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Avant Brands

Avant Brands touts sales growth overseas, plans $3.9M offering

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Avant Brands Inc. (TSX:AVNT) (OTCQX: AVTBF) posted record second-quarter results ending May 31, with international sales outpacing domestic revenue for the first time as the cannabis producer continues to expand globally.

Key stats:

  • Second-quarter gross revenue up 5% to C$9.4 million; net revenue rose 4% to C$8.3 million
  • International sales jumped 26% to C$3.7 million, now 45% of net revenue
  • Adjusted EBITDA surged 174% to C$2.8 million; adjusted net income of C$1.4 million versus C$300,000 loss year-ago
  • Domestic recreational sales fell 30% to C$3.3 million amid pricing pressures

The Kelowna, British Columbia-based company has been pivoting towards international markets as it faces headwinds in Canada’s recreational cannabis sector, where it says it relaunched the Flowr brand at a lower price point. CEO Norton Singhavon cited “strong international demand” as a key driver of growth.

Cannabis production increased 59% year-over-year to 3,186 kilograms, while sales volume rose 1% to 2,708 kilograms. Cash flow from operations more than doubled to a record C$4.6 million

Avant also plans to raise up to $3.9 million through a private offering of convertible debentures and warrants, with proceeds earmarked for debt repayment. Each $1,000 unit will comprise a 10% interest-bearing convertible debenture and 10,000 common share purchase warrants.

That follows a C$2.39M private placement closed on June 3, according to filings. The company also restructured some debt during the quarter, including extending a convertible debenture’s maturity.

What’s Next:

Avant’s management is “confident in the continued expansion of (the company’s) international footprint,” citing nine international agreements executed this fiscal year. The company has already shipped products to one client, with shipments pending for five more.

The new deals target key markets like Australia, Germany, and Israel, while also exploring opportunities in the Czech Republic, Poland, Portugal, Switzerland, and the United Kingdom. Collectively, these markets represent over 250 million potential consumers, it said.

“This expanded network positions Avant to become a leading player in the global premium cannabis market,” the company said, adding that its flagship brand BLK MKT, is “well-positioned for international success.”

Avant this year.teamed up with IM Cannabis Corp. (NASDAQ: IMCC) to launch BLK MKT in Germany, alongside “active discussions” to launch the brand in Australia.



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Avant Brands

Avant posts record 2024 on global growth, exports rise fourfold

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Avant Brands Inc. (TSX: AVNT) posted record financial results for fiscal 2024 ending Nov. 30, with strong growth coming from expanded international sales as exports make up two-thirds of the company’s net revenue these days.

The Canadian producer brought in $40 million in gross revenue for the year, up 32% from the previous year. But after subtracting $4.2 million in excise taxes, the net revenue was $35.8 million, up 36%, the company reported.

“Record revenues, significant international growth, and improved adjusted net income – fiscal 2024 was a landmark year for Avant Brands,” founder and CEO Norton Singhavon said in a statement. “We are focused on building on this success and creating long-term value for our stakeholders.”

The company’s export wholesale revenue saw the biggest jump, climbing 107% to C$19.4 million versus fiscal 2023, as Avant pushed more aggressively into markets abroad – especially in Australia, Germany, and Israel. Export sales in the fourth quarter hit a record C$7.3 million, a 352% increase over the same period last year and now make up 66% of the company’s net revenue.

Export wholesale revenue isn’t subject to domestic excise taxes, which is part of why the company is shifting its strategy toward international markets.

Cannabis production rose 19% to 12,643 kilograms, while sales volume nearly doubled with a 91% increase to 13,560 kilograms. The fourth quarter showed particularly strong sales with a 244% increase in cannabis volume versus the same period in 2023.

Despite the sales gains, Avant posted a gross loss of C$1.8 million in the fourth quarter, down from a C$1 million profit in the fourth quarter of 2023. The company said the decrease came from “non-cash impacts to biological asset valuations,” though noted these were partially offset by increased revenues.

For the full year, the company reported a net loss of C$22.5 million, versus a C$5.2 million loss in fiscal 2023. The increased loss was largely attributed to a C$6 million goodwill impairment charge and a C$3.8 million impairment on construction in progress.

