EnWave Announces 2019 First Quarter Consolidated Interim Financial Results and Appointment of Mr. Stephen Sanford to the Board of Directors
FEB 28TH 2019, 05:30AM
EnWave Corporation (TSX-V:ENW | FSE:E4U) (“EnWave”, or the “Company”) today reported the Company’s consolidated interim financial results for the first quarter ended December 31, 2018.
Key Financial Highlights for Q1 (expressed in ‘000s):
- Reported the highest quarterly revenue ever for the Company in Q1 2019 of $7,806 compared to $4,519 for Q1 of 2018, an increase of $3,287. Royalty revenues for Q1 2019 increased to $251, compared with $203 for Q1 of 2018. Revenue growth was driven by increased sales and distribution of the Company’s Moon Cheese®
- Achieved gross profit of $3,037 for Q1 2019 compared to $1,426 for Q1 2018, an increase of $1,611 or 113%. Gross margin as a percentage of revenue was 39% for Q1 2019 compared to 31% for Q1 2018.
- Continued to strengthen the cash flow profile with Adjusted EBITDA(*) of $1,163 for Q1 2019 compared to $315 for Q1 2018, an increase of $848. The growth in positive EBITDA represents the Company’s continued ability to generate cash from its operations.
- Reduced the consolidated net loss for the period after taxes to $15 for Q1 2019 compared to a net loss of $397 for Q1 2018, an improvement of $382 year-over-year.
- Invested in selling and marketing with S&M expenses of $976 for Q1 2019 compared to $590 for Q1 2018, an increase of $386. S&M expenses increased as part of the strategy to invest in marketing for Moon Cheese® as well as selling activities that promote REVTM technology across the food and cannabis sectors.
- Increased G&A and R&D expenses to $998 and $341 for Q1 2019, respectively, compared to $592 and $272 in Q1 2018. The Company added an experienced, full-time CEO for NutraDried to drive growth in the subsidiary business, and invested strategically in intellectual property to support our royalty licensing business model.
- Entered into a royalty-bearing commercial sub-license agreement with The Green Organic Dutchman (“TGOD”) and Tilray, Inc. (“Tilray”) granting TGOD non-exclusive rights to use EnWave’s technology for processing legalized cannabis in Canada. Received a purchase order from TGOD for a 60kW REVTM machine and robotic tray handling system.
- Received a purchase order from Milne Microdried Inc. (“Milne”) for a 120kW REVTM processing line. The purchase order represents Milne’s third 120kW REVTM machine and significantly increases Milne’s total royalty-bearing processing capacity.
- Signed a royalty-bearing commercial license agreement with Royal FrieslandCampina N.V. (“Friesland Campina”), one of Europe’s largest dairy companies. Friesland Campina will deploy REVTM technology to develop new products that fit the evolving consumer needs and taste preferences. Friesland Campina purchased a 10kW REVTM unit to initiate production.
- Received a purchase order from Bare Foods Co. (“Bare Foods”), a leading American snack food company recently acquired by PepsiCo, for its third 10kW REVTM machine to expand commercial production of healthy fruit snack products.
- Announced the commercial launch of Bonduelle Group’s (“Bonduelle”) InFlavor® dehydrofrozen vegetable product into the retail and food service channels. The Company extended Bonduelle’s exclusive rights to EnWave’s technology for dehydrofrozen vegetable products until September 30, 2019 in exchange for a milestone payment. Bonduelle must purchase a 400kW REVTM machine before September 30, 2019 in order to extend the term of its exclusive rights.
- Signed a royalty bearing commercial sub-license agreement with Your Wasabi Farms (“YWF”) and Tilray granting YWF the non-exclusive rights to use EnWave’s technology to process cannabis plant material and industrial hemp.
- Ended a commercial license agreement with Agropur Dairy Co-operative (“Agropur”). Agropur failed to purchase the large-scale REVTM machine that was required in order to extend its agreement with the Company.
- Installed the first scaled-up Good Manufacturing Practices (“cGMP”) freezeREV® machine for Merck and passed site acceptance testing. The machine will be used by Merck for potential development of freezeREV® technology as a continuous dehydration alternative to lyophilization.
