Naturally Splendid (TSXV:NSP) announces its financial results for the three months ended March 31, 2018. All amounts are in Canadian dollars and are prepared in accordance with International Financial Reporting Standards.
Naturally Splendid recorded a net loss of $13,397 during the three months ended March 31, 2018, compared to a loss of $942,055 during the three months ended March 31, 2017. The decrease in net loss was due to the sale of POS BPC Manufacturing Corp. which provided for a gain on sale of $1,535,096, offset by an increase in selling and distribution costs of $88,479 and administrative expenses of $453,230, mainly due to the addition of the Company’s Prosnack Natural Foods Inc. (“Prosnack”) business which was not included in the expenses in the comparative quarter, as the acquisition occurred on October 18, 2017.
Naturally Splendid recorded sales of $320,827 during the three months ended March 31, 2018 compared to $587,203 in for the three months ended March 31, 2017. This revenue decrease was mainly due to the collapse of sales of bulk hemp seed to South Korea where the Company had recorded $Nil bulk sales in the current quarter compared to $245,400 in the first quarter of 2017. The additional sales generated from the acquisition of the Prosnack business was not enough to counter the loss of bulk sales. Retail sales were off during the first quarter whereas online sales remained consistent.
Cost of Sales during the three months ended March 31, 2018 was $217,523, compared to $435,766 in the three months ended March 31, 2017. The Company significantly changed its sales mix in 2018 with a reduction of exporting bulk seed sales which have been generally sold at a lower gross margin percentage.
Gross profits during the three months ended March 31, 2018 was $103,304 (32.2% of sales) compared to $151,437 (25.8%) in the three months ended March 31, 2017 due to higher margins on retail and online sales whereas in the comparative quarter the lower margins on bulk seed sales caused the overall margins to decrease. In 2018, the Company is focused on rebuilding its markets and products and new commercial opportunities, both domestically and in new international markets, and with NSE’s acquisitions of Prosnack (acquired October 18, 2017) and Absorbent Concepts Inc. (“ACI”) (acquired April 24, 2018).
|Statements of Loss Data||For the Three Months Ended March 31, 2018
|For the Three Months Ended March 31, 2017
|Cost of sales||(217,523)||(435,766)|
|Selling and distribution expenses||(228,722)||(140,243)|
|Basic and Diluted Loss Per Share||(0.00)||(0.01)|
Internationally, current market trends and pricing have demonstrated severe margin reductions and an over supply of hemp seeds in South Korea. We will continue to maintain relationships with our distributors as this mature market has consumer demand in other hemp-based products. In the German market, the Company will continue efforts to increase sales of its NATERA(R) product line via the Naturally Splendid ecommerce platform. Advertising and promotional activities are being developed to build more awareness and generate sales opportunities in this market. Naturally Splendid has invested a year of research and due diligence to gain access to the Japanese CBD market. This vital and necessary process cannot be circumvented in order to have orderly and lawful approval of our products. By persevering, the Company hopes to secure a sales base and access to this lucrative market. In Australia, the Company has developed a relationship with a major distributor that has access to five key market segments; Veterinarians, Retail, Food Service, Health Practitioners and Ecommerce. The Company is preparing to market its NATERA(R) and Elevate Me(TM) brands of products (hemp seeds & hemp protein conventional and organic and bars) to satisfy three of the five sectors as an initial launch; allowing for market research, customer acceptance and development of logistical elements to prepare for further key market segment penetration and product introductions.
Company CEO Doug Mason states, “In the first quarter of my term as CEO, I evaluated the projects and opportunities in front of the Company. During this period, we set strategic initiatives to drive significant growth for Naturally Splendid, including divesting of the Company’s interest in POS BPC Manufacturing Corp. for a profit of $1.5M. We identified and negotiated to purchase a company, Absorbent Concepts Inc., that would enable the Company to become a truly vertically integrated, industrial hemp and biotech and consumer products company. Recognizing the significant market opportunities, we also began the process of becoming a Licensed Dealer in Canada, that upon successfully completing will allow the company to extract and manufacture multiple CBD fortified products. We have empowered the product development team at Naturally Splendid to leverage our unique and proprietary technologies, and to create additional business opportunities utilizing our recently acquired and expanded operations. Additionally, we put a new CFO in place adding strong financial expertise to our management team.”
Naturally Splendid’s financial statements can be viewed on SEDAR.
About Naturally Splendid Enterprises Ltd.
Naturally Splendid is a biotechnology and consumer products company that is developing, and we are producing, commercializing, and licensing an entirely new generation of plant-derived, bioactive ingredients, nutrient dense foods, and related products. Naturally Splendid is building an expanding portfolio of patents (issued and pending) and proprietary intellectual property focused on the commercial uses of industrial hemp and non-psychoactive cannabinoid compounds in a broad spectrum of applications.
Naturally Splendid currently has four innovative divisions:
- (1)BIOTECHNOLOGY – Focused on three major platforms:
- (1)Proprietary HempOmega(TM) encapsulation
- (2)Extraction and formulation with Cannabidiol (CBD)
- (3)Hemp and plant-based proteins.
(2) CONSUMER PRODUCTS –
-NATERA(R) – brand of retail hemp and superfood products distributed throughout North America, Asia and Europe.
-Prosnack Natural Foods Inc. (Elevate Me(TM)) – lifestyle brand of healthy meal replacement products distributed throughout North America.
-Chi Hemp Industries Incorporated (CHII) – e-commerce platform for natural and organic hemp products.
-PawsitiveFX(R) – topical pet care products.
-NATERA(R)CBD – retail hemp-based cannabinoid nutraceutical and cosmeceutical products distributed in Asia.
-NATERA(R)Skincare – brand of retail hemp based cosmeceutical products.
(3) NATERA(R) Ingredients – bulk ingredients including HempOmega(TM).
(4) Co-Packaging/Toll-Processing – packaging for house-brands (NATERA(R) and CHII) and third-party partners.
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. Douglas Mason
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.
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