CALGARY, Alberta, Aug. 23, 2022 (GLOBE NEWSWIRE) -- CE Brands Inc. (TSXV: CEBI; CEBI.WT) (“CE Brands”, “we”, “our”, or the “Company”), a data-driven consumer-electronics company, today announced its financial results for the three-month period ended June 30, 2022 (“Q1 2023”) ⁽¹⁾. The related condensed interim consolidated financial statements and Management’s Discussion and Analysis (“MD&A”) for Q1 2023 are available on SEDAR at www.sedar.com and on CE Brands’ website at www.cebrands.ca/investors.
Q1 2023 Highlights (Compared to Q1 2022)
- Revenue in the quarter increased 115% to $2.4 million driven by the launch of the moto watch 100.
- Gross profit improved 365% to $0.5 million.
- Increased investment, primarily in the marketing, selling and other costs to support revenue growth, netted a loss of $2.8 million, similar to last year.
- Additional financing completed to support current operations.
- Subsequent to the quarter end, new senior finance leadership announced.
Review of Operations
Total revenue of approximately $2.4 million in the three-month period ending June 30, 2022 from approximately $1.1 million in the prior year, representing an increase of approximately 115%. The increase in total revenue was primarily a result of the launch of the moto watch 100 late in fiscal 2022. Further contributing to the increase in total revenue was increased sales in smart home products, driven primarily by increased sales of air purifiers as well as sales of the KODAK Infinio F882 Outdoor Security Camera which was launched in January 2022. Gross profit of approximately $0.5 million in the three-month period ending June 30, 2022 from a gross profit of approximately $0.1 million in the prior year, representing an increase of approximately 365%. The increase in gross profit was due primarily to an increase in total sales from the launch of the new moto watch 100 product line and increased sales volumes from the air purifiers and security cameras product lines. The increase in gross profit also benefited from a decrease in cost of products and services as a percentage of sales compared to the prior year. This was driven by an increased proportion of total sales coming from higher margin products such as the moto watch 100, and Kodak smart home products, versus the prior year which had a product mix with a comparatively lower gross margin. Net loss of approximately $2.8 million for the three-month period ending June 30, 2022 up 4% compared with $2.7 million in the same period during the prior year. The increase in net loss was due to increased spend across marketing, selling and distribution, wages and contractors, royalties and license fees, technology and related, professional fees and general and administrative expenses associated with supporting the Company’s notable revenue growth.
Outlook
Following the launch of moto watch 100, which was announced in mid-November 2021, and the KODAK Infinio F882 Outdoor Security Camera (announced on January 20, 2022), the Company anticipates launching an additional three new smart watch products in calendar year 2022.
The Company continues to take steps to mitigate the impacts of the ongoing supply constraints on semiconductor chip manufacturing and global supply chain disruptions through supply-chain improvements and strategically prioritizing the Company’s product portfolio to conserve cash and improve near-term profitability. The Company continues to believe it is in the early stages of improved sales momentum through increased product deliveries and sales. In order to continue to meet customer demand and fulfill growing order backlog, the Company anticipates pursuing additional financing for working capital and general corporate purposes, principally to ensure the Company has sufficient financing on hand for the purchase of inventory, other financing needs and to support the Company’s product launches and sales. See the “Forward-Looking Information”, “Going Concern” and “Other Risk Factors” sections of the MD&A.
Selected Financial Information
| As at June 30, 2022 | As at March 31, 2022 | |
| Total assets | 13,707,896 | 13,901,560 |
| Total liabilities | 11,472,118 | 9,168,228 |
| Three months ended June 30, 2022 | Three months ended June 30, 2021 | |
| Total revenue | 2,394,697 | 1,115,143 |
| Cost of products and services | 1,847,177 | 997,413 |
| Gross Profit | 547,520 | 117,730 |
| Net loss | (2,790,504) | (2,689,563) |
⁽¹⁾ References in this press release to the “Company” refer to eBuyNow eCommerce Ltd. (“EBN”) and its direct or indirect subsidiaries for information provided in respect of any period prior to June 18, 2021, which is the date on which the Company’s Qualifying Transaction (as defined in the policies of the TSX Venture Exchange) was completed pursuant to which the business of EBN became the business of CE Brands. Subsequent to June 18, 2021, the “Company” refers to the consolidated operations of CE Brands Inc. and its direct or indirect subsidiaries and the historical operations of EBN and its direct or indirect subsidiaries.
