CV Sciences, Inc. (PNK:CVSI) Q3 2023 Earnings Call Transcript
CV Sciences, Inc. (PNK:CVSI) Q3 2023 Earnings Call Transcript November 14, 2023
Operator: Good day, and welcome to the CV Sciences, Inc. Third Quarter 2023 Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to CV Sciences. Please go ahead.
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 prepared remarks, we will take questions from the analyst community. I would like to remind you that during this call, management's prepared remarks may contain forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may cause 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.
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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 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?
Joseph Dowling: Good morning, everyone. Thank you for joining our call. This morning, we issued a press release reporting results for our third quarter ended September 30, 2023. We are very pleased with our Q3 results as we continue to move towards a profitable and positive cash flow operation. Significant financial highlights during Q3 included: we increased our revenue to $4.1 million for the third quarter 2023, which is both a sequential and year-over-year increase in a very competitive environment where many of our competitors are experiencing significant revenue declines. We achieved a gross margin of 45.1% in the third quarter, which is again both a sequential and year-over-year increase. For the 9 months ended -- of 2023 -- for the first 9 months of 2023, we generated cash flow from operations of $2.4 million, which included the collection of $2.5 million of governmental tax credits.
Nevertheless, it is a huge improvement when compared to cash used in operations of $2.1 million for the first 9 months of 2022. We continue to have a balanced mix of B2B and B2C revenue, and maintained our number one position in the natural products retail channel. We are increasing our market share in the natural product retail channel while brand contraction and consolidation continue to weed out weaker brands. We are aggressively managing working capital to ensure timely conversion of our receivables and inventory to cash. And our cost efficiency efforts continue to result in a lower overall company cost structure with efficiency gains and cash savings in several areas, including SG&A. Joerg will provide details on each of these areas during his remarks.
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