After the markets closed on Wednesday, Avant Brands Inc (TSX: AVNT)(OTCQX: AVTBF) reported its revenue rose 71% to $7.9 million for the fiscal first quarter that ended February 28, 2023. The net loss from operations of $0.1 million (an improvement of 98% or +$1.0 million).
“Continuing on our momentum from a record 2022 fiscal year, as one of the fastest growing Canadian cannabis companies, we have commenced the 2023 fiscal year with record adjusted EBITDA while generating meaningful cash flows from operations,” said Norton Singhavon, Founder and CEO of Avant.”Furthermore, we expect that the acquisition of the Flowr Group (Okanagan) Inc., will facilitate a continuation of our strong year-over-year growth in sales, cash flow and profitability.”
Avant also reported that its adjusted net income was $250,000 – an improvement of 131% or +$1.0 million. The net and comprehensive loss was $8,000 (an improvement of 98% or +$0.5 million). The company said it produced approximately 2,635 kilograms of cannabis (which includes dried flower and biomass) in the first quarter. The company sold approximately 1,424 kilograms of cannabis during the quarter.
Avant noted in its earnings statement that it completed the purchase of the Flowr Group (Okanagan) Inc., including Flowr Okanagan’s Kelowna facility. “Subsequent to the completion of the transaction, Avant implemented cost-saving initiatives that generated annualized savings of approximately $1 million (over and above the immediate elimination of The Flowr Corporation’s corporate overhead costs – achieved by purchasing a subsidiary of Flowr Okanagan, which was a subsidiary of The Flowr Corporation, as opposed to the parent company).” Avant completed the first harvest of an Avant cultivar at the Flowr Facility on March 6, 2023.
The company also completed the purchase of the remaining 50% of 3PL Venture Inc., which included seller financing with terms favorable to Avant, below the industry standards on the interest rate and security.
Avant said in its filing that it intends to finance operating costs over the next twelve months with current cash on hand and cash flow from operations, but is considering additional debt or equity financing as a source of funding for further expansion. As of February 28, 2023, the company maintained a strong financial position consisting of $2.6 million in cash and $17.4 million in working capital.