Cannabis product maker The Valens Company posted 7% revenue growth in the second quarter to $ 18.8 million, negative adjusted EBITDA

0
92

The Valens Company Inc. (TSX: VLNS) (OTCQX: VLNCF) reported its sSecond quarter financial results Wednesday with net sales of 6.5% to $ 18.8 million, compared to $ 17.6 million in the same period in 2020. Compared to net sales for the previous quarter, the numbers are down 6.2% from $ 20.0 million.

Key financial figures for the second quarter

  • Quarterly revenue increased 70.5% to $ 16.9 million (which accounts for approximately 90% of total net sales), compared to $ 9.9 million in the second quarter of last year; the company attributed better product sales to new product launches in various cannabis categories;
  • Gross profit was $ 4.1 million, or 22% of sales, compared to $ 6.3 million, or 35.8% of sales, for the second quarter of 2020;
  • Adjusted EBITDA for the period was a loss of $ 5 million compared to adjusted EBITDA gain of $ 2.7 million, or 15.3% of revenue, for the same quarter last year; the decrease in Adjusted EBITDA Valens due to the integration of LYF and higher expenses related to new product launches;
  • The company ended the quarter with approximately $ 23.9 million in cash before raising $ 46 million through an offer to buy units.

“We believe our business model has remained resilient despite the ongoing challenges posed by the pandemic, and our strategy has continued to prove effective as we achieved significant market penetration across the country,” said, “ Tyler Robson, CEO, Co-Founder and Chairman of Valens, “We are proud to announce that Valens had 132 SKUs listed in Canada in the second quarter alone – a 76% increase compared to 75 SKUs listed in the first quarter of 2021 The material growth of the SKU lists is in stark contrast to many of our competitors in the industry and is a testament to the innovation and quality we offer consumers and retailers. “

Current operational and business milestones

  • The British Columbia-based company completed the acquisition of Green Roads and its manufacturing subsidiary for $ 40 million in a cash and stock transaction and entered the US market in June;
  • Valens expanded its Canadian distribution and came to Manitoba, New Brunswick and Yukon Territory. The company currently sells its products in six provinces and one territory, including Alberta, British Columbia, Ontario and Saskatchewan;
  • In the previous period, Valens launched several new products in four new categories – edibles, flowers, pre-rolls and topicals;
  • It has teamed up with two Canadian producers – Rubicon Organics, for whom it will provide extraction and production services, and it will become Citizen Stash Cannabis Corp.
  • Changes made to the management team and board of directors, appointment Sunil Gandhi as ththe new CFO, Adam Shea as CCO while Dr. Guy Beaudin and Drew Wolff were elected to the company’s board of directors.

Strategic initiatives for the 2021 financial year

  • Valens will invest an additional $ 10 million in Green Roads to strengthen its sales and marketing resources. In addition, the company plans to reach further investors in the USA with a trading presence on the Nasdaq Capital Market in the second half of the year.
  • There are plans to launch more new products in different categories;
  • It will use the $ 28 million of recent net proceeds to support future acquisitions and business expansions in the US and international markets.

Price action

Valens stock closed Wednesday’s market session 3.76% lower at $ 2.05 per share.

Photo: Courtesy Esteban Lopez on Unsplash

For the latest financial news, exclusive stories and memes, follow Benzinga on Twitter, Facebook and Instagram. For the best interviews, stock market talks and videos, subscribe to our YouTube channel.

© 2021 Benzinga.com. Benzinga does not offer investment advice. All rights reserved.