22nd Century Group, Inc · NASDAQ:XXII
22nd Century — Q2 2023 Earnings Presentation
20 slides from 22nd Century's earnings presentation, Aug 14, 2023
Slide 1: XXII Second Quarter Earnings Presentation
XXII SECOND QUARTER EARNINGS PRESENTATION August 14, 2023
Slide 2: Cautionary Note on Forward-Looking Statements
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements concerning our business operations, and financial performance and conditions, as well as our plans, objectives, and expectations for our business operations and financial performance and conditions th
Slide 3: 2Q 2023: Continued Commercial Progress
VLN® advancing commercial launch program Rapid expansion of state/ store count – now 2,775+ locations, 14+ States Surpass 4,000+ stores, 16 states with first drug store partner in September, additional c-stores and others in funnel for rest of 2023 Revising go-to-market strategy to better maxi
Slide 4: FDA Authorized VLN, Cannabinoid Ingredients, APIs and CDMO Corporate/Financial
FDA Authorized VLN® Cannabinoid Ingredients, APIs and CDMO Corporate/Financial
Slide 5: VLN: Expanding Commercial Access
VLN®: EXPANDING COMMERCIAL ACCESS Now in 2,775+ locations across 14 states with clear path for continued rollout at major chains – Adding first drug store chain crosses 4,000 stores, 16 states Strong funnel of regional and national chains interested in VLN® as launch continues to expand New marketin
Slide 6: VLN Launch: Now 14 Key Markets and Growing
Example VLN® Distribution: MRTP States + Adjacent States 6 VLN® LAUNCH: NOW 14 KEY MARKETS AND GROWING Selling / Announced State Prospective Expansion State Source: CDC; Current Cigarette Use Among Adults (Behavior Risk Factor Surveillance System) 2019; World Population Review Cigarette Prices by St
Slide 7: Tobacco Division Executive Summary
Tobacco Division Executive Summary • The Success Drivers (to the consumer) and our Critical Levers (Org Dev) have not changed • The Drivers and Levers are Reinforcing to Each Other and Support our Mission • Success in Both Areas Will Drive Sales and Profits. All our Efforts are Focused in these Area
Slide 8: Updated VLN Marketing to Drive Awareness
UPDATED VLN® MARKETING TO DRIVE AWARENESS 8 4 Our new campaign is designed to establish this VLN Advantage: Our recent research showed that VLN was the preferred method for smoking reduction because it doesn’t force smokers to quit the behavior “cold turkey.” Reinforce the fact that they don’t have
Slide 9: Pinnacle Expands Retailer Reach, Improves Mix
PINNACLE EXPANDS RETAILER REACH, IMPROVES MIX Store Brand Offers Economic Value to Customers, Pathway to Launch VLN® Pinnacle is a conventional store brand cigarette for current adult smokers seeking lower cost alternatives Manufactured for a top 5 retail C-store chain in 20+ states Successful
Slide 10: FDA Authorized VLN, Cannabinoid Ingredients, APIs and CDMO Corporate/Financial
FDA Authorized VLN® Cannabinoid Ingredients, APIs and CDMO Corporate/Financial
Slide 11: GVB: Consolidating an Industry Leading Position
GVB Profile: Leading market share in North America plus broad global footprint in geographic markets targeted for growth Record ingredient sales volume in 2Q New CDMO+D model expands revenue, offers new value to customers New extraction unit, production facilities restore gross margin capabili
Slide 12: Record Ingredient Volumes, Production Upside
16,524 26,546 27,912 41,070 68,195 76,591 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 RECORD INGREDIENT VOLUMES, PRODUCTION UPSIDE Return to In-House Production Enables Margin Restoration; Incremental Gross Profit Directly Reduces Cash Use GVB Bulk Ingredient Volumes (kgs) GVB bulk ingredient volumes rising rap
Slide 13: Transformative New License & Distribution Deals
TRANSFORMATIVE NEW LICENSE & DISTRIBUTION DEALS Commencing Shipments Under Three-Year Agreements with Two Top Brands Working with the largest and best-known consumer CBD brands 13 New, single-source model provides complete solution Enhances GVB revenue and margin opportunities with distribution serv
Slide 14: FDA Authorized VLN, Cannabinoid Ingredients, APIs and CDMO Corporate/Financial
FDA Authorized VLN® Cannabinoid Ingredients, APIs and CDMO Corporate/Financial
Slide 15: Second Quarter 2023 Financial Highlights
SECOND QUARTER 2023 FINANCIAL HIGHLIGHTS 1. Gross profit margin is calculated by dividing gross profit by netrevenues. 2. See the tables included in this release for a reconciliation of Adjusted EBITDA (a non-GAAP measure) to net loss. +61.8% YoY increase in Net Revenues primarily due to GVB acquisi
Slide 16: Tobacco Revenue & Profit Breakdown
TOBACCO REVENUE & PROFIT BREAKDOWN Tobacco 2Q 2023 2Q 2022 Unit sales1 .8M 1.5M Net revenue $8.1M $10.0M Gross profit $(1.0)M $0.9M 16 Net revenues decreased QoQ reflecting a planned reallocation in production resources at the Company’s NASCO facilities away from lower margin filtered cigars to hi
Slide 17: Hemp/Cannabis Revenue & Profit Breakdown
HEMP/CANNABIS REVENUE & PROFIT BREAKDOWN 17 Net revenue growth QoQ primarily driven by: Addition of acquired GVB revenue contribution Significant GVB organic revenue volume growth Strong consumer demand for GVB bulk ingredients and new CDMO opportunities 1. Hemp/cannabis unit sales volume is m
Slide 18: Summary Balance Sheet Items
SUMMARY BALANCE SHEET ITEMS Balance sheet date as of: (in millions) Q2 2023 YE 2022 Cash and cash equivalents1 $11.9 $21.2 Total assets $125.0 $114.7 Total liabilities $52.4 $18.7 Total shareholders' equity $72.6 $96.0 18 Raised approximately $14.7 million in additional gross proceeds in equity tran
Slide 19: 2Q 2023: Continued Commercial Progress
2Q 2023: CONTINUED COMMERCIAL PROGRESS 19 Full Focus on Commercializing Tobacco Harm Reduction and Consumer Health and Wellness Products VLN® advancing commercial launch program Rapid expansion of state/ store count – now 2,775+ locations, 14+ States Surpass 4,000+ stores, 16 states with first d
Slide 20: Questions & Answers
Questions & Answers Q A INVESTOR RELATIONS & MEDIA CONTACT Matt Kreps Investor Relations 22nd Century Group, Inc. +1 -214 -597 -8200 mkreps@xxiicentury.com