Hill Incorporated: Rebuilt & Ready for Growth
May 1st, 2023
News, Top Story
Hill Incorporated (TSX-V: HILL) (OTC: HSEEF) is transforming its legacy business model to embrace a more profitable and scalable global growth agenda. Under a new C-Suite team, the Company is pioneering the space where craft consumer products meet bioscience by combining their deep consumer packaged goods expertise and brands with their licensing rights for patented DehydraTECHTM technology.
In this article, we’ll take a look at management’s progress improving legacy Vin(Zero) economics, why it’s doubling down on DehydraTECH, and what might be in store for the future.
Improving Vin(Zero) Economics
Hill Incorporated’s new management team began by making strategic adjustments to the legacy Vin(Zero) business to shorten the order-to-cash cycle, reduce working capital requirements, and improve logistics to drive efficiencies. In particular, the company focuses on ordering customer inventory during the optimal seasons to minimize transportation costs.
“We will leverage the streamlined distribution process and capitalize on marketing initiatives and global distribution opportunities with the intention of continually increasing revenues while maintaining or improving current margins,” read the company’s recent MD&A filing.
These changes helped improve gross margins from 25% in September 2022 to 34% by year-end. However, investors should note that the changes also result in larger orders spread further apart, which could translate to more quarterly Vin(Zero) revenue volatility. Investors may need to look at longer-term averages to discern true revenue trends.
Doubling Down on DehydraTECH
DehydraTECH makes it easy for leading, progressive cannabis edible manufacturers to deliver consistent, premium consumer experiences with the most reliable taste and impact.
Hill Incorporated is doubling down on its DehydraTECH licensing efforts in the U.S., expanding its operating footprint to 11 states with $22 billion in collective cannabis sales last year. As a result, licensing income for the six months ended December 31, 2022, increased 163% to nearly $500,000 – and management is working towards these figures building in future quarters.
“We will work with this DehydraTECH ecosystem and partners to not only grow within the territories where the company currently operates but also leverage the intellectual capital and network the company has built to both grow with current licensees and engage new ones as appropriate to build out our geographic and consumer product form factors roadmap,” added the company in its recent MD&A filing.
At the same time, its partners within these states have integrated DehydraTECH technology into new product formats, increasing the number of available SKUs and revenue potential. Management anticipates additional form factors throughout 2023 from both existing licensees and new licensees that it hopes to onboard over the coming months.
A Cleaner Financial Structure
Hill Incorporated (TSX-V: HILL) (OTC: HSEEF) is in the final stages of a significant transformation with obvious signs of success. With approximately $1.5 million in cash and equivalents on its balance sheet, the company is well-capitalized to execute on its plans to streamline its Vin(Zero) business and scale its DehydraTECH presence in the U.S. through new licensees and product formats. After a review of its record setting financials and note disclosures (click HERE), it is easy to see the corporate transformation from this time last year:
- Solid cash position after closing a fully subscribed private placement, with significantly insider participation (click HERE)
- Significant reduction in Accounts Receivable demonstrating a strong and reliable relationship with its customers
- As a result of the LuckNow Facility Lease (the Facility”) being extinguished in February 2023, the Company will now show on its financial statements
- The elimination of its lease liability
- The elimination of its right-of-use assets
- The gain on sale of its assets related to canning and bottling equipment (a previous business strategy that has now been shut down)
Long story short, this Company is setting itself up to have as clean a balance sheet as a growth Company can have and that is always something investors want to see.
If you want to follow along with the story, sign up HERE to receive the company’s investor presentation and regular updates.
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Hill Incorporated is a client of CFN Enterprises Inc. Hill Incorporated agreed to pay CFN Enterprises Inc. $27,000 beginning on April 4, 2023 for a three month investor awareness campaign.
This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.
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