Avant Brands Inc.

Fiscal 2023 gross revenue was a record $30.2 million from 7,105 kilos, up 33% and 93% respectively versus the prior year. Net revenue was a record $26.3 million, up 31% year over year. Canadian recreational net revenue was $15.8 million, up 10%; B2B and export revenue was $10.2 million, up 96%. Gross margin improved to 34% from 32%, adjusted EBITDA reached $4.4 million, up 132%, and net loss from operations narrowed to $1.5 million from $8.5 million. Cash flow from operations was a record positive $5.4 million versus a $3.5 million outflow in the prior year, and SG&A on a cash basis was $8.8 million, up $1.8 million, or 26%. Weighted average flower selling price fell to $4.23 per gram from $6.07. For Q1 2024, management guided gross revenue to $8.2 million to $8.7 million and said cash flow should be strong and better than breakeven, with that trend expected to continue into Q2.

Norton Singhavon framed 2023 as a record year and said momentum should continue into 2024 through cultivation efficiency, lower expenses, and revenue growth. He emphasized export as the fastest-growing channel and said four new export agreements were signed, with BLK MKT positioned as a global premium brand through trademark licensing. He was blunt that Canadian recreational sales are declining, especially in Ontario, because of inflation, changing consumer preferences, and retailers’ pay-to-play data programs, which Avant refuses to join because he считает they would pressure margins.

Miguel Martinez highlighted record gross revenue of $30.2 million, net revenue of $26.3 million, gross margin of 34%, adjusted EBITDA of $4.4 million, and operating cash flow of $5.4 million. He noted SG&A on a cash basis was $8.8 million, up $1.8 million year over year, but still improved to 33% of net sales from 35%. He also pointed to debt restructuring as a key cash-management move: the F-20 quarterly payment was reduced from about $1.8 million to $450,000, and MENA was extended another 6 months with about $60,000 in monthly payments, giving the company room to reinvest operating cash flow into strategic priorities.

Analysts focused on whether Q4 weakness signaled a cash crunch, whether accounts payable and dilution were rising, and whether the company might need more capital. Management said debt obligations are just under $1 million per quarter, but that Q3-type EBITDA and cash flow of about $1.6 million to $1.9 million should cover those payments if revenue stays around $8 million. They also explained that export revenue is delayed by shipment accumulation and permitting, that domestic B2B was reactivated to monetize excess inventory, and that the recent dilution was preferable to insolvency risk.