Decibel Announces Second Quarter Results
Decibel Cannabis Company Inc. (TSXV: DB) (OTCQB: DBCCF) announced its Q2 2024 results, showing a 22% year-over-year decrease in net revenue to $22.1 million. The company maintained a 5.6% national market share, ranking 4th among Canadian licensed producers. Gross margin before fair value adjustments was 42%, slightly down from 43% in Q2 2023. Adjusted EBITDA decreased by 46% to $3.9 million, while free cash flow increased by 194% to $0.9 million. The company reported positive adjusted net income of $0.6 million and adjusted EPS of $0.00. Decibel is addressing market share declines through brand relaunches and product introductions.
Decibel Cannabis Company Inc. (TSXV: DB) (OTCQB: DBCCF) ha annunciato i risultati del secondo trimestre del 2024, evidenziando una riduzione del 22% dei ricavi netti rispetto all’anno precedente, per un totale di 22,1 milioni di dollari. L'azienda ha mantenuto una quota di mercato nazionale del 5,6%, posizionandosi al quarto posto tra i produttori autorizzati canadesi. Il margine lordo prima delle rettifiche di fair value è stato del 42%, leggermente in calo rispetto al 43% del Q2 2023. Il EBITDA rettificato è diminuito del 46%, arrivando a 3,9 milioni di dollari, mentre il flusso di cassa libero è aumentato del 194%, raggiungendo 0,9 milioni di dollari. L'azienda ha riportato un reddito netto rettificato positivo di 0,6 milioni di dollari e un EPS rettificato di $0.00. Decibel sta affrontando le diminuzioni della quota di mercato attraverso il rilancio del marchio e l’introduzione di nuovi prodotti.
Decibel Cannabis Company Inc. (TSXV: DB) (OTCQB: DBCCF) anunció sus resultados del segundo trimestre de 2024, mostrando una disminución del 22% interanual en los ingresos netos, totalizando 22,1 millones de dólares. La compañía mantuvo una cuota de mercado nacional del 5,6%, ocupando el cuarto lugar entre los productores autorizados de Canadá. El margen bruto antes de ajustes de valor razonable fue del 42%, ligeramente por debajo del 43% en el Q2 de 2023. El EBITDA ajustado disminuyó un 46%, llegando a 3,9 millones de dólares, mientras que el flujo de caja libre incrementó un 194%, alcanzando 0,9 millones de dólares. La empresa reportó un ingreso neto ajustado positivo de 0,6 millones de dólares y un EPS ajustado de $0,00. Decibel está abordando la reducción de la cuota de mercado a través del relanzamiento de la marca y la introducción de nuevos productos.
Decibel Cannabis Company Inc. (TSXV: DB) (OTCQB: DBCCF)가 2024년 2분기 결과를 발표했으며, 전년 대비 순수익이 22% 감소하여 2,210만 달러에 이르렀습니다. 회사는 5.6%의 국내 시장 점유율을 유지하며 캐나다에서 면허를 소지한 생산자 중 4위에 올랐습니다. 공정 가치 조정 이전의 총 마진은 42%로, 2023년 2분기의 43%에서 소폭 하락했습니다. 조정된 EBITDA는 46% 감소하여 390만 달러에 이르렀고, 자유 현금 흐름은 194% 증가하여 90만 달러에 달했습니다. 회사는 60만 달러의 조정된 순이익과 조정된 EPS가 $0.00임을 보고했습니다. Decibel은 브랜드 재출시 및 신제품 도입을 통해 시장 점유율 감소에 대응하고 있습니다.
Decibel Cannabis Company Inc. (TSXV: DB) (OTCQB: DBCCF) a annoncé ses résultats du deuxième trimestre 2024, révélant une baisse de 22% des revenus nets par rapport à l'année précédente, atteignant 22,1 millions de dollars. L'entreprise a maintenu une part de marché nationale de 5,6%, se classant 4e parmi les producteurs autorisés du Canada. La marge brute avant ajustements de juste valeur était de 42%, légèrement en baisse par rapport à 43% au Q2 2023. L'EBITDA ajusté a diminué de 46%, atteignant 3,9 millions de dollars, tandis que le flux de trésorerie disponible a augmenté de 194%, atteignant 0,9 million de dollars. L'entreprise a rapporté un bénéfice net ajusté positif de 0,6 million de dollars et un EPS ajusté de 0,00 $. Decibel s'attaque aux baisses de part de marché par le biais de relancements de marque et d'introductions de nouveaux produits.
