Charlotte’s Web Posts Revenues Of $25.2 Million In Q3, Loss Of $6.5 Million
Charlotte’s Web Holdings (TSX: CWEB) this morning reported its third quarter financial results, posting revenues of $25.2 million, along with a net loss of $6.5 million for the three month period. Revenues were up 17% on a quarter over quarter basis, and up 0.4% on a year over year basis.
Gross profit before biological adjustments came in at $15.3 million, compared to $11.5 million in the prior quarter. Operating expenses overall came in at $28.3 million, nearly double gross profits during the quarter, proving that the company is a long ways away from achieving profitability and free cash flow.
Expenses were largely comprised of general administrative, which amounted to $17.8 million in the third quarter, as compared to $21.1 million in the second quarter. Sales and marketing however was up significantly quarter over quarter, from $6.8 million go $8.5 million, while research and development amounted to $2.0 million.
The company however was able to recognize additional income of $7.4 million, thanks in part to a falling share price that enabled the company to recognize a positive impact on derivative liabilities. The performance overall resulted in a net loss of $6.5 million for the three month period ended September 30, 2020.
Moving to the balance sheet, Charlotte’s Web saw its cash position fall quite dramatically from $99.8 million to $65.9 million. The drop appears to be the result of both operating expenses in the form of bills finally being paid, as well as a $12.2 million expenditure on the purchase of property and equipment and intangible assets.
Trade and other receivables also fell during the quarter, from $12.5 million to $6.5 million, while inventories declined from $67.1 million to $64.7 million. Prepaids expenses meanwhile climbed to $13.5 million from $7.7 million. Current assets overall declined from $200.9 million to $163.9 million.
Accounts payable fell dramatically during the quarter, a result of evidently paying some bills, with the company recording $5.3 million in payables as of September 30, compared to $15.5 million in the prior period. Current cultivation liabilities grew marginally, from $11.5 million to $12.7 million, while current notes payable fell from $1.3 million to $0.9 million. Overall, current liabilities fell from $45.9 million to $35.3 million.
Charlotte’s Web Holdings last traded at $4.95 on the TSX.
Information for this briefing was found via Sedar and Charlotte’s Web Holdings Inc. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.
