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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Valens Company Inc | NASDAQ:VLNS | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.7602 | 0.8308 | 0.7176 | 0 | 01:00:00 |
Provincial sales net revenue increased 31.7% to $7.9 million in Q4 2021 compared to $6.0 million in Q3 2021
Canada-wide provincial listings increased 21.0% to 219 in Q4 2021, compared to 181 in Q3 2021, with further growth to 255 as of January 30, 2022
Adjusted gross profit margin increased significantly to 34.1% in Q4 2021 compared to 27.4% in Q3 2021
B2C revenue lines of provincial sales and Green Roads accounted for 73.9% of net revenue in Q4 2021
Valens expects to achieve positive adjusted EBITDA by Q4 2022
KELOWNA, BC, Feb. 28, 2022 /PRNewswire/ - The Valens Company Inc. (TSX: VLNS) (Nasdaq: VLNS) (the "Company", "The Valens Company" or "Valens"), a leading manufacturer of cannabis products, is pleased to report its fourth quarter and fiscal year financial results for the period ended November 30, 2021.
Tyler Robson, Chief Executive Officer, Co-Founder and Chair of The Valens Company, said: "This quarter showcases the progress we have made in our business plan in key areas despite a competitive and challenging operating environment in Canada and globally. Net revenue slightly declined quarter-over-quarter as we completed the transition of our B2B business to align with the 'fewer, bigger, better' strategy and was negatively impacted by the floods in British Columbia which resulted in supply chain disruptions. However, in our two key revenue segments, we are very pleased with the industry leading growth in provincial sales revenue and the full quarter revenue generated by our Green Roads US CBD business. With the B2B transition largely behind us, we expect to have more sustained growth in 2022."
Robson continued, "A bright spot in the quarter was our adjusted gross profit margin which increased from 27.4% in Q3 2021 to 34.1% in Q4 2021. I am very proud of our operations and logistics teams which have had to deal with a significant business transition over 2021 as well as automation delays, inflationary cost pressures, supply chain disruptions, and the flooding in British Columbia. With further automation and our recently announced integration initiative, we are now heading down the path towards profitability. This supports our confidence and commitment to achieving both positive adjusted EBITDA by Q4 2022 and our revenue guidance for 2023 of at least $225 million."
Fourth Quarter & Full Year Fiscal 2021 Highlights:
Q4 2021 | Q3 2021 | Percentage Change | |
Net Revenue | $18.4 | $21.0 | -12.3% |
Provincial Sales | $7.9 | $6.0 | +31.7% |
Green Roads | $5.7 | $4.7 | +21.3% |
B2B | $4.1 | $8.9 | -53.9% |
Other | $0.7 | $1.4 | -50.0% |
*The term "provincial listings" refers to the total number of provincial and territorial listings in Canada of products manufactured and/or distributed by The Valens Company
**Book value per share is calculated by dividing total shareholders' equity from the Q4 2021 consolidated statements of financial position by the common shares found in the Q4 MD&A as of November 30, 2021.
Fourth Quarter & Full Fiscal 2021 Corporate and Operational Highlights:
Financial Summary
The following table of financial highlights is presented in thousands of Canadian dollars, except for number of provincial listings.
