EnWave Reports 2023 Third Quarter Consolidated Interim Financial Results
25 Août 2023 - 3:00PM
EnWave Corporation (TSX-V:ENW | FSE:E4U) (“EnWave”, or the
"Company") today reported the Company’s consolidated
interim financial results for the third quarter ended June 30,
2023.
All values in thousands and denoted in CAD
unless otherwise stated.
- Reported revenue for Q3 2023 of
$2,486, representing a decrease of $174 relative to the comparable
period in the prior year. The decrease was partially offset by
royalty revenues of $394, representing an increase of $93 relative
to the comparable period in the prior year.
- Reported an Adjusted EBITDA(1) loss
of $192 for Q3 2023, an improvement of $32 from the comparable
period in the prior year.
- Reported an overall decrease in
Selling, General & Administrative (“SG&A”) costs (including
Research & Development (“R&D”)) of $569 for Q3 2023
relative to the comparable period in the prior year, with the
decrease primarily related to a continued focus on managing
non-revenue generating spending.
- Reported cash and cash equivalents
of $4,471 and no debt as at June 30, 2023, an increase of $984 from
March 31, 2023.
- Signed a Commercial License
Agreement with Bridgford Foods and sold a 120kW REVTM machine to
produce military ration components for the U.S. Army, among
others.
Consolidated Financial
Performance:
($ ‘000s) |
Three months ended June 30, |
|
Nine months ended June 30, |
|
|
2023 |
|
|
2022 |
|
Change% |
|
|
2023 |
|
|
2022 |
|
Change% |
|
|
|
|
|
|
|
|
Revenues |
|
2,486 |
|
|
2,660 |
|
(7 |
%) |
|
|
9,906 |
|
|
8,224 |
|
20 |
% |
Direct
costs |
|
(1,767 |
) |
|
(1,423 |
) |
24 |
% |
|
|
(5,894 |
) |
|
(4,147 |
) |
42 |
% |
Gross margin |
|
719 |
|
|
1,237 |
|
(42 |
%) |
|
|
4,012 |
|
|
4,077 |
|
(2 |
%) |
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
General and administration |
|
501 |
|
|
736 |
|
(32 |
%) |
|
|
1,753 |
|
|
2,200 |
|
(20 |
%) |
Sales and marketing |
|
277 |
|
|
576 |
|
(52 |
%) |
|
|
1,167 |
|
|
1,681 |
|
(31 |
%) |
Research and development |
|
408 |
|
|
443 |
|
(8 |
%) |
|
|
1,220 |
|
|
1,530 |
|
(20 |
%) |
|
|
1,186 |
|
|
1,755 |
|
(32 |
%) |
|
|
4,140 |
|
|
5,411 |
|
(23 |
%) |
|
|
|
|
|
|
|
|
Net income(loss) continuing
operations |
|
(918 |
) |
|
(807 |
) |
(14 |
%) |
|
|
(974 |
) |
|
(2,191 |
) |
56 |
% |
Net loss discontinued
operations |
|
(1,031 |
) |
|
(1,208 |
) |
15 |
% |
|
|
(5,703 |
) |
|
(2,463 |
) |
(132 |
%) |
|
|
|
|
|
|
|
|
Adjusted EBITDA(1) |
|
(192 |
) |
|
(224 |
) |
14 |
% |
|
|
703 |
|
|
(654 |
) |
207 |
% |
Loss per share: |
|
|
|
|
|
|
|
Basic and diluted – continuous operations |
$ |
(0.01 |
) |
$ |
(0.01 |
) |
|
|
$ |
(0.01 |
) |
$ |
(0.02 |
) |
|
Basic and diluted – discontinued operations |
$ |
(0.01 |
) |
$ |
(0.01 |
) |
|
|
$ |
(0.05 |
) |
$ |
(0.02 |
) |
|
|
$ |
(0.02 |
) |
$ |
(0.02 |
) |
|
|
$ |
(0.06 |
) |
$ |
(0.04 |
) |
|
(1) Adjusted EBITDA is a non-IFRS
financial measure. Refer to the Non-IFRS Financial Measures
disclosure below for a reconciliation to the nearest IFRS
equivalent. EnWave’s annual consolidated financial statements and
MD&A are available on SEDAR at www.sedar.com and on the
Company’s website www.enwave.net
Key Financial Highlights for the Nine Months Ended Q3
2023 (expressed in ‘000s):
- Revenue for the
nine months ended Q3 2023 of $9,906, compared to $8,224 for the
nine months ended Q3 2022, an increase of $1,682. The increase in
revenue was primarily due to the resale of two large-scale
machines, relative to the comparable period of the prior year which
had one machine resale.
