EnWave Announces 2019 First Quarter Consolidated Interim Financial Results and Appointment of Mr. Stephen Sanford to the Boar...
February 28 2019 - 8:30AM
EnWave Corporation (TSX-V:ENW | FSE:E4U) (“EnWave”, or the
"Company") today reported the Company’s consolidated
interim financial results for the first quarter ended December 31,
2018.
Consolidated Financial
Performance:
($ ‘000’s) |
Three months ended December 31, |
|
2018 |
|
2017 |
|
Change% |
|
|
|
|
Revenues |
7,806 |
|
4,519 |
|
73 |
% |
Direct
costs |
4,769 |
|
3,093 |
|
54 |
% |
Gross
margin |
3,037 |
|
1,426 |
|
113 |
% |
|
|
|
|
Operating Expenses |
|
|
|
General
and administration |
998 |
|
593 |
|
68 |
% |
Sales and
marketing |
976 |
|
590 |
|
65 |
% |
Research
and development |
341 |
|
272 |
|
25 |
% |
|
2,315 |
|
1,455 |
|
59 |
% |
|
|
|
|
Net loss for the period
after taxes |
(15 |
) |
(397 |
) |
(96 |
%) |
Loss per share – basic
and diluted |
(0.00 |
) |
(0.01 |
) |
|
|
|
|
|
Adjusted
EBITDA* |
1,163 |
|
315 |
|
269 |
% |
* Adjusted EBITDA is a non-IFRS
financial measure. Refer to the disclosure below regarding non-IFRS
financial measures below and in the Company’s MD&A.
EnWave’s interim 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 Q1
(expressed in ‘000s):
- Reported the highest quarterly revenue ever for the Company in
Q1 2019 of $7,806 compared to $4,519 for Q1 of 2018, an increase of
$3,287. Royalty revenues for Q1 2019 increased to $251, compared
with $203 for Q1 of 2018. Revenue growth was driven by increased
sales and distribution of the Company’s Moon Cheese® product.
- Achieved gross profit of $3,037 for Q1 2019 compared to $1,426
for Q1 2018, an increase of $1,611 or 113%. Gross margin as a
percentage of revenue was 39% for Q1 2019 compared to 31% for Q1
2018.
- Continued to strengthen the cash flow profile with Adjusted
EBITDA(*) of $1,163 for Q1 2019 compared to $315 for Q1 2018, an
increase of $848. The growth in positive EBITDA represents the
Company’s continued ability to generate cash from its
operations.
- Reduced the consolidated net loss for the period after taxes to
$15 for Q1 2019 compared to a net loss of $397 for Q1 2018, an
improvement of $382 year-over-year.
- Invested in selling and marketing with S&M expenses of $976
for Q1 2019 compared to $590 for Q1 2018, an increase of $386.
S&M expenses increased as part of the strategy to invest in
marketing for Moon Cheese® as well as selling activities that
promote REVTM technology across the food and cannabis sectors.
- Increased G&A and R&D expenses to $998 and $341 for Q1
2019, respectively, compared to $592 and $272 in Q1 2018. The
Company added an experienced, full-time CEO for NutraDried to drive
growth in the subsidiary business, and invested strategically in
intellectual property to support our royalty licensing business
model.
Significant
Accomplishments:
- Entered into a royalty-bearing commercial sub-license agreement
with The Green Organic Dutchman (“TGOD”) and Tilray, Inc.
(“Tilray”) granting TGOD non-exclusive rights to use EnWave’s
technology for processing legalized cannabis in Canada. Received a
purchase order from TGOD for a 60kW REVTM machine and robotic tray
handling system.
- Received a purchase order from Milne Microdried Inc. (“Milne”)
for a 120kW REVTM processing line. The purchase order represents
Milne’s third 120kW REVTM machine and significantly increases
Milne’s total royalty-bearing processing capacity.
- Signed a royalty-bearing commercial license agreement with
Royal FrieslandCampina N.V. (“Friesland Campina”), one of Europe’s
largest dairy companies. Friesland Campina will deploy REVTM
technology to develop new products that fit the evolving consumer
needs and taste preferences. Friesland Campina purchased a 10kW
REVTM unit to initiate production.
- Received a purchase order from Bare Foods Co. (“Bare Foods”), a
leading American snack food company recently acquired by PepsiCo,
for its third 10kW REVTM machine to expand commercial production of
healthy fruit snack products.
- Announced the commercial launch of Bonduelle Group’s
(“Bonduelle”) InFlavor® dehydrofrozen vegetable product into the
retail and food service channels. The Company extended Bonduelle’s
exclusive rights to EnWave’s technology for dehydrofrozen vegetable
products until September 30, 2019 in exchange for a milestone
payment. Bonduelle must purchase a 400kW REVTM machine before
September 30, 2019 in order to extend the term of its exclusive
rights.
