22nd Century Group reported net sales of $7.8 million in the third quarter of 2021, up 6.9 percent over those posted in the prior-year period. The increase was due to an increase in contract manufacturing sales.
Gross profit for the third quarter of 2021 improved by 24 percent to $449,000 compared to the prior year period, reflecting the seventh consecutive quarter of year-over-year improvement in gross profit. The improvement in gross margin was primarily the result of increased filtered cigar sales mix due to new customer contracts and price increases on the company’s contract manufactured cigarettes.
Operating loss for the third quarter of 2021 was $7.9 million, an increase of $3.4 million compared to the prior year period. This was primarily driven by an increase in selling, general and administrative expenses and was partially offset by higher gross profit and lower research and development spend in the third quarter of 2021.
Net loss in the third quarter of 2021 was $9.4 million, an increase of $5.1 million compared to the prior year period primarily due to an increase in noncash charges offset by benefits to other income and expenses. This compares to the third quarter of 2020 net loss of $4.2 million.
“I am proud of the tremendous progress we have made during 2021 as we complete the final step to MRTP [modified-risk tobacco product] authorization of our VLN reduced-nicotine tobacco cigarettes and begin to monetize our highly disruptive hemp/cannabis plant lines and IP [intellectual property],” said James A. Mish, CEO of 22nd Century Group, in a statement.