Vext Science, Inc. (CSE: VEXT) (OTCQX: VEXTF) reported its financial results for the second quarter ending June 30, showing sustained revenue growth as it tees itself up for an Ohio market expansion.
The Arizona-based company reported a revenue of $9.2 million for the quarter, up from $8.76 million last year. Net income totaled $535,454 in the period versus $1.59 in the same time last year, according to filings.
The company’s adjusted EBITDA stood at $1 million, a sharp drop from the $4.84 million in the same quarter last year. This marks its 13th consecutive quarter of positive adjusted EBITDA. The company noted a gross margin of 30%, down from 70% in the comparable period last year.
Vext has secured regulatory approval for its acquisition of a Tier I grow site and an operating manufacturing facility in Ohio, expected to close by month’s end. Additionally, the company anticipates an ownership transfer approval for a Columbus, Ohio dispensary by the end of 2023, bringing its total dispensaries in the state to two.
In a statement, CEO Eric Offenberger commented on the choice to accept lower gross margins in the second quarter due to market overcapacity. He emphasized that they anticipate a gross margin rebound in the latter part of this year.
“We are well positioned from a vertical perspective, with indoor capacity from our Eloy facility picking up the slack and ensuring we are matching demand at our owned retail locations with our own internal supply,” he said.
The company also announced a leadership shuffle, with CFO Stephan Bankosz stepping down by Aug. 25. He will be succeeded by Trevor Smith. Nalee Pham has been tapped as the new Corporate Secretary.
“The Ohio market continues to expand with patient count up 23% in June 2023 as compared to the same period last year,” Offenberger added. “We view Ohio as a very attractive growth opportunity, with its limited license structure and the recreational use initiative making Ohio’s November ballot.”