CV Sciences, Inc. reported a slight decline in financial performance for the fiscal year ending December 31, 2024, with net product sales of $15.7 million, down 1.9% from $16.0 million in 2023. The company's gross profit increased marginally to $7.2 million, resulting in a gross margin of 45.6%, compared to 44.3% in the previous year. The decrease in sales was primarily attributed to lower business-to-business (B2B) sales, which fell to $8.8 million from $9.2 million in 2023. However, business-to-consumer (B2C) sales rose to $6.9 million, reflecting a shift in consumer purchasing behavior despite reduced digital marketing efforts.
In terms of operational changes, CV Sciences made significant strategic moves, including the acquisition of Cultured Foods, a European manufacturer of plant-based protein products, in December 2023, and Elevated Softgels, a manufacturer of encapsulated softgels, in May 2024. These acquisitions are part of the company's strategy to diversify its product offerings and enhance its market presence. Additionally, the company launched 24 new products since January 2023, contributing to 28% of its net revenue for the year. The total employee count increased from 43 to 49, reflecting the company's expansion efforts.
The filing also highlighted a reduction in research and development expenses, which decreased to $0.1 million from $0.2 million in 2023, primarily due to fewer new product development activities. Selling, general, and administrative expenses decreased by 5.2% to $9.2 million, with marketing expenses seeing a notable decline of 29% as the company reallocated resources. The overall cost of goods sold also decreased by 4.3%, contributing to improved gross margins.
Looking ahead, CV Sciences anticipates continued challenges due to a highly competitive market and evolving regulatory landscape. The company plans to focus on innovation, brand awareness, and strategic cost reductions to enhance its operational efficiency. Management has indicated that additional investment capital will be necessary to fund growth initiatives and operations, as the company generated negative cash flows from operations of $0.9 million in 2024. The outlook remains cautious, with management emphasizing the need for ongoing evaluation of market conditions and potential strategic partnerships to support future growth.
About CV Sciences, Inc.
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