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.
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.