The company noted its fourth straight quarter of positive adjusted EBITDA, which reached C$2.3 million in the fourth quarter. Adjusted net income hit C$2.7 million for the quarter. Still, auditors in filings noted a “material uncertainty related to going concern,” related to the company’s accumulated deficit of C$88 million as of Nov. 30, 2024.

For fiscal 2025, the company plans to grow further in existing international markets while exploring new territories including the Czech Republic, Poland, Switzerland, and the UK. Avant is also looking for partnerships with other Canadian producers to grow their strains under contract to meet rising global demand.

“This initiative will supplement existing production capacity and ensure a consistent supply of high-quality products to international clients,” the company said in a news release.



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Avant Brands

The Daily Hit: October 15, 2024

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News from: BevCanna, Michigan, Avant Brands, Leafly and more.

The Daily Hit is a recap of the top financial news stories for Tuesday, October 15, 2024.

On the Site

BevCanna changes name as it says goodbye to cannabis

The new company will focus on nutraceuticals after its recent acquisition.

Read more here.

Leafly at risk of Nasdaq delisting, plans appeal

The firm faces a minor league demotion, joining other cannabis-related firms in potentially leaving the exchange.

Read more here.

Michigan cannabis sales drop 10% in September

The average price for adult-use products fell 21% from September 2023.

Read more here.

Green Dragon warehouse sells for $11.4M as parent company Eaze preps shutdown

As Eaze winds down operations, the future of its subsidiaries like Green Dragon remains up in the air.

Read more here.

Earnings:

In Other News

Aurora Cannabis

Aurora Cannabis’ $8.05 million settlement with a proposed class of investors who accused it of orchestrating a $21.7 million “round-trip sale” to keep its stock prices high got a U.S. magistrate judge’s initial sign-off along with an order pausing the parties’ dispute while the deal is reviewed.

Read more here.

Happi Co.

Happi Co., a Birmingham-headquartered cannabis-infused drink company, raised $500,000 of a $2 million funding goal, securing it a spot in the top venture capital deals in Southeast Michigan for the third quarter.

Read more here.

New Hampshire

New Hampshire’s Therapeutic Cannabis Program is poised for expansion as the result of three new laws that recently went into effect, including one that allows medical providers to certify patients to use the drug for any debilitating condition or symptom.

Read more here.



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Avant Brands

Avant Brands reports surge in international cannabis sales during Q3

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Canadian cannabis producer Avant Brands Inc. (TSX:AVNT) (OTCQX: AVTBF) reported record third-quarter revenues on Tuesday, driven by surging international demand on its end.

The company posted gross revenue of C$9.6 million for the quarter ended Aug. 31, up 27% from a year earlier. Net revenue rose 30% to C$8.5 million. Net loss for the third quarter was C$2.5 million, compared with a year-ago net profit of C$1.3 million.

Avant’s export wholesale revenue more than doubled to C$5.1 million, outpacing domestic recreational sales for the first time.

“Avant Brands is rapidly establishing itself as a leader in the global cannabis market,” founder and CEO Norton Singhavon said in a statement. “Our strong international sales growth, coupled with new licensing agreements and partnerships, positions us for continued success.”

The company reported record cannabis production of 3,441 kilograms, up 5% year-over-year. Cannabis sold nearly doubled to 3,087 kilograms on increased international shipments.

While exports boomed, recreational sales in Canada fell 30% to C$2.8 million. During the quarter, Avant continued to streamline its offerings to focus on “high-performing and profitable core items,” the company said.

Avant had also inked nine international deals this year, eyeing expansion in markets like Australia and Germany.

“Along with new opportunities developing in the Czech Republic, Poland, Switzerland and the U.K. … these markets, with a combined population exceeding 250 million, present a substantial growth opportunity for Avant,” it said in a news release.

Gross profit fell to C$1 million from C$5 million a year ago, largely due to biological asset valuation impacts. Adjusted EBITDA reached C$2.1 million, marking the third straight quarter above C$2 million, it said.

Avant’s cash balance improved by C$2.4 million year-to-date, versus a C$5.1 million reduction in the same period last year. The company generated C$1.7 million in operating cash flow year-to-date.

Avant recently licensed its blk mkt brand in Australia, adding to deals in Germany, Israel and Switzerland.



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