Dixie Brands Inc. (CSE: DIXI.U) announced its financial results for the three-month and year-to-date periods ending September 30, 2018. Revenue was $2,435,000 in the third quarter of 2018, an increase of 110% over last year’s $1,162,000 for the same time period. However, Dixie delivered a net loss of $2,404,000 for the quarter versus $630,000 for the third quarter of 2017.
Dixie completed a reverse takeover in order to go public during the third quarter and this set back the company’s ability to record net income. Year-to-date, the company suffered a net loss of $4,696,000 in 2018. Dixie said that the 2018 results were affected by a non-cash charge of $2,187,000, which was recorded in Q3 2018, for the conversion of debt into equity, and by expenses of $803,000 associated with the reverse takeover, Series C financing and public stock listing completed subsequent to September 30. Without these charges, Dixie said it would have made a small profit in the quarter.
“Our revenue growth is accelerating as we realize an increasing return on years of investment in our product portfolio, manufacturing capabilities and distribution network,” said Chuck Smith, President, and CEO, Dixie Brands. “Our fully-funded business plan targets expansion into four-to-six new U.S. states and Canada in 2019, applying the successful template we have used in the four states where we already operate.”
The company reported that year-to-date, revenue was $4,205,000, up 60% from $2,630,000 in the first nine months of 2017. That growth was achieved by increased sales of Dixie’s THC-infused products in Colorado, Maryland, and Nevada, as well as the company’s CBD products. Dixie had $18,584,000 of cash on September 30, 2018. The company also noted that it had gross profits of $1,038,000 in the third quarter which was up 102% from $514,000 a year earlier.
During The Quarter
Dixie re-launched operations in California following a clarification of regulatory requirements in the state. Dixie said it expects to begin generating revenue in California in the fourth quarter of 2018. The company also entered into an agreement with Central Garden & Pet to distribute its Therabis line of pet wellness products. New products launched during the third quarter included Sour Smash Gummies and Cucumber-Melon Mints, and Mindset, a new brand focused on high quality vape and concentrate products.
Dixie closed on a Series C financing round on October 1, 2018, raising gross proceeds of $25 million in an oversubscribed, non-brokered private placement. The company completed a reverse takeover of Academy Explorations Limited on November 27 and began trading on the Canadian Securities Exchange on November 2.