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Dixie Manufacturers delivers 266% year-over-year income development and solidifies its positioning as a number one “Home of Manufacturers”

Administration to host investor convention name August 30 at 10:00am EDT

DENVER, Aug. 29, 2019 /CNW/ – Dixie Manufacturers Inc. (“Dixie” or “the Firm”) (CSE: DIXI.U), (OTCQX: DXBRF), (Frankfurt: 0QV), one of many cannabis business‘s main shopper packaged items (“CPG”) corporations, at the moment introduced its second quarter 2019 monetary outcomes. All figures are acknowledged in U.S. {dollars}.

Chuck Smith, President and CEO, Dixie Manufacturers said-

“As soon as once more, we delivered robust year-over 12 months and sequential income development. As our enterprise beneficial properties momentum in each current and lately entered U.S. states. I imagine the advantages of our ‘Home of Manufacturers’ technique have gotten clear as we leverage our mental property and distribution capabilities to turn into a accomplice of selection for corporations coming into the cannabis-infused house. The latest announcement of our partnership with AriZona Manufacturers is a crucial validation of Dixie’s place of management within the business.”

Second Quarter 2019 Monetary Highlights

  • Income was $2,995,310 within the second quarter of 2019. It’s a rise of 266% from $817,558 of income in Q2 2018. And it’s also, 35% up from $2,218,175 within the first quarter of 2019. Income development was pushed by sustained presence and elevated dispensary penetration in established markets. Like rising traction in the important thing California market, the primary full quarter of gross sales in Michigan, and the introduction of recent merchandise.
  • Gross revenue of $1,040,064 in Q2 2019 was up 172% from $383,170 a 12 months earlier. As a share of income, gross revenue margin declined to 35% in comparison with 47% in Q2 2018, on account of the upfront price of scaling manufacturing to fulfill the elevated demand in California and Michigan. The Firm expects a compression in margins as new markets open, which finally will enhance as efficiencies and economies of scale are realized.
  • Internet loss attributable to the Firm was $6,769,557 in comparison with $1,187,194 in Q2 2018. The elevated loss resulted primarily from larger working bills related to the growth of Dixie’s work drive, and particularly its gross sales and advertising and marketing group, in addition to prices associated to turning into a publicly-listed firm. Internet loss consists of $2,403,987 of non-cash bills ensuing primarily from inventory choices issued as compensation for key administration and exterior service suppliers.
  • Dixie had $2,280,082 of money at June 30, 2019 in comparison with $5,635,000 at March 31, 2019. The decrease money stability mirrored the price of funding operations in addition to investing within the infrastructure and distribution required to help elevated revenues for the stability of the 12 months.

New Financing

On August 28, the Firm obtained $1 million of money within the type of an unsecured, non-dilutive mortgage (“the Mortgage”) bearing annual easy curiosity at 12% from a brand new strategic funding accomplice.  The Mortgage is contemplated to be the primary a part of a broader financing plan, because the Firm is in discussions with this accomplice regarding the identical.

Additionally subsequent to the tip of the quarter, the Firm obtained money proceeds of $248,000 from the train of choices by a shareholder.

Current Working Highlights

  • Introduced growth into Oklahoma, the sixth state within the Firm’s rising U.S. footprint, via a partnership with Globus Holdings to fabricate and promote Dixie merchandise starting within the fourth quarter of 2019.
  • Accomplished the primary full quarter of operations in Michigan, after signing a licensing settlement with a neighborhood accomplice in February 2019 and launching merchandise by the tip of March. Dixie merchandise are already being bought in roughly two-thirds of the dispensaries within the state.
  • Practically doubled year-over-year income in Colorado pushed by a 13% improve in account penetration, and the energy of specific classes reminiscent of gummies, and Dixie’s Mindset model, which has tripled month-to-month gross sales because the begin of 2019.
  • Signed new distribution agreements for Dixie subsidiary AcesoHemp masking the Southern California, Nevada and Alaska markets, and offering a near-term path to greater than double the model’s present presence in roughly 1,000 retail places.
  • Launched a brand new Veterinarian Method product line for pet wellness subsidiary Therabis LLC, and signed a business distribution settlement focusing on the veterinary channel with nationwide distributor Vedco Inc. The primary order was shipped to Vedco on June 28, 2019 with subsequent re-orders positioned in Q3 2019.
  • Introduced regulatory approval of the 50/50 three way partnership with Khiron Life Sciences Corp., and commercialization plans for each Dixie’s cannabis-infused merchandise within the Latin American market and Khiron’s Kuida cosmeceutical line to be distributed by Dixie within the U.S. market. U.S. gross sales of Kuida are anticipated to begin by the tip of This fall 2019.
  • Strengthened the chief workforce with the addition of Chief Monetary Officer Greg Robbins, a veteran of Pink Bull North America, and Vice President of Gross sales for regulated merchandise Oliver Arnold, who beforehand spent greater than twenty years in gross sales management roles at Terlato Wines and can focus totally on rising the California market.
  • Introduced that the Firm’s subordinate voting shares have commenced buying and selling on the OTCQX Finest Market below the image DXBRF, and that the shares are actually eligible for digital clearing and settlement within the US via the Depository Belief Firm (DTC).
  • Introduced a breakthrough in THC water solubility via a proprietary emulsification approach and enhanced ingredient administration, delivering improved uptake of cannabis-infused liquids. The proprietary course of can be showcased in a brand new line of drink additive merchandise referred to as FUSE, in addition to enhancements to current drinks and tinctures.
  • In August, Dixie signed a letter of intent (LOI) with AriZona Drinks to develop, produce and distribute a line of THC-infused merchandise below the AriZona banner. Per the LOI, the Firm expects to execute Definitive Agreements by the tip of Q3. Product formulations and model improvement are already underway between the events.

