Charlie’s Holdings, a supplier of nicotine vapor and CBD products, reported revenues of $3.89 million for the three months ended Sept. 30, 2020, down 30 percent from those in the comparable 2019 quarter. The decline was due to a $1.18 million decrease in its nicotine-based product sales and a $515,000 decrease in sales of its CBD wellness products.
Gross profit for the three months was $2.23 million compared to $3.07 million for last year’s quarter. The resulting gross margin was 57 percent for the 2020 quarter compared to 55 percent for the 2019 quarter.
Cost of goods sold, as a percent of revenue, decreased 200 basis points due to a favorable mix of higher margin sales but was slightly offset by the effects of distributors and retailers participating in volume incentive rebate programs as well as lower fixed cost absorption.
“While we have experienced adversity, with the vapor industry having its share of ups and downs during the past few years, from unfavorable news in late 2019 and the ensuing regulatory uncertainty, to the advent of a global pandemic during 2020, we as an industry have collectively overcome many challenges,” said Brandon Stump, CEO of Charlie’s in a statement.
Stump noted that the U.S. Food and Drug Administration had recently accepted Charlie’s Holdings’ premarket tobacco product application, which would now enter the substantive review phase of the process. “This news is worthy of celebration as it highlights our progress towards achieving full regulatory compliance and providing our customers with a trusted product portfolio,” he said.