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Naturally Splendid Enterprises Ltd. (FRANKFURT:50N) (TSXV:NSP) (OTC:NSPDF) (“Naturally Splendid”, “NSE” or “the Company”) announces its audited financial results for the year ended December 31, 2018. All amounts are in Canadian dollars and are prepared in accordance with International Financial Reporting Standards.
Naturally Splendid recorded a net loss for the year of $1,611,361 during the year ended December 31, 2018, compared to a loss of $4,816,545 during the year ended December 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 $5,071,223, an increase in Gross Profit Margins of $307,089, offset by an increase in Selling and Distribution costs of $286,870 and an increase in Administrative expenses of $1,664,022 and a Revaluation of a contingent consideration payable of $565,000. The increases in Sales, Gross Margins and expenses are mainly due to the addition of the Prosnack business which only included two and a half months in the comparative period as the acquisition occurred on October 18, 2017.
Naturally Splendid recorded sales of $2,073,776 during the year ended December 31, 2018, compared to $1,550,469 in for the year ended December 31, 2017. The Company’s sales increased by approximately $523,000. The Company continued to experience lower bulk sales, particularly export sales of bulk hemp seeds and hemp products in general which accounted for a decrease of approximately $330,000 and offsetting the decrease was the Natera Sport(TM) and Natera FX(TM) products which added approximately $103,000 in sales and the Prosnack business having a full year of business reporting under the Company accounted for an additional $750,000 in sales compared to the prior year. Today the international bulk sales market is highly price competitive and margins continue to shrink. Accordingly, the Company is focused on branded international sales and has entered the German, Australian and Japanese markets.
Cost of Sales during the period December 31, 2018 was $1,549,652 compared to $1,333,434 in 2017. The Company significantly changed its sales mix in 2018 with a reduction of export bulk seed sales, which, sold at a lower gross margin percentage, thus the period ended December 31, 2018 provided better margins due to the minimal volume of bulk seed sales. The Company is now focused on its higher margin products and new commercial opportunities.
Gross profits for the year ended December 31, 2018 was $524,124 (25.3% of sales) compared to $217,035 (14.0%) for the year ended December 31, 2017. In 2018, the Company was focused on rebuilding its markets and branded packaged products and new commercial opportunities. The best market opportunities for NSE have been both domestic and new international destinations along with Prosnack Natural Foods Inc. products.
CEO Mr. Douglas Mason states,” We accomplished a number of strategic objectives over this past year. Naturally Splendid has increased our processing capacity as well as has attained an SQF (Safe Quality Food) Level2 certification for our Bar Makers Division. We are continually improving efficiencies and increasing margins, and this continues to be a major focus for our growing company. We are seeing the effect of our strategies beginning to reflect in this latest quarter of 2018 and continue into the first quarter of 2019, and we anticipate recently announced sales and manufacturing contracts to bolster revenues moving forward.
We continue to follow the licensing process for our Dealer’s License, which has now been changed to a Processors License under the revised Cannabis Act. The reputation we are earning in the market as a premium food manufacturer, in combination with our hemp and extraction expertise, is sure to position the company favorably as CBD (cannabidiol) regulations continue to evolve here in Canada and in fact, globally. These initiatives firmly position the Company for CDB- fortified manufacturing and production capabilities, as set forth in our strategic plan once newly anticipated Canadian legislation allows.
Private Label and co-packing and most notably contract manufacturing have increased over this past year and many clients have begun signaling the demand for increased production as well as expressed interest for CBD fortified food products, anticipating favorable regulations. These initiatives firmly position the Company for CDB fortified manufacturing and production capabilities, as set forth in our strategic plan.
In closing, we believe 2018 was a defining year for NSE, as the foundation has been laid to provide maximum shareholder value in 2019 and beyond.”
About Naturally Splendid Enterprises Ltd.
Please visit: www.naturallysplendid.com
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, including its application to become a Licensed Dealer, 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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