Namaste Announces Quarterly Sales of $4.1M Representing 32% Quarter-Over-Quarter Growth
VANCOUVER, July 23, 2018 /PRNewswire/ – Namaste Technologies Inc. (“Namaste” or the “Company”) (CSE: N), (FRANKFURT: M5BQ), (OTCMKTS: NXTTF) is pleased to announce the filing of its unaudited quarterly financial statements, management’s discussion and analysis and certification of the quarterly filings for the third quarter of fiscal 2018. The statements for the period can be accessed on the Company’s SEDAR profile at www.sedar.com.
The Company’s net revenues for the three months ended May 31, 2018 were $4.1 million (2017 – $3.1 million), which is an increase of $1.0 million or 32% as compared to the three months ended May 31, 2017. The increase in net revenues during the third quarter of 2018 was primarily due to organic growth in the Company.
The Company’s net revenues for the nine months ended May 31, 2018 were $14.6 million (2017 – $7.1 million), which is an increase of $7.5 million or 106% as compared to the nine months ended May 31, 2017 despite having divested the Company’s U.S. business in December 2017. The increase in net revenues during the nine months ended May 31, 2018 was primarily due to revenue growth from EDIT domains and Australian Vaporizers. EDIT domains were acquired in October 2016 and Australian Vaporizers was acquired in March 2017.
The majority of revenues were generated by several key markets. For the three and nine months ended May 31, 2018, the top five revenue earning countries generated 90% and 84% of revenues, respectively. For the three and nine months ended May 31, 2017, the top five revenue earning countries generated 87% and 87% of revenues, respectively.
The Company’s cost of sales for the three months ended May 31, 2018 were $3.2 million (2017 – $2.4 million), which resulted in a gross profit of $0.9 million (2017 – $0.7 million). The gross profit increased by $0.2 million or 31% primarily due to the growth in revenue. The gross profit margin of 21% was comparable to the gross margin of 22% in the same period last year.
Management is focused on the expansion of its globally diversified platform of e-commerce websites to reinforce its position as “Your Everything Cannabis Store™” by selling all cannabis-related products ranging from vaporizers and smoking accessories to CBD products, as well as personal growing and extraction equipment.
The Company is actively engaged with Health Canada in relation to Namaste’s wholly owned subsidiary and Access to Cannabis for Medical Purposes Regulations (“ACMPR”) Licensed Producer, Cannmart, which awaits its medical cannabis “sales-only” license.
Namaste acquired Findify AB (“Findify” or “Findify.io”) during its third quarter. Findify is a leading artificial intelligence (“AI”) software company, which uses machine learning algorithms to track users’ behavior online in real-time, and provide a more personalized buying experience. Findify’s technology works to provide better recommendations to consumers and to optimize search results that are customized to the user’s choice patterns. The Company is working with Findify’s management team to develop a marketing and roll-out strategy that will introduce the technology across Namaste’s e-commerce platform and offer it to other companies in the industry.
Management Commentary
Kenneth Ngo, CFO of Namaste comments: “We are pleased to see a 32% increase in quarterly revenue compared to the same period last year, due to organic growth in the Company’s vaporizer business. The Q3 results are very encouraging especially considering that Namaste divested its U.S assets and revenue which accounted for 14.4% of the total revenue during Q3 of 2017.
The acquisition of Findify AB in the quarter was the largest acquisition to date in the history of Namaste. This acquisition will bring significant value to Namaste and its shareholders by accelerating the Company’s growth in revenue.”
Our Q3 financial results show continuous growth year-on-year, and this quarter also represented major milestones for the Company including the acquisition of Findify, which we believe will drive significant revenue going forward by increasing customer conversion and retention. We are working on several integrations of Findify’s technology in real-world applications of AI within the cannabis industry that will be impactful in understanding patients’ needs and in personalizing their online experience.
Sean Dollinger, President and CEO of Namaste
Namaste will continue to focus and developing innovative technology which drives revenue and brings long term value to the company. Our quarterly results are very encouraging and have not factored in any cannabis sales or the sale of CBD products in international markets, which we are highly focused on presently. We’re looking forward to seeing impactful results in these new sales channels in the near future.
About Namaste Technologies Inc.
Namaste Technologies is Your Everything Cannabis Store™. Namaste operates the largest global cannabis e-commerce platform with over 30 websites in 20+ countries under various brands. Namaste’s product offering through its subsidiaries includes vaporizers, glassware, accessories, CBD products, and the company will soon be selling medical cannabis in the Canadian market, subject to approval by Health Canada.
Namaste has developed and acquired innovative technology platforms including NamasteMD.com, Canada’s first Health Canada compliant telemedicine application, and in May 2018 the Company acquired a leading e-commerce AI and Machine Learning Company, Findify AB. Findify uses artificial intelligence algorithms to optimize and personalize a consumer’s on-site buying experience. Namaste is focused on leveraging its cutting-edge technology to enhance the user experience throughout its platforms. Namaste will continue to develop and acquire innovative technologies which will provide value to the Company and to its shareholders as well as to the broader cannabis market.
