Expanding Distribution In Ontario Pays Off, Decibel Cannabis Hits Record Q2 Net Revenue

Decibel Cannabis Company Inc. DBCCF DB released its second quarter financial results for the three and six month periods ending June 30, 2022, revealing record net revenue of $18.6 million, with sequential growth of 11% over Q1 2022 and 49% over Q2 2021.

Net revenue growth was driven by expanded distribution particularly in the Ontario market, the continued launch of new General Admission and Qwest infused products in various provinces and continued growth in demand for derivative products.

Financial Highlights

• Record gross margin before fair value adjustments, sequential improvement to 41% in Q2, compared to 35% in Q1 2022 and 41% in Q2 2021.

• Record adjusted EBITDA of $3.2 million in Q2, with growth of 31% over Q1 2022 and 49% over Q2 2021. This marks Decibel's eighth quarter of consecutive quarterly positive adjusted EBITDA.

• Cash flow from operations of $1.8 million of cash flow from operations in Q2, a sequential decrease of $1.2 million over Q1 2022 and an improvement of $4.8 million over Q2 2021. This marks Decibel's second consecutive quarter of positive cash flow from operations.

• On May 11, 2022, the company repaid its 9.5% convertible debentures with the draw-down of a fixed 4.75% $12 million term loan. This extends the maturity date of $12 million of debt by 4 years, avoids approximately 6% of potential shareholder dilution, and results in $0.6 million of annual interest expense savings.

"Our second quarter results continue to demonstrate that Decibel is on the path we projected in our 2022 operational outlook", stated Paul Wilson, CEO of Decibel. "Our New Unique and Innovative product development and revenue generating initiatives have once again produced quarter-over-quarter record performance. This progress has been compounded by our productivity initiatives and record gross profit, now resulting in positive cash flow, putting us on track for another projected milestone."

"With more highlights scheduled for the back half of 2022, Decibel is delivering exactly what we've planned and forecasted to the market, ourselves, and our shareholders."

Price Action

Decibel shares were trading 3.87% higher at $0.0779 per share at the time of writing Thursday morning.

Photo by Richard T on Unsplash

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