The Canadian cannabis company released its financial report card in the period ending June 30, 2021.
Nova delivered approximately $56.3 million in total revenue during the period, a 90% gain versus the same period last year — beating the Yahoo Finance Average analyst estimate for revenues of $38.66 million.
Nova reported that second-quarter sales rose 90% to $56.3 million over last year and saw a 13% increase over the first quarter of 2022. The company attributed the sales growth to the 29 retail cannabis stores that were opened since March last year, and rising sales from stores that were re-branded to the Value Buds discount banner at various times throughout 2021.
“The performance of our Value Buds stores continues to outpace the growth of the industry as we reported record sales for the second quarter of 2022, underpinned by equally strong sales and gross margin growth that is driving greater operating leverage to the bottom line,” said CEO Marcie Kiziak.
Nova recorded a net loss of $1.4 million, versus a net loss of $7 million in the same period last year. The reduction is primarily a result of the increase in sales and gross margin over the period.
Gross margin for the period was $10.6 million, up $5.4 million or 105.0%, from $5.2 million for the same period in the prior year. The gross margin as a percent of sales was 18.8% for the period.
During the comparative period for 2021, the stores were operated under the Nova Cannabis, YSS and Sweet Tree banners with a different operating, pricing and margin strategy than in the second quarter of 2022 when sales came primarily from the stores converted to the Value Buds discount banner.
Since then, the company revised prices at certain retail locations where the competitive response has waned which has led to increases in gross margin percentage.
Nova has an uncommitted revolving credit facility with Sundial in an aggregate principal amount not to exceed $15 million. Currently, $8.7 million in principal and accrued interest is outstanding on the credit facility.
The company currently has $6.2 million worth of cash.
Last month, Nova launched an at-the-market equity offering program, which will allow the company to issue up to $20 million of common shares from treasury to the public at the discretion of the company and subject to market conditions and regulatory requirements
“Delivering superior value to cannabis consumers will become increasingly important in the current economic environment, and Value Buds is purpose built for this,” said Kiziak. “We will stay the course by being disciplined in how we expand our footprint, remaining customer focused and choosing the best real estate for our strategy, whether through acquiring stores or building our own.”