EnWave Reports 2022 Third Quarter Consolidated Interim Financial Results
August 22 2022 - 7:11PM
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,
2022.
- Royalty revenue YTD of $1.15
million, representing annual growth of 55% in the high-margin
royalty portfolio.
- First 10kW GMP unit was
commissioned for the dehydration of premium cannabis products in
New Zealand, expanding the use of REV™ across the legalized global
cannabis industry.
- REVworx™ facility obtained Safe
Quality Food Certification (“SQF”) as part of the strategy to
provide advanced toll processing capabilities to the food
industry.
Consolidated Financial
Performance:
($ ‘000s) |
Three months ended June 30, |
|
Nine months ended June 30, |
|
|
|
2022 |
|
|
2021 |
Change% |
|
|
2022 |
|
|
2021 |
|
Change% |
|
|
|
|
|
|
|
|
|
|
Revenues |
|
5,554 |
|
|
7,351 |
(24%) |
|
|
18,732 |
|
|
19,570 |
|
(4%) |
|
Direct
costs |
|
4,090 |
|
|
4,737 |
(14%) |
|
|
13,209 |
|
|
14,780 |
|
(11%) |
|
Gross margin |
|
1,464 |
|
|
2,614 |
(44%) |
|
|
5,523 |
|
|
4,790 |
|
15% |
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
General and administration |
|
1,186 |
|
|
1,035 |
15% |
|
|
3,494 |
|
|
3,375 |
|
4% |
|
Sales and marketing |
|
1,493 |
|
|
831 |
80% |
|
|
4,074 |
|
|
3,656 |
|
11% |
|
Research and development |
|
485 |
|
|
391 |
24% |
|
|
1,662 |
|
|
1,423 |
|
17% |
|
|
|
3,164 |
|
|
2,257 |
40% |
|
|
9,230 |
|
|
8,454 |
|
9% |
|
Net loss after taxes |
|
(2,015) |
|
|
670 |
(401%) |
|
|
(4,654) |
|
|
(2,987) |
|
(56%) |
|
Adjusted EBITDA(1) |
|
(1,096) |
|
|
937 |
(217%) |
|
|
(2,013) |
|
|
(1,942) |
|
(4%) |
|
Loss per share |
|
|
|
|
|
|
|
|
Basic and diluted |
$ (0.02) |
|
$0.00 |
|
|
$ (0.04) |
|
$(0.03) |
|
|
|
(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 Q3 (expressed in
‘000s):
- The Company
reported consolidated revenue for Q3 2022 of $5,554, compared to
$7,351 in Q3 2021, a decrease of $1,797 or 24%.
- EnWave’s segment
revenue was $2,663 compared to $3,560 in Q3 2021, a decrease of
$897 or 25%. Royalty revenues for Q3 2022 were $301 compared to
$191 for Q3 2021, an increase of $110 or 58%.
- NutraDried’s
segment revenue was $2,891 compared to $3,791 for Q3 2021, a
decrease of $900 or 24% due to lower sales volumes of bulk and
ingredient products.
- Gross margin for
Q3 2022 was 26%, compared to 35% for Q3 2021 and Q2 2022. Gross
margins at NutraDried in the quarter were compressed due to higher
input costs related to cheese and freight.
- Adjusted
EBITDA(1) (refer to Non-IFRS Financial Measures section below) for
Q3 2022 was a loss of $1,096 compared to a profit of $937 for Q3
2021, a decrease of $2,033.
- SG&A
expenses (including R&D) were $3,164 in Q3 2022, compared to
$2,257 in Q3 2021 an increase of $907. The Company continued to
invest in developing its intellectual property during the quarter
to support the expansion of its global licensing strategy.
Marketing investments were made to generate awareness and enhance
the business development pipelines at EnWave and NutraDried.
Significant Corporate Accomplishments in
Q3 2022 and Subsequently:
- Sold a 120kW
REV™ machine to Dole Worldwide Food and Beverage Group (“Dole”),
that will significantly increase Dole’s vacuum-microwave production
capacity and processing capabilities. The machine is expected to be
delivered in early calendar 2023 to begin royalty-bearing
commercial production.
