Valens GroWorks Corp., a vertically integrated provider of industry leading extraction products and services; including a diverse suite of extraction methodologies, next generation cannabinoid delivery formats and an ISO 17025 accredited analytical lab is pleased to report its financial results for the second quarter of fiscal 2019.
Key Financial Highlights of The Second Quarter of Fiscal 2019
- Revenue increased to $8.8 million, a 296% increase over the first quarter of 2019.
- Gross profit increased to $5.1 million, or 58.0% of revenue, for the second quarter of 2019 compared to $0.9 millionor 38.3% of revenue in the first quarter.
- Adjusted EBITDA(1) of $2.0 million in the second quarter, or 23.0% of revenue.
- Strong balance sheet with $65.5 million in cash and cash equivalents and short-term investments and a net working capital position of $76.3 million as at May 31, 2019.
Key Operating Highlights of The Second Quarter of Fiscal 2019
- Increased annual extraction capacity significantly to 425,000 KG of dried cannabis and hemp biomass in the second quarter of 2019 to meet increasing customer demand with plans to further increase capacity to over 1,000,000 KG per year with the buildout of the adjacent facility in Kelowna, BC anticipated to be completed in H1 2020.
- Announced three new extraction partners in the second quarter of 2019, including The Green Organic Dutchman Holdings Ltd, HEXO Inc and Tantalus Labs and expanded contracted extraction capacity with Tilray Inc by 300% to 60,000 KG per year and added contract manufacturing services.
- 8,547,000 grams of dried cannabis and hemp biomass was processed in the second quarter of 2019, a 376% increase over the first quarter of 2019. The Company has already processed 7,348,000 grams of biomass in the first 45 days of the third quarter.
- The Company was accepted for listing the common shares and warrants of the Company on the TSX Venture exchange as a Tier 1 life sciences issuer.
“The second quarter of 2019 provided a number of significant achievements for Valens as the team continued to successfully execute on our commercial production plan which translated into revenues of $8.8 million for the second quarter, a 296% increase from the first quarter of 2019,” said Tyler Robson, CEO of Valens, “This increase in production volume also allowed the team at Valens to achieve increased efficiency targets resulting in strengthening gross margins to 58.0% of revenue in the second quarter of 2019, up from the 38.3% realized in the first quarter of 2019.”
“With the recent increase in annual production capacity to 425,000 kg, and significant interest from our industry partners in white label product development and manufacturing for vape cartridges, tinctures, gel capsules, beverages and topicals, we remain focused on the expansion of our footprint in Kelowna to capitalize on these significant opportunities. With this and other strategic investments, we expect to continue to strengthen Valens’ position as the world’s leading production partner in the cannabis industry and for growth to accelerate throughout the remainder of fiscal 2019 and beyond,” concluded Mr. Robson.