Emblem Corp. (TSXV:EMC) saw its second-quarter revenue surge 180% with a 36% quarter-over-quarter increase in active registered patients
SmallCapPower | August 24, 2018: Emblem Corp. (TSXV:EMC) Wednesday reported a stellar set of numbers in three and six months ended June 30, 2018 (Q2). Total revenues increased by 180% and 93% during the three and six months ended June 30, 2018 on the back of the commencement of oil sales during December 2017 and higher patient education revenues. The Company also saw a 36% quarter-over-quarter increase in active registered patients, reaching 4,000+ active registered patients as at June 30, 2018.
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Revenues from dried cannabis flower purchased by registered medical patients amounted to $499,000 and $956,000 during the three and six months ended June 30, 2018 as compared to $398,000 and $859,000 in the three and six months ended June 30, 2017, respectively. Dried cannabis flower revenues purchased by Licensed Producers amounted to $182,000 and $576,000 during the three and six months ended June 30, 2018. This revenue increase was due mainly to an increase in average selling prices of dried flowers. Medical patients were charged an average selling price of $8.58 per gram and $8.59 per gram in three months and six months June 30, 2018 compared to $8.41 per gram and $7.90 per gram three months and six months June 30, 2017, respectively. The average selling price for licensed producers was $5.00 per gram and $5.25 per gram (June 30, 2017 – $nil and $4.02 per gram).
Revenues from cannabis oil products amounted to $320,000 and $507,000, or 39% and 35% of total sales to medical patients during the three and six months ended June 30, 2018, respectively. A wholly-owned subsidiary of Emblem – GrowWise Health Limited (GrowWise) – generated total revenues of $251,000 and $463,000, respectively (June 30, 2017 – $131,000 and $195,000), an increase of 92% and 137%, respectively, from the prior year’s comparable periods.
Total bottled oils sold to medical patients during the three and six months ended June 30, 2018 were approximately 22.0 kilogram equivalents and 35.4 kilogram equivalents at an average selling price of $14.51 per gram equivalents and $14.31 per gram equivalents, respectively. Total bottled oils sold to licensed producers were 28.3 kilogram equivalents during the three and six months ended June 30, 2018, at an average selling price of $7.83 per gram equivalent. Active registered patients grew 36% QoQ reaching 4,000+ as at June 30, 2018
The Company reported a Gross Profit (loss) for the three and six months ended June 30, 2018 of $(159,000) and $23,000 compared to a gross loss of $(nil) and $(89,000) for the prior year’s comparable periods, respectively. The Company’s Adjusted EBITDA came in at $(4,119,000) and $(6,552,000) during the three and six months ended June 30, 2018, due mainly to higher operating expenses during the current periods.
Emblem President & CEO Nick Dean said, “I’m pleased to report a robust second quarter with substantial progress in sales, patient counts, capacity, distribution and product development. We remain steadfastly focused on executing against our plan and building a sustainable business that will drive long term value for our shareholders. Our second quarter results are a testament to this mission. Demand for our medical cannabis products significantly increased period over period, further driven by our oil extracts released at the end of 2017. We have established Emblem as a trusted brand in the medical cannabis space. We are supporting our registered patients with additional cannabinoid oil profiles and new size formats including 30ml bottles, in addition to the original 60ml bottles. In addition, we anticipate launching our new metered-dose controlled oral sprays during the third quarter of 2018.”
Emblem Corp trades at market capitalization of $180.03 million with price to book multiple of 1.77x.
Disclosure: Neither the author nor his family own shares in the company mentioned above.
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