Mr. Brent Charleton reports
ENWAVE REPORTS 2024 THIRD QUARTER CONSOLIDATED INTERIM FINANCIAL RESULTS
EnWave Corp. has released its consolidated interim financial results for the third quarter (Q3) ended June 30, 2024, demonstrating strong improvement over the first and second quarters this fiscal year (all dollar values in thousands and denoted in Canadian dollars, unless otherwise stated).
Q3 2024 highlights:
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Reported revenues for Q3 2024 of $2,622, compared with $2,486 for Q3 2023, representing an increase of $136. The increase was related to a large-scale machine resale with a higher margin and increased small-scale machines sales for the period;
- Reported royalty revenues of $425, representing an increase of $31 relative to the comparable period in the prior year, due to increased sales and production from current royalty partners;
- Reported an adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) (refer to the section on non-IFRS (international financial reporting standards) financial measures) profit of $85 for Q3 2024, compared with an adjusted EBITDA loss of $192 in the same period in the prior year, due to the resale of a high-margin large-scale machine and increased royalty revenues;
- Gross margin for the three months ended Q3 2024 was 44 per cent, compared with 29 per cent for the three months ended Q3 2023. The increase in margin was a result of the resale of the large-scale machine with a higher margin and increased royalties;
- Reported selling, general and administrative (SG&A) costs (including research and development (R&D)) of $1,364, which increased by $178 from the comparable period in the prior year, due to increased personnel costs, legal fees and increased sales efforts, including higher attendance at trade shows.
EnWave's consolidated interim financial statements and MD&A are available on SEDAR+ and on the company's website.
Key financial highlights for the nine months ending June 30, 2024:
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Royalties for the nine months ending June 30, 2024, were $1,319, compared with $1,085 for the same period ending June 30, 2023, an increase of $234 or 22 per cent. Royalties grew due to increased partner product sales and production, offset by a decrease in exclusivity fees;
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Reported revenues for Q3 2024 of $4,547, representing a decrease of $5,349 relative to the comparable period in the prior year. The decrease was related to overall fewer machine sales and machines in fabrication compared with the prior period, due to the inherent volatility in large-scale Radiant Energy Vacuum (REV) machine orders;
- SG&A (selling, general and administrative) costs for the nine months ending June 30, 2024, were $4,016, compared with $4,140 for the same period ending June 30, 2023, a decrease of $124, as a result of concerted efforts to maintain discretionary spending;
- Adjusted EBITDA loss for the nine months ended Q3 2024 of $1,939, compared with an adjusted EBITDA profit of $703 in the same period in the prior year, due to fewer machine sales to absorb fixed overhead costs.
Significant corporate accomplishments in Q3 2024 and subsequently:
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Signed a technology evaluation and licence option agreement with a North American food company led by a renowned chef with multiple Michelin Stars;
- Signed an equipment purchase agreement for a 120-kilowatt REV dehydration machine with an existing royalty partner;
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Signed an equipment purchase agreement with BranchOut Foods LLC, a current royalty partner, for a 100-kilowatt REV dehydration machine to provide additional drying capacity;
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Signed a commercial licence agreement with Bounty Specialty Foods to produce several product types in the Philippines and sold a 10-kilowatt REV dehydration machine for product development;
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Signed a commercial licence agreement with an existing royalty partner to produce several tropical fruit products in an unspecified Central American country. An annual six-figure royalty fee will be paid in exchange for the exclusive rights;
- Subsequent to the quarter, repurchased a large-scale machine from a cannabis multistate operator to expedite the completion of the 120-kilowatt REV Branchout Foods LLC equipment purchase agreement.
Non-IFRS financial measures
This news release refers to adjusted EBITDA, which is a non-IFRS financial measure. The company defines adjusted EBITDA as earnings before deducting amortization and depreciation, stock-based compensation, foreign exchange gain or loss, finance expense or income, income tax expense or recovery and non-recurring impairment, restructuring and severance charges, and discontinued operations. This measure is not necessarily comparable with similarly titled measures used by other companies, and should not be construed as an alternative to net income or cash flow from operating activities, as determined in accordance with IFRS.
About EnWave
Corp.
EnWave is a global leader in the innovation and application of vacuum microwave dehydration. From its headquarters in Delta, B.C., EnWave has developed a robust intellectual property portfolio, perfected its REV technology, and transformed an innovative idea into a proven, consistent and scalable drying solution for the food, pharmaceutical and cannabis industries that vastly outperforms traditional drying methods in efficiency, capacity, product quality and cost.
With more than 50 royalty-generating partners spanning 23 countries and five continents, EnWave's licensed partners are creating profitable, never-before-seen snacks and ingredients, improving the quality and consistency of their existing offerings, running leaner, and getting to market faster with the company's patented technology, licensed machinery and expert guidance.
EnWave's strategy is to sign royalty-bearing commercial licences with food producers that want to dry better and faster, and more economically than freeze drying, rack drying and air drying, and enjoy the following benefits of producing exciting new products, reaching optimal moisture levels up to seven times faster, and improve product taste, texture, colour and nutritional value.
We seek Safe Harbor.
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