EnWave Corporation Announces Strong Q3 2024 Financial Results
EnWave Corporation (TSX-V:ENW | FSE:E4U) has released its consolidated interim financial results for the third quarter, emphasizing significant improvements compared to previous quarters in the current fiscal year. The financial updates demonstrate the company’s strategy towards growth and operational efficiency.
All financials are represented in thousands of CAD unless stated otherwise.
Key Financial Metrics for Q3 2024
The company reported a revenue of $2,622 for the third quarter of 2024, marking an increase from $2,486 recorded in the same quarter of 2023. This rise in revenue is primarily attributed to the resale of a large-scale machine, which yielded higher margins, along with increased sales of small-scale machines.
In addition, EnWave generated royalty revenues totaling $425, an uptick of $31 year-over-year, driven by increased sales and production from its current royalty partners.
The Adjusted EBITDA for Q3 2024 stood at a profit of $85, a turnaround from an Adjusted EBITDA loss of $192 in the same period last year, showcasing the positive impact of enhanced royalty revenues and the high-margin large-scale machine resale.
The gross margin improved significantly to 44%, compared to 29% for Q3 2023, attributed to both the resale of the high-margin machine and the increase in royalties.
Management Discussion on Operating Expenses
EnWave's Selling, General & Administrative (SG&A) expenses, including Research & Development (R&D), increased by $178 to reach $1,364 during this quarter. This rise was due to higher personnel costs, legal fees, and an increase in sales efforts, marked by greater attendance at trade shows.
Financial Overview for the First Nine Months of 2024
The overall revenues for the nine months ending June 30, 2024, reached $4,547. This figure signifies a decrease from the previous year's $5,349, reflecting fewer machine sales and ongoing fabrication activities impacted by the volatility inherent in large-scale Radiant Energy Vacuum (REV™) machine orders.
Royalties during this period surged to $1,319 compared to $1,085 in the previous year, marking a robust growth of 22% owing to enhanced partner product sales and production, even as exclusivity fees declined.
SG&A costs for the same nine-month span ended at $4,016, reducing from $4,140 in the preceding year, as part of a strategic endeavor to maintain discretionary spending.
Significant Corporate Developments
Throughout Q3 2024, EnWave achieved several noteworthy accomplishments:
- Secured a Technology Evaluation and License Option Agreement with a notable North American food company led by a celebrated chef.
- Established an Equipment Purchase Agreement for a 120kW REV™ dehydration machine with an existing royalty partner.
- Finalized another Equipment Purchase Agreement with BranchOut Foods LLC for a 100kW REV™ dehydration machine.
- Engaged in a Commercial License Agreement with Bounty Specialty Foods for product production in the Philippines alongside a REV™ dehydration machine sale.
- Entered a Commercial License Agreement with an existing royalty partner for tropical fruit product production in Central America.
- After the quarter, prudently repurchased a large-scale machine from a cannabis operator.
Details on Non-IFRS Financial Measures
This financial report includes references to Adjusted EBITDA as a non-IFRS financial measure. Adjusted EBITDA is defined as earnings prior to amortization, depreciation, stock-based compensation, foreign exchange variations, finance income or expenses, income taxes, and non-recurring costs. It provides insights for evaluating the company’s performance but should not replace official measures dictated by IFRS.
About EnWave Corporation
EnWave Corporation specializes in vacuum microwave dehydration technology, having established itself as a leader in developing advanced solutions for the food, pharmaceutical, and cannabis sectors. The company has created a robust portfolio of intellectual property and transformed innovative concepts into practical applications that enhance product quality, improve production efficiency, and reduce costs. With more than fifty royalty-generating partners across various sectors, EnWave helps clients produce unique snacks and quality ingredients, revolutionizing their offerings.
Contact Information
For more information regarding EnWave Corporation, please contact:
Brent Charleton, CFA
President and CEO
Phone: +1 (778) 378-9616
Email: bcharleton@enwave.net
Dylan Murray, CPA, CA
CFO
Phone: +1 (778) 870-0729
Email: dmurray@enwave.net
Frequently Asked Questions
What were EnWave's revenue figures for Q3 2024?
EnWave reported revenues of $2,622 for Q3 2024, an increase from $2,486 in the same quarter of the previous year.
How much did EnWave's royalities increase in Q3 2024?
Royalty revenues increased to $425 in Q3 2024, marking an uptick of $31 compared to Q3 2023.
What strategic agreements did EnWave sign recently?
EnWave signed multiple agreements, including a technology evaluation deal with a renowned food company and equipment purchase agreements with existing partners.
How did EnWave's Adjusted EBITDA perform in Q3 2024?
Adjusted EBITDA turned positive at $85 for Q3 2024, compared to a loss of $192 in the same period last year.
What is EnWave Corporation's primary business focus?
EnWave specializes in vacuum microwave dehydration technology, optimizing drying processes for the food, pharmaceutical, and cannabis industries.
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