LIFD - Earnings call transcript Q3 2024

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Operator

Welcome to LFTD Partners Third Quarter 2024 Earnings Conference Call. This call is being recorded. [Operator Instructions]. I will hand the conference over to Gerry Jacobs, the Chairman and CEO of LFTD Partners, Inc. Please go ahead.

Gerard Jacobs

to quarter earnings of welcome discuss call and third the XXXX. morning, LFTD conference Partners to Good

Our earnings the press our some third to quarter -- release can website, and financial XXXX both extended share we been statements www.lftdpartners.com. On replay some have we today's period filed will our found shall with available end be of the SEC, some call, links of and questions on for answer comments on at through be accessible our time website. will quarterly call. of performance, of A the and for of call an we will answer section this the the Investors

the harbor Here's notice. safe

would, statements actual should and a business, we performance, that number such forward-looking financial verbiage should, Some make today uncertainties could reliance hope, cause might, results are differ not involve The words place statements. that believe, to expect, could, operations of such similar statements potentially project and of regarding our listeners upon that including materially. and the may, undue risks will as

more risk in Form statements. the recent forward-looking most the update factors filed to please information, with obligation our We XX-K refer SEC. discussed these undertake For no to

welcomed is years professional Sharial Sharial grow our During QX, forward working member, look real to our Directors. who our Sharial with Kevin to to we Board of an has Board with worked Howard company. for estate accomplished closely Rocio. We

promptly because is all Lake have Associates. Transfer our in are the I of December outside have Board will our our on votes. our mail contact participate to in Stock shareholders proxy file their should proxy We Fruci Salt engagement transfer out or of materials vote shareholders any with not all to our of which received agent, X to on Colonial firm Orlando received and date the the in auditing now, shareholders is address who transfer should agent City. a on on meeting of by & Directors be vote shareholders election materials encourage our holding By of

to business over the few like that I'd have address topics Now a past months. few impacted our

reducing working on comment he our sales herbs Energy of discretionary Mielos hemp-derived to environment, expand sales retailer made important direct consumers our to spending their initiatives challenging and operating on going cannabinoid have First his to including some Nick this have during products. nationally reduce team Rebel sales to expenses. direct-to-consumer grow had is sales, and Wellness that all, Gummies of items, and to been and lifted Gummies been on

the both continuing marijuana by big products. state restrictions lobby against severe cannabinoid are led companies to and hemp-derived at levels opponents prohibitions Secondly, the for federal and/or

guardrails other members industry time, have of packaging hemp-derived would regulatory of all and of persuade rigorous company to intoxicating Our legislators testing and to that the to deal spending intended support attempting sales minors a to money that require prohibit products. products would lab cannabinoid energy prohibit to hemp would minors been and of great that appeal

candidates potential in hemp-derived derived sell both non-hemp discussions are we Third, and certain acquisition products. serious with that

the candidates acquisition expanding U.S. the involved is potential these industry also is and European of One into in marijuana Union.

exploring a actively or X. combination potential equity of are debt using We or capital fund acquisitions, raises to including potential the such

point I'm We position not much in nondisclosure this detail subject more provide to at so time. are agreements, in a to

Made. Nick owned of over can At for our turn acquisitions concluded. successfully Lifted Chairman that I subsidiary, us, discussions the no Founder will While caution given the Vice Operations and these point in our potential priority to be assurance must and and these are CEO presentation that time, wholly extremely Chief Warrender, high this I'll be Officer,

Nicholas Warrender

everyone. developments Thank LFTD. you, and updates regarding information Gerry, morning, like some regarding exciting I'd and good provide to

High Fly of significantly increase our iteration featuring to we've direct-to-consumer on way intensively a team QX, X intended of initiatives direct-to-retailer push is launched these built sales. Increase sales, our the major newest During and ground. a products using the boots that relaunched flagship a XX-person Urb, in theme. direct-to-retailer we We're best-selling to online brand, our