Decibel Cannabis Company Inc. (TSXV: DB) (OTCQB: DBCCF) gab seine Ergebnisse für das 2. Quartal 2024 bekannt und verzeichnete einen Rückgang des Nettoumsatzes um 22% im Vergleich zum Vorjahr auf 22,1 Millionen Dollar. Das Unternehmen hielt eine Marktanteil von 5,6% und belegte den 4. Platz unter den lizenzierten Produzenten Kanadas. Die Bruttomarge vor Anpassungen des Fair Value betrug 42%, leicht gesunken von 43% im Q2 2023. Das bereinigte EBITDA fiel um 46% auf 3,9 Millionen Dollar, während der freie Cashflow um 194% auf 0,9 Millionen Dollar anstieg. Das Unternehmen meldete einen positiven bereinigten Nettogewinn von 0,6 Millionen Dollar und einen bereinigten EPS von 0,00 $. Decibel geht der sinkenden Markanteile durch Neulancierungen von Marken und Produkteinführungen entgegen.
- Maintained 4th place ranking among Canadian licensed producers with 5.6% national market share
- Positive free cash flow of $0.9 million, a 194% sequential increase
- Positive adjusted net income of $0.6 million
- Gross margin before fair value adjustments remained relatively stable at 42%
- 22% year-over-year decrease in net revenue to $22.1 million
- 46% year-over-year decline in Adjusted EBITDA to $3.9 million
- $1.4 million inventory write-down impacting gross margin
- Market share declines in infused pre-roll and vape segments
"Decibel has shown good discipline reducing our current liabilities by ~5mm this quarter. Market share has been challenged but early indications from Qwest relaunch suggest we will regain market share in flower. A continued focus on execution and capital efficiency will serve as the platform for future growth." said Benjamin Sze, Decibel's Chief Executive Officer.
Second Quarter Highlights
- National Market Share(1) of
5.6% in Q2 2024, which placed Decibel as the 4th largest licensed producer inCanada by market share. - Net Revenue was
$22.1 million 22% . Net revenue decrease driven by increased competition in the infused pre-roll segment, vape consumers switching towards large format 510 cartridges and disposables and the halting of exports toIsrael as the Company transitioned to a new distribution partner. Decibel is combatting market share declines with the relaunch of its domestic flower brand Qwest, introduction of large format 510 cartridges and disposables, and Vox brand extension. - Gross Margin Before Fair Value Adjustments was
42% in the second quarter of 2024, compared to43% in the second quarter of 2023. The quarter was negatively impacted by a write-down to inventory of$1.4 million - Adjusted EBITDA(2) of
$3.9 million 46% over the second quarter of 2023. The decrease in Adjusted EBITDA quarter over quarter was primarily driven by a decline in net Canadian recreational sales and international sales. - Positive Free Cash Flow(2) of
$0.9 million 194% over the second quarter of 2023. - Adjusted Net Income(2) of positive
$0.6 million $3.7 million - Adjusted Earning Per Share ("Adjusted EPS")(3) of
$0.00 $0.01
Notes: | |
1 | HiFyre Retail Analytics, Licensed Producer Sales over time Nationally |
2 | Non-GAAP financial measure. Refer to "Cautionary Statement Regarding Certain Non-GAAP Measures" for further details. |
3 | Non-GAAP ratio. Refer to "Cautionary Statement Regarding Certain Non-GAAP Measures" for further details. |
Summary Highlights
Three months ended | Six months ended | ||||
June 30 | June 30 | ||||
2024 | 2023 | 2024 | 2023 | ||
(thousands of Canadian dollars, except where noted) | |||||
Gross Canadian recreational sales 1 | |||||
Net Canadian recreational sales 1 | |||||
International sales 1 | |||||
Total | |||||
Gross revenue | |||||
Net revenue | |||||
Gross profit before fair value adjustments | |||||
Gross margin before fair value adjustments | 42 % | 43 % | 45 % | 47 % | |
Adjusted EBITDA 2 | |||||
Net income (loss) and comprehensive income (loss) | ( | ( | ( | ||
Adjusted net income (loss) 2 | ( | ||||
Cash flow from operations | |||||
Free cash flow 2 | |||||
Per Share Metrics | |||||
Income (loss) per share | - | - | - | - | |
Adjusted EPS 3 | - | ( |
1 | Supplementary financial measure. Refer to "Cautionary Statement Regarding Certain Non-GAAP Measures" for further details. |
2 | Refer to "Cash Flows" in the MD&A (as defined herein) for further details. |
3 | Non-GAAP financial measure. Refer to "Cautionary Statement Regarding Certain Non-GAAP Measures" for further details. |
Decibel's unaudited condensed consolidated interim financial statements for the three-month period ending June 30, 2024 (the "Financial Statements") and related management's discussion & analysis for the three and six month periods ending June 30, 2024 ("MD&A") are available under the Company's profile at www.sedarplus.ca.
