for agricultural
products reflects a fair and sustainable rate driving higher
quality yield, encouraging regenerative farming practices, and
supporting U.S. farming communities. Management believes that its
socially oriented and environmentally responsible actions have a
positive impact on its customers, suppliers, employees and
stakeholders. Charlotte's Web
donates a portion of its pre-tax earnings to charitable
organizations.
Shares of Charlotte's Web trade
on the Toronto Stock Exchange (TSX) under the symbol "CWEB" and are
quoted in U.S. Dollars in the United
States on the OTCQX under the symbol "CWBHF". As of
August 5, 2022, Charlotte's Web had 145,453,442 Common Shares
outstanding.
Forward-Looking
Information
In the interest of providing the shareholders and potential
investors of Charlotte's Web
Holdings, Inc. with information about the Company, certain
information provided herein constitutes forward-looking statements
or information (collectively, "forward-looking statements") within
the meaning of applicable securities laws. Forward-looking
statements are typically identified by words such as "may", "will",
"should", "could", "anticipate", "expect", "project", "estimate",
"forecast", "plan", "intend", "target", "believe" and similar words
suggesting future outcomes or statements regarding an outlook.
Although these forward-looking statements are based on assumptions
the Company considers to be reasonable based on the information
available on the date such statements are made, such statements are
not guarantees of future performance and readers are cautioned
against placing undue reliance on forward-looking statements. By
their nature, these statements involve a variety of assumptions,
known and unknown risks and uncertainties, and other factors which
may cause actual results, levels of activity, and achievements to
differ materially from those expressed or implied by such
statements. The forward-looking statements contained in this press
release are based on certain assumptions and analysis by the
management of the Company in light of its experience and perception
of historical trends, current conditions and expected future
development and other factors that it believes are
appropriate.
Specifically, this press release contains forward-looking
statements relating to, but not limited to: rebuilding DTC traffic
and conversion; progress continuing in key international markets;
our products continuing being allowed to be sold in the
UK; the expectation that we will have our first bulk
product shipment in the second half of the year; that we continue
to steward use of cash while furthering our product rationalization
to lower complexity and costs across our operations; anticipated
consumer trends and corresponding product innovation; anticipated
future financial results; international expansion activities and
strategy, including partnerships in Greater China, harvest and planned product
sales in Canada, and expansion in
UK and EU; sales volume, product, channel and international
expansion plans; growth of the Company's market share position;
that the reorganization right-sized our operating expenses to our
revenue; the impact of certain activities on the Company's business
and financial condition; suggested regulatory developments; and the
Company's anticipated trajectory, long-term growth expectations and
shareholder value creation.
The material factors and assumptions used to develop the
forward-looking statements herein include, but are not limited to,
the following: the impact of the COVID-19 pandemic; the regulatory
climate in which the Company currently operates and may in the
future operate; successful sales of the Company's products; the
success of sales and marketing activities; there will be no
significant delays in the development and commercialization of the
Company's products, including in relation to supply chain
disruptions; outcomes from R&D activities; ability for the
Company to leverage R&D and brand recognition for product
sales; the Company's ability to deal with adverse growing
conditions (due to pests, disease, fungus, climate or other
factors) in a timely and cost-effective manner; there will be no
significant reduction in the availability of qualified and
cost-effective human resources; new products will continue to be
added to the Company's portfolio; demand for the Company's products
will grow in the foreseeable future; there will be no significant
barriers to the acceptance of the Company's products in the market,
including in international markets; the Company will be able to
maintain compliance with applicable contractual and regulatory
obligations and requirements; there will be adequate liquidity
available to the Company to carry out its operations and business
plans; the Company will have sufficient capital to pursue its sales
volume, product, channel and international expansion; and products
do not develop that would render the Company's current and future
product offerings undesirable and the Company is otherwise able to
minimize the impact of competition and keep pace with changing
consumer preferences.
