Namaste Technologies Inc.
(“
Namaste” or the “
Company”)
(TSXV: N) (FRANKFURT: M5BQ) (OTCMKTS: NXTTF) a
marketplace platform for cannabis and wellness products, today
reported its financial results for the second quarter ended May 31,
2021 (“
Q2 2021”) with references made to financial
results for the second quarter ended May 31, 2020 (“
Q2
2020”). All financial figures are in Canadian dollars
unless otherwise indicated.
Q2 2021 Highlights:
- Three consecutive quarters of
improved gross margins before inventory adjustments as a result of
increased sales of higher margin products.
- Gross revenue for Q2 2021 was
$6.3 million, of which a strong
52% is attributable to cannabis revenues, with
cannabis revenues growing 18% in Q2 2021 compared
to Q2 2020.
- Operating expenses for the
six-month period decreased by 15% compared to the
same period in 2020 and contributed to improved EBITDA in all
operating segments. Overall EBITDA across operating segments
improved 33% in Q2 2021 and 30%
in Q2 YTD 2021.
- Inventories decreased by
14% to $5.2 million in Q2 2021
($6.0 million in the first quarter ended February 28, 2021)
demonstrating continued improved inventory management
practices.
- The Company’s working capital
position remains strong at $25 million as at May
31, 2021.
Recent Corporate
Highlights:
- The Company’s wholly owned
subsidiary CannMart Inc. (“CannMart”), received a
Health Canada renewal of its standard licence for processing and
sale of cannabis under the applicable regulations.
- CannMart entered into a number of
supply agreements including with CannTx Life Sciences Inc.
(CannMart exclusive distributor on a SKU-by-SKU basis), Rilaxe
Canna Inc. (CannMart exclusive distributor) and Safari Flower Co.
to expand its product offering to both its provincial cannabis
board buyers and its own medical customers across Canada at
CannMart.com.
- The Company’s wholly owned
subsidiary CannMart Labs Inc., (“CannMart
Labs”) submitted its application for a Health
Canada Controlled Drugs and Substances Dealer’s Licence for future
storage and distribution of the following controlled substances:
psilocybin, psilocin, ketamine, LSD, DMT and MDMA.
- As part of our sustainability
initiative, the Company successfully subleased its Toronto office
location until expiry of its lease on October 30, 2024, confirming
its commitment to finding top talent all over the world. The
decision made by the Company is an initial step towards a long-term
commitment to developing an Environment, Social and Governance
(ESG) plan for meaningful action to protect our planet.
- The Company’s wholly owned Swedish
subsidiary Findify AB, achieved its best ever consecutive four
months of sales in the first six calendar months of 2021 with
revenue per new customer up 54% and subscription
sales value up 106% compared to the same period
last year.
- CannMart, signed a Master
Distribution Agreement with Rapid Dose Therapeutics Corp.
(“RDT”) to be the exclusive distributor of their
innovative RDT branded products across Canada.
- CannMart Labs in-house brand
“Roilty” received its first purchase orders from the provinces of
Manitoba and Saskatechewan for its consumer-focused cannabis
concentrates.
- SKU listings at CannMart.com
increased 589% to over 800 as of
the end of Q2 2021, compared to 116 in Q1 2021 as CannMart received
a record amount of requests from vendors across North America to
list their products onto the CannMart.com platform.
“We are very pleased with the accomplishments we
have made on the operating front which include increased margins
over the last three quarters as well as an improvement in EBITDA
within all our operating segments,” said Meni Morim, CEO of
Namaste. “While this is important, revenues were not where we
wanted them to be as Covid-19 continued to have an impact on retail
establishments. However, with the reduction of Covid-19
restrictions enabling greater access to retail stores, Covid-19
will have less of an impact on future revenues combined with the
continuously improving margins will have a synergistic effect on
our financials moving forward. In addition, we believe our various
initiatives, including the impending launch of CannMart Labs, our
in-house “Roilty” shatter brand hitting the shelves in the coming
months, the upcoming launch of our nutraceuticals business in Q4
2021 as well as continuing to increase the number of SKUs available
at CannMart.com will contribute to sales growth and improved
margins over the next few quarters. We continue to be focused on
controlling our operating expenses, improving gross margins and
selling the right product mix to position Namaste on a clear path
and trajectory towards profitability.”
For further details, the complete Financial
Statements for the second quarter ended May 31, 2021 and the
related Management’s Discussion & Analysis can be accessed on
the Company’s SEDAR profile at www.sedar.com.
NON IFRS FINANCIAL MEASURES
Management evaluates the Company’s performance
using a variety of measures, including “Net loss before income tax,
depreciation and amortization” and “Adjusted EBITDA”. The non-IFRS
measures discussed below should not be considered as an alternative
to or to be more meaningful than revenue or net loss. These
measures do not have a standardized meaning prescribed by IFRS and
therefore they may not be comparable to similarly titled measures
presented by other publicly traded companies and should not be
construed as an alternative to other financial measures determined
in accordance with IFRS.
The Company believes these non-IFRS financial
measures provide useful information to both management and
investors in measuring the financial performance and financial
condition of the Company.
