Nutritional High Provides Update on Growth of Its Distribution Business in California
TORONTO, April 09, 2019 (GLOBE NEWSWIRE) -- Nutritional High International Inc. ("Nutritional High" or the "Company") (CSE: EAT, OTCQB: SPLIF, FRANKFURT: 2NU) is pleased to provide an update on Calyx Brands Inc. ("Calyx"), Nutritional High's wholly-owned subsidiary which operates a distribution business in California.
Financial and Operating Metrics1
For the three months ended January 31, 2018, Calyx achieved a revenue of approximately $5.7 million, representing an annualized revenue run rate of approximately $22.7 million. For the same period, the gross margin was 19.5% and the Company's total operating expenses were approximately $4.25 million.
As disclosed in the press release dated April 1, 2019, for the 12 months ended January 31, 2018, Calyx's revenue was approximately $17.2 million. Sales in the second half of the period increased by 96% to $11.4 million from $5.8 million in the first half of the period. In the same period, cost of sales increased from $5.1 million to $8.9 million, which represents an improvement in gross margin percentage of almost 10%.
Calyx continues to grow its distribution capability in the State of California and currently has distribution relationships with over 450 licensed dispensaries throughout the state. It is estimated that there were approximately 650 retail locations in California in the fourth quarter 2018, increased from 450 in the third quarter 2018 and the overall market remains underpenetrated2.
Calyx's curated distribution portfolio is comprised of of 13 market-leading brands, including Nutritional High's own flagship FLÏ™. The product offering includes but is not limited to edible products such as beverages, natural fruit bites, gummies and mints, as well as concentrates, flower and pre-rolls.
Executive Quotes and Commentary
Maintaining and expanding relationships with dispensaries is critical to Nutritional High's business in terms of driving sales growth and building intelligence
Commented Dakota Sullivan, CEO of Calyx.
The data that we are able to gather from our footprint ensures that we are constantly at the forefront of industry trends and respond to changing consumer preferences by sourcing promising new brands and bringing them to the attention of retailers
Own the distribution pipeline and own the shelf space. That is our strategy
commented Jim Frazier, CEO of Nutritional High.
To elaborate, through our ownership of the distribution pipeline, we are effectively aiming to control which products appear on shelves without actually owning any dispensaries and exposing the Company to the risk of operating a brick and mortar retail operation. This strategy was further highlighted by our exit from retail business when we sold our remaining 50% interest in The Clinic Effingham in Illinois in October 2018. Our diversified approach puts us in a position to take established brands to the next level, as well as nurture the lasting success of emerging up-and-comers
Our latest quarter revenues are approximately 7.2x of the revenue base of Calyx pre-acquisition
added Adam Szweras, Co-Chair of the Nutritional High board.
Since acquiring Calyx in March 2018, we have been able to rapidly accelerate revenue growth through capital injection and the joint management expertise of Nutritional High and Calyx. Based on Calyx's current market access of over 450 dispensaries in California, the management believes that Nutritional High's footprint represents a dominant market position in the California distribution landscape when compared to other players in the market
Nutritional High is focused on developing, manufacturing and distributing products under recognized brands in the cannabis products industry, with a specific focus on edibles and oil extracts for medical and adult recreational use. The Company works exclusively with licensed facilities in jurisdictions where such activity is permitted and regulated by state law.
The Company follows a vertically integrated model with a fully developed strategy for acquisitions in extraction, production, sales, and distribution sectors of the cannabis industry. Nutritional High has brought its flagship FLÏ™ edibles and extracts product line from production to market through its wholly owned subsidiaries in California and Oregon, as well as Colorado where its FLÏ™ products are manufactured by a third-party licensed producer. In California, the Company distributes its products and products manufactured by other leading producers through its wholly owned distributor Calyx Brands Inc. and is entering the Nevada, Washington State and Canadian markets in the near future.
For updates on the Company's activities and highlights of the Company's press releases and other media coverage, please follow Nutritional High on Facebook, Twitter, Instagram and Google+ or visit www.nutritionalhigh.com.
For further information, please contact:
Co-Chairman of the Board
Nutritional High International Inc.
Director, Investor Relations
Nutritional High International Inc.
NEITHER THE CANADIAN SECURITIES EXCHANGE NOR OTC MARKETS GROUP INC., NOR THEIR REGULATIONS SERVICES PROVIDERS HAVE REVIEWED OR ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
This news release may contain forward-looking statements and information based on current expectations. These statements should not be read as guarantees of future performance or results. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by such statements. The statements relate to potential market expansion and the use of the proceeds of the Offering. Risks that may have an impact on the ability for these events to be achieved include completion of due diligence, negotiation of definitive agreements and receipt of applicable approvals. Although such statements are based on management's reasonable assumptions, there can be no assurance that such assumptions will prove to be correct. We assume no responsibility to update or revise them to reflect new events or circumstances.
The Company's securities have not been registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"), or applicable state securities laws, and may not be offered or sold to, or for the account or benefit of, persons in the United States or "U.S. Persons", as such term is defined in Regulation S under the U.S. Securities Act, absent registration or an applicable exemption from such registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in the United States or any jurisdiction in which such offer, solicitation or sale would be unlawful.
Additionally, there are known and unknown risk factors which could cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information contained herein. All forward-looking information herein is qualified in its entirety by this cautionary statement, and the Company disclaims any obligation to revise or update any such forward-looking information or to publicly announce the result of any revisions to any of the forward-looking information contained herein to reflect future results, events or developments, except as required by law. Some of the risks and other factors that could cause actual results to differ materially from those expressed in forward-looking information expressed in this press release include, but are not limited to: obtaining and maintaining regulatory approvals including acquiring and renewing U.S. state, local or other licenses, the uncertainty of existing protection from U.S. federal or other prosecution, regulatory or political change such as changes in applicable laws and regulations, including U.S. state-law legalization, market and general economic conditions of the cannabis sector or otherwise.