How Charlotte’s network turned things around in Q4

After the catastrophic 2020, Charlotte’s Web Holdings (OTC: CWBHF) he seems to be on the right track this year. CBD’s pioneering shares have risen more than 30% since the market closed on Wednesday.

The outlook for the Charlotte network now looks even brighter. The company posted results in the fourth quarter before the market opened today, and cannabis stocks jumped more than 6% in early trade before giving up some gains. Here are the most important data from the update for the fourth quarter.

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By numbers

Charlotte’s Web recorded fourth-quarter revenue of $ 26.9 million, up 18% from a year earlier. However, it missed the analysts’ average estimate of $ 27.6 million.

The company announced a net loss of $ 14.7 million, or $ 0.11 per share, in the fourth quarter. In the previous year, it announced a net loss of 18.8 million dollars, or 0.19 dollars per share.

Charlotte’s Web recorded adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $ 2.1 million in the fourth quarter. This is an improvement over the adjusted EBITDA loss of $ 6.7 million in the third quarter of 2020 and $ 10.1 million in the previous year.

The CBD leader ended the fourth quarter with cash and cash equivalents of $ 52.8 million.

Behind the numbers

Anyone wondering if Charlotte’s Web can turn things around in the fourth quarter after poor performance in previous quarters of 2020 has gotten their answer. And it was a resounding “yes.”

The company’s direct sales to consumers rose 21.2% year-over-year to $ 17.4 million. These sales accounted for nearly 65% ​​of the company’s total revenue in the fourth quarter. This improvement was driven by a rearrangement of Charlotte’s competitive network prices, which increased sales and expanded market share.

Net sales between companies increased by 12.4% compared to last year. The company attributed this growth to an expanded thematic product offering.

This performance enabled Charlotte’s Web to end 2020 as a clear leader in market share in total CBD food / drug / mass retail products. He also ended the year as a leader in the U.S. retail market for natural specialties and in a channel directly to consumers.

The company’s lower result is partly due to revenue growth. But the program to optimize administration costs also helped. Total operating expenses fell 10.4% year-on-year to $ 23.6 million.

Looking ahead

CEO Deanie Elsner said, “In 2021, we are committed to long-term growth and shareholder value creation as we evolve toward establishing Charlotte’s Web as a leading global company for wellness products for botanists by expanding into wellness cannabis where federally permitted.” In particular, the company has the option of acquiring a Stanley Brothers cannabis deal if U.S. cannabis laws change.

The chances of that happening now are higher than they were in the past. Democrats control both houses of Congress and generally support federal cannabis reform.

Look for Charlotte’s network to expand internationally as well. The company has an exclusive five-year distribution agreement with Intercare / Canndoc, one of the largest medical cannabis producers in Israel. This is the first big step of Charlotte’s network on the way to the international cannabis market.

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