HempFusion's Q3 Revenue Spikes 155% YoY, Accelerates Sales Activity in Q4

Author: Jelena Martinovic | November 15, 2021 10:34am

HempFusion Wellness Inc. (TSX:CBD) (OTCQB:CBDHF) (FWB: 8OO) announced financial results Monday for the third quarter ended September 30, 2021, revealing a net revenue of $3.1 million, up by 155% year-over-year and 154% sequentially.

Q3 2021 Financial Highlights

Excluding the recently completed acquisitions, HempFusion's revenue increased 31% year-over-year and 30% sequentially as the company makes strong progress on its retail distribution and e-commerce growth initiatives.
Direct-to-consumer eCommerce sales totaled $971,911, increasing by 190% from $334,322 in the prior period.
HempFusion stand-alone website-based sales increased 38.2% versus the same period last year.
Platform DTC sales, including Amazon, Walmart, and Tmall, increased 145% versus the same period last year.
Business-to-business net revenue increased 140% to $2.2 million from $898,620 in the second quarter and 95% compared to $1.1 million in the prior year's period.
Gross profit was $1.3 million or 43% of net revenue versus 33% in the prior-year quarter, representing a 1,000 bps improvement reflective of more effective inventory management, improvements in managing production costs and higher-margin sales contributions from the two most recent acquisitions.
Operating expenses were $7.5 million, an increase of 14% year-over-year from $7 million.

Q3 2021 Business Highlights

HempFusion completed both of the previously announced acquisitions of Sagely Enterprises Inc. (Sagely Naturals) and APCNA Holdings LLC, which is doing business as Apothecanna, expanding the company's distribution footprint to over 15,000 locations.
Launched its highly anticipated CBD Gummy line in early August 2021, utilizing HempFusion's proprietary broad-spectrum hemp extract.
Launched its new EU compliant Probulin Probiotics products in Boots Pharmacies in Ireland in June.
Launched its sixth distribution channel, Private Label, in June.

"Coming out of the quarter, we have seen continued strength, with October preliminary net sales of $1.4 million," Dr. Jason Mitchell, HempFusion's co-founder and CEO said. "We expect this momentum to continue as we move through the always important holiday sales period. We remain confident in our ability to meet or exceed our revenue guidance for 2022 of $20 to $25 million and expect our profitability and cash burn to improve significantly throughout 2022."

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