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Achieved three consecutive quarters of sequential revenue growth, which management views as a clear indicator that the core business is trending in the right direction.
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Performance was driven by improved execution in the core cbdMD brand and the wholesale channel, which grew 17% year-over-year.
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The company completed a deliberate multi-year reset focused on reducing fixed costs, simplifying operations, and strengthening the balance sheet for durable growth.
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Management attributed a 6% year-over-year gross margin decline to increased warehouse expenses and a shift in revenue mix toward the wholesale channel.
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The direct-to-consumer channel remains the primary revenue driver, representing approximately 72% of total revenue for the quarter.
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Regulatory challenges created packaging and compliance-related confusion among customers, though wholesale momentum remained encouraging despite this backdrop.
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The second quarter focus is centered on integrating the Bluebird Botanicals acquisition, specifically consolidating supply chain, marketing, and operational areas to extract synergies.
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Management expects the Bluebird acquisition to provide a step-function increase in revenue at attractive contribution margins through a broader wellness portfolio.
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The company established a $20 million equity line of credit to opportunistically capitalize on potential positive stock movements while minimizing dilution.
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Guidance for the next quarter assumes a lower working capital build compared to the first quarter, excluding the specific impacts of the Bluebird acquisition.
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Strategic participation in Medicare-related CBD programs is underway ahead of an April pilot program, which management believes favors compliance-focused operators.
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Regained full NYSE American continued listing compliance in early December, removing the company’s previous temporary status.
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Completed a $2.25 million Series C preferred financing in December to strengthen liquidity and working capital positions.
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The acquisition of Bluebird Botanicals assets was structured with limited upfront equity and performance-based earn-outs to mitigate financial risk.
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Net loss per share improved significantly to $0.04 from $1.73 in the prior year, primarily due to the elimination of Series A preferred dividends.
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