Management uses these and other non-IFRS
financial measures to exclude the impact of certain expenses and
income that must be recognized under IFRS when analyzing
consolidated underlying operating performance, as the excluded
items are not necessarily reflective of the Company’s underlying
operating performance and make comparisons of underlying financial
performance between periods difficult. From time to time, the
Company may exclude additional items if it believes doing so would
result in a more effective analysis of underlying operating
performance. The exclusion of certain items does not imply that
they are non-recurring.
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/f2b450d6-f2b5-496b-a252-51ee1ccab229
(i) Current and deferred income taxes,
depreciation and amortization, and share-based compensation were
excluded from the Adjusted EBITDA calculation as they do not
represent cash expenditures.
(ii) Other income consisting of gain on disposal
of subsidiary, interest income, realized gain on disposition of AFS
investments, unrealized gain on derivatives and other miscellaneous
non-recurring income were excluded from Adjusted EBITDA
calculation.
(iii) Non-recurring costs related to
restructuring and legacy issues were excluded from Adjusted EBITDA
calculation.
(iv) Impairment loss relating to goodwill,
customer list, domains and brand names were excluded from Adjusted
EBITDA calculation.
(v) Impairment loss relating to receivable is a
provision for expected credit loss to an associate and was excluded
from Adjusted EBITDA calculation.
(vi) Share of associates loss, net of tax, is
excluded due to lack of control.
About Namaste Technologies
Inc.
Namaste Technologies is a marketplace platform
for cannabis and wellness products. At CannMart.com, the Company
provides Canadian medical customers with a diverse selection of
hand-picked products from a multitude of federally licensed
cultivators and US customers with access to hemp-derived CBD and
smoking accessories. The Company also distributes licensed and
in-house branded cannabis and cannabis derived products in Canada
through a number of provincial government control boards and
retailing bodies and facilitates licensed cannabis retailer sales
online in Saskatchewan. Namaste’s global technology and continuous
innovation address local needs in a burgeoning cannabis industry
requiring smart solutions.
Information on the Company and its many products
can be accessed through the links below:
NamasteTechnologies.com
NamasteMD.com
Cannmart.com
For more information please
contact:Namaste Technologies Inc.Meni Morim, CEOEdward
Miller, VP Investor RelationsPh: 647-362-0390Email:
ir@namastetechnologies.com
Source: Namaste Technologies Inc
FORWARD-LOOKING INFORMATION – This news release
contains “forward-looking information” within the meaning of
applicable securities laws. All statements contained herein that
are not historical in nature contain forward-looking information.
Forward-looking information can be identified by words or phrases
such as “may”, “expect”, “likely”, “should”, “would”, “plan”,
“anticipate”, “intend”, “potential”, “proposed”, “estimate”,
“believe” or the negative of these terms, or other similar words,
expressions and grammatical variations thereof, or statements that
certain events or conditions “may” or “will” happen.
The forward-looking information contained
herein, including, without limitation, statements related to the
Company’s expectations relating to increasing top line revenue, its
intended adjustment to its product mix, the Company’s expected
launch of new products and the creation of its new nutraceutical
division, the Company’s continued focus on improving margins toward
its goal to be profitable, are made as of the date of this press
release and are based on assumptions management believed to be
reasonable at the time such statements were made, including,
without limitation, Namaste’s ability to maintain momentum of
expanding its business, its ability to broaden its total
addressable market and to evolve into a recognized wellness
company, the Company’s expectation that the nutraceutical and
wellness market and potentially the market for psychedelics will
develop as currently anticipated, the nutraceutical market will
continue to be a multi-billion dollar high-margin market, the
introduction of new products and brands will generate additional
revenue, the ability of the Company to turn inventory as
anticipated, the impact and duration of covid-19 lockdowns on the
business of the Company diminishing in the future, as well as other
considerations that are believed to be appropriate in the
circumstances. While the Company considers these assumptions to be
reasonable based on information currently available to management,
there is no assurance that such expectations will prove to be
correct. By its nature, forward-looking information is subject to
inherent risks and uncertainties that may be general or specific
and which give rise to the possibility that expectations,
forecasts, predictions, projections or conclusions will not prove
to be accurate, that assumptions may not be correct and that
objectives, strategic goals and priorities will not be achieved. A
variety of factors, including known and unknown risks, many of
which are beyond our control, could cause actual results to differ
materially from the forward-looking information in this press
release. Such factors include, without limitation: the inability of
the Company to develop its business as anticipated and to increase
revenues and/or its profitable margin on such revenues,
unanticipated changes to current regulations that would adversely
impact the Company’s business and proposed business and other
regulatory risks, risks relating to the Company’s ability to
execute its business strategy and the benefits realizable therefrom
and risks specifically related to the Company’s operations.
Additional risk factors can also be found in the Company’s current
MD&A and annual information form, both of which have been filed
under the Company’s SEDAR profile at www.sedar.com. Readers are
cautioned not to put undue reliance on forward-looking information.
The Company undertakes no obligation to update or revise any
forward-looking information, whether as a result of new
information, future events or otherwise, except as required by
applicable law. Forward-looking statements contained in this news
release are expressly qualified by this cautionary statement.
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 or has in any way approved
or disapproved of the contents of this press release.
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