LFTD meeting a and an have face-to-face shops We with intensive push. XXX city-by-city

worrying our far, Atlanta, sales Urb's in brands, firms volumes about laws. We're make states. brought that less current accelerate of LFTD major be convenience violating hopeful team local also because metro on on equipped interested their and can distributors. We're want for are margins X handling some country's Dummy. online and that X product and illegal expand significantly many spent are SEO will money other these online brands initiatives continuing important SKUs Energy So us without sales, Rebel our X reliant to we'll and into store marketing Mielos country some our state grocery and and not free time, of time or the marketing be are efforts. centers on and marketing in Dallas, that has profit very chains new of These other spending the energy Houston, large the best and in to online engaged non-hemp products and areas. Increase direct-to-consumer shipped Austin, marketing over They we've our all distribution hemp

Thanksgiving 'XX from Energy season from another expect very in our going holiday CapEx another is the have QX -- year X% which the prior payroll proactively Mielos traction the and spending expense reduced year-to-date to our will to We we 'XX also QX We season are expenses on busy to expenses. and from from and $XXX,XXX our been Year, QX $XXX,XXX then efforts gain forward. products. We've expenses Gummies XXXX. marketing to QX. Professional 'XX Rebel reduced our to our through from been our also payroll QX XX% CapEx We've down QX on reduced X% focused a XX% New reducing for historically and came QX during QX containing fee from and spending

activities cash due decline investing to and fell Financial operating cash activities. initiatives, financing point, Chief turn the a and by will to Jake I from President Jacobs, $XX,XXX At over all our nearly Officer. our our and only As was result in this presentation year-to-date these of of

William Jacobs

My Nick. comments based the I unless of on XXXX, of XXXX the quarter-over-quarter you, state of third comparisons third otherwise. quarter Thank quarter to be will

Our number sales consolidated to a of net headwinds. due million, XX% down $X.X were

prohibition psychoactive such of similar that price marketplace intoxicating discretionary competition There regulation of Consumers also economically have tighter in Firstly, are or to in reducing and are been is selectively hemp-derived in products stressed has for markets and and competition proposed their that increased own spending. more at LFTD, products to greater for and hemp-derived active been creating prices. branded cannabinoids products is are shelf California. their products There's and other selling point valuable or states pay many branded their more or space. ingredients at for brands paying the adopted significant brands low willing as those are that LFTD sells. More a are than wholesalers LFTD distributors for containing competing unit distributors of own what per lower milligrams

the risk to $XXX,XXX causing inventory raw future for lifted goods predict sold. obsolete raw products that Our increase to it goods $X.X constantly goods and to Written cost and was LFTD total to an compared of finds of million and $XXX,XXX. is write Consequently, extremely sales exposed decreased industry in goods needs XX%. off production. down to quickly difficult to will its customer it LFTD future anticipate sold need of cost This evolving. preferences off are

$XXX,XXX company in from recognize customers a has partners' net the net was LFTD to and of expenses income which $XXX,XXX which was net receipt operating Excluding to operating earnings have disregard primary gross allowance XX.X purchased payment slow-paying and sales older XX this the receipts income loss million, share. Operating or to Basic industry. from per have slower to The were doubtful customers average the as the in quarter compared payments caused Net effect protocol, terms. Management outstanding increasingly loss by compared the bad slow-paying was causes increase expense. $XXX,XXX. direct LFTD or for be paying for margin customers, invoices per $XX,XXX. The may for of shares in $XX,XXX be payments regulatory an a for certain compared other up own share in share. company's distributors accounts of the million collection part $X.X than to customers net certain The written sales LFTD because percentage expenses for Certain LFTD. primarily was become as $X.XX become Consequently, receivables, debt of speculate days. accounting issue $X.XX of and were off on that income driver $XXX,XXX inventory an LFTD of company these impact uncertainty expenses of delay may all diluted delay slow were pay for their XX% XX%. Operating of our LFTD weighted shares. effectively per products X%. to over an customers $XXX,XXX some issues, compared

from Inventory XX% from XX, to X Current million. $XX.X exercised, $X generate compared the XXXX million. assets outstanding from to our XX% ended of $XX.X to includes During down down $X.X used cash options with cashless which million Bank balance restricted XXXX a decreased XX, our to decreased million proceeds X.XX. XX% $X.XX million, ignoring XX, was to of had in million, million and million. X% $XX.X million. on of and $X.XX, cash operating sheet $X.X Surety to September would down down XX, Current warrants December average months which $X.X to million, total if decreased weighted hand, sheet, down from all million, X.XX decreased price notes any million, capital XXXX, to exercise from Working $XX,XXX. At from vested ratio $X.X were payable regards and $XX.X balance XX% September and of to $XX.X decreased million, cash we features. In XXXX, increased activities exercisable $XX.X exercise September $X.X

