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Decibel Announces 2022 Financial Outlook, Strategic Priorities, and Organizational Alignment

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Isail4fun
(@rtimothyobrienhotmail-com)
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CALGARY, AB, Jan. 31, 2022 /PRNewswire/ - Decibel Cannabis Company Inc. is pleased to provide an update on its strategic priorities and 2022 financial outlook.

Highlights

Strong 2022 drivers now in place to generate substantial revenue and EBITDA growth. Anticipate achieving milestone of positive cash flow from operations in the first half of 2022.Driving organic growth, targeting 2022 market share growth of over 40% versus 2021.Canadian recreational market forecasted to grow more than 30% over prior year. Targeting 40 – 45% product gross margin by mid-2022.Organizational realignment to focus on 4 strategic priorities (See Strategic Priorities and Five-Year Outlook).

CEO Comments

Commenting on the Company's outlook, Paul Wilson, CEO of Decibel noted the following:

"We have established a solid foundation through strong execution of our priorities in 2021 and are well positioned to execute on our 2022 objectives and achieve strong year over year growth in revenue and margins. Demand for our brands and products in the recreational market continues to exhibit strong growth, confirming our thesis that quality across category expansion, consistency, and revenue growth, will lead to creation of competitive advantages for years to come.

Our organic growth will be focused on broadening distribution of existing products, expanding with brands into core segments, launching a pipeline of new, unique, and innovative products, and operational efficiency gains from a series of investments generating substantial EBITDA improvement.

We are investing heavily in growing sales and broadening our distribution, having set Ontario in our sights as a key market for future growth. Over 2021, we've tripled our market share and revenues from this province and remain focused on maintaining this trend. As our horizons widen, we are looking to other eastern provinces as additional channels of growth.

We're confident that our brands and products will continue to provide superior experiences to our customers and that our team will remain flexible to meet evolving consumer trends – and in the future, will be shaping them. We believe that our strategic plan will provide compelling organic growth, which combines further development of our competitive advantages and an attractive cannabis growth outlook."

Strategic Priorities and Five-Year Outlook

"At Decibel's core, we will ensure genetics, expertise, and quality remain our core competencies, such that we are flexible to meet consumer trends and produce the highest quality product in each price segment."

The Company's 2022 Strategic Plan priorities continue to reinforce elevating Decibel's customers' experiences, aggressive sales growth, differentiation of products, and organic growth potential of its cash flows, include the following:

Continue to champion the Qwest Family of Brands as an industry-leading premium brand, which creates a "halo" extending to Decibel's other brands and products; Broaden distribution and enter new markets through a multi-channel and best-in-class sales system; Execute on capital investments and maximizing product gross margin through a large-scale transition from manual to automation driven production lines; and establish and refine product differentiation and competitive advantages.

2022 Financial Outlook

The Company highlights the following financial milestones in 2022:

Anticipate achieving milestone of positive cash flow from operations in the first half of 2022;Driving high double digit revenue growth through broader distribution and a new, unique, and innovative product pipeline; Targeting 40 – 45% product gross margin by mid-2022 through automation and other capital investments; Repaying its outstanding convertible debentures with low cost non-dilutive debt capital, resulting in blended cost of debt capital of less than 5%;Strengthening balance sheet and financial position with the expectation to reach less than 3.0x debt / trailing twelve month Adj. EBITDA in 2022; and Established a low cost $7.5 million accordion debt facility for future growth.

The Company's 2022 performance drivers include:

Expanded Decibel presence in the core price segment through the launch of General Admission jarred flower and infused pre-roll products in January; Launched Qwest premium infused pre-roll products in January; Launched early stage infused products in Ontario in January, with additional General Admission and Qwest infused products launching in early Q2;Optimizing yields and supply of Qwest flower and pre-rolls over the course of 2022;Enhancing distribution through investments in Decibel's revenue generation system and expanding into Eastern provinces; Completing the majority of capital investments in the first half of 2022 which are designed to bring automation and substantial EBITDA generation to existing product lines and revenue; and Continued investment in quality of offerings and development of product pipeline (15 new products launching in 2022), focused on new, unique and innovative approach.


   
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D. H. Taylor
(@dhtaylor)
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Posted by: @rtimothyobrienhotmail-com

Anticipate achieving milestone of positive cash flow from operations in the first half of 2022

This translates into profits on the bottom of the Operations section of the financial statement.  That would mean positive EBTIDA and the only remaining objective is that continued increases in revenue will push economies of scale and marginal profits upwards.  Eventually, Decibel becomes net earnings profitable... probably 2023.  

$DBCCF is a sleeper others need to look at - one of my top picks.


   
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