As of June 30, 2024, Decibel was in compliance with all of its financial covenants and expects to remain in compliance for the remainder of its twelve-month forecast period.
About Decibel
Decibel is a consumer-focused cannabis company focused on delivering products that delight customers through a commitment to robust innovation and product quality. Leading brands General Admission, Qwest and Vox are among its portfolio sold both across
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 news release.
Cautionary Statements
Non-GAAP Measures
This news release contains certain financial performance measures that are not recognized or defined under IFRS (termed "Non-GAAP Measures"). As a result, this data may not be comparable to data presented by other licensed producers and cannabis companies. For an explanation of these measures to related comparable financial information presented in the Financial Statements prepared in accordance with IFRS, refer to the discussion below. The Company believes that these Non-GAAP Measures are useful indicators of operating performance and are specifically used by management to assess the financial and operational performance of the Company. Accordingly, these Non-GAAP Measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.
Non-GAAP Financial Measures
Adjusted EBITDA is a Non-GAAP Financial Measure that is calculated as net income (loss) and comprehensive income (loss) excluding unrealized gain on changes in fair value of biological assets, change in fair value of biological assets realized through inventory sold, depreciation and amortization expense, share-based compensation, other income, finance costs, foreign exchange loss, non-cash production costs and severance payments. Non-cash production costs relate to amortization expense allocations included in production costs. This Non-GAAP Financial Measure should be considered together with other financial information prepared in accordance with IFRS to enable investors to evaluate the Decibel's operating results, underlying performance and prospects in a manner similar to Decibel's management.
Three months ended | Six months ended | |||
June 30 | June 30 | |||
2024 | 2023 | 2024 | 2023 | |
(thousands of Canadian dollars) | ||||
Net income (loss) and comprehensive income (loss) | 122 | (423) | (3,212) | (992) |
Unrealized gain on changes in fair value of biological assets | (3,310) | (471) | (7,906) | (4,425) |
Change in fair value of biological assets realized through inventory sold | 3,795 | 5,157 | 8,246 | 13,029 |
Depreciation and amortization | 1,178 | 322 | 2,422 | 1,359 |
Share-based compensation (recovery) | (855) | 173 | (793) | 571 |
Other expense (income) | 211 | (76) | 223 | (143) |
Finance costs | 753 | 710 | 1,526 | 1,371 |
Foreign exchange loss (gain) | (5) | 134 | 85 | 244 |
Gain on disposal of Prairie Records Retail assets | (62) | - | (62) | - |
Non-cash cost of goods sold | 1,819 | 1,572 | 2,552 | 2,634 |
Other adjustments | 294 | 204 | 4,447 | 418 |
Adjusted EBITDA | 3,940 | 7,302 | 7,528 | 14,066 |
Adjusted Net Income is a Non-GAAP Financial Measure that is calculated as net income (loss) and comprehensive income (loss) excluding unrealized gain on changes in fair value of biological assets and change in fair value of biological assets realized through inventory sold. Adjusted EPS is a Non-GAAP ratio that is calculated as net income (loss) and comprehensive income (loss) excluding unrealized gain on changes in fair value of biological assets and change in fair value of biological assets realized through inventory sold, divided by the weighted average common shares outstanding. These measures are intended to provide a proxy for the Company's net income (loss) and comprehensive income (loss) and are used to compare Decibel to its competitors and derive expectations of future financial performance of the Company and should be considered together with other financial information prepared in accordance with IFRS to enable investors to evaluate the Decibel's operating results, underlying performance and prospects in a manner similar to Decibel's management.
Three months ended | Six months ended | |||
June 30 | June 30 | |||
2024 | 2023 | 2024 | 2023 | |
(thousands of Canadian dollars) | ||||
Net income (loss) and comprehensive income (loss) | 122 | (423) | (3,212) | (992) |
Unrealized gain on changes in fair value of biological assets | (3,310) | (471) | (7,906) | (4,425) |
Change in fair value of biological assets realized through inventory sold | 3,795 | 5,157 | 8,246 | 13,029 |
Adjusted net income (loss) 1 | 607 | 4,263 | (2,872) | 7,612 |
Weighted average number of shares outstanding | 418,953,642 | 408,984,777 | 423,958,978 | 408,984,777 |
Adjusted EPS | - | ( |
Free Cash Flow is a Non-GAAP Financial Measure that is calculated as cash flow from operations less cash provided by (used in) investing activities. This Non-GAAP Financial Measure should be considered together with other financial information prepared in accordance with IFRS to enable investors to evaluate the Decibel's operating results, underlying performance and prospects in a manner similar to Decibel's management.
