Avant Brands Reports Record Revenues for Q1 F2022
April 13th, 2022
News, Top News
- Delivered record gross revenues of $4.6 million – representing 107% growth YOY and 67% QOQ
- Increased recreational cannabis sales by $0.5 million or 25% – demonstrating the demand for Avant’s brands
- Achieved positive Adjusted EBITDA (A)
- Achieved positive Cash Flow from Operations before changes in non-cash working capital (B)
- Maintained a strong capital position with $11.7 million of cash and no debt
KELOWNA, BC / ACCESSWIRE / April 13, 2022 / Avant Brands Inc. (TSX:AVNT)(OTCQX:AVTBF)(FRA:1BU0) (“ Avant ” or the “ Company “), a leading producer of handcrafted, high quality cannabis products, is pleased to announce its financial results for the first quarter ended February 28, 2022 (“Q1 2022”).
“Q1 2022 saw our revenue more than double over the same period last year, primarily from new products and international exports,” said Norton Singhavon, Founder and CEO of Avant. “We are confident that our new cultivars, brand activations, production innovation and multi-channel sales strategy will continue our path to success for the fiscal 2022 year and beyond.”
Key Financial Highlights
All figures are compared to the Company’s most recent fiscal quarter (Q4 2021), unless otherwise stated; all financial information in this press release is reported in Canadian dollars.
Following a successful corporate and financial restructuring in the 2021 fiscal year, Avant has continued to build positive momentum by achieving record gross and net revenues, positive cash flow from operations before changes in non-cash working capital (B) , and positive adjusted EBITDA (A) in Q1 2022. As at February 28, 2022, the Company maintained a strong financial position consisting of $11.7 million in cash, $22.8 million in working capital and no debt obligations.
- Achieved historical record gross revenues of $4.6 million, compared to $2.8 million, an increase of $1.8 million or 67%, with net revenue also being a record
- Recreational cannabis sales of $2.5 million, compared to $2.0 million, an increase of $0.5 million or 25%, demonstrating the significant demand for Avant’s premium cannabis brands
- Recreational cannabis gross margin excluding concentrates improved to 52%, compared to 43%, demonstrating the ability for Avant’s brands to resist price and margin compression
- Cash inflow from operating activities before changes in non-cash working capital (B) was $0.1 million, compared to a cash outflow of $2.0 million, representing an improvement of $2.1 million or 104%
- Gross margin before fair value adjustments (C) was $1.0 million, compared to $0.8 million, with overall weighted gross margin percentage of 23% compared to 34%. The decrease in gross margin percentage was due to a large bulk export sale and an increase in volume of its co-packing partnership with Habitat
- Operating expenses from continuing operations (D) were $1.3 million, compared to $2.2 million, an improvement of $0.9 million or 40%, as a result of normalized operations without the many one-time professional fees the company experienced during fiscal 2021
- Net loss from operations was $1.1 million, compared to net loss from operations of $2.7 million, an improvement of $1.6 million, or 61%. Comprehensive loss was $0.5 million, compared to $7.7 million, representing an improvement of $7.2 million or 94%
- Achieved positive Adjusted EBITDA (A) of $0.1 million, compared to an Adjusted EBITDA loss of $1.2 million, an improvement of $1.3 million or 107%
- Maintained a strong capital position with approximately $11.7 million of cash, $22.8 million of working capital and no debt
Other Key Highlights
- BLK MKT was the #1 selling live rosin in the Province of Ontario, with a 24% market share
- Successfully expanded global cannabis exports with shipments totalling over 375kg of dried cannabis during the quarter
- Sold a total of 885kg of cannabis, representing an increase of 524kg, or 145% in volume
- Overall weighted average selling price of recreational cannabis maintained at $7.12 (including excise tax), compared to $7.25 per gram
|Q1 2022||Q1 2021||% Change|
|Management fees and other revenue||102||–||N/A|
|Gross margin before fair value adjustments (C)||954||811||18||%|
|Gross margin % before fair value adjustments (C)||23||%||41||%||(45||%)|
|Other income (expenses)||556||(115||)||583||%|
|Net loss before income tax||(495||)||253||(296||%)|
|Adjusted EBITDA (A)||79||(199||)||140||%|
|Kilograms of cannabis flower sold||885||342||159||%|
|Kilograms of cannabis produced||637||759||(16||%)|
|Average recreational gross pricing per gram (E)||7.12||7.48||(5||%)|
|Weighted average gross pricing per gram (E)||4.78||6.41||(25||%)|
Note (A) Adjusted EBITDA is a non-IFRS measure and the Company calculates adjusted EBITDA as (loss) income from continuing operations, as reported, adjusted for depreciation and amortization, equity (gain) loss on investment in associate, financing costs, gains and losses on sale of marketable securities, Canadian emergency wage subsidy, interest and accretion, share-based payments, change in fair value of biological assets realized through inventory sold, and unrealized gains and losses on changes in fair value of biological assets. The most directly comparable measure to adjusted EBITDA (excluding fair value adjustment to biological assets and inventory) calculated in accordance with IFRS is net income (loss) from continuing operations. Please refer to the Company’s MD&A for definitions and a reconciliation of Adjusted EBITDA to net income (loss) from continuing operations.
Note (B) Cash flow from operations before changes in non-cash working capital is calculated by adjusting the net loss from continuing operations for non-cash items, but excludes the cash flow influence from changes in non-working capital. Please refer to the Company’s Q1 2022 Financial Statements and MD&A for further information.
Note (C) Gross margin before fair value adjustments. Please refer to the Company’s Q1 2022 Financial Statements and MD&A for definitions and a reconciliation to IFRS.