The Company's forward-looking statements are subject to risks
and uncertainties pertaining to, among other things, the adverse
impact of the COVID-19 pandemic to the Company's operations, supply
chain, distribution chain, and to the broader market for the
Company's products; revenue fluctuations; nature of government
regulations (both domestic and foreign); economic conditions; loss
of key customers; retention and availability of executive talent;
competing products; common share price volatility; loss of
proprietary information; product acceptance; internet and system
infrastructure functionality; information technology security;
available capital to fund operations and business plans; crop risk;
international and political considerations; regulatory changes; and
including but not limited to those risks and uncertainties
discussed under the heading "Risk Factors" in the Company's Annual
Report on Form 10-K for the year ending December 31, 2021
available on www.sec.gov and
www.sedar.com, and other risk factors contained in other
filings with the Securities and Exchange Commission available
on www.sec.gov and filings with Canadian
securities regulatory authorities available on
www.sedar.com. The impact of any one risk,
uncertainty, or factor on a particular forward-looking statement is
not determinable with certainty as these are interdependent, and
the Company's future course of action depends on management's
assessment of all information available at the relevant
time.
Except as required by applicable law, the Company assumes no
obligation to publicly update or revise any forward-looking
statements made, whether as a result of new information, future
events, or otherwise. All forward-looking statements, whether
written or oral, attributable to the Company or persons acting on
the Company's behalf, are expressly qualified in their entirety by
these cautionary statements.
(1) Non-GAAP Measures
The press release contains
non-GAAP measures, including EBITDA and Adjusted EBITDA.
Please refer to the section in the tables captioned "Non-GAAP
Measures" below for additional information and a reconciliation to
GAAP for all Non-GAAP metrics.
CHARLOTTE'S WEB
HOLDINGS, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS (in thousands, except share
and per share amounts)
|
|
June 30,
|
|
December
31,
|
|
|
|
|
|
2022
(unaudited)
|
|
2021
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
14,817
|
|
$
19,494
|
Accounts receivable,
net
|
2,455
|
|
4,882
|
Notes receivable -
current
|
495
|
|
495
|
Inventories,
net
|
52,631
|
|
52,077
|
Prepaid expenses and
other current assets
|
4,390
|
|
8,095
|
Income taxes
receivable
|
7,579
|
|
10,764
|
Total current
assets
|
82,367
|
|
95,807
|
Property and equipment,
net
|
32,917
|
|
36,085
|
Operating lease
right-of-use assets, net
|
19,358
|
|
20,679
|
Intangible assets,
net
|
2,337
|
|
2,843
|
Stanley Brothers USA
Holdings purchase option
|
13,100
|
|
13,000
|
Notes receivable -
noncurrent
|
1,037
|
|
1,037
|
Other long-term
assets
|
1,898
|
|
2,062
|
Total assets
|
$
153,014
|
|
$
171,513
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
5,122
|
|
$
5,049
|
Accrued and other
current liabilities
|
7,304
|
|
9,570
|
Cultivation
liabilities – current
|
2,957
|
|
3,448
|
Lease obligations –
current
|
2,408
|
|
2,103
|
Total current
liabilities
|
17,791
|
|
20,170
|
Cultivation liabilities
– noncurrent
|
—
|
|
385
|
Lease obligations –
noncurrent.
