VEXT Reports First Quarter 2020 Results
VEXT Reports First Quarter 2020 Results |
[01-June-2020] |
/THIS NEWS RELEASE IS NOT INTENDED FOR DISSEMINATION IN THE UNITED STATES/ VANCOUVER, June 1, 2020 /CNW/ - Vext Science, Inc. (CSE: VEXT & OTCQX: VEXTF) ("VEXT" or the "Company") a cannabinoid brand leader leveraging core expertise in extraction, manufacturing, cultivation, and marketing to build retail and distribution through management agreements, investments and joint venture partnerships, today reported financial results for the period ended March 31, 2020. All currency references used in this news release are in U.S. currency. First Quarter Fiscal Year 2020 Summary Financial Results
Eric Offenberger, Chief Executive Officer of VEXT, commented: "In the fourth quarter of 2019, we adjusted the Herbal Wellness Center ("HWC") dispensary fee structure, which creates an incongruent first quarter year-over-year compare and does not accurately represent the progress in our business. The acquisition of an Arizona based company to provide exclusive turn-key services for Organica Patient Group, Inc. completed in the second quarter of 2020 provides the Company with another Arizona dispensary, which will increase revenue for the remainder of the year. COVID-19 related delays on goods imported from China, including cartridges and packaging, limited sales to HWC in the first quarter. Shipments from China have resumed and with HWC inventory levels replenished, we anticipate revenue to recover in the second quarter. Helped by increasing HWC sales, a second medical marijuana dispensary in Arizona, our multi-state joint ventures, and investments coming online, we anticipate returning to year-over-year revenue growth for the remainder of 2020. Also, operating expenses in the first quarter included several one-time and non-cash items, not incurred in the same period last year, and therefore we anticipate operating expense margins to improve going forward. VEXT has sufficient liquidity to execute on our strategy of adding additional partnerships and investments in new states that will accelerate our revenue growth, improve profitability, and increase shareholder value." Please refer to the VEXT's MD&A filed with www.SEDAR.com on June 1, 2020 for a complete discussion of the Company's result of operations is based on its condensed consolidated financial statements for the quarter ended March 31, 2019. First Quarter 2020 Results Overview The Company's revenues from operations were $4.1 million, compared to $6.5 million in the comparative quarter in 2019. During the fourth quarter of 2019, the Company adjusted revenue to better reflect the current business trends. Furthermore, revenue was impacted by the delay in shipments from China under Covid-19 restrictions, so it reduced the product sales to HWC. The revenue adjustments and delayed shipments from China due to the pandemic reduced the Company's gross revenue on a comparative quarterly basis, thus impacting the gross profit in the first quarter of 2020. Additionally, the Company's operating expenses were $2.3 million compared to $1.0 million in the comparative quarter in 2019 mainly due to several one-time and non-cash expenses and expenses related to being a public company that were not incurred in the same period prior year; therefore, this further impacted the net income and EBITDA for the first quarter of 2020. As both medical and economic concerns have increased over the past few months, regarding the spreading and impact of the novel coronavirus known as "COVID-19", the Company wants to assure its shareholders that it is taking all the necessary steps to protect employees and customers, ensuring full compliance with established guidelines. The safety of our employees and customers have been a primary focus. About Vext Science Non-IFRS Financial Measures
Management believes that these non-IFRS financial measures reflect the Company's ongoing business in a manner that allows for meaningful comparisons and analysis of trends in the business, as they facilitate comparing financial results across accounting periods and to those of peer companies. Management also believes that these non-IFRS financial measures enable investors to evaluate the Company's operating results and prospects in the same manner as management. As there are no standardized methods of calculating these non-IFRS measures, the Company's methods may differ from those used by others, and accordingly, the use of these measures may not be directly comparable to similarly titled measures used by others. Accordingly, these non- IFRS 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. COVID-19 Risk Factor Forward Looking Statements Forward-looking statements may include, without limitation, statements related to future developments and the business and operations of VEXT. Although VEXT has attempted to identify important factors that could cause actual results, performance or achievements to differ materially from those contained in the forward-looking statements, there can be other factors that cause results, performance or achievements not to be as anticipated, estimated or intended, including, but not limited to: dependence on obtaining regulatory approvals; being engaged in activities currently considered illegal under U.S. Federal laws; change in laws; reliance on management; requirements for additional financing; competition; hindered market growth and state adoption due to inconsistent public opinion and perception of the medical-use and adult-use marijuana industry and; regulatory or political change. There can be no assurance that such information will prove to be accurate or that management's expectations or estimates of future developments, circumstances or results will materialize. Because of these risks and uncertainties, the results or events predicted in these forward-looking statements may differ materially from actual results or events. Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements in this news release are made as of the date of this release. VEXT disclaims any intention or obligation to update or revise such information, except as required by applicable law, and VEXT does not assume any liability for disclosure relating to any other company mentioned herein. The Canadian Securities Exchange has not reviewed, approved, or disapproved the content of this news release. Eric Offenberger SOURCE Vext Science, Inc. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company Codes: OTC-QX:VEXTF, CNSX:VEXT |
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