The Tinley Beverage Co (CSE: TNY) released its fourth quarter 2019 and full fiscal year financials this evening after the bell, posting solid revenue growth as the firm worked towards completing its flagship facility in Long Beach, California. Further to the fourth quarter financials, the company also provided guidance for its first quarter revenue results, with gross margins estimated above 40% and quarterly revenues more than doubling.
Revenues for the fourth quarter of 2019 came in at $62,463, an increase from $21,664 in the prior quarter. Notably, these revenues would have been higher however two Californian distributors of the firm went bankrupt during the quarter, representing a loss in revenue of $25,000. This loss is primarily due to the manner in which Tinley recognizes revenue, wherein it is required to be paid by its distributors for the product before recording revenue.
Operating expenses for the year totaled out at $7.3 million, largely comprised of general and administrative expenses of $4.3 million and sales and marketing at $1.1 million as the company worked towards getting its phase two and phase three facilities operational over the course of the year. Net loss for the year came in at $7.4 million.
Looking towards the cash flow statement, Tinley spent approximately $4.5 million on operating activities throughout the course of the year, while spending $5.9 million on the development of the phase two and phase three facilities. Notably, with the phase three facility nearing final licensing, the phase two facility has been slated for installation at an expansion territory outside of California as the company works to expand its cannabis infused beverage distribution.
Now would also be the time to address the fact that Tinley revealed it has a conditional license for its Long Beach, California facility from the state. The license is conditional upon the company receiving a Certificate of Occupancy from the city, as well as on the completion of an ownership review, the latter of which it can be operational for while the step is being conducted.
In terms of cash, the company saw its cash position increase marginally on a quarter over quarter basis, from $2.5 million to $2.6 million. Short term investments decreased from $1.1 million to $1.0 million, while inventories rose to $0.6 million from $0.4 million. Total current assets rose from $4.3 million to $4.5 million on a quarter over quarter basis.
In terms of non-current assets, the company saw significant growth over the year given its small-cap status. Property, plant and equipment grew from $2.1 million to $7.1 million as the company nears final completion of its flagship facility, while right of use assets grew from nil to $2.1 million. Total assets overall grew from $6.8 million to $13.9 million over the course of 2019.
Total current liabilities grew on a quarter over quarter basis as well however, with accounts payable increasing from $0.1 million to $0.9 million, and current lease payable staying relatively unchanged at $0.6 million. Over the course of 2019, liabilities grew from $0.3 million to $3.3 million, however $2.5 million of that figure is related to lease liabilities.
Looking to the first quarter of 2020 and beyond, Tinley has provided guidance for Q1 of revenues in excess of $170,000, while gross margins will be positive and exceed 40%, representing more than a doubling of 2019 revenues in a single quarter as distribution of Tinley products grow and consumers turn to smoke-free consumption methods of cannabis. Additionally, the company has identified that it has a pipeline of co-packing clients waiting to sign on the dotted line once the Long Beach facility nears final approval.
Finally, Tinley Beverage also revealed that it has signed on two additional, undisclosed, major chains that will soon be launching its Beckett’s non-infused beverage products. Collectively, the four national chains the company is working with now represents over 6,000 retail locations across the USA and Canada. Trials are to begin soon at Southern California locations of these chains in the near term.
Tinley Beverage Co last traded at $0.32 on the CSE.
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