Note (D) Operating expenses from continuing operations excludes non-cash items, such as depreciation and amortization and share-based payments. Please refer to the Company’s Financial Statements and MD&A for definitions and a reconciliation to IFRS.
Note (E) Average recreational gross pricing per gram is calculated by determining the total recreational sales divided by the total number of recreational grams sold. The weighted average gross pricing per gram is calculated by determining the total flower sales divided by the total number of flower grams sold.
About Avant Brands Inc.
Avant is an innovative, market-leading premium cannabis company. Avant has multiple licensed and operational production facilities across Canada, which produce high-quality, handcrafted cannabis products for our highly desired, and award-winning consumer brands, sold across both recreational and medical channels.
Avant’s recreational consumer brands includes: BLK MKT ™, Tenzo ™, Cognōscente™ and Treehugger™, all produced from rare and exceptional cultivars, and sold in British Columbia, Ontario, Saskatchewan, Manitoba, New Brunswick, and the Yukon. The Company’s medical cannabis brand, GreenTec™, is distributed nationwide, directly to qualified patients through its GreenTec Medical portal, and through various medical cannabis partners.
Avant is a publicly traded corporation listed on the Toronto Stock Exchange (TSX: AVNT), and cross-trades on the OTCQX Best Market (OTCQX: AVTBF) and Frankfurt Stock Exchange (FRA: 1BU0). The Company is headquartered in Kelowna, British Columbia and has operations in British Columbia, Alberta and Ontario.
To learn more about Avant, to access the investor presentation, or learn more about its consumer brands, please visit www.avantbrands.ca .
For additional information, please contact:
Investor Relations at Avant Brands Inc.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION:
This news release includes certain “forward-looking information” as defined under applicable Canadian securities legislation, including statements regarding the plans, intentions, beliefs and current expectations of the Company with respect to future business activities and operating performance. Forward-looking information is often identified by the words “may”, “would”, “could”, “should”, “will”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect” or similar expressions and includes information regarding: the Company’s ability to execute on its growth strategy; investments in new product development, packaging and other initiatives expected to generate positive operating cash flows; the Company receiving the necessary licenses to increase gross margins on concentrate products; the continued monetization of the 3PL facility, including the Company’s ability to drive 3PL into full production to deliver significant revenue growth to the Company; the launch of new products under the Company’s recreational cannabis brands; the Company’s ability to further develop innovation to expand its product offerings; the Company’s ability to secure Health Canada license amendments; the Company’s ability to facilitate direct sales of concentrate products to provincial liquor boards; the Company’s ability to continue operating in a fiscally responsible and disciplined manner; the continued evaluation of all operational costs and budgets; the expansion of the Company’s global export client base; the Company’s ability to build on the initial success of the initial Treehugger TM and Cognoscente TM brand activations; further expansion or production in order to fulfill demands of the Company’s domestic recreational sales and global exports; the Company’s pursuit of opportunities to expand production output; management’s development of an ESG framework; and expectations for other economic, business, and/or competitive factors. To the extent any forward-looking information in this news release constitutes “financial outlooks” within the meaning of applicable Canadian securities laws, such information is being provided as preliminary financial results for Q1 2022 and the reader is cautioned that this information may not be appropriate for any other purpose and the reader should not place undue reliance on such financial outlooks. Forward-looking information is necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking information. Financial outlooks, as with forward-looking information generally, are, without limitation, based on the assumptions and subject to various risks as set out herein. The Company’s actual financial position and results of operations may differ materially from management’s current expectations and, as a result, our revenue and cash on hand may differ materially from the revenue and cash values provided in this news release. Examples include statements that the Company will operate in a fiscally disciplined manner; preliminary financial results are subject to the completion of the Company’s financial closing procedures and have not been audited or reviewed by the Company’s independent auditor; that the Company will build long-term shareholder value and reduce operational expenses; or that the Company will increase its revenue and gross margins.
Investors are cautioned that forward-looking information is not based on historical fact but instead reflects management’s expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Although the Company believes that the expectations reflected in such forward-looking information are reasonable, such information involves risks and uncertainties, and undue reliance should not be placed on such information, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of the Company. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking information are the following: regulatory and licensing risks; changes in consumer demand and preferences; changes in general economic, business and political conditions, including changes in the financial markets; the global regulatory landscape and enforcement related to cannabis, including political risks and risks relating to regulatory change; compliance with extensive government regulation; public opinion and perception of the cannabis industry; the impact of COVID-19; and the risk factors set out in the Company’s annual information form dated March 16, 2021, filed with Canadian securities regulators and available on the Company’s profile on SEDAR at www.sedar.com.
Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. For instance, there can be no assurance that the Company’s financial results for Q1 2022, including the Company’s revenues or any other preliminary financial results for Q1 2022 will be as projected. Although the Company has attempted to identify important risks, uncertainties and factors that could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking information, which speak only as of the date of this news release. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
This news release refers to certain financial performance measures that are not defined by and do not have a standardized meaning under International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. These non-IFRS financial performance measures are defined in the MD&A. Non-IFRS financial measures are used by management to assess the financial and operational performance of the Company. The Company believes that these non-IFRS financial measures, in addition to conventional measures prepared in accordance with IFRS, enable investors to evaluate the Company’s operating results, underlying performance and prospects in a similar manner to the Company’s management. As there are no standardized methods of calculating these non-IFRS measures, the Company’s approaches may differ from those used by others, and accordingly, the use of these measures may not be directly comparable. Accordingly, these non-IFRS measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.
SOURCE: Avant Brands, Inc.
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