Outlook

Dixie has made important investments via the primary half of 2019 to ascertain necessary parts of its development platform.  Important outcomes have included robust natural income development, the announcement of key strategic partnerships, entry into the Michigan market and the deliberate entry into the Oklahoma market in This fall 2019, the build-out of a gross sales and advertising and marketing infrastructure in California, the event of necessary channel relationships, the launch of a number of new merchandise, and an expanded workforce able to executing the Firm’s development technique.

The Firm’s strategic focus is now shifting to driving elevated income and returns from these current investments. Administration believes there are important alternatives inside the current portfolio of markets and merchandise to generate development and advance in direction of profitability, and expects to be EBITDA-positive on a constant foundation by the primary half of 2020. Within the the rest of 2019, the Firm plans to prioritize executing on these alternatives, with funding in new markets and classes enjoying a secondary function.

The Firm anticipates to proceed its sample of strong natural development via the rest of the 12 months, with a number of initiative including to income starting subsequent 12 months. Initiatives anticipated to generate new income streams in 2020 embrace the graduation of gross sales within the Latin American and Canadian markets and the event of a brand new line of cannabis-infused merchandise below the AriZona banner. The Firm additionally expects to expertise important year-over-year development in its two CBD strains, AcesoHemp and Therabis, on account of an growth of distribution networks all through 2019.

Mr. Smith added: “We’re very happy with the investments we’ve got made this 12 months to ascertain the muse of our development platform. Based mostly on present market dynamics, we imagine one of the best technique of delivering shareholder worth is to focus our efforts on executing these alternatives and consolidating our robust positions in current markets. We stay very enthusiastic about our prospects for accelerated income development for the rest of this 12 months and into 2020.”

Investor Convention Name

Administration invitations traders to take part in a convention name to debate the Firm’s second quarter outcomes and strategic course.

Convention Name Particulars:

Time: 

Friday, August 30, 2019 at 10:00 am EDT

Dial-in: 

888-231-8191 (toll free) or (+1) 647-427-7450 (native or worldwide calls)

Webcast: 

A dwell webcast may be accessed from the Buyers part of the Firm’s web site at dixieelixirs.com or at this hyperlink.

An archive of the webcast can be obtainable on the Firm’s web site for one 12 months.

Replay:

An audio replay of the decision can be obtainable for seven days at
(+1) 416-849-0833 or 855-859-2056 passcode 9357308.

The Firm will file its full second quarter 2019 monetary statements and administration dialogue and evaluation at www.sedar.com.

ABOUT DIXIE BRANDS, INC

Dixie Manufacturers Inc. is main the CPG cannabis business by championing freedom of selection for customers world wide. By its licensed companions, Dixie has been perfecting the artwork and science of making award-winning THC and CBD-infused merchandise for practically a decade. A real multi-state operator at present in California, Colorado, Maryland, Michigan, Nevada and Oklahoma, Dixie is ready to develop internationally, together with Canada and Latin America.

Dixie’s relentless dedication to product innovation from enjoyable to purposeful has earned the model a spot as one of many business’s most acknowledged shopper manufacturers.  Dixie’s portfolio options over 100 merchandise throughout greater than 15 totally different product classes representing the business’s best edibles, drinks, tinctures, topicals and connoisseur grade extractions, in addition to world-class CBD-infused wellness merchandise and pet dietary supplements.

To seek out out extra about Dixie’s progressive merchandise, go to www.dixiebrands.com.

SOURCE Dixie Manufacturers, Inc.

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