For more information, please see CE Brands’ corporate presentation, which is available on CE Brands’ website at www.cebrands.ca/investors.
About CE Brands
CE Brands Inc. develops products with leading manufacturers and iconic brand licensors by utilizing proprietary data that identifies key market opportunities. With sales today in over 70 countries, our innovative, highly repeatable process, which we call the “CE Method”, has created an optimal growth path for CE Brands to be the premier global licensed brand manufacturer.
Neither the TSX Venture Exchange nor its regulation services provider (as defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.
Numerical Amounts
The reporting and the functional currency of the Company is the Canadian dollar.
Forward-Looking Information
This press release contains forward-looking information within the meaning of applicable securities laws. In general, forward-looking information refers to disclosure about future conditions, courses of action, and events. The use of any of the words “anticipates”, “believes”, “expects”, “intends”, “plans”, “will”, “would”, and similar expressions are intended to identify forward-looking information. More particularly and without limitation, this press release includes forward-looking information with respect to the Company’s intention to pursue additional financing opportunities, including the expected timing and successful completion thereof, the Company’s production targets and related expectations around product launches, the Company’s ability to meet its revenue forecasts and anticipated product sales and the Company’s ability to manage manufacturing, supply chain and inventory constraints and continue to operate its business in the ordinary course.
The forward-looking information is based on certain key expectations and assumptions, including the continuance of manufacturing operations at the Company’s partner factories in Asia, the timing of product launches, shipments and deliveries, forecast sales price and sales volume of the Company’s products and the ability of the Company to secure additional sources of financing in 2022.
There can be no assurance that the Company will be able to secure additional financing in the future and/or access funding under the Choco Facility (as defined in the MD&A) and/or the Vesta Facility (as defined in the MD&A) on the terms contemplated, in a timely manner or at all. If the Company fails to secure additional financing and/or access funding under the Choco Facility and/or the Vesta Facility, then the Company may have insufficient liquidity and capital resources to operate its business resulting in material uncertainty regarding the Company’s ability to meet its financial obligations as they become due and continue as a going concern.
Although CE Brands believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because CE Brands cannot give any assurance that it will prove to be accurate. By its nature, forward-looking information is subject to various risks and uncertainties, which could cause the actual results and expectations to differ materially from the anticipated results or expectations expressed in this press release. Such risks and uncertainties include, without limitation: the risks described in the “Other Risk Factors” section of the MD&A; the impact of the evolving Covid-19 pandemic on the Company’s business, operations and sales; reliance on third party manufacturers and suppliers; the Company’s ability to stabilize its business and secure sufficient capital, including the funding under the Choco Facility (as defined in the MD&A), which may not be available in a timely manner or at all; the inability of the Company to enter into a Definitive Kang-Shuo Agreement; the Company’s available liquidity being insufficient to operate its business and meet its financial commitments, which could result in the Company having to refinance or restructure its debt, sell assets or seek to raise additional capital, which may be on unfavorable terms, if available at all; the inability to implement the Company’s objectives and priorities for 2022 and beyond, which could result in financial strain on the Company and continued pressure on the Company’s business; anticipated product launches and commercial partnerships; risks associated with developing and launching new products; increased indebtedness and leverage; the fact that historical and projected financial information may not be representative of the Company’s future results; the inability to position the Company for long-term growth; risks associated with issuing new equity including the possible dilution of the Company’s outstanding common shares; the value of existing equity following the completion of any financing transaction; the Company defaulting on its obligations, which could result in the Company having to file for bankruptcy or undertake a restructuring proceeding; the Company being put into a bankruptcy or restructuring proceeding; and the risk factors included in CE Brand’s other continuous disclosure documents available on SEDAR at www.sedar.com. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date of this press release, and to not use such forward-looking information other than for its intended purpose. CE Brands undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events, or otherwise, except as required by applicable securities law.
Further Information
For further information about CE Brands or its principal operating subsidiary, eBuyNow eCommerce Ltd., please contact:
Kalvie Legat
EVP Corporate Development
778-771-0901
ir@cebrands.ca