- Royalty Revenues
for the nine months ended Q3 2023 of $1,085, compared to $1,051 for
the nine months ended Q3 2022, an increase of $34. The increase in
royalties was a result of increased production and sales by current
Partners in Q3 2023.
- Gross margin for
the nine months ended Q3 2023 was 41% compared to 50% for the nine
months ended Q3 2022. The decrease in margin was a result of the
overall machine sale mix, including resales, relative to the
comparable period of the prior year.
- SG&A
expenses (including R&D) for the nine months ended Q3 2023 of
$4,140, compared to $5,411 for the nine months ended Q3 2022, a
decrease of $1,271. The decrease resulted from concerted efforts to
maintain discretionary spending, including lower personnel costs
across all departments.
- Adjusted EBITDA
(refer to Non-IFRS Financial Measures section below) for the nine
months ended Q3 2023 was $703, compared to a loss of $654 for the
nine months ended Q3 2022, an increase of $1,357. The increase in
adjusted EBITDA was primarily due to the wind down of NutraDried
and its classification as discontinued operations, the resale of
two large scale machines and the reduction of SG&A expenses
(including R&D).
Significant Corporate Accomplishments in
Q3 2023 and Subsequently:
- Sold a 120kW
REV™ machine to Bridgford Foods in partnership with the United
States Department of Defence for production of military rations.
Bridgford will also use the REVTM technology to develop additional
consumer-branded products at their North Carolina facility.
- Signed a
Technology Evaluation and License Option Agreement with Moleciwl
Cyf of Wales to develop fruit and vegetable products for the Welsh
market.
- Received
approval for a cost-shared funding project through the Food
Processing Growth Fund, for which we gratefully acknowledge the
financial support of the Province of British Columbia through the
Ministry of Agriculture and Food. The program will fund up to 75%
of approved project costs to a maximum contribution in the amount
of $750. The funding will be used for capital additions to the
REVworx™ facility, including but not limited to a retail packaging
system.
- NutraDried
received correspondence from the Internal Revenue Service advising
a tax refund of $497 USD, of an estimated total potential $1,183
USD tax refund, would be issued in Q4 2023 relating to the Employee
Retention Tax Credit for businesses affected during the COVID-19
pandemic. There has not been any additional correspondence from the
Internal Revenue Service concerning the remaining tax refund and
there is no certainty it will be issued.
Non-IFRS Financial
Measures:
This news release refers to Adjusted EBITDA which is a non-IFRS
financial measure. We define Adjusted EBITDA as earnings before
deducting amortization and depreciation, stock-based compensation,
foreign exchange gain or loss, finance expense or income, income
tax expense or recovery and non-recurring impairment, restructuring
and severance charges, government assistance and discontinued
operations. This measure is not necessarily comparable to similarly
titled measures used by other companies and should not be construed
as an alternative to net income or cash flow from operating
activities as determined in accordance with IFRS. Please refer to
the reconciliation between Adjusted EBITDA and the most comparable
IFRS financial measure reported in the Company’s consolidated
financial statements.
