Decibel Archives - Green Market Report

Adam JacksonAugust 18, 2022
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5min1500

Decibel Cannabis Company Inc. (TSX-V: DB) (OTCQB: DBCCF) posted promising results as it continues to find gains in the Canadian market and overseas. The Alberta-based company delivered its financial report card using Canadian dollars in the period ending June 30, 2022.

Decibel reported approximately $18.6 million in net revenue during the period, up 11% since the previous quarter; and a gain of 49% since the same period last year. Total gross sales were $26 .2 million for the quarter. Additionally, the company reached 4.5% market share in July, rising 70% year over year.

Second-quarter net losses totaled $2.1 million, up 77% sequentially; versus a net loss of $620,000  in the same period last year. The earnings were a loss of one cent per share; in line with the previous quarter.

“Our second quarter results continue to demonstrate that Decibel is on the path we projected in our 2022 operational outlook,” said CEO Paul Wilson. “Our New Unique and Innovative product development and revenue generating initiatives have once again produced quarter-over-quarter record performance. This progress has been compounded by our productivity initiatives and record gross profit, now resulting in positive cash flow, putting us on track for another projected milestone.”

Decibel said that net revenue growth was driven by expanded distribution “particularly in the Ontario market, the continued launch of new General Admission and Qwest infused products in various provinces and continued growth in demand for derivative products.” The company said that net revenue would have been $18.9 million, however, $320,000 of discounts were provided related to discontinued products.

The company also posted record gross margins, a sequential improvement to 41% in the second quarter versus 35% in the previous quarter; and 41% in the same period last year. Decibel said that the increase was driven by “initiatives realized midway through the second quarter” — such as operational efficiencies, automation equipment commissioned and sourcing of more cost-effective components related to the manufacturing of cannabis products.

Adjusted EBITDA was $3.2 million, rising 31% since the previous quarter and 49% since the same time last year — marking Decibel’s eighth quarter of consecutive quarterly positive adjusted EBITDA.

Decibel reported $1.8 million of cash flow from operations in the quarter, a sequential decrease of $1.2 million since the previous quarter and an improvement of $4.8 million since the same time last year.

The company repaid its 9.5% convertible debentures in May with the draw-down of a $12 million term loan fixed at 4.75% — extending the maturity date of $12 million of debt by four years and avoiding approximately 6% of potential shareholder dilution; resulting in $0.6 million of annual interest expense savings.

“The cost engineering initiatives and capital investments impacted the later part of the second quarter, with additional equipment landed early August expected to drive continued sequential margin expansion,” the release said. The company said it achieved its previously stated target of 40 – 45% gross margin ahead of the second half of this year.

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, and the company expects initial international export to occur in the second half of the year.

“With more highlights scheduled for the back half of 2022,” Wilson said. “Decibel is delivering exactly what we’ve planned and forecasted to the market, ourselves, and our shareholders.”

StaffMay 26, 2022
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3min760

Decibel Cannabis Company Inc.  (TSXV: DB) (OTCQB: DBCCF) released its first-quarter financial results for the first quarter ending March 31, 2022. Decibel reported $23 million in total sales for the quarter, with strong growth over the fourth quarter and topping last year’s revenue of $14 million in the same time period in 2021. The company said that net revenue growth was driven by the launch of Decibel’s new infused pre-roll lines and continued growth in demand for flower, vape and concentrate products, despite the first quarter historically being a seasonally weak period.

“Decibel remains on track to achieve its previously communicated targets, which is a testament to the focus on our strategic plan, and particularly our New, Unique and Innovative products and dedication to our customers”, said Paul Wilson, CEO of Decibel. “We see momentum growing in our core business, and at the same time are driving towards creating shareholder value by restructuring our balance sheet. This makes Decibel one of the few in the cannabis space to repay convertible debentures rather than accept shareholder dilution.”

During the quarter, Decibel said it incurred a net loss of $4.37 million, generated funds amounting to $2.86 million in its operations, and has net current assets of $7.3 million.

On May 11, 2022, the company repaid its 9.5% convertible debentures with the draw-down of a fixed 4.75% $12 million term loan from its credit facilities. This extends the maturity date of Decibel’s $12 million of debt by 4 years, removes approximately 6% of potential shareholder dilution, and results in $0.6 million of annual interest expense savings. As of March 31, 2022, the company is in compliance with all covenants.

Cash flow from operations was $3.0 million in the quarter, an improvement of $8 million over the fourth quarter and $6 million over Q1 2021. In Q4 2021, the company made significant investments in working capital to meet the growing demand for Decibel brands and products and mitigate against supply chain risks.

The company said it anticipates reduced working capital needs in 2022 and is seeing improvements in its supply chain. The company said it has identified various initiatives and capital investments to accelerate cash flow generation and manage working capital levels that are expected to support Q2 2022 onwards.


Debra BorchardtJanuary 14, 2022
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4min2560

Canadian-based Decibel Cannabis Company Inc.  (TSXV: DB) (OTCQB: DBCCF) announced that it has refinanced $54 million of its debt.  Decibel entered into an amended and restated commitment letter with connectFirst Credit Union Ltd. over an initial 5-year term for the debt. The Committed Amount is comprised of $40.5 million of term debt, a $6.0 million authorized overdraft secured against government receivables, and an accordion line of $7.5 million. The company said it expects the proceeds combined with contributions from operations to provide sufficient liquidity to repay Decibel’s convertible debentures on maturity.

“With this refinancing, Decibel has added financial flexibility to optimize its capital structure and is well-positioned to continue to execute its aggressive growth strategy,” said Stuart Boucher, Chief Financial Officer of Decibel. “This transaction reflects the strong position Decibel has established in the Canadian cannabis market and the continued confidence from connectFirst and our team in the execution of the company’s strategic plan”.

Decibel has three operating production houses along with its wholly-owned retail business, Prairie Records. The Qwest Estate in Creston, BC is a licensed and operating 26,000 square foot cultivation space that produces the widely championed, rare cultivar-focused brands Qwest and Qwest Reserve, which are sold in six provinces across Canada. Thunderchild Cultivation is a licensed and operating 80,000 square foot indoor cultivation facility in Battleford, SK. The Plant, Decibel’s extraction facility, in Calgary, AB has 15,000 square feet of Health Canada licensed extraction and product development space. This production house will fuel the growth of our brands Qwest, Qwest Reserve, Blendcraft, and General Admission, into new and innovative product formats like concentrates, vapes, edibles and beyond.

In November, Decibel reported its third-quarter results with net revenue totaling $13.4 million, a 7% increase over the prior quarter, driven by growth in Decibel’s existing and newly launched flower, vape, and concentrate products. Net revenue grew by 76% over the comparative 2020 quarter. The company sold 492 kilograms of flower in the third quarter, with an average wholesale net price per gram of $7.65, an increase of 10% in kilograms sold, and a decrease of 4% in average wholesale net price per gram, over the prior quarter. The decline in price per gram was the result of a greater volume allocation towards Qwest products versus Qwest Reserve products which achieves a higher price point and the launch of the General Admission line of pre-rolls.

“Decibel’s continued growth is a testament to our consumer-focused approach, the strength of our brands, and our dedication towards producing high-quality products for our customers”, said Paul Wilson, CEO of Decibel. “We are closing out 2021 with strong momentum as we launch 40 new products, elevate the experience our products create for consumers and innovate to meet cannabis consumers’ evolving preferences.”


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