Decibel Expects Revenue Above $18 Million in Second Quarter

Decibel Cannabis Company Inc.  (TSX-V: DB) (OTCQB: DBCCF) released a preliminary outlook for net revenue and Adjusted EBITDA for the second quarter, ending June 31, 2022. Decibel said it expects its revenue to be between $18.5 million and $19.5 million. The company also said it has demonstrated positive cash flow from operations in the first two quarters of 2022.

“In the second quarter Decibel continued to match and exceed revenue projections, and significantly exceed EBITDA projections. Performance was driven by exceptional continued growth in demand for our popular brands and new products. This, coupled with prioritizing certain key capital initiatives, generated gross margin and EBITDA significantly beyond our forecast,” said Paul Wilson, CEO of Decibel. “We expect revenue in the quarter to be in the $18.5 – $19.5 range and corresponding Adjusted EBITDA in the $3.0 – $3.5M range. Margins and profitability expanded with our automation, infrastructure and cost engineering improvements coming online earlier than planned. These improvements have been in the pipeline and impacted the end of Q2, with the full impact unfolding in the third and fourth quarter. The impact of these projects appears to be well beyond our projections for gross margin expansion.”

The company also provided these forecasts:

  • Anticipated Adjusted EBITDA of $3.0 to $3.5 million ($2.5 million Q1 2022)
  • Anticipating significant ongoing gross margin and profitability increases
  • Significant amount of cost engineering and automation infrastructure investments realized in late Q2 and early Q3, with potential for Decibel to exceed previously stated targeted gross margin of 40 – 45%.

Decibel said it will release its second-quarter financial results and related management discussion and analysis for the period ended June 30, 2022, on August 18, 2022, before markets open. The company has said in past statements that it is a going concern.

Israeli Sales

At the end of June, the company announced that is had received its certification to export its cannabis products internationally. The IMC-G.A.P certification will allow for a new international sales channels in Israel. The company expects initial international export to occur in the second half of 2022.

“After a number of ongoing conversations, we are well aware of the international demand for our cannabis products,” said Adam Coates, Chief Revenue Officer. “As global cannabis markets expand, we’ve seen a clear demand for higher quality than what is currently available. Decibel is well positioned to deliver on this growing demand for premium cannabis outside of Canada.”

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