Emerald Health Therapeutics Reports First Quarter 2019 Financial Results; Demonstrates Continued Growth in Sales
- Emerald’s 1Q19 sales of
$2.6 millionrepresents an increase of 131% over the prior quarter and almost 600% year-over-year.
- Pure Sunfarms (50%-owned joint venture) sales reach
$14.4 millionin Q1; Emerald’s 50% share $7.2 million; aggregate pro forma sales including Emerald’s proportionate share of Pure Sunfarms’ revenue amounts to $9.0 million.
- Emerald net loss improves from
$13.9 millionin 4Q18 to $3.6 millionin 1Q19.
- Delivering or approved to supply cannabis to eight provinces and one territory.
- Increased medical client base by 40% and achieved greater percentage of medical sales from oils; revenue was comprised of approximately 87% dried products and 13% oils.
- Emerald Health Naturals (“EHN”) (51%-owned) now selling non-cannabis natural health products for the endocannabinoid system. Its
Endoproduct line is now in 82 stores across Canada.
- BC-based Pure Sunfarms 50% owned joint venture:
° 1Q19 sales of
° Achieved EBTIDA of
$7.8 million; net income before tax of $16.1 million.
° Emerald records
$5.8 millionas share of income from Pure Sunfarms compared to $1.4 millionin the prior quarter.
° Fully planted in 1.1 million square foot greenhouse. On track to reach annualized production run-rate in first greenhouse of 75,000 kg by mid-year.
° Advancing plans to convert a second, nearly identical 1.1 million square foot greenhouse in the same complex. This greenhouse is targeted to complete its first harvest in 2020 and annualized full run-rate production of 75,000kg in 4Q20.
° Received its processing license for packaging and extraction.
“Our Q1 sales demonstrate the Company’s accelerating growth in the market,” said Dr.
Financials Results & Capital Resources
Selected Quarterly Financial Information
The following table summarizes selected quarterly financial information for the Company, which was derived from annual financial statements prepared in accordance with IFRS or interim financial statements prepared in accordance with IFRS applicable to the preparation of interim financial statements, IAS 34, Interim Financial Reporting:
|Q1 2019 Key Financial and Operational Metrics|
|Q1 2019||Q4 2018||% Change||Q1 2018||% Change|
|Cannabis gross revenue|
|Gross margin (net of fair value adjustment)||(2,371,821||)||(3,466,535||)||32||%||(107,955||)||-2097||%|
|Total SG&A (net of share based payments)||6,242,128||11,283,031||-45||%||3,243,996||92||%|
|Net income (Loss)1||(3,648,683||)||(13,900,360||)||74||%||(5,045,420||)||28||%|
|Cash and cash equivalents||$||15,664,718||$||36,042,090||-57||%||$||89,503,515||-82||%|
|Plant and equipment & Plant under construction||36,202,526||27,276,218||33||%||6,011,174||502||%|
|Average selling price, net of excise duty|
|Pure Sunfarms Financial Results|
|Gross margin (net of fair value adjustment)||9,283,235||3,313,388||180||%||-||N/A|
|Net income (Loss)||11,427,641||7,107,460||61||%||(603,585||)||1993||%|
|(1) 50% of the net income adjusted for transactions with EMH and for fair value is and adjusted EBITDA are reflected in EMH net income and adjusted EBITDA respectively.|
|(2) EMH adjusted EBITDA is calculated by substracting interest income, gain on changes in fair value of biological assets, share of income from joint venture and deferred income tax recovery and adding back depreciation, share-based payments, other expenses, loss from fair value changes in financial assets and 50% of Pure Sunfarms adjusted EBITDA from EMH net loss and comprehensive loss.|
|(3) Pure Sunfarms adjusted EBITDA is calculated by substracting Pure Sunfarms' change in fair value of biological asset, non-cash other income ($50,999 in Q1 2019) and fair value adjustment, and adding back realized fair value amounts included in inventory sold, amortization expense and provision for income tax (adjusted for $3,750 in Q1 2019)|
The Company’s unaudited condensed, interim consolidated financial statements and MD&A for the three months ended
During 1Q19 the Company filed a short form base shelf prospectus in each of the provinces of
Production & Sourcing
Pure Sunfarms (PSF), Emerald’s 50%-owned joint venture, completed conversion of its 1.1 million square foot
PSF exercised its option to acquire the nearly identical 1.1 million square foot
PSF entered into a credit agreement with Bank of Montréal and
Verdélite, Emerald’s wholly-owned 88,000 square feet indoor grow facility in
Cannabis Sales Agreements – Adult-use Markets
Emerald is currently delivering cannabis to government authorities in
The Company has received its first purchase order from the Société Québécoise du Cannabis and anticipates fulfilling it in the second quarter of 2019.
As previously announced, the Company signed a term sheet to form a strategic alliance with
Emerald Health Naturals
EHN commenced sales to natural health stores across
Other Key Events
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Emerald is part of the
Please visit www.emeraldhealth.ca for more information or contact:
(800) 757 3536 Ext. # 5
Emerald Investor Relations
(800) 757 3536 Ext. #5
Non-GAAP Financial Measures
This press release contains references to EBITDA and Pro Forma Sales. These financial measures are not measures that have any standardized meaning prescribed by IFRS and are therefore referred to as “non-GAAP measures”. Non-GAAP measures used by the Company may not be comparable to similar measures used by other companies. EBITDA is defined as “income (loss) before interest expenses, taxes, depreciation and amortization. Pro
The Company uses these non-GAAP measures because they provide additional information regarding performance of the Company’s overall business that are not otherwise reflected under IFRS.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Cautionary Note Regarding Forward-Looking Statements: Certain statements made in this press release that are not historical facts are forward-looking statements and are subject to important risks, uncertainties and assumptions, both general and specific, which give rise to the possibility that actual results or events could differ materially from our expectations expressed in or implied by such forward-looking statements. Such statements include production and processing capacity of various facilities; conversion of facilities; expansion of facilities; use of proceeds of financings; commencement of production; sales volumes; receipt of licenses; execution of final agreements with
We cannot guarantee that any forward-looking statement will materialize, and readers are cautioned not to place undue reliance on these forward-looking statements. These forward-looking statements involve risks and uncertainties related to, among other things, changes of law and regulations; changes of government; failure to obtain regulatory approvals; failure to obtain necessary financing; results of production and sale activities; results of scientific research; regulatory changes; changes in prices and costs of inputs; demand for labour; demand for products; failure of counter-parties to perform contractual obligations; as well as the risk factors described in the Company’s annual information form and other regulatory filings. The forward-looking statements contained in this press release represent our expectations as of the date hereof. Forward-looking statements are presented for the purpose of providing information about management's current expectations and plans and allowing investors and others to obtain a better understanding of our anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes. The Company undertakes no obligations to update or revise such statements to reflect new circumstances or unanticipated events as they occur, unless required by applicable law.
Source: Emerald Health Therapeutics Inc.