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Decibel Provides Preliminary Record Level Q4 2022 Results and 2023 Outlook

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  • Q4 2022 record Net Revenue of $25.25  $26.25 million (>38% growth from Q3 2022)
  • Q4 2022 record Adjusted EBITDA of $6.25  $7.25 million (>47% growth from Q3 2022)
  • Q4 2022 achieved <3.0x Debt to trailing twelve-month Adjusted EBITDA
  • Targeting 2023 Net Revenue year-over-year growth of >35%

Management Commentary

Decibel has continued its market share gains, becoming the third largest LP in Canada by market share and the fastest growing large LP with 77% growth in 2022. We remained focused on developing consumer loyalty and category expansion supported through refinement of differentiation within our products. By creating demand, it led to an abundance of attractive investment opportunities by way of automation and supply chain optimization, leading to record level gross margin in the back half of the year. Through these steps, we've grown Decibel's top and bottom line substantially, capping off the year with record level results. We are steadfast in our strategic plan that has driven our recent success, while remaining nimble to navigate a highly dynamic Canadian marketplace and ever-growing international landscape.

We plan to grow our position to become a market leader in Canada through organic growth centered around a pipeline of new, unique, and innovative products, and a strong revenue generation engine to grow distribution. Growing our footprint and recognition in Canada will in turn create a foundation to expand our brands internationally, bringing quality and choice to consumers abroad.

With demand in place, Decibel has invested aggressively to expand its margins and drive free cash flow, with a pipeline of high return on capital opportunities still in place. This year, we are increasing our focus on improving operating cash conversion with the streamlining of operations, a continued transition towards automation, and improving our balance sheet. We think this is critical given the current challenges present in the industry, and positions Decibel to further reinvest in its business and reinforce its ability to outcompete.

Link to Decibel's Updated Investor Presentation

About Decibel

Decibel is uncompromising in the process and craftsmanship needed to deliver the highest quality cannabis products and retail experiences. Decibel has three operating production houses along with its wholly owned retail business, Prairie Records. The Qwest Estate in Creston, BC is a licensed and operating 26,000 square foot cultivation space which produces the widely championed, rare cultivar-focused brands Qwest and Qwest Reserve, which are sold in six provinces across Canada. Thunderchild Cultivation, is a licensed and operating 80,000 square foot indoor cultivation facility in Battleford, SK. The Plant, Decibel's extraction facility, in Calgary, AB has 15,000 square feet of Health Canada licensed extraction and product development space. This production house will fuel the growth of our brands Qwest, Qwest Reserve, Blendcraft, and General Admission, into new and innovative product formats like concentrates, vapes, edibles and beyond.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Noble Member Admin
Joined: 3 years ago
Posts: 1202

Solid.  Their price/book ratio is about 2.33 which is about half the broader S&P500.  If these guys hit their goals with 2023, and their numbers continue to impress, this could be a solid winner.  Their EBITDA/Revenue percentage is coming in at ~28.5%.  This is on par with some of the better performing companies and is just above the broader S&P500.  So, if they increase their revenues as they expect by 35% this year, and simultaneously economies of scale increase profitability, this could be a solid opportunity.

I see a lot of upward momentum with the numbers on cannabis companies.  If we see a big swing to profitability, this, alone, will take out the short sellers as potentially new buyers start to enter the market.


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