Eve & Co Inc. (TSXV: EVE / OTCQX: EEVVF) – Revenue Increase 102% QoQ / Facility Expansion Approved by Health Canada – FINAL REPORT
Fundamental Research Corp has issued a report entitled “Eve & Co Inc. (TSXV: EVE / OTCQX: EEVVF) – Revenue Increase 102% QoQ / Facility Expansion Approved by Health Canada – FINAL REPORT†and dated January 8, 2020. The full report is now atKey Highlights
 Eve & Co Inc. (“Eve & Coâ€, “companyâ€) reported Q3-2019 financials, with revenue growing 102% quarter-over-quarter (“QoQâ€). The company shipped 242 kg of dried cannabis flower and trim at an average revenue per kg of $3,797 (a QoQ increase of 53%). Given the current state of the Canadian cannabis market, and a delay in the commencement of its German supply contracts, we are revising our 2019, and 2020, revenue forecasts to $4.31 million (previously $7.25 million) and $47.88 million (previously $73.38 million), respectively.
 The company’s normalized gross margin for Q3-2019 was 20.84% compared to 38.61% in the preceding quarter. The deterioration in gross margin, indicated by management, was due to lower high margin bulk sales. We are revising our gross margin forecasts for 2019, and 2020, to 35.65% (previously 44.42%) and 42.59% (previously 58.73%), respectively.
 SG&A expenses for Q3-2019 were $0.83 million, a QoQ decrease of 23%. The decline was primarily due to lower professional fees and consulting and contract work. Our 2019, and 2020, SG&A expense forecasts seem to be too high and we are revising these to $3.37 million (previously $6.54 million) and $9.58 million (previously $14.68 million), respectively.
 The company reported a net loss of -$1.96 million (EPS: -$0.01) for Q3-2019, compared to net income of $0.36 million (EPS: $0.00) for Q2-2019. The deterioration in bottom line QoQ was primarily due to changes in the fair value of company biological assets. Our revised earnings forecast for 2019, and 2020, are -$4.36 million (EPS: -$0.02) and $6.88 million (EPS: $0.02), respectively. This compares to our previous earnings forecast for 2019, and 2020, of -$6.58 million (EPS: -$0.02) and $19.75 million (EPS: $0.07), respectively.
 The company’s 0.78 million sq. ft. facility expansion was approved by Health Canada in December 2019. In addition, the company now has a distribution footprint to the provinces of Ontario, Saskatchewan, Manitoba and Newfoundland and Labrador.
The Vancouver Resource Investment Conference (VRIC) is the World's Largest Resource Investment Event with over 350 companies, 9000 investors and 100 top speakers. The 2020 Event takes palce January 19th & 20th, at the Vancouver Convention Centre West. Register today at /vancouver-resource-investment-conference/register
*FRC provides issuer paid coverage; read all the important disclosures at the back of each report
Since 2003, Fundamental Research Corp has provided the highest institutional quality equity research coverage on over 250 small and micro cap public companies through our extensive distribution network. Since 2009, we have also issued over 80 reports on exempt market (private) securities. Our research is being used by some of the largest institutional investors in the world who access it through channels such as Reuters, Capital IQ, the Globe and Mail, and by subscription. Our goal from the beginning was to provide high quality research to a broad audience, while adhering to high ethical standards and a strong foundation of integrity. These principles are evident in everything we do.
Our firm was created when we noticed that all equity research is paid for in one way or another, traditionally through corporate finance relationships. In 2003, it came to light that many investors were not aware that the research they were reading had potential conflicts between research and corporate finance. This led to large fines being levied on some large U.S. investment banks.
However, on the debt side, research relied upon by investors, and produced by firms such as Moodys is paid for, directly by the issuer to the research provider. The model is also used by auditors who are paid to provide an independent opinion to investors.
That brings us to today. To ensure high quality, continuous, and thorough research coverage, we employ full time in house analysts and industry specialists (such as a geologist). Because our analysts are in house, they are readily available to respond to investor inquiries, calls from institutions, and speak to management. We have invested in institutional platforms, such as Reuters Knowledge and Capital IQ, so that our analysts have access to the same high caliber information as the largest money managers in the world.
To ensure ethical behavior throughout our firm, we have, and continue to adopt CFA Institute Standards.
Our analysts are sought after by the media and at conferences to give their opinion on the markets, current topics of interest such as the direction of commodity prices, and top stock picks.
In the end, we are first and foremost a premier research firm that markets its research. A truly solid research firm is one that has full time analysts, access to the same information as large institutional investors, is ranked and adopts ethical and professional standards. The hard work we have done to establish our research is paying off. We have ranked in the Top Ten in independent third party evaluations of our research, and have developed a reputation for producing high quality research.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.