COVID-19The weed wire1933 strengthens balance sheet, but revenue cut by Covid

The company has cut back on operating expenses in an effort to weather the current economic storm
Nick Laba Nick LabaJune 29, 20205 min

While a decline in tourism has hurt revenues for Nevada producer 1933 Industries Inc. (CSE: TGIF and OTCQX: TGIFF), the company reported a strengthening in other operating results in its latest earnings report.

1933 released its latest figures Monday afternoon for the fiscal quarter ended April 30.

The company reported revenues of $2.6 million, a 17 per cent decrease from the previous quarter.

However, 1933 said its gross margin improved by 186 per cent to $0.9 million quarter-over-quarter. Its net loss also improved by 27 per cent to $4.7 million, from $6.4 million over the same period.

Read more: 1933 Industries posts declining revenues in Q2 report

Adjusted earnings before interest, taxes, depreciation and amortization improved by 45 per cent to a loss of $3 million.

Stock in the company climbed 6 per cent to $0.085 on the Canadian Securities Exchange.

1933 ended the quarter with $4.9 million in cash, a decrease of 46 per cent.

During the quarter, the company said its revenues were negatively impacted by the pandemic-related closures in the state of Nevada. The market disruption, it said, was precipitated by the loss of tourism in Las Vegas and the challenges of serving the local market through home-delivery only.

1933 says it will continue to monitor local developments related to Covid-19 and assess operations as the situation evolves. Despite casinos re-opening earlier this month, the company’s outlook for the rest of fiscal 2020 is for limited revenue growth as the company adapts to the uncertainty introduced by the virus.

CFO Stephen Radusch said his company’s main priority has been to implement forward-looking measures to enable it to weather the current economic storm.

“We have reduced expenses and we are carefully managing our cash position, while maintaining operations amidst the pandemic,” he said in a statement. “Going forward, we will continue to focus on cost controls and additional reductions as we improve efficiencies.”

Given the circumstances, 1933 has temporarily postponed further spending on its expansion projects in Nevada for both hemp and cannabis extraction.

On the other hand, the firm scaled up its cultivation operations in its Las Vegas facility, with all 15 grow rooms populated with continuous harvests every two weeks.

Over the quarter, it launched its new line of Canna Hemp hemp seed oil products. 1933 increased its business-to-consumer commerce with the Hemp products available in 10 online marketplaces.

At the end of the fiscal period, the company appointed Paul Rosen as CEO and Eugene Ruiz as president, with a “renewed focus on execution and profitability.

Top image via 1933 Industries

 

nick@mugglehead.com

@nick_laba

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