“Covid-19 appears to be accelerating the growth trend for plant-based nutrition even though this category was already out performing practically every other retail market food category.”
- Naturally Splendid recorded a net loss and comprehensive loss of $1,320,761 for the three months ended March 31, 2020
- Revenues decreased slightly by 7% over the same period last year
- Gross profit margins decreased to 18% of sales
- Administrative expenses decreased to $861,864
- The three-months ended March 31, 2020 provided lower margins due to the increase volume of bulk hemp seed sales
- Sales have remained relatively stable in branded hemp products
Vancouver, July 15th – Naturally Splendid Enterprises Ltd. (FRANKFURT:50N) (TSXV:NSP) (OTC:NSPDF) announces its unaudited financial results for the three months ending March 31, 2020. All amounts are in Canadian dollars and are prepared in accordance with International Financial Reporting Standards.
Naturally Splendid recorded a net loss and comprehensive loss of $1,320,761 for the three months ended March 31, 2020, compared to a net loss of $1,103,965 during the three months ended March 31, 2019. The increase in net loss and comprehensive loss was attributed to a number of factors including the additional production employees and quality assurance costs due to additional requirements needed for SQF2 certification compared to the same period in 2019. There were also increased costs developing strategic operational plans as Covid-19 pandemic began to make its presence known in North America resulting in additional production runs needed to build up inventories as a proactive measure addressing concerns of disrupting operations.
Revenues decreased slightly by 7% over the same period last year and gross profit margins decreased to 18% of sales. Administrative expenses decreased to $861,864. The decrease was mainly due to a reduction in consulting and corporate promotion. The Company is expanding its diverse product lines and has resumed exporting bulk hulled hemp seed to South Korea. Administrative expenses decreased by over 20% from $1,085,616 to $861,864. The decrease was mainly due to a reduction in consulting and corporate promotion. The Company continues review operations and will endeavor to institute additional efficiencies throughout the organization, further optimizing operations.
The Company’s gross margin percentage decreased to 18%, in the three months ended March 31, 2020. The Company will balance a focus on a mix of its higher margin products and new commercial opportunities, with expanding bulk export opportunities. The Company changed its sales mix when compared to 2019 with an increase of export bulk seed sales, which sold at a lower gross margin percentage. Thus the three-months ended March 31, 2020 provided lower margins due to the increase volume of bulk hemp seed sales.
Naturally Splendid recorded sales of $720,255 during the three months ended March 31, 2020, compared to $772,803 for the three months ended March 31, 2019. The Company had decreased sales in its private label bars and bites business of approximately $16,000, while branded products recorded virtually the same sales. Sales have remained relatively stable in branded hemp products, showing decrease of approximately $29,000 and new Natera Sport products remained stable recording a slight decrease by approximately of approximately $8,200.
Cost of Sales during the three months ended March 31, 2020 was $593,626 compared to $523,269 in three months ended March 31, 2019.
The Company is continuing to focus on plant-based nutritional products while resuming exporting bulk hemp seed to South Korea. The Company is focused on private label and branded sales and is re-establishing our presence in international markets such as US and Korean markets. Market opportunities for NSE will continue to include both domestic and international destinations. Additionally, Prosnack Natural Foods Inc. has been proactively securing new private label clients.
|For the Three Months Ended March 31, 2020||For the Three Months Ended March 31, 2019|
|Statements of Loss Data|
|Cost of sales||593,626||523,269|
|Selling and distribution expenses||(604,421)||(275,942)|
|Other income(loss) and taxes||(1,320,761)||(1,103,965 )|
|Net income (loss)||(1,320,761)||(1,103,965 )|
|Basic and Diluted Earnings (Loss)|
Naturally Splendid CEO Mr. J. Craig Goodwin states, “Given the challenges operating within these Covid-19 conditions, I am mostly satisfied with our Q1 results. Quite obviously, prior to the pandemic, our expectations for Q1 were set considerably higher. Having said that, I am extremely proud of our entire team and the efficiency we were able to transition our facility and operating procedures to account for these challenges. We are seeing many of our contract manufacturing clients begin to recover sales as well. The Company will continue our strategy to deliver nutritious, ethical, sustainable plant-based nutrition to a growing consumer base. Covid-19 appears to be accelerating the growth trend for plant-based nutrition even though this category was already out performing practically every other retail market food category. We will continue to focus our resources and capital in this rapidly growing category and look forward to bringing on new opportunities in a timely manner”.
About Naturally Splendid Enterprises Ltd.
NSE operates a Safe Quality Food Level 2 certified food manufacturing facility just outside Vancouver, BC in Canada. We have established numerous healthy, functional foods under recognized brands such as Natera Sport(TM), Natera Hemp Foods, CHII (TM), Elevate Me(TM) and Woods Wild Bar. The Company has a myriad of new products and line extensions under development that are approaching launch. NSE has also developed proprietary technologies for the extraction of high demand, healthy omega 3 and 6 oils from hemp. NSE is the current “go-to” manufacturer for healthy, functional food products and ingredients focusing on plant-based ingredients. The Company provides contract manufacturing services for many global healthy food companies, private labelling a wide variety of nutritional food products destined for global healthy food markets.
For more information e-mail firstname.lastname@example.org or call Investor Relations at 604-673-9573
On Behalf of the Board of Directors
Mr. J. Craig Goodwin
Naturally Splendid Enterprises Ltd.
(NSP – TSX Venture; NSPDF – OTCQB; 50N Frankfurt)
#108-19100 Airport Way
Pitt Meadows, BC, V3Y 0E2
Office: (604) 465-0548
Fax: (604) 465-1128
Information set forth in this news release contains forward-looking statements that are based on assumptions as of the date of this news release. These statements reflect management’s current estimates, beliefs, intentions and expectations. They are not guarantees of future performance. Naturally Splendid cautions that all forward looking statements are inherently uncertain and that actual performance may be affected by a number of material factors, many of which are beyond Naturally Splendid’s control including, Naturally Splendid’s ability to compete with large food and beverage companies; sales of any potential products developed will be profitable; sales of shelled hemp seed will continue at existing rates or increase; the ability to complete the sales of all bulk hemp seed purchase orders; and the risk that any of the potential applications may not receive all required regulatory or legal approval. Accordingly, actual and future events, conditions and results may differ materially from the estimates, beliefs, intentions and expectations expressed or implied in the forward-looking information. Except as required under applicable securities legislation, Naturally Splendid undertakes no obligation to publicly update or revise forward-looking information.
NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
Source: The Newswire
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