Le Lézard
Classified in: Business
Subjects: ERN, MAT

Nova Announces Fourth Quarter and Year End 2022 Results

Fourth quarter sales growth of 4.2% and increased gross margin percentage to 20.8% from 18.9%  compared to the third quarter of 2022, driven by the execution of Nova's disciplined pricing strategy and private label initiatives

EDMONTON, AB, March 29, 2023 /CNW/ - Nova Cannabis Inc. (the "Company" or "Nova") (TSX: NOVC) today released its annual audited consolidated financial statements (the "annual financial statements") and management's discussion and analysis ("MD&A") for the year ended December 31, 2022. All financial information in this press release is reported in millions of Canadian dollars and represents results from continuing operations, unless otherwise indicated.

"Building on the consistent momentum we've demonstrated through the year, Nova once again posted record revenue for the fourth quarter of 2022 as the Value Buds format continues to standout in a competitive marketplace," said Marcie Kiziak, CEO of Nova.  "Our revenue growth is accompanied by gross margin growth, as we've started to adjust pricing in certain areas where the competitive pressures have waned. This, along with growing revenues from data analytics licensing and the successful launch of our private label products in partnership with SNDL, gives us levers to drive future gross margin growth as we capture greater market share, further validating our strategy. These remarkable achievements are a testament to the dedication and hard work of our management team and employees, who have worked tirelessly to optimize our operations and drive efficiencies. By focusing on our core strengths and investing in our people and processes, we expect to unlock continued value for our shareholders."



1 Source: Statistics Canada: Retail trade sales by province and territory



Summary of Consolidated Cash Flows

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Revolving Credit Facility

Nova has an uncommitted revolving credit facility with SNDL in an aggregate principal amount not to exceed $15.0 million (the "Revolving Credit Facility"). On October 31, 2022, the term of the Credit Facility was extended to April 30, 2023.

As at March 28, 2023, $11.2 million in principal and accrued but unpaid interest is outstanding on the Revolving Credit Facility.

ATM Program

On July 22, 2022, the Company announced the establishment of an at-the-market equity offering program (the "ATM Program") that allows the Company to issue up to $20.0 million of Nova Shares from treasury to the public at the discretion of the Company and subject to regulatory requirements. Any Nova Shares sold through the ATM Program will be sold at prevailing market prices when issued in ordinary broker's transactions on the TSX, or another Canadian marketplace on which the common shares are listed, quoted, or otherwise traded. The ATM Program provides Nova optionality to access additional capital if needed. On December 29, 2022, the Company issued 16,500 Nova Shares through the ATM Program for nominal proceeds, net of share issuance costs. No Nova Shares were issued under the ATM Program subsequent to December 29, 2022.


Nova's strategy is to be one of the largest and fastest-growing cannabis retailers in Canada. Its goal is to disrupt and solidify the cannabis retail market by promoting a wide range of cannabis products at everyday best-value prices, while encouraging greater migration from the illicit cannabis market. The Company's strategy is rooted in the quality of its store footprint and locations, the sales efficiency of Nova stores, and the appeal of the Value Buds brand. Nova continues to remain disciplined and customer focused by choosing the best real estate for its strategy ? whether through acquiring stores or building its own.


Nova will host a conference call and webcast at 10:30 a.m. EDT (8:30 a.m. MDT) on Wednesday, March 29, 2023.

Call Access

Canada: 1-800-319-4610
International: +1-604-638-5340

Webcast Access

To access the live webcast of the call, please visit the following link: 


The webcast archive will be available for three months via the link provided above. A telephone replay will be available for one month. To access the replay dial: 

Canada/USA Toll Free: 1-800-319-6413 or International Toll: +1-604-638-9010 
When prompted, enter Replay Access Code: 9968# 

For further information, refer to the Company's interim financial statements and MD&A for the three and twelve months ended December 31, 2022, which are available from the Company's profile on SEDAR, at www.sedar.com, or on the Company's website at www.novacannabis.ca.


This news release contains forward-looking statements or information (collectively "forward-looking statements") within the meaning of applicable securities legislation. Forward-looking statements are typically identified by words such as "continue", "anticipate", "will", "believes", "should", "plan", "intention", and similar words suggesting future events or future performance. All statements and information other than statements of historical fact contained in this news release are forward-looking statements. In particular, this news release contains forward-looking statements pertaining to: the Company's expectations regarding its growth and business strategies; the launch of the at-the-market equity offering program and the issuance of common shares thereunder; Nova's private label strategy; Alberta and Ontario expansion; and the completion of the Nova Reorganization and the expected benefits resulting therefrom.

With respect to forward-looking statements contained in this news release, the Company has made assumptions regarding, among other things: the Company's ability to identify locations for, construct and open new stores and the costs related thereto; the availability of hardware and equipment for those stores; government regulation and applicable laws will not change in a manner adverse to the Company; receipt of necessary regulatory approvals to open new stores; the Company's ability to obtain leases for new sites and attract the necessary personnel to operate new stores; demand for the products the Company sells; other factors that will drive sales growth in the Value Buds banner, including Nova's private label strategy; availability of acquisition opportunities; sustainability of competitors' businesses and competition in the retail cannabis industry, including from the illicit cannabis market;  consumer demands; and factors that influence consumer behavior.

Although the Company believes that the expectations reflected in the forward-looking statements, and the assumptions on which such forward-looking statements are made, are reasonable, there can be no assurance that such expectations and assumptions will prove to be correct. Readers should not place undue reliance on forward-looking statements included in this news release. Forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties that may cause actual performance and financial results to differ materially from any estimates, forecasts or projections. These risks and uncertainties include, among other things, the risk that Nova will be unable to execute its strategic plan and growth strategy, as planned without significant adverse impacts from various factors beyond its control; business decisions and strategies of SNDL, Nova's direct majority shareholder; dependence on suppliers; potential delays or changes in plans with respect to capital expenditures and the availability of capital on acceptable terms; risks inherent in the retail cannabis industry; competition for, among other things, customers, supply, capital and skilled personnel; changes in labour costs and markets; incorrect assessments of the value of acquisitions; general economic and political conditions in Canada (including Alberta, Ontario and Saskatchewan), and globally; industry conditions, including changes in government regulations; fluctuations in foreign exchange or interest rates; unanticipated operating events; failure to obtain regulatory and third?party consents and approvals when required; changes in tax and other laws that affect Nova and its shareholders; the Company's ability to complete the Nova Reorganization and to realize the projected benefits; the potential failure of counterparties to honour their contractual obligations; stock market volatility; and the other factors described in the Company's public filings available at www.sedar.com. Readers are cautioned that this list of risk factors should not be construed as exhaustive.

The forward-looking statements contained in this news release are made as of the date hereof. Except as expressly required by applicable securities legislation, Nova does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.

SOURCE Nova Cannabis Inc.

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