|
19,299
|
|
20,500
|
Other long-term
liabilities
|
12
|
|
12
|
Total
liabilities
|
37,102
|
|
41,067
|
Commitments and
contingencies
|
|
|
|
Shareholders'
equity:
|
|
|
|
Common shares, nil par
value; unlimited shares authorized as of June 30,
2022 and December 31, 2021, respectively;
145,278,165 and 144,659,964
shares issued and outstanding as of June 30,
2022 and December 31, 2021
|
1
|
|
1
|
Proportionate voting
shares, nil par value; nil shares authorized as of
June 30, 2022 and December 31, 2021,
respectively; nil shares issued and
outstanding as of June 30, 2022 and December
31, 2021, respectively
|
—
|
|
—
|
Additional
paid-in capital
|
321,021
|
|
319,059
|
Accumulated
deficit
|
(205,110)
|
|
(188,614)
|
Total shareholders'
equity
|
115,912
|
|
130,446
|
Total liabilities and
shareholders' equity
|
$
153,014
|
|
$
171,513
|
CHARLOTTE'S WEB
HOLDINGS, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share
amounts)
|
|
|
Three Months Ended June 30,
(unaudited)
|
|
Six Months
Ended June 30,
(unaudited)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
Revenue
|
$
18,877
|
|
$
24,152
|
|
$
38,234
|
|
$
47,559
|
Cost of goods
sold
|
9,556
|
|
8,325
|
|
17,199
|
|
18,095
|
Gross profit
|
9,321
|
|
15,827
|
|
21,035
|
|
29,464
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
17,259
|
|
25,178
|
|
37,614
|
|
48,964
|
Operating
loss
|
(7,938)
|
|
(9,351)
|
|
(16,579)
|
|
(19,500)
|
|
|
|
|
|
|
|
|
Other (expense) income,
net
|
68
|
|
105
|
|
(17)
|
|
210
|
Change in fair value of
financial instruments and other
|
—
|
|
3,319
|
|
100
|
|
623
|
Loss before provision
for income taxes
|
(7,870)
|
|
(5,927)
|
|
(16,496)
|
|
(18,667)
|
Income tax (expense)
benefit
|
—
|
|
4
|
|
—
|
|
(30)
|
Net loss
|
$
(7,870)
|
|
$
(5,923)
|
|
$
(16,496)
|
|
$
(18,697)
|
Net loss per common
share, basic and diluted
|
$
(0.05)
|
|
$
(0.04)
|
|
$
(0.11)
|
|
$
(0.13)
|
Weighted-average shares
used in
computing net loss per share, basic and
diluted
|
145,168,510
|
|
139,936,443
|
|
145,079,859
|
|
139,817,622
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHARLOTTE'S WEB HOLDINGS, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(in thousands, except share
amounts)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proportionate
Voting Shares
|
|
Common
Shares
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Deficit
|
|
Total
Shareholders'
Equity
|
|
Shares
|
|
Shares
|
|
Amount
|
|
|
|
Balance—December 31,
2021
|
—
|
|
144,659,964
|
|
$
1
|
|
$
319,059
|
|
$
(188,614)
|
|
$
130,446
|
Common shares issued
upon vesting of
restricted share units, net of withholding
|
—
|
|
77,193
|
|
—
|
|
(45)
|
|
—
|
|
(45)
|
Harmony Hemp contingent
equity compensation
|
—
|
|
169,045
|
|
—
|
|
165
|
|
—
|
|
165
|
ATM program issuance
costs
|
—
|
|
239,500
|
|
—
|
|
(2)
|
|
—
|
|
(2)
|
Share-based
compensation
|
—
|
|
—
|
|
—
|
|
1,214
|
|
—
|
|
1,214
|
Net loss
|
—
|
|
—
|
|
—
|
|
—
|
|
(8,626)
|
|
(8,626)
|
Balance— March 31,
2022
|
—
|
|
145,145,702
|
|
$
1
|
|
$
320,391
|
|
$
(197,240)
|
|
$
123,152
|
Common shares issued
upon vesting of
restricted share units, net of withholding
|
—
|
|
132,463
|
|
—
|
|
(13)
|
|
—
|
|
(13)
|
Share-based
compensation
|
—
|
|
—
|
|
—
|
|
643
|
|
—
|
|
643
|
Net loss
|
—
|
|
—
|
|
—
|
|
—
|
|
(7,870)
|
|
(7,870)
|
Balance—June 30,
2022
|
—
|
|
145,278,165
|
|
$
1
|
|
$
321,021
|
|
$
(205,110)
|
|
$
115,912
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proportionate
Voting Shares
|
|
Common
Shares
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Deficit
|
|
Total