Three months | Three months | Fiscal year | Fiscal year | |
Q4 2021 | Q3 2021 | Fiscal 2021 | Fiscal 2020 | |
Gross Revenue $ | 23,342 | 24,569 | 90,154 | 86,059 |
Net Revenue $ | 18,407 | 20,990 | 78,175 | 83,778 |
Gross Profit $ | 2,705 | 5,629 | 17,239 | 25,724 |
Gross Profit Margin | 14.7% | 26.8% | 22.1% | 30.7% |
Adjusted Gross Profit | 6,272 | 5,748 | 21,470 | 39,992 |
Adjusted Gross Profit | 34.1% | 27.4% | 27.5% | 47.7% |
Adjusted EBITDA $ | (13,347) | (6,183) | (26,731) | 14,139 |
Adjusted EBITDA % | N/A | N/A | N/A | 16.4% |
Net income (loss) $ | (21,423) | (12,799) | (49,034) | (20,682) |
Basic/diluted income | (0.34) | (0.24) | (0.88) | (0.49) |
Cash and marketable | 19,125 | 30,958 | 19,125 | 21,376 |
Provincial Listings | 219 | 181 | 219 | N/A |
Key Performance Indicators and Revenue Guidance:
Key Objectives for 2022:
Revenue & EBITDA Guidance 2023:
Jeff Fallows, President of The Valens Company, said: "We have now completed the successful 'Launch' phase of our business plan, having achieved attractive growth in provincial listings to create a leading cannabis consumer products company with an exciting portfolio of brands. Although we have only just begun to experience the targeted revenue growth from our 'Launch, Grow, Optimize' strategy, we now look to enter the 'Growth and Optimize' phases of our business plan, which will focus on maximizing sell-through, driving higher utilization across our facilities, removing underperforming listings, and pursuing optimization initiatives. This will ensure we remain operationally agile, competitively positioned in the market, and best able to deal with the ongoing logistical and inflationary challenges in the current economic environment. In Q1 2022, we are already starting to see strong momentum across all our key segments with strong growth in provincial sales and increased utilization through our realigned B2B partnerships which are expected to provide both sustained quarter-over-quarter revenue growth in 2022 and enhanced margins. This, combined with our integration initiatives announced in early February that are expected to generate $20 million in annual savings, has set us on a clear pathway to become EBITDA positive by fiscal Q4 2022."
Fallows continued, "Over the course of the year, we believe that our focus on business fundamentals with the expectation to drive revenue growth, achieve positive EBITDA, and attain deeper US market penetration will reflect positively as we look to generate shareholder value. With our track record of driving one of the highest revenues per dollar invested compared to our Canadian cannabis peers, our recent Nasdaq listing already showing increasing liquidity and expanding our reach to investors in the United States, we believe we are well positioned to drive value for our shareholders in 2022. Looking back over the last year we are incredibly proud of what we have achieved in a tough global environment. In 2022 we have a leading cannabis innovation platform best positioned to drive B2C revenue growth both north and south of the border as well as B2B revenue growth as the benefits of our 'Fewer, Bigger, Better' strategy begin to materialize. We expect 2022 to be a challenging environment where only the companies with distinct competitive advantages, low-cost infrastructure, and innovative product capabilities will thrive. We believe we have positioned ourselves with the right team and strategy to generate long-term value for shareholders."
This press release is intended to be read in conjunction with Company's Management's Discussion and Analysis ("MD&A") for the period and the accompanying Financial Statements and notes, available under the Company's profile on SEDAR at www.sedar.com and the Company's Form 10-Q, which will be filed on (www.sec.gov/edgar.shtml).
Q4 2021 Conference Call Details
The Company will host a conference call tomorrow, Tuesday, March 1, 2022, at 11:00 am Eastern Time / 8:00 am Pacific Time to discuss the financial results and business outlook.
Participant Dial-in Numbers:
Toll-Free: 1-877-407-0792
Toll / International: 1-201-689-8263
*Participants should request The Valens Company Earnings Call or provide confirmation code 13727202.
The call will be available via webcast on the Valens investor page of the Company website at https://thevalenscompany.com/investors/ or at this link. Please visit the website at least 15 minutes prior to the call to register, download, and install any necessary audio software. A replay of the call will be available on the Valens investor page approximately two hours after the conference call has ended.
Tyler Robson, Chief Executive Officer, Sunil Gandhi, Chief Financial Officer, Jeffrey Fallows, President, and Everett Knight, Executive Vice President of Corporate Development and Capital Markets, will be conducting a question-and-answer session following the prepared remarks.
At Valens, it's Personal.