Instructions]. now questions submitted will been We have [Operator us. answer to that

William Jacobs

Okay.

last is, Board with dramatic fees the first revenue in be X reduced want will to have question this we of you the the quarterly Gerry, commensurate Directors' take over decline do So one? years. the

Gerard Jacobs

very point at And warrants doing top to to a environment filings, also this our issuing our where look in the of $X,XXX independent hanging when for or we've been like not litigious industry is, functioning on in per a regulatory it's directors it's very of reasonable. risk. fees to reasonable like time, are they're directors very very, it being this challenging insurance. In in may and directors lot you and quarter context is differ But lot in -- I That's these doing negotiate, in point. context at fees. opinion, environment. directors we've paid this issues our modest mean ours Yes. in having it of opinion, Board industry in a of got and in of that the get officers Directors with I in, that A very a companies management's opinion, impossible reasonable are this the on a environment these realize quarterly our people options very to

William Jacobs

All right.

from now second The question you take XX% years is the is have turn this around want have What decreased we do the X.X you ago. Nick, one? their high plan company? do revenues to to -- over

Nicholas Warrender

mean -- I Yes.

William Jacobs

me? hear guys you Can

Nicholas Warrender

way, stabilize way industry easy the to the doing face been proper years a Yes. X I great the years. playing the path. compliant field, works like done create the only we've We've than rather ago, in a the that states proposing X.X always doing not advantage. uncertainty think focused job last we right facing didn't our regulations we've to but fair on to believe which regulatory I'd things certain in things

a where the see, average And optimistic have, understand it. to we outcome, to everybody protecting impact for us, saturation, while aren't we our to of based we've on but leverage outside the that it approach your taken direct-to-consumer been and I need both consumer. do to been we mass and state-by-state direct expand on to realize focusing there's outside in simultaneously, that's really continue current basis. a would last a where reason extremely ourselves industry, been industry hemp the a put work so. These So time, the well have economic energy money year believe new things we for of fight results that and a of and have change to and infrastructure as as lot this been to to to ever to and to engaged that spending And has also making we harder retail we I federal than of great are those as tackle get why amounts working as we've expanding but and in changes we're position different the take time, on but this over like can

William Jacobs

reducing the about next is to officers? All question compensation compensated the right. Gerry? The what X highest

Gerard Jacobs

Without of of mean in is a very to XX% being what our thing industry, which what in publicly leading in for the own years, relative traded to industry, end have hemorrhaging you amount better company the losing encourage the the the of Yes. of of our performed pay, our is been modest results if hundreds mean exaggeration, some money-losing these of by companies some my has CEO, millions millions, cannabis said, I high typically any other extremely if not lost CEOs that of been doing than have less companies for case the is industry. like have competitors I Jake. I been who dollars of $XXX,XXX concerned have compensation And have paid by executive those these do salary the our I comparison XX% mean, look of performance been, on of at the of billions cannabis are Nick their compensation of executive companies companies have had industry. our millions any business. I A we pay significantly and of of companies the your same significantly dollars. competitors sort our higher dollars CEOs who drastically salary, shareholder companies. money investor compensation same than been the competitors. to And about and between paid money. than our

William Jacobs

of experience hemp Nick besides What percentage industry? father, have the the Okay. Gerry? Board, and any his in marijuana current

Gerard Jacobs

industry, is our in to next just at mean cannabis Marijuanas interaction complexities the point, up Board this and terms the of our and entire both I hemp. with Yes.