- Sold a third
10kW REV™ machine to Dairy Concepts to further increase their
commercial production capacity for the sale of its shelf-stable
hand-held dairy snacks in Ireland.
- Sold a 10kW REV™
machine to Fungaria Snack Ltd to develop and commercialize premium
fruit and vegetable snack for the Hungarian market.
- Received a
purchase order for an EU-GMP (European Union – Good Manufacturing
Practice certified) with an unnamed pharmaceutical cannabis company
to dry cannabis for medical consumption and derivative products for
sale in the European Union and legal global markets.
- Obtained Safe
Quality Food Certification (“SQF”) for REVworx™ state-of-the-art
vacuum-microwave toll drying facility which has a 10kW and 60kW
REV™ machine to provide toll drying services for companies of all
sizes and in all sectors.
- Launched
national distribution of 4 flavors of Moon Cheese® into
Kroger.
- Signed a
Technology Evaluation and License Option Agreement with Bounty
Fresh Group, a leading producer of protein products in Southeast
Asia, to evaluate the potential commercial use of REV™ technology
in producing a variety of meat, cheese and other nutritious
snacks.
- Signed a
Technology Evaluation and License Option Agreement with Wyckoff
Farms Inc. to evaluate the use of REV™ technology to dry premium
hops products.
- Signed a
Technology Evaluation Agreement with a large Canadian cannabis
company to evaluate REV™ technology at its facilities using a 10kW
machine.
- Completed the
installation of BranchOut Snacks’ 60kW REV™ machine in Peru to
scale up royalty-bearing commercial production capacity for its
line of better-for-you snack products.
Rescheduled Conference Call:The
Company has rescheduled the conference call to discuss the 2022
Third Quarter Financial Results and the Company’s state of affairs.
The conference call will be held on Tuesday August 23, 2022.
Prepared remarks will be given followed by a question-and-answer
session for shareholders.
Date: |
August 23rd, 2022 |
Time: |
7:00am PST / 10:00am EST |
Participant Access: |
1-877-407-2988 (toll free number) |
Webcast: |
https://event.choruscall.com/mediaframe/webcast.html?webcastid=Zyo6ssWa |
1 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, non-recurring
impairment, restructuring and/or severance charges, and government
assistance. 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 endedJune 30, |
|
Nine months endedJune 30 |
|
($ ‘000s) |
2022 |
|
|
2021 |
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
Net (loss) income after income
tax |
(2,015) |
|
|
670 |
|
(4,654) |
|
|
(2,987) |
|
Amortization and depreciation |
648 |
|
|
639 |
|
1,830 |
|
|
1,903 |
|
Stock-based compensation |
308 |
|
|
198 |
|
920 |
|
|
637 |
|
Foreign exchange loss |
(48) |
|
|
(275) |
|
18 |
|
|
4 |
|
Finance expense, net |
11 |
|
|
- |
|
20 |
|
|
1 |
|
Income tax recovery |
- |
|
|
(70) |
|
- |
|
|
(1,158) |
|
Non-recurring impairment and restructuring costs |
- |
|
|
- |
|
- |
|
|
691 |
|
Government assistance |
- |
|
|
(225) |
|
(147) |
|
|
(1,033) |
|
Adjusted EBITDA |
(1,096) |
|
|
937 |
|
(2,013) |
|
|
(1,942) |
|
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 EnWaveEnWave is a global
leader in the innovation and application of vacuum microwave
dehydration. From its headquarters in Vancouver, 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 and product quality.
With more than fifty royalty-generating partners
spanning twenty 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 20% more terpenes and 25% more
cannabinoids, and achieve at least a 3-log reduction in
crop-destroying microbes.
Learn more at EnWave.net.
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
Dan Henriques, CFO at +1 (604) 835-5212E-mail:
dhenriques@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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