The Valens Company Inc. (OTCQX: VLNCF) report its fourth quarter and fiscal year financial results for the period ended November 30, 2020. Valens reported gross revenue for the fourth fiscal quarter fell to $17.9 million from $18.5 million in the third quarter of 2020. The net loss increased to $16.6 million sequentially over the third quarter’s net loss of $3 million.
Full Fiscal Year
Sales for the full fiscal year ending in November were $86 million versus the 2019 fiscal year-end sales of $58 million. The net loss for the full fiscal year of 2020 was $20.6 million versus 2019’s net loss of $6.5 million. Product sales increased 237% to $54.7 million in the fiscal year 2020 over 2019
“In fiscal year 2020, we transformed Valens from a leading extraction company into the industry’s most trusted third-party manufacturer of cannabis consumer packaged goods. Over the course of the year, we strategically employed our human and capital resources to strengthen our platform and build the infrastructure required to offer what we believe are the most innovative and cost-competitive product manufacturing capabilities in the market today,” said Tyler Robson, Chief Executive Officer, Co-Founder and Chair of The Valens Company. “Moving into 2021 with a transformed business model, a growing international presence, and over 77,000 square feet of manufacturing space, Valens is focused on three key initiatives – growing unit volumes per SKU, increasing Cannabis 2.0 and 3.0 product market share, and driving revenues in new consumer verticals. We expect to do this by expanding our provincial distribution capabilities, entering new international markets including the US, and broadening our custom manufacturing and white label partnership network.”
Valens said that it increased its market share to ~4.9% of the Cannabis 2.0 market in Alberta, British Columbia, and Ontario in the fourth quarter based on Headset data and not including B2B LP manufacturing, and grew cannabis-infused beverage market share in Canada to approximately 5.2% in the quarter for its product lineup with only one customer in this category to date. the company also said it cemented its position as the largest third-party vape manufacturer in Canada. Valens said in a statement that it transitioned from shipping bulk distillate in the first quarter of 2020 to shipping hundreds of thousands of finished product units per month in the fourth quarter, resulting in revenue that is expected to be recurring in nature
Valens reiterates its previously announced guidance for the first fiscal quarter with revenue projected to be between $19 million to $23 million, driven by the company’s newly launched and operational K2 Facility which is expected to give Valens the ability to increase production capabilities and unit volumes. The company said it ended the year with a current cash balance of $48.7 million, including gross proceeds of $39.7 million from the bought deal financing that closed subsequent to the quarter-end.
Jeff Fallows, President of The Valens Company, said, “Moving into fiscal year 2021, we have already executed on step one of our strategic plan for the year with the announcement of our agreement to acquire LYF and are focused on quickly integrating and realizing on the incredible opportunity we see in adding their edibles platform to our capabilities. With our recent bought deal financing, we are also well-positioned to aggressively pursue available and future growth opportunities, including potential acquisitions.”