It may be a holiday weekend for Americans with Thanksgiving, but Canadian companies soldier on with earnings announcements.
Westleaf Inc. (TSX-V:WL) (OTCQB:WSLFF) reported operating revenues of $1.7 million for the third quarter of 2019, up 82% from Q2 2019. The company also reported a loss of $4.9 million
The company said that total revenue reflects operations from three cannabis retail stores in the Saskatoon region and one in Calgary, the latter which was only operational for the final two weeks of the interim period. In management’s view, the urban stores continue to perform well and are achieving blended gross margins of ~37%.
“During the reporting period, we executed on our previously stated plans to build out a viable integrated premium cannabis company and prepare the Company for the coming of Cannabis 2.0, that is the legalization of a large variety of cannabis derivative products,” said Scott Hurd, President and CEO of Westleaf. “We successfully completed construction on The Plant, and we received a standard processing licence from Health Canada within the estimated time frame. Subsequent to the quarter-end The Plant has been operationalized and we are now prepared to begin manufacturing a number of cannabis derivative products for sale by the Company and through white label contracts for third parties.”
Selling General & Administrative costs of $3.1 million for the quarter, down ~$0.7 million or 17% from Q2 2019. Westleaf continues to be focused on cost reductions and is implementing further overhead reduction initiatives.
Naturally Splendid Enterprises Ltd. (TSXV:NSP) (OTC:NSPDF) announced its sales in Canadian dollars of $2,359,525 during the nine months ending September 30, 2019, compared to $1,304,040 for the nine months ended September 30, 2018. The company’s sales increased by approximately $1,055,485 representing an 81% increase over the same period last year.
Naturally Splendid recorded a net loss of $3,627,472 for the nine months ended September 30, 2019, compared to a net profit from continuing operations of $301,793 during the nine months ended September 30, 2018. The net profit in 2018 was mainly due to the company’s disposition of its shareholding of POS BPC Manufacturing Corp. which resulted in a material gain of $5,102,068 for the same period ended in 2018.
The company said it continued to expand its private-label bars and bites business by approximately $856,000 and other branded products increased by approximately $11,000. Branded hemp products decreased by approximately $208,000 as the company focused more on its new Natera Sport(TM) products which expanded by approximately $396,000. The company is focused on private label and branded sales and has entered the international markets such as German, Australian and Japanese markets.
Gross profits increased by approximately 77% for the nine months ended September 30, 2019, at $731,251 (31.0% of sales) compared to $413,235 (31.7%) for the nine months ended September 30, 2018. The cost of sales during the nine months ended September 30, 2019, was $1,628,274 compared to $890,805 in the nine months ended September 30, 2018. The company continues to maintain an approximate 31% gross margin for the nine months ended September 30, 2019. Increases in the costs of sales were approximately consistent with increased revenue and sales.