- Signed a royalty bearing commercial sub-license agreement with
Your Wasabi Farms (“YWF”) and Tilray granting YWF the non-exclusive
rights to use EnWave’s technology to process cannabis plant
material and industrial hemp.
- Ended a commercial license agreement with Agropur Dairy
Co-operative (“Agropur”). Agropur failed to purchase the
large-scale REVTM machine that was required in order to extend its
agreement with the Company.
- Installed the first scaled-up Good Manufacturing Practices
(“cGMP”) freezeREV® machine for Merck and passed site acceptance
testing. The machine will be used by Merck for potential
development of freezeREV® technology as a continuous dehydration
alternative to lyophilization.
- Expanded sales and distribution of Moon Cheese® with additional
product rotations in a number of Costco divisions.
- Doubled the Company’s production capacity of Moon Cheese®
through the installation of a second 100kW nutraREV® machine and a
10kW REVTM machine. The expansion was facilitates continued sales
growth of Moon Cheese® and positions for future projected demand in
the consumer marketplace.
Appointment of Mr. Stephen Sanford to
the Board of Directors:
The Company is pleased to announce that Mr.
Stephen Sanford has been appointed to the Board of Directors as a
new independent director. The addition of a highly experienced
legal executive will further strengthen the diverse skillset of the
Company’s Board of Directors.
Mr. Sanford is a seasoned legal professional
with over 30 years of experience as an executive for a Fortune 500
company. He is the Senior Vice President and Managing General
Counsel at Fluor Corporation (“Fluor”), a global engineering and
construction company. Mr. Sanford has significant experience
structuring major commercial transactions in a variety of legal
systems around the world. In his role at Fluor, Mr. Sanford manages
a team of legal professionals with a global footprint that
addresses intellectual property matters, taxation, insurance and
risk management matters. During his tenure at Fluor, Mr. Sanford
has provided legal expertise and leadership during the structuring
of billions of dollars in transactions.
Mr. Sanford obtained both his Bachelor’s Degree
and Law Degree from Dalhousie University and holds an MBA from the
University of Calgary.
(*) Non-IFRS Financial
Measures:Adjusted EBITDA is not a measure of financial
performance under IFRS. 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 and non-recurring impairment charges.
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 discussion
included in the Company’s interim MD&A for December 31, 2018
and annual MD&A for the year ended September 30, 2018.
About EnWave EnWave
Corporation, a Vancouver-based advanced technology company, has
developed Radiant Energy Vacuum (“REV™”) – an innovative,
proprietary method for the precise dehydration of organic
materials. EnWave has further developed patent-pending methods for
uniformly drying and decontaminating cannabis through the use of
REV™ technology, shortening the time from harvest to marketable
cannabis products.
REV™ technology’s commercial viability has been
demonstrated and is growing rapidly across several market verticals
in the food, and pharmaceutical sectors including legal cannabis.
EnWave’s strategy is to sign royalty-bearing commercial licenses
with industry leaders in multiple verticals for the use of REV™
technology. The company has signed over twenty royalty-bearing
licenses to date, opening up nine distinct market sectors for
commercialization of new and innovative products. In addition to
these licenses, EnWave has formed a Limited Liability Corporation,
NutraDried Food Company, LLC, to develop, manufacture, market and
sell all-natural cheese snack products in the United States under
the Moon Cheese® brand.
EnWave has introduced REV™ as the new
dehydration standard in the food and biological material sectors:
faster and cheaper than freeze drying, with better end product
quality than air drying or spray drying. EnWave currently has three
commercial REV™ platforms:
1. nutraREV® which is used in
the food industry to dry food products quickly and at low-cost,
while maintaining high levels of nutrition, taste, texture and
colour;
2. powderREV® which is used for
the bulk dehydration of food cultures, probiotics and fine
biochemicals such as enzymes below the freezing point, and
3. quantaREV® which is used for
continuous, high-volume low-temperature drying.
An additional platform, freezeREV®, is being
developed as a new method to stabilize and dehydrate
biopharmaceuticals such as vaccines and antibodies. More
information about EnWave is available at www.enwave.net.
EnWave CorporationMr. Brent
Charleton, CFAPresident and CEO
For further information:
John P.A. Budreski, Executive Chairman at +1 (416) 930-0914
E-mail: jbudreski@enwave.net
Brent Charleton, CFA, President and CEO at +1 (778) 378-9616
E-mail: bcharleton@enwave.net
Deborah Honig, Corporate Development at + 1 (647)
203-8793E-mail: dhonig@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, and the expected synergies
following the closing are forward-looking statements. All third
party claims referred to in this release are not guaranteed to be
accurate. All third party references to market information in this
release are not guaranteed to be accurate as the Company did not
conduct the original primary research. 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. 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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