Delivra Health Brands Inc, formerly Harvest One Cannabis, has transformed into a profitable business during the second quarter of its fiscal year 2023, buoyed by strong demand for its popular brands including LivRelief and Dream Water.
For its fiscal 2Q ended December 31, 2022, the Vancouver-based consumer packaged goods company operating in the health and wellness sector, reported adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $0.14 million, compared to a loss of $0.95 million in the same period a year earlier. This represents a $1.09 million year-over-year improvement from continued operations, noted the firm.
Delivra chalked up the increase in EBITDA to management's laser focus on “customer mix, gross profit margin improvement and efficient administrative and selling support functions.”
READ: Delivra Health sees adjusted EBIDTA and Dream Water products distribution improve in fiscal 1Q
"The 2Q of fiscal 2023 reflects the start of a new phase in our history as Delivra Health has now become a profitable business," Delivra CEO Gord Davey said in an earnings statement.
"In 2Q 2023, the company reported positive adjusted EBITDA. Since the start of our strategic reorganization in March 2020, the Delivra Health team has worked diligently on its customer mix, margins and achieving a responsible level of selling, general and administrative expenses.”
Profitable business model
Davey said the positive results demonstrate that the company’s business model is “effective and scalable” without burning significant cash going forward.
“With the sale of our Lucky Lake facility, Delivra Health's balance sheet is now well positioned for growth. The company will be increasing its investment in innovation projects, customer programs and marketing campaigns," added Davey.
Delivra reported a 37% increase in total net revenue to $2.39 million during the quarter, compared to $1.74 million in fiscal 2Q 2021.
“This increase was primarily due to higher sales of Dream Water in the US to international distributors and higher sales of the company's licensed LivRelief cannabis-infused topical creams in Canada,” said Delivra.
The company reported a gross profit of $0.98 million and a gross profit margin of 41%, compared to $0.64 million and 37%, respectively, in the same period a year earlier.
The firm kept a tight grip on expenses. The company cut expenses by 45% to $0.96 million for the three months ended December 31, 2022, compared to expenses of $1.75 million for the three months ended December 31, 2021.
Meanwhile, for the six months ended December 31, 2022, Delivra reported a 6% jump in total net revenue to $4.12 million, from $3.87 million in same period in 2021.
Again, the firm chalked the bump in revenue to higher sales of Dream Water in the US to international distributors and higher sales of LivRelief cannabis-infused topical creams in Canada.
The Delivra Health portfolio features brands like Dream Water and LivRelief, which deliver relief from issues like chronic pain, anxiety, and sleeplessness.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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