KELOWNA, BC, July 15, 2019 /CNW/ - Valens GroWorks
Corp. (TSXV: VGW) (OTC: VGWCF) (the "Company" or
"Valens"), 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 million or 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. 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." said Tyler Robson, CEO of
Valens.
"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.
The management's discussion and analysis for the period and the
accompanying financial statements and notes are available under the
Company's profile on SEDAR at www.sedar.com.
|
(1)
|
Adjusted EBITDA is a
non-GAAP measure used by management that does not have any
standardized meaning prescribed by IFRS and may not be comparable
to similar measures presented by other companies. Management
defines adjusted EBITDA as loss and comprehensive loss from
operations, as reported, before interest, tax, depreciation and
amortization, and adjusted for removing share-based payments,
unrealized gains and losses from short term investments and other
one-time and non-cash items including impairment losses.
Management believes adjusted EBITDA is a useful financial metric to
assess its operating performance on an adjusted basis as described
above. See "Reconciliation of non-IFRS measures" in the Company's
Management's Discussion and Analysis for the period ended May 31,
2019 for additional information
|
Option Grant
On July 15, 2019, the Company
granted 2,500,000 options to purchase common shares of the Company
exercisable at a price of $4.32 per
share and expiring on July 14, 2024,
to employees, officers and directors of the Company. The options
vest quarterly over a three-year period and are granted pursuant to
the terms of the Company's stock option plan, subject to regulatory
approval.
Conference Call Details
The company will host a conference call on Tuesday, July 16, 2019 at 11am Eastern Time / 8am
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 GroWorks Earnings Call or provide confirmation
code 13692339
The call will be webcast on the Valens Investor page of the
Company website at https://www.valensgroworks.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, Chris Buysen, Chief
Financial Officer, Jeffery Fallows,
President and Everett Knight,
Executive Vice President, Strategy & Investments, will be
conducting a question and answer session following the prepared
remarks.
About Valens GroWorks
Valens GroWorks Corp. (TSXV: VGW) (OTC: VGWCF) is
a multi-licensed, vertically-integrated cannabis
company focussed on being the partner of choice
for leading Canadian and international cannabis brands by
providing best-in-class, proprietary services including CO2,
ethanol, hydrocarbon, solvent-less and terpene extraction,
analytical testing, formulation and white label product
development. Valens is the largest
third-party extraction Company in Canada with an annual
capacity of 425,000 kg of dried cannabis and hemp biomass at
our purpose-built facility in Kelowna, British Columbia which is
in the process of becoming European Union (EU) Good
Manufacturing Practices (GMP) compliant.
Additionally, our subsidiary Valens Labs is a Health Canada licensed ISO
17025 accredited cannabis testing lab providing sector-leading
analytical services and has partnered with Thermo Fisher Scientific
to develop a Centre of Excellence in Plant-Based Science. For
more information, please visit http://valensgroworks.com.
The Company's investor deck can be found specifically
at http://valensgroworks.com/investors/
Notice regarding Forward Looking Statements
This news release contains certain "forward-looking statements"
within the meaning of such statements under applicable securities
law. Forward-looking statements are frequently characterized by
words such as "anticipates", "plan", "continue", "expect",
"project", "intend", "believe", "anticipate", "estimate", "may",
"will", "potential", "proposed", "positioned" and other similar
words, or statements that certain events or conditions "may" or
"will" occur. These statements are only predictions. Various
assumptions were used in drawing the conclusions or making the
projections contained in the forward-looking statements throughout
this news release. Forward-looking statements are based on the
opinions and estimates of management at the date the statements are
made and are subject to a variety of risks and uncertainties and
other factors that could cause actual events or results to differ
materially from those projected in the forward-looking statements.
The Corporation is under no obligation, and expressly 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 expressly required by applicable law.
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.
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SOURCE Valens GroWorks Corp.