|
Three months ended June 30, |
Nine months endedJune 30 |
($ ‘000s) |
2023 |
|
|
2022 |
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
Net (loss) income after income
tax |
(1,949 |
) |
|
(2,015 |
) |
(6,677 |
) |
|
(4,654 |
) |
Amortization and
depreciation |
276 |
|
|
323 |
|
841 |
|
|
769 |
|
Stock-based
compensation |
103 |
|
|
308 |
|
468 |
|
|
920 |
|
Foreign exchange
loss |
54 |
|
|
(48 |
) |
86 |
|
|
18 |
|
Finance expense
(income), net |
(22 |
) |
|
- |
|
(33 |
) |
|
(23 |
) |
Non-recurring
impairment expense |
315 |
|
|
- |
|
315 |
|
|
- |
|
Government assistance |
- |
|
|
- |
|
- |
|
|
(147 |
) |
Discontinued operations |
1,031 |
|
|
1,208 |
|
5,703 |
|
|
2,463 |
|
Adjusted EBITDA |
(192 |
) |
|
(224 |
) |
703 |
|
|
(654 |
) |
Non-IFRS financial measures should be considered
together with other data prepared accordance with IFRS to enable
investors to evaluate the Company's operating results, underlying
performance and prospects in a manner similar to EnWave’s
management. Accordingly, these non-IFRS financial measures are
intended to provide additional information and should not be
considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS. For more information,
please refer to the Non-IFRS Financial Measures section in the
Company’s MD&A available on www.sedar.com.
About EnWave
EnWave is a global leader in the innovation and
application of vacuum microwave dehydration. From its headquarters
in Delta, BC, EnWave has developed a robust intellectual property
portfolio, perfected its Radiant Energy Vacuum (REV™) technology,
and transformed an innovative idea into a proven, consistent, and
scalable drying solution for the food, pharmaceutical and cannabis
industries that vastly outperforms traditional drying methods in
efficiency, capacity, product, quality, and cost.
With more than fifty royalty-generating partners
spanning twenty six countries and five continents, EnWave’s
licensed partners are creating profitable, never-before-seen snacks
and ingredients, improving the quality and consistency of their
existing offerings, running leaner and getting to market faster
with the company’s patented technology, licensed machinery, and
expert guidance.
EnWave’s strategy is to sign royalty-bearing
commercial licenses with food and cannabis producers who want to
dry better, faster and more economical than freeze drying, rack
drying and air drying, and enjoy the following benefits:
- Food and ingredients companies can
produce exciting new products, reach optimal moisture levels up to
seven times faster, and improve product taste, texture, color and
nutritional value.
- Cannabis producers can dry four to
six times faster, retain up to 20% more terpenes and 25% more
cannabinoids, and achieve at least a 3-log reduction in
crop-destroying microbes.
EnWave Corporation
Mr. Brent Charleton, CFAPresident and CEO
For further information:
Brent Charleton, CFA, President and CEO at +1 (778)
378-9616E-mail: bcharleton@enwave.net
Dylan Murray, CPA, CA, CFO at +1 (778) 870-0729E-mail:
dmurray@enwave.net
Safe Harbour for Forward-Looking Information
Statements: This press release may contain forward-looking
information based on management's expectations, estimates and
projections. All statements that address expectations or
projections about the future, including statements about the
Company's strategy for growth, product development, market
position, expected expenditures, the Company ceasing to make
investments in NutraDried, the timing of the wind-down and
dissolution of NutraDried, expectations around the cost of winding
down NutraDried, and the Company's intended focus for the future
are forward-looking statements. These statements are not a
guarantee of future performance and involve a number of risks,
uncertainties and assumptions. Although the Company has attempted
to identify important factors that could cause actual results to
differ materially, there may be other factors that cause results
not to be as anticipated, estimated or intended, including that the
process of winding up NutraDried will involve time and expense to
the Company materially greater than anticipated, that the
realization of assets of NutraDried will not sufficiently cover the
orderly wind-up of NutraDried, which could result in the
requirement for additional funding by the Company to complete such
wind-up, that the foregoing developments will adversely affect the
Company, in terms of cost, management time and focus, outlook or
reputation; the ability of the Company to achieve its longer-term
outlook, the ability to lower costs, and the other risk factors set
forth in the Company's public filings. There can be no assurance
that such statements will prove to be accurate, as actual results
and future events could differ materially from those anticipated in
such statements. Accordingly, readers should not place undue
reliance on forward-looking statements.
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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