Decibel Cannabis booked a net loss of 569,000 Canadian dollars ($418,000) in the first fiscal quarter of 2023, marking a substantial improvement over the Calgary, Alberta-based company’s CA$4.4 million loss in the same period last year.
Decibel reported adjusted net income of CA$3.3 million in the quarter, a CA$5 million improvement year-over-year and up of 87% over the prior quarter.
Adjusted net income accounts for changes in the fair value of biological assets.
Cash flow from operations was CA$2.3 million.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) – a measure of profitability – amounted to CA$6.8 million in the January-March quarter.
In a news release disclosing the quarterly results, Decibel said it was the eleventh quarter of consecutive quarterly positive adjusted EBITDA.
Decibel has been one of the leading licensed producers in Canada based on market share.
Citing data from Canadian cannabis retail data tracker Hifyre, Decibel said its 6.7% share of the Canadian adult-use market made it the No. 3 LP in the quarter ended March 31.
Decibel’s net revenue in the quarter was CA$27.1 million, up 5% over the previous quarter, and 63% year-over-year.
The company said the net revenue improvement was driven by growth in demand for derivative cannabis products and expanded distribution.
“Our new, unique and innovative products, assortments and formats continue to resonate with both new and existing customers,” CEO Paul Wilson said in the release.
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“This provides ample momentum as we approach a number of material and additional catalysts this summer, when we expect to build market share and brand position in Canada, and in turn continue to leverage our business internationally.”
Decibel’s revenue consists of wholesale sales to provincial distributors and other licensed producers, plus direct sales through the company’s retail locations.
Decibel’s gross retail sales in the January-March quarter were CA$1.42 million, down from CA$2.29 million one year ago, according to the company’s interim financial statements.
Gross wholesale revenue, on the other hand, rose 92% from last year to CA$41.3 million in the three months ended March 31.
All revenues in the quarter were generated in Canada, Decibel said, with the exception of two international exports to Israel worth CA$600,000.
As of March 31, the company had CA$3.9 million in cash.