- Expanded sales and distribution of Moon Cheese® with additional product rotations in a number of Costco divisions.
- Doubled the Company’s production capacity of Moon Cheese® through the installation of a second 100kW nutraREV® machine and a 10kW REVTM The expansion was facilitates continued sales growth of Moon Cheese® and positions for future projected demand in the consumer marketplace.
Appointment of Mr. Stephen Sanford to the Board of Directors:
The Company is pleased to announce that Mr. Stephen Sanford has been appointed to the Board of Directors as a new independent director. The addition of a highly experienced legal executive will further strengthen the diverse skillset of the Company’s Board of Directors.
Mr. Sanford is a seasoned legal professional with over 30 years of experience as an executive for a Fortune 500 company. He is the Senior Vice President and Managing General Counsel at Fluor Corporation (“Fluor”), a global engineering and construction company. Mr. Sanford has significant experience structuring major commercial transactions in a variety of legal systems around the world. In his role at Fluor, Mr. Sanford manages a team of legal professionals with a global footprint that addresses intellectual property matters, taxation, insurance and risk management matters. During his tenure at Fluor, Mr. Sanford has provided legal expertise and leadership during the structuring of billions of dollars in transactions.
Mr. Sanford obtained both his Bachelor’s Degree and Law Degree from Dalhousie University and holds an MBA from the University of Calgary.
(*) Non-IFRS Financial Measures:
Adjusted EBITDA is not a measure of financial performance under IFRS. We define Adjusted EBITDA as earnings before deducting amortization and depreciation, stock based compensation, foreign exchange gain or loss, finance expense or income, income tax expense and non-recurring impairment charges. This measure is not necessarily comparable to 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. Please refer to the discussion included in the Company’s interim MD&A for December 31, 2018 and annual MD&A for the year ended September 30, 2018.
EnWave Corporation, a Vancouver-based advanced technology company, has developed Radiant Energy Vacuum (“REV™”) – an innovative, proprietary method for the precise dehydration of organic materials. REV™ technology’s commercial viability has been demonstrated and is growing rapidly across several market verticals in the food, legal cannabis and pharmaceutical sectors. EnWave’s strategy is to sign royalty-bearing commercial licenses with industry leaders in multiple verticals for the use of REV™ technology. The company has signed over twenty royalty-bearing licenses to date, opening up eight distinct market sectors for commercialization of new and innovative products. In addition to these licenses, EnWave has formed a Limited Liability Partnership, NutraDried LLP, to develop, manufacture, market and sell all-natural cheese snack products in the United States under the Moon Cheese® brand.
EnWave has introduced REV™ as the new dehydration standard in the food and biological material sectors: faster and cheaper than freeze drying, with better end product quality than air drying or spray drying. EnWave currently has three commercial REV™ platforms:
1. nutraREV® which is used in the food industry to dry food products quickly and at low-cost, while maintaining high levels of nutrition, taste, texture and colour;
2. powderREV® which is used for the bulk dehydration of food cultures, probiotics and fine biochemicals such as enzymes below the freezing point, and
3. quantaREV® which is used for continuous, high-volume low-temperature drying.
An additional platform, freezeREV®, is being developed as a new method to stabilize and dehydrate biopharmaceuticals such as vaccines and antibodies. More information about EnWave is available at www.enwave.net.
Dr. Tim Durance
President & CEO
For further information:
John Budreski, Executive Chairman at +1 (416) 930-0914
Brent Charleton, Senior Vice President, Sales and Business Development at +1 (778) 378-9616
Deborah Honig, Corporate Development, Adelaide Capital Markets at + 1 (647) 203-8793
Safe Harbour for Forward-Looking Information Statements: This press release may contain forward-looking information based on management’s expectations, estimates and projections. All statements that address expectations or projections about the future, including statements about the Company’s strategy for growth, product development, market position, expected expenditures, and the expected synergies following the closing are forward-looking statements. All third party claims referred to in this release are not guaranteed to be accurate. All third party references to market information in this release are not guaranteed to be accurate as the Company did not conduct the original primary research. These statements are not a guarantee of future performance and involve a number of risks, uncertainties and assumptions. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.
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