Canadian producer Indiva Limited (TSXV: NDVA) (OTCQX: NDVAF) says it’s maintained the leading position in the cannabis edibles category despite reduced sales over the summer.
On Tuesday, the Ontario-based company released its financial results for the third quarter ended Sept. 30, reporting net revenue of $7.7 million — a 15-per-cent decrease from $9 million in the previous quarter.
The decrease was blamed on “seasonal weakness,” and a lack of new products, like the three new Wana Quick SKUs and two Bhang chocolate SKUs launched in the second quarter.
Net revenue from edibles was $6.9 million, down 18 per cent from $8.4 million in the previous quarter. Edible sales represented 90 per cent of net revenue.
Gross profit excluding fair value adjustments, impairments and one-time items was $2.8 million. Gross margin totaled $2.2 million, a 19-per-cent decrease from $2.7 million.
Total cash at the end of the period was $2.6 million, falling 21 per cent from $3.3 million.
Operations costs stayed flat in both quarters at $3 million. Operating expenses as a percentage of net revenue was 39 per cent in the third quarter, versus 34 per cent in the second.
“Looking forward to the fourth quarter of 2021, we expect to see sequential net revenue growth based on continued organic growth, the strength of purchase orders booked to date, and expected new SKU and product introductions,” said Indiva CEO Niel Marotta in a statement.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) stayed positive, but declined 69 per cent to $170,000 compared to $540,000 last quarter.
Company stock fell by 7 per cent Tuesday to $0.33 on the TSX Venture Exchange.
In the third quarter, Indiva sold 42 million milligrams’ worth of distillate, a 19-per-cent decrease from the 52 million milligrams sold in the previous quarter. Average distillate cost was $0.005 per milligram.
Impairment charges totalled around $446,000 including the disposal of old inventory.
Last month, Canopy Growth Corporation (TSX: WEED) (Nasdaq: CGC) said it’s set to acquire Wana, an American gummy brand that Indiva is licensed to use in Canada. Canopy says details surrounding Indiva’s partnership have yet to be worked out.
Recent Ontario Cannabis Store data showed that four of the top 10 cannabis products sold were by Indiva including three Wana gummy SKUs and one Bhang Chocolate SKU.
Indiva also expanded distribution to Prince Edward Island, and now sells products in all Canadian provinces and two territories, as well as through Medical Cannabis by Shoppers.
During the third quarter, the firm introduced its first baked goods in the Ontario market with three new Cookie SKUs from Slow Ride Bakery.
The company plans on launching new products during its next two quarters including chewable fruit tablets, called Jewels, as well as craft cannabis flower SKUs under the Artisan Batch brand.