Indiva Reports First Quarter Fiscal Year 2020 Results
LONDON, Ontario, June 08, 2020 (GLOBE NEWSWIRE) — Indiva Limited (the “Company” or “Indiva”) (TSXV:NDVA) (OTCQX:NDVAF) is pleased to announce its financial and operating results for first quarter fiscal 2020 ended March 31, 2020. All figures are reported in Canadian dollars ($), unless otherwise indicated. Indiva’s financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”). For a more comprehensive overview of the corporate and financial highlights presented in this press release, please refer to Indiva’s Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Three Months Ended March 31, 2020, and the Company’s Condensed Consolidated Interim Financial Statements for the Three Months Ended March 31, 2020 and 2019, which are filed on SEDAR and available on the Company’s website, www.indiva.com.
We are pleased to report record revenues for Indiva in the first quarter of 2020. After receiving our edibles, extracts and topicals licence on January 31, 2020, the Company delivered its 2.0 products to market within days. Today, Bhang® Chocolate is a top-selling edible and a high velocity SKU in multiple provinces.
Niel Marotta, Indiva’s President and Chief Executive Officer
Our INDIVA™ THC capsules also lead their category online in Ontario. With multiple top-tier products in market, we are looking forward to capitalizing on our success and earning more consumers’ loyalty by delivering new, innovative products, like Wana Sour Gummies, in 2020.
- The Company realized significant sales growth in Q1 2020 after receiving its edibles, extracts and topicals sales licence on January 31, 2020.
- Gross revenue in Q1 2020 was $2.3 million representing a 690% increase from Q1 2019.
- Net revenue in Q1 2020 was $2 million representing a 522% sequential increase from Q4 2019.
- Bhang® Chocolate sales totaled $1.6 million, net of excise taxes.
- The Company realized $253,760 in tolling revenue attributable to processing and service arrangements.
- On March 31, 2020, Bhang® Milk and Dark Chocolate were the number one and number two SKUs in the Ontario Cannabis Store’s edibles category by dollars and unit sales.
- Across the three categories in which Indiva competes, namely, edibles, pre-rolls and capsules, Bhang® Milk Chocolate was the number one SKU measured by dollars and units in Ontario.
- Currently, Indiva has distribution agreements in place with eight provinces.
- Gross margin was ($217,696) versus ($85,013) in the same period last year as positive gross margins on Bhang® and INDIVA™ products were offset by losses on contract manufacturing operations. Higher allocation of facility overhead and fixed costs related to cost of goods sold also hurt margins in the quarter. Management expects to see significant improvement in gross margins as operating efficiencies improve, output increases and lower value contract manufacturing agreements come to an end this year.
- Operating expense declined by 44% versus Q1 2019 to $1.79 million as a result of reduced pre-production costs, and increased allocation of overhead to cost of goods sold.
- Net loss declined in Q1 2020 from Q1 2019 due to increased revenue resulting from the launch of new SKUs in the edibles and extracts categories and lower operating expenses.
- The Company closed two issuances of convertible debentures in the aggregate amounts of $1 million and $1.5 million.
Events Subsequent to Quarter End
- On April 15, 2020, Indiva announced that it had shipped Bhang® Chocolate to British Columbia.
- On May 21, 2020, Indiva announced that it had shipped Bhang® Chocolate to New Brunswick and INDIVA™ pre-rolls, THC capsules and Bhang® Chocolate to Manitoba.
- As of June 5, 2020, Bhang® Chocolate was the top-selling edible product in multiple provinces, including Ontario.
- As of June 5, 2020, INDIVA™ capsules were the top-selling indica capsule online in Ontario and ranked second in the broader capsule category.
Company Updates and Outlook
Near nationwide distribution: In Q1 2020, Indiva significantly broadened its distribution network adding five new provinces enabling access to the vast majority of Canada’s of-age population. The Company expects to see Ontario and British Columbia add more than 300 stores in 2020 creating new channels through which Indiva’s popular products can be sold.
Extending the lead: Bhang® Chocolate currently leads the edibles category in multiple provinces including Ontario. The national performance of Bhang® Chocolate affirms Indiva’s strategy to partner with proven, trusted brands.
Innovation ahead: In 2020, Indiva will deliver Wana’s pectin-based, cannabis-infused edibles that lead the U.S. market in dollars sold. Wana Sour Gummies will be available in flavours such as strawberry lemonade, watermelon and pomegranate blueberry acai. The Company will also deliver cannabis-infused sugar, salt and sweet and sour candies using Crystal Fusion Technology™, which mechanically fuses cannabinoids within the crystal structures of sugar and salt. With the delivery of these new products, Indiva looks to position itself as one of Canada’s most consumer-centric and innovative cannabis companies.
OPERATING AND FINANCIAL RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2020
Overarching Financial Data
The Company also announces that its Board of Directors approved the grant of 655,000 stock options to employees of the Company. The options granted are exercisable into common shares of the Company at a price of $0.40 per common share in accordance with TSX Policy 4.4, subject to the rules of the TSX Venture Exchange and the Company’s Stock Option Plan. The options have a term of five years and will expire on June 5, 2025. One-third of all options will vest on the first anniversary of the grant, one-third of all options will vest on the second anniversary of the grant and the final one-third of all options will vest on the third anniversary of the grant.
Government and private entities are still assessing the present and future effects of the COVID-19 pandemic. As an essential business, Indiva has continued to operate with enhanced health and safety protocols in place to protect its employees. The Company continues to assess the customer, supply chain and staffing implications of COVID-19 and is committed to making continuous adjustments to minimize disruption and impact. Indiva will remain proactive in its response to the pandemic and compliant with any and all provincial and/or federal policy enacted to protect Canadians.
Indiva sets the standard for quality and innovation in cannabis. As a Canadian licensed producer, Indiva creates premium pre-rolls, flower, capsules, and edible products and provides production and manufacturing services to peer entities. In Canada, Indiva produces and distributes the award-winning Bhang® Chocolate, Wana Sour Gummies, Ruby® Cannabis Sugar, Sapphire™ Cannabis Salt and other Powered by INDIVA™ products through license agreements, partnerships and joint ventures. Click here to connect with Indiva on LinkedIn, Instagram, Twitter and Facebook, and here to find more information on the Company and its products.
Kate Abernathy, Vice President of Marketing and Communications
Steve Low, Investor Relations