- The company achieved net revenue of $12.4 million
- Record adjusted EBITDA of $2.1 million
- 449 kilograms of dried flower sold in the second quarter
- Retail sales totalled $3.2 million
- $5.7 million of net sales of vape and concentrate product sales
- Decibel is a cannabis company involved in the production, distribution, and sale of recreational cannabis
- Decibel Cannabis Company Inc. (DB) is unchanged, trading at C$0.34 per share at 2:30 pm ET
Decibel Cannabis Company (DB) is pleased to announce its second-quarter financial results for the period ending June 30, 2021.
The company achieved net revenue of $12.4 million with strong gross margins of 41 per cent and a record adj. EBITDA of $2.1 million, its fourth consecutive quarter of positive adj. EBITDA.
“Decibel’s tremendous first half results are a testament to the strength of our brands, ability to innovate and our exceptional team”, said Paul Wilson, CEO of Decibel.
“We continue to build a solid foundation by creating meaningful brands, high quality products and executing against our aggressive strategic plan.”
Financial highlights
- Net Revenue: Net revenue was $12.4 million in the second quarter, a 1 per cent decrease over the prior quarter, driven by strong product sales across a number of categories but offset by stock-outs that totalled 7 weeks in the quarter, supply chain disruption given COVID and delayed or reduced purchase orders as a result of in-store shopping closures in Ontario. Net revenue grew by 111 per cent over the comparative 2020 quarter.
- Record positive adjusted EBITDA: The company achieved a record $2.1 million of adjusted EBITDA in the second quarter, its fourth consecutive quarter of positive adjusted EBITDA, and an increase of 6 per cent from the prior quarter (improvement of $2.2MM from the prior year). For the trailing twelve months, the company has achieved $6.1MM in adjusted EBITDA.
- Flower sales: 449 kilograms sold in the second quarter, with an average wholesale net price per gram of $7.96, an increase of 4 per cent and a decrease of 11 per cent, respectively, over the prior quarter. The decline in price per gram was a result of a greater volume allocation towards Qwest products versus Qwest Reserve products which achieves a higher price point.
- Derivative sales: $5.7 million of net sales of vape and concentrate products in the second quarter, a 2 per cent increase from the prior quarter. Sales growth was driven by increased demand for vape and concentrate products launched within Q2, partially offset by the COVID shut down in Ontario and product launch timeline changes implemented in Alberta and Ontario.
- Retail sales: $3.2 million of retail sales, a 1 per cent increase over the prior quarter, primarily driven by seasonality and sales growth in the Alberta retail stores as COVID restrictions relaxed, partially offset by new entrants into the Saskatchewan retail market. Retail sales declined by 17 per cent over the comparative 2020 quarter.
- Product innovation roll-out:
- Decibel continued its aggressive rollout of in-demand products launching 15 new product SKUs across Ontario, Saskatchewan, Alberta and BC in the quarter with strong interest from customers in different jurisdictions and impressive market share improvements.
- Decibel was successful in both the April and June OCS product calls, the company achieved 15 new listings that have or will launch in Q2 and early Q3 of this year.
- Launched two new cultivars, Stuffed French Toast under the Qwest brand and Sunset Mac under the Qwest Reserve brand, in new glass packaging.
- Launched into the live concentrate category with two live resin vapes under the General Admission brand alongside two strains of Gems & Juice and Live Sugar under the Pressed by Qwest brand.
- Launched into large-format pre-rolls with the General Admission brand, its first dried flower product with 6, 7 and 12 x 0.5g pre-rolls.
- Thunderchild cultivation operational development: The company continues to invest in working capital as it ramps the facility and has now fully planted and commissioned all 20 rooms with a number of rare cultivars coinciding with Decibel’s unique product roadmap. Thus far, the facility has achieved and outperformed expectations on yield per square foot. The company anticipates run-rate production by mid-Q4 with a focus on implementing a number of operational efficiencies that can be achieved in post-processing.
- Strengthened balance sheet: On May 13, 2021, the company announced it had closed an amendment to its authorized overdraft facility increasing it from $1.5 million to $7.5 million with a committed interest rate of Prime + 1.00 per cent. The additional capital will accelerate Decibel’s sales growth through the Thunderchild Cultivation facility and new vape and concentrate launches.
Decibel is a cannabis company involved in the production, distribution, and sale of recreational cannabis. The company has three operating production houses along with its wholly-owned retail business, Prairie Records.
Decibel Cannabis Company Inc. (DB) is unchanged, trading at C$0.34 per share at 2:30 pm ET.