Shareholders'
Equity
|
|
Shares
|
|
Shares
|
|
Amount
|
|
|
|
Balance—December 31,
2020
|
81,177
|
|
107,060,237
|
|
$
1
|
|
$
305,133
|
|
$
(50,892)
|
|
$
254,242
|
Exercise of stock
options
|
—
|
|
8,261
|
|
—
|
|
30
|
|
—
|
|
30
|
Conversion to common
shares
|
(3,961)
|
|
1,584,410
|
|
—
|
|
—
|
|
—
|
|
—
|
Common shares issued
upon vesting of
restricted share units, net of withholding
|
—
|
|
61,548
|
|
—
|
|
(112)
|
|
—
|
|
(112)
|
Exercise of common
stock warrants
|
—
|
|
98,788
|
|
—
|
|
441
|
|
—
|
|
441
|
Share-based
compensation
|
—
|
|
—
|
|
—
|
|
832
|
|
—
|
|
832
|
Harmony Hemp contingent
equity compensation
|
—
|
|
169,046
|
|
—
|
|
360
|
|
—
|
|
360
|
Net loss
|
—
|
|
—
|
|
—
|
|
—
|
|
(12,774)
|
|
(12,774)
|
Balance—March 31,
2021
|
77,216
|
|
108,982,290
|
|
$
1
|
|
$
306,684
|
|
$
(63,666)
|
|
$
243,019
|
Conversion to common
shares
|
(1,327)
|
|
530,900
|
|
—
|
|
—
|
|
—
|
|
—
|
Withholding of common
stock upon vesting of
restricted share awards
|
—
|
|
16,559
|
|
—
|
|
(26)
|
|
—
|
|
(26)
|
Harmony Hemp contingent
equity compensation
|
—
|
|
—
|
|
—
|
|
363
|
|
—
|
|
363
|
ATM Offering, net of
share issuance costs
|
—
|
|
278,200
|
|
—
|
|
839
|
|
—
|
|
839
|
Share-based
compensation
|
—
|
|
—
|
|
—
|
|
994
|
|
—
|
|
994
|
Net loss
|
—
|
|
—
|
|
—
|
|
—
|
|
(5,923)
|
|
(5,923)
|
Balance—June 30,
2021
|
75,889
|
|
109,807,949
|
|
$
1
|
|
$
308,854
|
|
$
(69,589)
|
|
$
239,266
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHARLOTTE'S WEB
HOLDINGS, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF SHAREHOLDERS'
EQUITY (in
thousands)
|
|
|
Six Months Ended June
30,
(unaudited)
|
|
2022
|
|
2021
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
Net loss
|
$
(16,496)
|
|
$
(18,697)
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
Depreciation and
amortization
|
3,940
|
|
5,466
|
Change in fair value
of financial instruments
|
(100)
|
|
(613)
|
Allowance for credit
losses
|
(2)
|
|
515
|
Inventory
provision
|
1,857
|
|
178
|
Share-based
compensation
|
2,022
|
|
2,549
|
Loss on disposal of
assets
|
150
|
|
93
|
Adjustment to accrual
for cultivation liability
|
(582)
|
|
—
|
Changes in
right-of-use assets
|
1,236
|
|
—
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts receivable,
net
|
2,430
|
|
601
|
Inventories,
net
|
(2,411)
|
|
(315)
|
Prepaid expenses and
other current
assets
|
3,706
|
|
589
|
Operating lease
obligations
|
(896)
|
|
21
|
Accounts payable,
accrued and other liabilities
|
(2,194)
|
|
(1,825)
|
Income taxes
receivable
|
3,185
|
|
540
|
Cultivation
liabilities
|
(323)
|
|
(5,243)
|
Other operating assets
and liabilities, net
|
194
|
|
(26)
|
Net cash used in
operating activities
|
(4,284)
|
|
(16,167)
|
Cash flows from
investing activities:
|
|
|
|
Purchases of property
and equipment and intangible assets
|
(333)
|
|
(3,268)
|
Proceeds from sale of
assets
|
—
|
|
9
|
Issuance of notes
receivable, net of collections
|
—
|
|
363
|
Investment in Stanley
Brothers USA Holdings purchase option
|
—
|
|
(8,000)
|
Other investing
activities
|
—
|
|
507
|
Net cash used in
investing activities
|
(333)
|
|
(10,389)
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from sale of
public offering, net of issuance costs
|
—
|
|
978
|
Proceeds from stock
option exercises
|
—
|
|
30
|
Other financing
activities
|
(60)
|
|
(159)
|
Net cash (used)
provided in financing activities
|
(60)
|
|
849
|
Net decrease in cash
and cash equivalents
|
(4,677)
|
|
(25,707)
|
Cash and cash
equivalents —beginning of period
|
19,494
|
|
52,803
|
Cash and cash
equivalents —end of period
