VANCOUVER, British Columbia, Jan. 29, 2018 (GLOBE NEWSWIRE) -- Namaste Technologies Inc. (“Namaste” or the “Company”) (CSE:N), (FRANKFURT:M5BQ), (OTC:NXTTF) is pleased to announce the filing of its unaudited quarterly financial statements, management’s discussion and analysis and certification of the quarterly filings for the first quarter of fiscal 2017. The statements for the period can be accessed on SEDAR at www.sedar.com. The Company’s sales for the three months ending on November 30, 2017, were $4.9M, representing a $2.8M or 136% increase in comparison with the Company’s quarter ended November 30, 2016. Gross margin also increased to 32% for the three months ended on November 30, 2017 in comparison to 28% for the Company’s quarter ended November 30, 2016.
During the financial reporting period of September 1, 2017 to November 30, 2017, the Company focused on expanding sales in existing territories as well as in emerging markets such as Mexico and Brazil while reducing sales exposure in the United States.
The Company also sold its US assets and operations as a strategic decision to eliminate risk related to US market exposure.
The Company remains focused on achieving profitability and on launching its medical cannabis marketplace, NamasteMD, through our wholly-owned subsidiary, Cannmart Inc.
Quarterly Financial Highlights
The Company’s cost of sales for the three months ended November 30, 2017 were $3.4 million (2016 – $1.5 million), which resulted in a gross profit of $1.6 million (2016 – $0.6 million). The gross profit increased by $1.0 million or 167%, which is primarily due to the growth in revenue outside the United States. The gross profit margin increased year over year from 28% to 32% due to better operating efficiencies.
Operating costs were $4.7 million (2016 - $1.5 million), which is an increase of $3.2 million. The increase in operating costs is primarily due to non-cash charges of $2.6 million, which included share-based compensation, shares for services, amortization of intangible assets, and depreciation.
Selling expenses for the three months ended November 30, 2017 were $1.1 million (2016 – $0.5 million), which is an increase of $0.6 million. The increase is due in part to an increase in advertising expenses of $0.1 million and consulting expenses of $0.2 million. Advertising expenses relate to online search services as well as other online promotional and social media tools utilized by the Company to generate sales. These costs further represent the Company’s significant investment into search engine optimization and its ongoing customer acquisition strategy. In addition to this, there were non-cash expenses related to shares for services of $0.2 million.
Consulting expenses relate to compensation amounts paid to various companies and individuals for marketing, order fulfillment, customer service activities, e-commerce product development, back-office e-commerce support and sales commissions. The increase in consulting fees is primarily related to information technology in order to develop current and new revenue channels that the Company is working towards.
Administration expenses for the three months ended November 30, 2017 were $3.3 million (2016 – $0.9 million), which is an increase of $2.4 million. The increase is primarily due to share-based compensation of $2.1 million and shares for services of $0.1 million
Other expenses for the three months ended November 30, 2017 were $0.3 million (2016 – approximately nil), which is an increase of $0.3 million. The increase is primarily due to amortization of intangibles of $0.2 million, which relates to the amortization of the customers list from the acquisition of Australian Vaporizers.
Sean Dollinger, President and CEO of Namaste comments: “During the first quarter ended November 30, 2017, Namaste embarked on implementing many strategic business initiatives focused on expansion in international markets other than the United States. In addition, posting record-breaking revenues, management remains focused on seeking and securing strong partnerships to further accelerate growth going forward. We expect to see significant upside to Namaste's revenue and profitability as a direct result of the many acquisitions and partnerships that were initiated both during and following this quarter. Management believes there are many more strategic opportunities that exist in the cannabis market that will serve to strengthen Namaste's position moving forward. In particular the NamasteMD platform will be key driver of growth. We are extremely excited at where the industry is headed and believe Namaste is well-positioned in 2018 and beyond.”
About Namaste Technologies Inc.
Namaste is the largest online retailer for medical cannabis delivery systems globally. Namaste distributes vaporizers and smoking accessories through e-commerce sites in 26 countries and with 5 distribution hubs located around the world. Namaste has majority market share in Europe and Australia, with operations in the UK, Canada and Germany and has opened new supply channels into emerging markets including Brazil, Mexico and Chile. Namaste, through its acquisition of Cannmart Inc., a Canadian based late-stage applicant for a medical cannabis distribution license (under the ACMPR Program) is pursuing a new revenue vertical in online retail of medical cannabis in the Canadian market. Namaste intends to leverage its existing database of Canadian medical cannabis consumers, along with its expertise in e-commerce to create an online marketplace for medical cannabis patients, offering a larger variety of product and a better user experience.
Forward Looking Information
This press release contains forward-looking 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. Although such statements are based on management's reasonable assumptions. The Company assumes no responsibility to update or revise forward-looking information to reflect new events or circumstances unless required by law.
Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. These statements speak only as of the date of this press release. Actual results could differ materially from those currently anticipated due to a number of factors and risks including various risk factors discussed in the Company's disclosure documents which can be found under the Company's profile onwww.sedar.com.
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The CSE has neither reviewed nor approved the contents of this press release.