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Monday, Oct 3, 2022
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.

The weed wire

1933 Industries posts declining revenues in Q2 report

1933 attributed most of the losses to the completion of two cost-heavy projects

1933 attributed most of the losses to the completion of two cost-heavy projects

It was a rough second quarter for producer and processor 1933 Industries Inc. (CSE: TGIF).

On Tuesday, the U.S. operator reported declining revenues and increasing losses for the quarter ended Jan. 31.

Shares in the company fell over 27 percent following the news to $0.08 on the Canadian Securities Exchange.

1933 reported quarterly revenues of $3.1 million, a 20 per cent decrease from the previous quarter and a 15 per cent decrease from Q2 2019.

Net losses sharply increased to $6.4 million or $0.02 per share, from $3.8 million in the previous quarter. According to the company, its adjusted EBITDA loss was $4.8 million for Q2 2020 compared to $3.4 million for the same quarter in 2019.

Q2 2020 Consolidated Results

Q2 2020

Q1 2020

Q2 2019

Revenues

$3,139,265

$3,881,183

$3,682,561

Gross margin

($775,917)

$2,085,104

$2,050,308

Cash balance

$9,144,470

$14,872,277

$8,811,807

Net loss

($6,421,360)

($3,816,298)

($2,926,982)

Comprehensive loss

($6,031,828)

($3,962,300)

($3,110,781)

Adjusted EBITDA loss

($4,821,517)

($1,827,699)

($3,427,872)

Basic and diluted loss per share

($0.02)

($0.01)

($0.01)

Total assets

$55,289,649

$61,358,608

$54,237,227

Total liabilities

$25,833,196

$26,033,715

$15,107,066

Total equity

$29,456,453

$35,324,893

$39,130,161

1933 attributed most of the losses to the completion of two cost-heavy projects: a new cultivation facility in Las Vegas and expansion of its operations in California under a management agreement with Green Spectrum Trading Inc.

Read more: 1933 Industries continues Nevada operations despite public lockdown

“The projects spanned two quarters and required extensive capital expenditures and resources and are notable milestones for the company,” it said in a statement. “The company also continued to attract premium brands as partners in Nevada, and added edibles brand The Pantry Company as well as premier cannabis brand Bloom to its extensive product portfolio.”

1933 said that while it used the necessary resources to bring its infrastructure projects in Nevada and California online, it maintains a “strong” cash position, with a balance of $9.1 million for ongoing operations.

Revenues were lower than expected, 1933 said, due to reduced overall sales from its cultivation arm as it transitioned from its old facility to its new Las Vegas operations. Revenues also lagged because of a slower than expected recovery of vape and distillate sales, following last year’s crisis of vape-related illnesses.

“While the vape crisis had a negative effect on revenues across both THC and CBD products during the first two quarters of fiscal 2020, we have seen a slight rebound in demand subsequent to the end of the second quarter,” CEO Chris Rebentisch said in the statement. “Our outlook for the remainder of 2020 is for limited revenue growth, as the company adapts to current market conditions.”

Top image via 1933 Industries Inc.

 

nick@mugglehead.com

@nick_laba

 

 

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