|
$
14,817
|
|
$
27,096
|
Non-cash
activities:
|
|
|
|
Non-cash purchases of
property and equipment
|
$
—
|
|
$
(2,364)
|
(1) Non-GAAP Measures
Earnings before interest, taxes,
depreciation, and amortization ("EBITDA") is not a recognized
performance measure under U.S. GAAP. The term EBITDA consists
of net loss and excludes interest, taxes, depreciation, and
amortization. Adjusted EBITDA also excludes other non-cash
items such as changes in fair value of financial instruments
(Mark-to-Market), Share-based compensation, and impairment of
assets. These non-GAAP financial measures should be considered
supplemental to, and not a substitute for, our reported financial
results prepared in accordance with GAAP. The non-GAAP
financials measures do not have a standardized meaning prescribed
under U.S. GAAP and therefore may not be comparable to similar
measures presented by other issuers. The primary purpose of
using non-GAAP financial measures is to provide supplemental
information that we believe may be useful to investors and to
enable investors to evaluate our results in the same way we do. We
also present the non-GAAP financial measures because we believe
they assist investors in comparing our performance across reporting
periods on a consistent basis, as well as comparing our results
against the results of other companies, by excluding items that we
do not believe are indicative of our core operating performance.
Specifically, we use these non-GAAP measures as measures of
operating performance; to prepare our annual operating budget; to
allocate resources to enhance the financial performance of our
business; to evaluate the effectiveness of our business strategies;
to provide consistency and comparability with past financial
performance; to facilitate a comparison of our results with those
of other companies, many of which use similar non-GAAP financial
measures to supplement their GAAP results; and in communications
with our board of directors concerning our financial performance.
Investors should be aware, however, that not all companies define
these non-GAAP measures consistently.
(1) EBITDA and Adjusted
EBITDA are non-GAAP financial measures with reconciliations
provided in the table below.
|
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
|
U.S. $
Thousands
|
|
2022
|
|
2021*
|
|
2022
|
|
2021*
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
(7,870)
|
|
$
(5,923)
|
|
$ (16,496)
|
|
$ (18,697)
|
|
|
|
|
|
|
|
|
|
Depreciation of
property and
equipment and amortization of
intangibles
|
|
1,862
|
|
2,798
|
|
3,940
|
|
5,466
|
Financing
costs
|
|
2
|
|
30
|
|
|
|
30
|
Interest
income
|
|
|
|
|
|
|
|
(19)
|
Income tax
|
|
|
|
(4)
|
|
|
|
30
|
|
|
|
|
|
|
|
|
|
EBITDA Loss
|
|
(6,006)
|
|
(3,099)
|
|
(12,556)
|
|
(13,190)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Comp
|
|
643
|
|
1,357
|
|
2,022
|
|
2,549
|
Mark-to-market
financial
instruments
|
|
-
|
|
(3,319)
|
|
(100)
|
|
(623)
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Loss
|
|
$
(5,363)
|
|
$
(5,061)
|
|
$ (10,634)
|
|
$ (11,264)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Certain prior year amounts in the table above have been
conformed to the current year presentation in accordance
with how the Company is defining the EBITDA and Adjusted EBITDA
calculation as of June 30, 2022.
View original content to download
multimedia:https://www.prnewswire.com/news-releases/charlottes-web-delivers-operating-improvements-on-lower-revenue-in-second-quarter-of-2022-301602167.html
SOURCE Charlotte''s Web
Holdings, Inc.