regulatory, is independent well order legal for as movements, have they moving to our that to to have be sure of both Board the requirement all company independent competitor reacting to completely pieces making a fashion. There continuing in We to in constantly be operate this the that as be is a in members industry, industry.

members that we the point, acquired since independent educated dramatically the Board the this But than So what's Board have are on all -- But businesses both just last other in marijuana terms cannabis by have been we've principal Sharial at everything months. of through couple of of definition, our been by Board of industry. are LFTD members, outside because going hemp. members industry in our within going our remainder of has joined out in participating Sharial, the and going

William Jacobs

Pablo give increase? the can the how & edibles in edible? the Can increasing impact you Okay. resilience The XXXX continues hump Can for next interest Associates. Republicans market pressures stake X% Zuanic connect With equity bill the to Is Zuanic question this? in we While of sales there have the hemp and you vape of thinking is the from from Ablis beverages? continue some are despite they your Senate, explain you the industry? to controlling on decline, explain farm

Gerard Jacobs

number a has try them. I of of I'll some Pablo different through mean, walk to raised Well, points.

Oregon beverages. in extremely side that an folks CBD we is of retailers and as Those have dealing challenges, competitors has into anxiety now THC which is products like beverage THC navigated as launching of well a which industry company own In challenges great we of just retailing products, difficult deal with Ablis, a are into terms on that of have that of controversial. have set the branching X.X%

and Founder and CEO principal lot of who's of the Ablis. owner confidence of a in Bendis, the have Jim We Bendistillery

how larger seen. that's potential. to mutual to of like time. been terms Ablis. I'm about a road, what But in down merger are up we people the agreement anything a a we're occur time on with Bendistillery We're were time, this is to they -- Bendistillery in We but potential isn't conversations We're monitoring there had -- Board no the growth under time this closely mutual and eventually Jim, from optimistic have from consensus if decisions point, they're and point might think where We doing. It that us. To a transaction, have and/or to the ends time but about stake, at what forth. merging Ablis be they're for not a potential on with Ablis' place has in we speaking or so what And to Jim, have. But that do discussed that that doing. remains further valuation the that and a of

terms reasons migrated have In why that of from and as the away raised terms question in of are compared edibles mean, towards Pablo of that there of to edibles sales sales believe I vapes. I consumers vapes.

with Also, now Some of of some that face. have using vapes, issues it some eliminates with edibles. the safety to I experienced other our think, relates companies ease gummies people it

there So additional are has. Both sales Nick, them vapes and any concerns. opportunities are to you But that care this? channels, edibles, make gummies still vibrant on are very comments both safety do of LFTD significant.

Nicholas Warrender

edibles. where and market seeing example in that we're we've basically captured of do. caps Minnesota to continued capturing states beverages vapes the category edible well, year, great Iowa rather share state. up a but which this right, for regulations I for more shift that milligram But expand is other that we've being market Really, at years. And banned in a in with has to market look that in the another the opened been over lot was limited share drastic. as a Minnesota, over

based either are are there edibles So to due still newly while limit open. that or a just states implemented vapes that's banned entirely regulations, category

It's here lot we're something in believe even and to continuing regulations. states there's actively are in we are that pursuing beverage. where edibles extremely explore of stay but we're We to -- a tech in, participating tight

Gerard Jacobs

the extension probably you'd I terms bill? the the the that. in thinking of calculus -- about farm Nick, the bill does question, Pablo guess, best -- of Okay. raised answer be Republicans last as the controlling change person to or farm And that then Senate, and with

Nicholas Warrender

We've last a over Republican years. worked closely with states few lot the of

has bipartisan really our So perspective working of been our relationships in with issue this have expanded. But sides. a both

protect So the administrations for important new industry and it's forward and the the push and consumers continue through legitimizing to to sensible hemp with We're us, protecting work simultaneously. excited regulations. to industry

William Jacobs

are questions. let there No, sure. right make concludes like aren't -- any Looks just there today's, Okay. me other This none.

today's for may Thank this Okay. and time. you concludes you conference, disconnect your participation. at This

LFTD Partners (LIFD) 15 Nov 242024 Q3 Earnings call transcript