Three months ended | Six months ended | |||
June 30 | June 30 | |||
2024 | 2023 | 2024 | 2023 | |
(thousands of Canadian dollars) | ||||
Cash provided by operating activities | 985 | 768 | 1,860 | 2,965 |
Cash used in investing activities | (90) | (464) | (620) | (950) |
Free cash flow 1 | 895 | 304 | 1,240 | 2,015 |
Non-GAAP Ratios
Adjusted earnings per share (adjusted net income (loss) divided by the number of outstanding shares) is a Non-GAAP ratio, does not have a standardized meaning prescribed by GAAP and is therefore unlikely to be comparable to similar measures presented by other issuers. The Company believes that adjusted earnings per share is a useful metric to normalize net income for biological asset accounting impacts.
Supplementary Financial Measures
International Sales is a supplementary financial measure intended to provide a more accurate depiction of international sales earned by the Company's wholesale operations.
Gross Canadian Recreational Sales is a supplementary financial measure intended to provide a more accurate depiction of gross revenue earned by the Company's wholesale operations. Inventory transferred directly from the Company's wholesale operations to the Company's retail operations is added to Gross Canadian Recreational Sales as found in the Financial Statements to arrive at Gross Canadian Recreational Sales.
Net Canadian Recreational Sales is a supplementary financial measure intended to provide a more accurate depiction of net revenue earned by the Company's wholesale operations. Inventory transferred directly from the Company's wholesale operations to the Company's retail operations is added to Net Canadian Recreational Sales as found in the Financial Statements to arrive at Net Canadian Recreational Sales.
Forward-Looking Statements
This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release.
Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements.
In this news release, forward-looking statements relate to, among other things: expectations that demand for Decibel's products will grow; the ability for Decibel to delight customers through the Company's product offering; the ability of the Company to extend its product offering to new countries and create a global footprint; and the Company's expectation that it will remain in compliance with all of its financial covenants under its credit facilities for the remainder of its twelve-month forecast period and its other business plans and expectations. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements contained in this news release. Except as required by law, the Company assumes no obligation to update the forward-looking statements of beliefs, opinions, projections or other factors should they change, except as required by law.
Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: risks relating to delays, regulatory changes and impacts; capital requirements; construction impacts; the ability to obtain and maintain licences to retail cannabis products; review of the Company's production facilities by Health Canada and maintenance of licences (including any amendments thereto) from Health Canada in respect thereof; future legislative and regulatory developments involving cannabis; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the labour market generally and the ability to access, hire and retain employees; general business, economic, competitive, political and social uncertainties; the risk that the Company may not be able to meet consumer demand; the risk that the Company may not improve its operational capacity when anticipated or at all; the risk that Decibel may not remain in compliance with its financial covenants for the remainder of its twelve-month forecast period; and the delay or failure to receive board, regulatory or other approvals, including any approvals of the TSX Venture Exchange, as applicable.
With respect to forward-looking statements contained in this news release, Decibel has made assumptions regarding, but not limited to: growth of the brand and recognition in
Readers are cautioned that the foregoing list of assumptions and risk factors is not exhaustive. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this news release are made as of the date hereof and Decibel does not undertake any obligation to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise unless so required by applicable securities laws
Market, Independent Third Party and Industry Data
Certain market, independent third party and industry data contained in this news release is based upon information from government or other independent industry publications and reports or based on estimates derived from such publications and reports. Government and industry publications and reports generally indicate that they have obtained their information from sources believed to be reliable, but Decibel has not conducted its own independent verification of such information. This news release also includes certain data derived from independent third parties. While Decibel believes this data to be reliable, market and industry data is subject to variations and cannot be verified with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties inherent in any statistical survey. Decibel has not independently verified any of the data from independent third-party sources referred to in this news release or ascertained the underlying assumptions relied upon by such sources.
View original content to download multimedia:https://www.prnewswire.com/news-releases/decibel-announces-second-quarter-results-302221862.html
SOURCE Decibel Cannabis Company Inc.
FAQ
What was Decibel's net revenue for Q2 2024?
What was Decibel's (DBCCF) national market share in Q2 2024?
How much was Decibel's (DBCCF) Adjusted EBITDA for Q2 2024?
What was Decibel's (DBCCF) free cash flow in Q2 2024?