About The Valens Company
The Valens Company is a leading cannabis consumer products company, with significant expertise in manufacturing cannabinoid based products and a mission to bring the benefits of cannabis to the world. Valens provides proprietary cannabis processing services and best-in-class product development, manufacturing, and commercialization of cannabis consumer packaged goods. Valens' high-quality products are formulated for the recreational, health and wellness, and medical consumer segments and are offered across all cannabis product categories, with a focus on quality and product innovation. Valens also manufactures, distributes, and sells a wide range of CBD products in the United States through its subsidiary Green Roads, and distributes medicinal cannabis products to international markets through its subsidiary Valens Australia. In partnership with brand houses, consumer packaged goods companies and licensed cannabis producers around the globe, Valens continues to grow its diverse product portfolio in alignment with evolving cannabis consumer preferences. Through Valens Labs, Valens is setting the standard in cannabis testing and research and development with Canada's only ISO17025 accredited analytical services lab, named The Centre of Excellence in Plant-Based Science by partner and scientific world leader Thermo Fisher Scientific. Discover more on The Valens Company at http://www.thevalenscompany.com.
Notice regarding Forward Looking Statements
All information included in this press release, including any information as to the future financial or operating performance and other statements of The Valens Company that express management's expectations or estimates of future performance, other than statements of historical fact, constitute forward-looking information or forward-looking statements within the meaning of applicable securities laws and are based on expectations, estimates and projections as of the date hereof. Forward-looking statements are included for the purpose of providing information about management's current expectations and plans relating to the future. Wherever possible, words such as "plans", "expects", "scheduled", "trends", "forecasts", "future", "indications", "potential", "estimates", "predicts", "anticipate", "to establish", "believe", "intend", "ability to", or statements that certain actions, events or results "may", "should", "could", "would", "might", "will", or are "likely" to be taken, occur or be achieved, or the negative of these words or other variations thereof, have been used to identify such forward-looking information. Specific forward-looking statements include, without limitation, all disclosure regarding future results of operations, future outcomes of transactions, economic conditions, and anticipated courses of action. Investors and other parties are advised that there is not necessarily any correlation between the number of SKUs manufactured and shipped and revenue and profit, and undue reliance should not be placed on such information.
The risks and uncertainties that may affect forward-looking statements include, among others, cannabis regulatory risk, risks relating to the regulation of hemp in the United States, U.S. entry restrictions, the uncertainties, effects of and responses to the COVID-19 pandemic, reliance on Canadian licenses, reliance on Australian licenses, the illegality of cannabis under federal law in the United States; catastrophic events; competition; the recent development of the cannabis industry and market in Canada; price compression in the cannabis industry; maturation of the cannabis market; dependence on supply of cannabis and reliance on other key inputs, material weakness in the Company's internal controls over financial reporting, dependence on senior management and key personnel, general business risk and liability, regulation of the cannabis industry, change in laws, regulations and guidelines, compliance with laws, foreign operations, reliance on a limited number of facilities, limited operating history, TSX and Nasdaq continued listing requirements, vulnerability to rising energy costs, environmental regulations and risks, conflicts of interest, unfavourable publicity or consumer perception, product liability, risks related to intellectual property, product recalls, difficulties with forecasts, management of growth and litigation, many of which are beyond the control of The Valens Company. For a more comprehensive discussion of the risks faced by The Valens Company, and which may cause the actual financial results, performance or achievements of The Valens Company to be materially different from estimated future results, performance or achievements expressed or implied by forward-looking information or forward-looking statements, please refer to The Valens Company's latest Annual Information Form filed with Canadian securities regulatory authorities at www.sedar.com or on The Valens Company's website at www.thevalenscompany.com. The risks described in such Annual Information Form are hereby incorporated by reference herein. Although the forward-looking statements contained herein reflect management's current beliefs and reasonable assumptions based upon information available to management as of the date hereof, The Valens Company cannot be certain that actual results will be consistent with such forward-looking information. The Valens Company cautions you not to place undue reliance upon any such forward-looking statements. The Valens Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law. Nothing herein should be construed as either an offer to sell or a solicitation to buy or sell securities of The Valens Company.
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SOURCE The Valens Company Inc.
Copyright 2022 PR Newswire
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