Q2 2025 cbdMD Inc Earnings Call Transcript
Key Points
- cbdMD Inc (YCBD) successfully converted Series A preferred stock into common stock, raising its pro forma non-GAAP adjusted book value from approximately $670,000 to over $7 million.
- The company eliminated legacy obligations, including $4 million in annual dividends and over $50 million in preferred waterfall payouts, simplifying its capital structure.
- Wholesale revenue increased by 22% compared to the previous year, demonstrating growth in the core wholesale business.
- The Herbal Oasis brand, a hemp-derived THC seltzer, is expanding with new distribution partners in Alabama, Florida, and North Carolina, and has received awards at the 2025 High Spirits Award.
- cbdMD Inc (YCBD) reported a significant reduction in SG&A expenses, totaling $3.5 million compared to $4.1 million in the prior year, due to cost-saving initiatives.
- Total net sales for the second quarter of fiscal 2025 decreased by 7.9% from the first quarter, indicating a decline in quarterly performance.
- The e-commerce direct-to-consumer business was flat year-over-year, generating $3.6 million in sales, representing a decrease in its share of total net sales.
- Q2 marketing performance fell short of expectations, prompting leadership changes and a renewed focus on customer acquisition and retention.
- The rollout momentum for Herbal Oasis slowed in Q2 due to legislative activity, impacting distribution progress.
- Despite improvements, the company still reported a loss from operations of approximately $485,000 for the second quarter of fiscal 2025.
Good afternoon, and welcome to the cbdMD, Inc. conference call to discuss results for their second quarter of fiscal 2025 period ending March 31, 2025. This afternoon, the company issued a new press release that provided an overview of its second quarter results, which followed the filing of its quarterly report on Form 10-Q.
Today's conference call will be recorded and will be available online along with the earnings press release covering financial results and non-gap presentation at cbdmd.com in accordance with cbdMD's retention policies.
(Operator Instructions) At this time, I would like to turn the conference over to Brad Whitmore, the company's Chief Accounting Officer. Brad, please go ahead.
Thank you, Galen, and thank you all for joining cbdMD's March 31, 2025, second quarter of fiscal 2025 earnings call and update. On the call today, we also have Ronan Kennedy, our CEO and Chief Financial Officer. We'd like to remind everyone that various remarks about future expectations, plans,
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