CALGARY, AB – Decibel Cannabis Company Inc., a market leader in premium cannabis and extract manufactured products, reported its unaudited interim financial results for the three and six month period ending June 30, 2024.
“Decibel has shown good discipline reducing our current liabilities by ~5mm this quarter. Market share has been challenged but early indications from Qwest relaunch suggest we will regain market share in flower. A continued focus on execution and capital efficiency will serve as the platform for future growth.” said Benjamin Sze, Decibel’s Chief Executive Officer.
Second Quarter Highlights
National Market Share of 5.6% in Q2 2024, which placed Decibel as the 4th largest licensed producer in Canada by market share.
Net Revenue was $22.1 million in the second quarter of 2024, a year over year decrease of 22%. Net revenue decrease driven by increased competition in the infused pre-roll segment, vape consumers switching towards large format 510 cartridges and disposables and the halting of exports to Israel as the Company transitioned to a new distribution partner. Decibel is combatting market share declines with the relaunch of its domestic flower brand Qwest, introduction of large format 510 cartridges and disposables, and Vox brand extension.
Gross Margin Before Fair Value Adjustments was 42% in the second quarter of 2024, compared to 43% in the second quarter of 2023. The quarter was negatively impacted by a write-down to inventory of $1.4 million.
Adjusted EBITDA of $3.9 million in the second quarter of 2024, with a year over year decline of 46% over the second quarter of 2023. The decrease in Adjusted EBITDA quarter over quarter was primarily driven by a decline in net Canadian recreational sales and international sales.
Positive Free Cash Flow of $0.9 million in the second quarter of 2024, with a sequential increase of 194% over the second quarter of 2023.
Adjusted Net Income of positive $0.6 million in the second quarter of 2024, with a decline of $3.7 million over the second quarter of 2023.
Adjusted Earning Per Share (“Adjusted EPS”) of $0.00, with a year over year decrease of $0.01.
Summary Highlights
Decibel’s unaudited condensed consolidated interim financial statements for the three-month period ending June 30, 2024 (the “Financial Statements”) and related management’s discussion & analysis for the three and six month periods ending June 30, 2024 (“MD&A”) are available under the Company’s profile at www.sedarplus.ca.
As of June 30, 2024, Decibel was in compliance with all of its financial covenants and expects to remain in compliance for the remainder of its twelve-month forecast period.
About Decibel
Decibel is a consumer-focused cannabis company focused on delivering products that delight customers through a commitment to robust innovation and product quality. Leading brands General Admission, Qwest and Vox are among its portfolio sold both across Canada and beginning to extend towards new countries to create a global footprint. Decibel operates a processing and manufacturing facility in Calgary, Alberta and two cultivation facilities in Creston, British Columbia and Battleford, Saskatchewan.
