Pure Sunfarms achieves fifth consecutive profitable quarter and 179% quarter-to-quarter growth in retail branded product sales volume; builds on retail success in Ontario with 20% market share in April; continues leadership in low-cost cultivation
VANCOUVER, British Columbia, May 15, 2020 (GLOBE NEWSWIRE) -- Emerald Health Therapeutics, Inc. ("Emerald") (TSXV: EMH; OTCQX: EMHTF) has provided preliminary, unaudited financial results for the first quarter of 2020 for its 41.3%-owned joint venture, Pure Sunfarms.
During the three months ended March 31, 2020, Pure Sunfarms made important strides in growing its cannabis retail sales to provincial distributors, increasing revenue and volume in the retail market by 118% and 179%, respectively, over the fourth quarter of 2019. It continued to build market share in Ontario through the end of April, introduced competitive new product formats, and added new provincial markets in its ongoing market expansion effort. In achieving these steps, Pure Sunfarms achieved its fifth consecutive quarter of net income and sixth consecutive quarter of positive EBITDA.
"We are pleased to see Pure Sunfarms continue to demonstrate solid traction in its transition into the retail market," said Riaz Bandali, President and Chief Executive Officer of Emerald. "The Pure Sunfarms team is also to be commended for their fifth consecutive quarter of profitability, which place it in a very unique and enviable position in the sector."
Pure Sunfarms' Financial Summary for the First Quarter Ended March 31, 2020
(millions, excluding cost of cultivation and % metrics)
CAD$ | 2020 | 2019 | Change | |||||
Total gross sales | $21.5 | $14.4 | 49% | |||||
Total net sales | $18.0 | $14.4 | 25% | |||||
Gross profit | $9.4 | $9.3 | 1% | |||||
Gross margin | 52% | 60% | -13% | |||||
SG&A | $3.3 | $1.3 | 153% | |||||
EBITDA | $6.7 | $8.6 | -22% | |||||
EBITDA margin | 37% | 60% | -38% | |||||
Cultivation $/gram (incl. depreciation) | $0.88 | $1.38 | -36% |
Financial Highlights
Operating Highlights
1. Data cited has been calculated by Pure Sunfarms from sales information provided by OCS.
2. Statistics Canada. Last 12 months ended February 29, 2020.
COVID-19 Update
Pure Sunfarms' facilities in Canada remain open and operational. Pure Sunfarms already adheres to the highest health and safety standards in their operations and has put in place heightened hygiene practices and safety protocols, including more stringent cleaning and sanitization, and is taking appropriate precautions throughout all operations as per the recommendations of health authorities. Pure Sunfarms will continue to enhance and evolve such practices and protocols as the situation warrants.
About Emerald Health Therapeutics, Inc.
Emerald Health Therapeutics, Inc. is committed to cutting-edge cannabis science to create new consumer experiences with distinct recreational, medical and wellness-oriented cannabis and non-cannabis products. With an emphasis on innovation and production excellence, Emerald's three distinct operating assets are designed to uniquely serve the Canadian marketplace and international opportunities. These assets, all in full production, include: its Metro Vancouver, BC-based greenhouse operation (78,000 square feet) capable of producing organic-certified product; Verdélite, its premium craft cannabis production indoor facility in St. Eustache, Québec (88,000 square foot); and Pure Sunfarms, its 41.3%-owned joint venture in Delta, BC, producing high quality, affordably priced products (1.1 M square feet). Its Emerald Naturals subsidiary has launched a new natural wellness product category with its non-cannabis endocannabinoid-supporting product line and is expanding distribution across Canada.
Please visit www.emeraldhealth.ca for more information or contact:
Jenn Hepburn, Chief Financial Officer
1(800) 757 3536 Ext. #5
Emerald Investor Relations
(800) 757 3536 Ext. #5
[email protected]
Non-GAAP Financial Measures
This press release contains references to EBITDA. This financial measure does not have any standardized meaning prescribed by IFRS and is therefore referred to as "non-GAAP measures". Non-GAAP measures used by the Company may not be comparable to similar measures used by other companies. EBITDA is defined as "income (loss) before interest expenses, taxes, depreciation and amortization.
The Company uses these non-GAAP measures because they provide additional information regarding performance of the Company's overall business that are not otherwise reflected under IFRS.
Neither the 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.
Cautionary Note Regarding Forward-Looking Statements: Certain statements made in this press release that are not historical facts are forward-looking statements and are subject to important risks, uncertainties and assumptions, both general and specific, which give rise to the possibility that actual results or events could differ materially from our expectations expressed in or implied by such forward-looking statements. Such statements include production and processing capacity of various facilities; conversion of facilities; expansion of facilities; use of proceeds of financings; commencement of production; sales volumes; receipt of licenses; execution of final agreements with FTI; construction and operation of a laboratory; receipt of hemp deliveries; and anticipated production costs.
We cannot guarantee that any forward-looking statement will materialize, and readers are cautioned not to place undue reliance on these forward-looking statements. These forward-looking statements involve risks and uncertainties related to, among other things, changes of law and regulations; changes of government; failure to obtain regulatory approvals; failure to obtain necessary financing; results of production and sale activities; results of scientific research; regulatory changes; changes in prices and costs of inputs; demand for labour; demand for products; failure of counter-parties to perform contractual obligations; as well as the risk factors described in the Company's annual information form and other regulatory filings. The forward-looking statements contained in this press release represent our expectations as of the date hereof. Forward-looking statements are presented for the purpose of providing information about management's current expectations and plans and allowing investors and others to obtain a better understanding of our anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes. The Company undertakes no obligations to update or revise such statements to reflect new circumstances or unanticipated events as they occur, unless required by applicable law.
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