LANGLEY, BC, Nov. 29, 2018 /CNW/ - Bevo Agro Inc. (TSXV:
BVO) is pleased to announce operating and financial results for the
first quarter ending September 30,
2018.
Q1 Highlights
Bevo announced an Arrangement Agreement with Sun Pharm
Investments for a reverse take-over of Bevo which involves three
main elements:
- the amalgamation of Sun Pharm
with a wholly-owned subsidiary of Bevo with Sun Pharm shareholders receiving 86% of the
outstanding Bevo shares (the expected exchange ratio being one Bevo
share for each Sun Pharm share) and
the existing Bevo shareholders continuing to hold Bevo shares
representing a 14% interest in Bevo.
- a plan of arrangement under which Bevo will distribute its
interest in CubicFarm Systems Corp. ("Cubic") to the shareholders
of Bevo (the "Spin-Out"), with Bevo shareholders expected to
receive one common share of Cubic for every Bevo share held. A
brief summary of Cubic's cubic farming business is set out
below.
- Bevo changing its name to Zenabis Global Inc. ("Zenabis" being
one of Sun Pharm's established
brands in the cannabis industry).
The transaction is scheduled to close in December 2018.
Sales for Q1 of fiscal 2019 totaled $4,249,699, a decline of 6% compared to sales of
$4,510,593 for the same quarter last
year. The first quarter typically involves cleaning and
transitioning the greenhouses from fourth quarter flower shipments
into vegetable propagation and sales vary.
The gross profit for the three months was $1,242,185 (29% of sales) compared to
$1,422,002 (32%) for the same period
last year. The decrease in margin is directly related to a changed
mix of client orders of propagated plants and utility costs.
EBITDA (Earnings before interest, taxes, depreciation and
amortization) were $559,549 for the
quarter ended Sept. 30, 2018 compared
to $813,144 for the same period last
year.
General operating expenses for the first quarter ending
September 30, 2017 totaled
$1,404,432, versus $1,361,273, reported for the same three months
last year.
The after-tax net loss was $121,747 for the three months compared to a net
profit of $44,929 in the first
quarter of fiscal 2017.
Readers are encouraged to view the Company's financial
statements for the first quarter ending September 30, 2018 and accompanying MD&A at
www.sedar.com.
Summary- Consolidated Condensed Statements of Operations and
Comprehensive Income
3 months
ended
|
Sept. 30,
2018
|
|
Sept. 30,
2017
|
|
Change
|
Sales
|
$4,249,699
|
100%
|
|
$4,510,593
|
100%
|
|
-$260,894
|
Cost of
Sales
|
$3,007,514
|
71%
|
|
$3,088,591
|
68%
|
|
-$81,077
|
Gross
Margin
|
$1,242,185
|
29%
|
|
$1,422,002
|
32%
|
|
-$179,817
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
General
Operating
|
$366,812
|
9%
|
|
$324,212
|
7%
|
|
$42,600
|
Employee
Benefits
|
$315,824
|
7%
|
|
$284,646
|
6%
|
|
$31,178
|
Amortization
|
$542,328
|
13%
|
|
$555,217
|
12%
|
|
-$12,889
|
Interest
expenses
|
$179,468
|
4%
|
|
$197,198
|
4%
|
|
-$17,730
|
Total
expenses
|
$1,404,432
|
33%
|
|
$1,361,273
|
30%
|
|
$43,159
|
Earnings (loss) from
operations
|
-$162,247
|
-4%
|
|
$60,729
|
1%
|
|
-$222,976
|
Earnings before
taxes
|
-$162,247
|
|
|
$60,729
|
|
|
-$222,976
|
Income
taxes-future
|
-$40,500
|
|
|
$15,800
|
|
|
-$56,300
|
Net earnings (loss)
for period
|
-$121,747
|
-3%
|
|
$44,929
|
1%
|
|
-$166,676
|
|
|
|
|
|
|
|
|
EBITDA
|
$559,549
|
13%
|
|
$813,144
|
18%
|
|
-$253,595
|
Bevo Agro is North America's leading supplier of propagated
agricultural plants, operating approximately 53 acres of greenhouse
facilities on 98 acres of land in Langley, BC and 20 acres of land in
Pitt Meadows, BC. The Company's
main products are the propagation of vegetable plants such as
tomatoes, peppers, cucumbers, and other plants such as bedding
plants, flowers and grasses. The Company markets its products to
established greenhouse growers, nurseries and retail outlets
throughout North America.
Sun Pharm is a leader in
agriculture, technology, pharmaceutical sales, consumer packaged
goods, international distribution and brand marketing, with
cannabis and cannabis-related purchase orders from the provinces of
New Brunswick, British Columbia, Nova Scotia, and Yukon Territory. Sun
Pharm is currently a privately-held cannabis company which has one
of the largest, federally licensed indoor medical cultivation
footprints in Canada, operating
two licensed production facilities in British Columbia and New Brunswick, with a third expected to be
coming online shortly in Nova
Scotia. These facilities encompass 660,000 square feet of
indoor pharmaceutical grade cannabis production space,
strategically positioned on Canada's coasts, facilitating national
distribution and access to international markets. Sun Pharm is currently working towards globally
recognized EU GMP certifications. Sun Pharm has one of the
most experienced management teams in the industry, with expertise
in retail consumer packaged goods, global pharmaceutical sales and
manufacturing, quality assurance, and commercialized cultivation.
The growing team has more than two decades of experience in organic
cultivation and distribution of herbs and nutraceutical products
throughout the Americas, North
Africa, and the Middle East. Sun Pharm's sales team has
more than two decades in product development, commercialization,
and retail and pharmaceutical sales including international
distribution.
Neither the TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE Bevo Agro Inc.