Namaste Technologies (TSXV: N) this morning published its first quarter 2020 financial results, revealing its best revenue quarter in two years with revenues of $5.3 million on a net basis. The trouble, is that despite the great top line figure, the company is nowhere near profitability, posting a net loss of $7.4 million.
Net revenues for the firm consisted of $2.6 million from Namaste Vapes, $1.3 million from CannMart, $1.0 million from Australian Vaporizers, $0.3 million from Findify, and finally $45,596 from NamasteMD. Collectively, cost of goods sold amounted to $4.5 million, provided a gross profit of $0.8 million before inventory writedowns of $0.2 million, resulting in a final gross profit of $0.6 million.
Operating expenses comparatively amounted to over $7.3 million, with the largest expense being office and general at $2.6 million, followed by salaries and other compensation costs at $2.5 million. Combined with an impairment of $0.6 million in an investment in an associate, the company reported a first quarter net loss of $7.4 million.
Net cash used in operating activities during the quarter totaled out to $10.2 million, while investing activities saw cash outflows of $0.6 million and financing activities saw outflows of $0.1 million. Namaste’s cash position decreased from $37.9 million to $27.0 million over the three month period ended February 29, 2020.
Trade and other receivables meanwhile grew slightly over the quarter, from $2.5 million to $3.3 million, while inventories grew from $6.0 million to $8.9 million. Total current assets fell from $51.1 million to $44.4 million, largely a result of the decrease in the firms cash position.
Current liabilities comparatively changed rather insignificantly. Accounts payable was relatively unchanged at $7.1 million, while short term leases increased to $0.2 million from $nil. Provisions fell from $4.0 million to $3.4 million, while deferred revenue decreased to $0.2 million from $0.6 million. Overall, total current liabilities fell from $11.7 million to $11.0 million.
Namaste Tech last traded at $0.48 on the TSX Venture.
Information for this analysis was found via Sedar and Namaste Technologies Inc. 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.
