Hill Street Beverage Company Inc (CVE:BEER) saw a 5% increase in its year-to-date net revenue despite retail pullback due to the coronavirus pandemic, according to its latest financial results posted on Monday.
The Toronto-based infused beverage company posted net revenue of C$1.4 million for the nine months ended March 31, 2020, up 5% from the $1.3 million it put up during the same year-ago period.
The firm made “important and prudent decisions” to bring its cost structure in line with anticipated revenues from the alcohol-free product segment while it begins construction on its cannabis production facilities, said CEO Terry Donnelly in a statement accompanying the news.
READ: Hill Street Beverage closes C$1 million financing as it prepares launch of cannabis-infused beverages
During its fiscal 3Q ended March 31, 2020, Hill Street posted net revenue of C$389,000 compared to the $428,000 it generated in the same year-ago quarter, as the global pandemic impacted consumer spending across the retail sector. Nearly 95% of the year-over-year decrease in quarterly revenue came in March.
The firm improved its net loss by around 25% to come in at C$796,000 versus the $1 million loss it posted in 3Q 2019 thanks to a streamlined operating structure and a 55% reduction in operating expenses.
Hill Street is preparing to launch its cannabis-infused products later in 2020.
"Our Joint Manufacturing Partnership for the production of cannabis infusion ingredients and finished goods has begun the licensing process for our newly acquired Lucknow facility, which is strategically important to our growth strategy going forward,” CEO Donelly told shareholders.
“We are currently seeing Cannabis 2.0 products as best sellers in the recreational market, which gives us confidence that our focus on this segment was strategically correct, and we anticipate the category will only grow in revenues and volumes as more consumers seek alternatives to smoking, vaping, and alcohol.”
The company expects to launch its cannabis products portfolio made from unique DehydraTECH technology it licensed from Lexaria Biosciences Corp later this year, Donnelly added.
Hill Street sells its alcohol-free beverage products online and in recognized retail chain stores in Canada and parts of the US. It recently closed a C$1 million financing to support the company’s plans to launch cannabis-infused beverages in North America.
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