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VEXT Announces Financial Results for Q3-2021


b17jayhawker
(@b17jayhawker)
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Joined: 4 weeks ago
Posts: 54
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  • Revenue of US$9.4 million; Adjusted EBITDAi of US$3.6 million (margin of 38.0%); Fully diluted EPS of US$0.01; and operating cash flow of US$2.4 million.
  • The Company will hold a conference call and webcast on Thursday November 18, 2021, at 8:00am ET to discuss its Q3 financial results.

VANCOUVER, BC, Nov. 18, 2021 /CNW/ - Vext Science, Inc. ("Vext" or the "Company") (OTCQX: VEXTF) (CSE: VEXT) a cannabinoid brand leader based in Arizona, leveraging its core expertise in extraction, manufacturing, cultivation, and marketing to build a profitable multi-state footprint, today reported its financial results for the period ended September 30, 2021. All currency references used in this news release are in U.S. currency unless otherwise noted.

Summary Financial Results (unaudited)

 

Q3 2021

Q3 2020

Q2 2021

Revenue

$9,399,700

$7,951,648

$9,375,774

Gross margini (%)

43.6%

39.4%

45.0%

Net income (loss) after taxes

$970,106

$1,412,974

$1,792,449

Earnings per common share, fully diluted

$0.01

$0.01

$0.01

Adjusted EBITDAi

$3,567,827

$2,581,347

$3,463,735

Adjusted EBITDA margini (%)

38.0%

32.5%

36.6%

Management Commentary

Eric Offenberger, CEO of VEXT, commented, "During Q3, our team in Arizona generated solid revenue, while maintaining strict cost control and realizing efficiencies from our recently completed manufacturing expansion. These factors drove Adjusted EBITDA margins up by over 140bps sequentially, to 38%. Q4 is off to a strong start and overall, we expect continued growth in the Arizona market, which recently surpassed Colorado as the second largest cannabis market in the U.S." ii

Mr. Offenberger added, "While market-wide inflationary pressures will likely translate into some additional price sensitivity within certain consumer groups in the short-term, Vext's vertically integrated position gives it a competitive advantage. We have opted to divide our Eloy expansion into two phases, to allow construction costs to normalize and ensure we are able to optimally match Phase I production with our own retail needs. We expect the next 12 months to be an important period for Vext as we continue to grow in Arizona, look for accretive opportunities to expand our footprint in the market and continue to solidify a vertical position in Ohio, all backed by a proven track record of operational excellence and profitability."

Summary of Recent Operating Developments

  • Today, Vext also announced that given elevated construction costs market-wide, the Company has made the decision to revise the previously announced expansion schedule at its Eloy cultivation facility. The Company now plans to divide construction into two phases. Phase I is expected to be complete during Q3 2022, and will bring canopy at Eloy to ~17,000 square feet. Phase II, expected to be complete during Q3 of 2023, will bring total canopy on site to ~34,000 square feet.
  • On November 17, 2021, Vext announced that an affiliated entity (the "Affiliate") of Appalachian Pharm Processing, LLC, an Ohio limited liability company ("APP"), has received a Level I Cultivator provisional license (the "License") to be co-located at the APP facility at 16064 Beaver Pike, Jackson, Ohio. The License, granted by the Ohio Department of Commerce, will enable the Affiliate to build-out an initial cultivation area of up to 25,000 square feet, with the potential to expand up to 50,000 square feet following further application and approval.
  • On October 18, 2021, Vext announced that it had received approval to have ownership of a manufacturing operation in Ohio, through a 37.5% ownership interest in APP. In July 2022, the Company expects to apply to the Ohio regulators, through another affiliated joint venture partner (the "Joint Venture"), to transition an operating cannabis dispensary license to the Joint Venture. The combination of these acquisitions, once approved by the Ohio regulators and completed, will move Vext closer to vertical integration in Ohio, which is an attractive limited license state with the potential for a future transition into an adult-use market.

Q3-2021 Financial Results Conference Call

Vext will host a conference call and webcast Thursday November 18, 2021, at 8:00 a.m. ET to discuss its third quarter financial results. The call will be chaired by Eric Offenberger, CEO and Vahan Ajamian, CFO:

Date: November 18, 2021 | Time: 8:00 a.m. ET

Participant Dial-in: 416-764-8609 or 1-888-390-0605

Replay Dial-in: 416-764-8677 or 1-888-390-0541

Conference ID: 92801735

Playback #: 801735 (Expires December 2, 2021)

Listen to webcast:  https://bit.ly/3pLqGIl    

Non-IFRS Financial Measure
The Company has provided certain non-IFRS financial measures including "Gross margin", "Adjusted EBITDA" and "Adjusted EBITDA margin". These non-IFRS financial measures do not have a standardized definition under IFRS, nor are they calculated or presented in accordance with IFRS and may not be comparable to similar measures presented by other companies. The Company defines "Gross margin" as Gross Profit divided by Revenue. The Company defines "Adjusted EBITDA as net income (loss) from operations, as reported, before interest and tax, adjusted to exclude extraordinary items, non-recurring items, other non-cash items, including stock-based compensation expense, depreciation and amortization, foreign exchange and acquisition related costs, if applicable. The Company defines "Adjusted EBITDA margin" as Adjusted EBITDA divided by Revenue.

The Company has provided these non-IFRS financial measures as supplemental information and in addition to the financial measures that are calculated and presented in accordance with IFRS. The Company believes that these supplemental non-IFRS financial measures provide a valuable additional measure to use when analyzing the operating performance of the business. These supplemental non-IFRS financial measures should not be considered superior to, as a substitute for or as an alternative to, and should only be considered in conjunction with, the IFRS financial measures presented herein. The following tables provide a reconciliation of each of the non-IFRS measures to its closest IFRS measure.

Adjusted EBITDA
The following information provides reconciliations of the supplemental non-IFRS financial measure presented herein to the most directly comparable financial measure calculated and presented in accordance with IFRS.

 

Q3 2021

Q3 2020

Q2 2021

Net income after taxes

$970,106

$1,412,974

$1,792,449

Interest (net)

$75,574

$63,917

$(38,194)

Income taxes

$538,308

-

$433,636

Depreciation & amortizationiii

$886,920

$802,108

$743,999

EBITDA

$2,470,908

$2,278,999

$2,931,890

Accretion

$785,192

$37,542

$208,946

Share (profit)/loss on JVs

$2,602

$76,747

$102,938

Share-based compensation

$171,479

$86,790

$220,410

Gain on derecognition of ROU

-

-

$(3,195)

(Gain)/loss on investment

$212,675

-

 

(Gain)/loss on asset disposal

$(75,000)

$82,531

-

Foreign exchange

$(29)

$18,738

$2,746

Adjusted EBITDA

$3,567,827

$2,581,347

$3,463,735

 


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D. H. Taylor
(@cannabisinvestingnewsletter)
Member Admin
Joined: 1 year ago
Posts: 263
 

@b17jayhawker 18% QoQ revenue increase.  Solid.  These guys are going to be big.  Plus, they are licensing out their brands in other states.  Little effort and collections checks.  Such an undervalued company.  


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