Cannabis Edibles Maker Indiva Reports Record Revenue In 2023, Positive EBITDA And Income From Q4 Operations
Author: Jelena Martinovic | April 25, 2024 10:07am
Canadian cannabis edibles producer Indiva Limited (TSXV:NDVA) (OTC:NDVAF) announced on Thursday its financial and operating results for the fourth quarter and fiscal year ended Dec. 31, 2023.
The company reported a 53.3% increase year-over-year increase in gross profit before inventory write-down to CA$4.2 million (roughly $3 million) for the fourth quarter.
Gross margin before inventory write-down improved to a record 38.5% of net revenue, versus 37.1% in the prior quarter and 29.3% in the prior year's period.
Indiva attributed the improvement in gross margin percentage year over year to higher sales, improved operating efficiencies and a positive mix shift toward higher-margin products.
"We are very pleased with our performance in the fourth quarter and fiscal year 2023, generating record net revenue, improved gross margins as well as record positive EBITDA and income from operations," Niel Marotta, president and CEO of Indiva said.
Q4 2023 Financial Highlights
- Net revenue was a record CA$10.9 million, representing an 11% sequential increase, and a 16.8% increase year-over-year, driven primarily by strength in core brands, including Pearls by Grön, where net revenue grew by greater than 360% year-over-year, as well as strong contribution from No Future gummies.
- Net revenue from edible products was CA$9.5 million, or 87.7% of net revenue, up 5.3% quarter-over-quarter and 27% year-over-year.
- Operating expenses dropped by 19% year-over-year to CA$3.1 million, a record low at 28.9% of net revenue versus 31% in the prior period and 41.7% in the same quarter of last year.
- EBITDA came in positive at CA$0.9 million, or 8.1% of net revenue. Adjusted EBITDA increased sequentially to a record profit of CA$1.5 million or 13.9% of net revenue, versus a profit of CA$1 million in the previous quarter, and a loss of CA$0.6 million in the fourth quarter of last year.
- Income from operations was CA$0.5 million versus CA$13,000 in the third quarter of 2023 and a loss of CA$1.7 million in the fourth quarter of 2022.
- Comprehensive net loss included one-time expenses and non-cash charges including inventory impairments totaling CA$0.5 million and CA$0.4 million in the same quarter of 2022.
FY 2023 Financial Highlights
- Record net revenue of CA$37.6 million versus CA$34.4 million for the year ended Dec. 31, 2022, representing a 9.2% year-over-year increase.
- Net revenue from edible products grew to CA$32.7 million, representing 87.2% of net, versus CA$30.5 million or 88.7% of net revenue in the prior year period.
- Gross profit before inventory write-down improved by 26.9% to a record CA$13.2 million or 35.1% of net revenue versus CA$10.4 million or 30.2% of net revenue for the year ended Dec. 31, 2022.
- Operating expenses decreased by 11.3% to CA$12.6 million versus CA$14.3 million for the year ended 2022. As a percentage of net revenue, operating expenses decreased to 33.7% for 2023 versus 41.4.% in 2022.
- EBITDA was a record positive at CA$1.6 million, or 4.2% of net revenue in 2023 versus a loss of CA$4.8 million in 2022. Adjusted EBITDA improved to a profit of CA$2.4 million versus a loss of CA$1.5 million last year.
- Comprehensive net loss, excluding one-time expenses and non-cash charges, improved to CA$4.4 million, versus a loss of CA$8.4 million in fiscal year 2022.
Outlook
- Indiva anticipates net revenue for the first three months of fiscal 2024 will be lower on a sequential basis, primarily due to seasonality, and flat year-over-year, due to the continued growth in Pearls by Grön, and the contribution to revenue from No Future gummies and Indiva Blips offset by Wana converting to contract manufacturing and the loss of lozenge revenue.
- Margins are also expected to decline sequentially in the first quarter due to lower sales and reduced overhead absorption due to lower production levels as compared to the fourth quarter offset by a positive mix shift and the benefit of the implementation of automation in the production and packaging of edible products, the company said in a press release.
- For the fiscal year 2024, the Company expects to generate record net revenue and record EBITDA.
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