Eve & Co Incorporated (TSXV: EVE) last night filed its third quarter 2020 financial results, reporting a decline in net revenues of 50.3% on a quarter over quarter basis with revenues falling from $1.3 million to $0.6 million. THe company also posted a net loss of $4.3 million, as compared to a net income of $29.0 million in the prior period.
The massive decline in revenue reported by the company, based on the filed management discussion and analysis, is believed to be a result of a one-time bulk sales arrangement that went through in the prior quarter. It should also be noted that with production costs of $0.7 million, the company posted a gross loss before fair value adjustments, and before a $1.7 million inventory write down is factored into the equation.
Total expenses meanwhile amounted to $1.5 million during the quarter, just shy of twice the gross revenue figure posted during the same period. General and administrative expenses amounted for the largest portion at $0.7 million, followed by operating labour of $0.2 million as well as finance expenses at $0.2 million and share based compensation at $0.2 million.
Loss from operations overall amounted to $4.3 million, which resulted in an overall net loss of $4.3 million following minimal other income of just $722.
Looking to the balance sheet, and the company appears to be in a dire position. Cash has fallen to just $0.4 million, and with the company spending $0.4 million in operating activities, $0.2 million in financing activities, and $39k in investing activities over the three month period, it does not provide a positive outlook for the firm.
Other receivables and prepaid expenses climbed from $0.6 million to $0.7 million, while inventory also climbed marginally from $9.3 million to $9.4 million, despite the write downs exhibited above. Accounts receivable however fell from $1.4 million to $0.9 million, while biological assets tumbled from $3.4 million to $1.2 million. Total current assets overall fell from $15.8 million to $12.6 million.
Accounts payable meanwhile rose from $5.5 million to $6.0 million, which proves problematic given the low cash position held by the company. Loans nd borrowings stayed flat at $18.6 million, with the outstanding promissory note also staying flat at $0.9 million. Total current liabilities, as well as total liabilities, rose from $25.1 million to $25.6 million overall.
Eve & Co last traded at $0.07 on the TSX Venture.
Information for this briefing was found via Sedar and Eve & Co Incorporated. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.