The Valens Company Inc. VLNS VLNS, a leading manufacturer of cannabis products, reported its financial results for the first quarter of fiscal year 2022 late Wednesday.
Highlights
Net sales grew 26.1% sequentially to $23.2 million, from $18.4 million in the fourth quarter of 2021. Net sales were primarily driven by provincial sales, which closed in the first quarter of 2022. increased by 36.7% compared to the fourth quarter of 2021. B2C revenue lines from provincial sales and Green Roads accounted for 68.5% of net sales in the first quarter of 2022. Valens reiterates its target of achieve positive adjusted EBITDA in the fourth quarter of 2022.
“The first quarter results show that Valens’ underlying business has passed a turning point. This performance reinforces the importance of Valens’ now diversified business lines across provincial sales, B2B LP sales and Green Roads sales (…), enabling us to achieve more sustainable growth. With the launch of Versus and Contraband, we delivered another quarter of strong provincial sales as we continue to grow our recreational market share,” said Tyler Robson, CEO, co-founder and chairman of The Valens Company. “Our Green Roads US CBD business saw a modest decline in sales, mainly due to normal seasonal trends, with December being the slowest month historically.”
“We took the opportunity to exit some more expensive stocks through the B2B channel. These factors resulted in lower gross margins in the quarter. It was also encouraging to see gross margin improvements in provincial sales, despite significant compression in retail prices and increases in supply chain costs in the quarter.
“We have implemented a series of integration initiatives aimed at driving efficiencies across the organization and tailoring our cost structure to ensure we remain nimble and aggressive in a competitive market. With these initiatives now well underway and following our recent CDN $32.3 million funding, we believe we have the branded product portfolio, manufacturing capabilities and balance sheet strength to pursue our key strategic objectives in 2022,” added Jeff Fallows , Valens Company president in a press release.
Key objectives for 2022
Increase the adult recreational market share in Canada by trying to become a top 5 player in vapes, edibles and beverages and a top 10 player in floral products. Unlock the company’s potential in the US and international markets through the Green Roads platform acquired in April 2021. Aim for positive fourth quarter adjusted EBITDA by improving the company’s gross margin and SG&A profile through integration initiatives based on a combination of cost efficiencies, the realization of M&A synergies and higher levels of automation and process standardization. Reduce cash burn through improvements in adjusted EBITDA, working capital management, and monetization of non-core assets. Development of the company’s US THC strategy “as permitted under federal regulation.”
Revenue and EBITDA Guidelines for 2023
Minimum revenue of CAD $225 million. Adjusted EBITDA margins greater than 10%.
This post Valens Company Q1 Revenues Up 26% Consecutively to $18.5 Million
was original published at “https://www.benzinga.com/markets/cannabis/22/04/26626490/valens-company-q1-revenue-increases-26-sequentially-to-18-5m”
