Sunniva (CSE: SNN) announces first quarter financial results
Sunniva Inc. (CSE: SNN) (OTCQB: SNNVF) announced first quarter 2019 financial results and certain key executive appointments. In summary, Q1 2019 revenues increased +175% year over year to $14.2 million with a gross margin of 37%. These results include revenue of $10 million from initial sales of branded cannabis products in California (up $10.0 million), $2.4 million from Full-Scale Distributors (-$0.1 million) and $1.8 million from Natural Health Services (-$0.8 million). These results are in line with the US $55 – US $60 million in Sunniva branded sales this year. (see full financial results here)
In addition, SNN announced some changes at the senior management level. Mr. David Lyle has been appointed Chief Financial Officer, effective June 3, 2019. Mr. Lyle will be based in California. Mr. Lyle previously served as CFO at Maxwell Technologies, Inc. (NASDAQ:MXWL) a global leader in the development and manufacture of innovative, cost-effective energy storage and power delivery solutions. Maxwell was recently acquired by Tesla, Inc. Mr. Lyle will take over for David Negus, the current CFO, who will transition to supporting the Company in a consulting role commencing at the end of June 2019.
As a result of the Company's stated plans to focus primarily on its California operations, the corporate functions will be relocated from Vancouver, Canada to Carlsbad, California. Mr. Negus will work closely with Mr. Lyle and the executive leadership team to ensure a smooth transition.
Sunniva Chairman and CEO, Dr. Anthony Holler said, “We are very excited to have someone of David Lyle's caliber and experience join our executive team and help to continue to move us toward the next phase of Sunniva's growth….This management change is consistent with our focussed plans in California and we are confident the leadership team we have assembled will continue to deliver on our strategy."
Conclusion: It is pleasing to see that patient Sunniva shareholders can look forward to positive news in excess of expectations after over a year of disappointments. It is also positive to see that the market is receptive to positive results. On Friday, May 31, 2019, SNN shares rose 3.5% on a day when some cannabis indexes were down double that amount. I expect more additions to the management team in California and perhaps some news on the dispensation of Canadian assets. Investors should look on SNN as a major opportunity for growth moving forward into 2019 – 2020.