SLANG Worldwide Inc. (CNSX: SLNG) delivered its financial results in Canadian dollars for the second quarter ending June 30, 2019, with revenue increased sequentially by 44% to $7.2 million and a big jump over last year’s $440,000 for the same time period. More importantly, Slang reported a net income of $17.5 million in the quarter versus a net loss of $13 million for the same time period in 2018. An even bigger accomplishment sequentially with a net loss of $16.1 million in the first quarter.
Revenue Plans Revised Down
Still, the company revised its outlook downward from its previously estimated $130-$160 million to a more conservative $70-$100 million. Canada’s vape business was pushed back from October to mid-December, significantly affecting Slang’s vape plans. The company also said that it has decided to focus on growth in mature markets where our brands are currently performing well, versus Massachusetts and Michigan which have been growing much more slowly.
“These markets have been developing at a slower pace than anticipated and are currently facing supply constraints. While management believes these markets offer significant longer-term opportunities for the SLANG brands, further investment in growth initiatives in the current environment would put pressure on margins and profitability.” The company also said it plans to delay the launch of new products.
“We saw significant momentum across our business and delivered strong growth in revenue and unit sales in Q2 over the previous three months. Through each deal and initiative we announced in the quarter, we adhered to the capital-light model that we believe delivers the best value for our shareholders,” said SLANG CEO Peter Miller. “Global cultural, political and commercial tailwinds represent a huge organic growth opportunity for our brands. We will responsibly scale into this opportunity, continuing to focus on building a great team and the right assets to efficiently and competitively deliver our products to market. We continue to see strong organic growth opportunities for the remainder of 2019 and beyond, and remain optimistic about the outlook for the business.”
The company noted that its current increase in revenue reflected the inclusion of a full quarter of operations, sequential growth in Nevada and Oregon, positive changes in product mix, the initiation of sales of the Firefly 2+ vaporizer as well as the Company’s first sales in Florida and Puerto Rico.
Additional highlights from the company were as follows:
- .1 million branded units sold — Branded unit volumes have increased by 16% over Q1 2019 following the start of sales in Florida, and growth in Nevada and Oregon.
- Nearly 74 million branded servings (average of 800,000+ servings per day) — Branded servings grew by 45% in the quarter versus Q1 2019. Percentage growth in branded servings significantly outpaced growth in branded units as product mix shifted towards higher volume form factors.
- 2,600+ retail stores across 12 states selling SLANG’s branded products — SLANG commenced sales in Florida during the quarter and announced several agreements to initiate sales in additional high-quality cannabis markets. The Company will continue to leverage its extensive distribution network and corporate development activity to grow its business through the balance of 2019.