February 24, 2022
CALGARY, Alberta, Feb. 24, 2022 (GLOBE NEWSWIRE) -- CE Brands Inc. (TSXV: CEBI; CEBI.WT) (“CE Brands”, “we”, “our”, or the “Company”), a data-driven consumer-electronics company, today announced its financial results for the three-month and nine-month periods ended December 31, 2021 (“Q3 2022”) ⁽¹⁾. The related condensed interim consolidated financial statements and Management’s Discussion and Analysis for Q3 2022 are available on SEDAR at www.sedar.com and on CE Brands’ website at www.cebrands.ca.
Q3 2022 Highlights
“Despite the third quarter continuing to be challenging operationally for CE Brands with ongoing production, logistical and supply chain disruptions; we were able to achieve quarter over quarter sales growth in our smart home product line, driven by increased sales in baby monitors. Further, we successfully closed a financing which enabled us to launch our latest two products, the moto watch 100 and the KODAK Infinio F882 Outdoor Security Camera and we are pleased with the initial market uptake of both of these products,” said Craig Smith, Chief Executive Officer of CE Brands. “We are currently seeing improvements in supply chain constraints and we remain confident that CE Brands will achieve our stated planned product releases; however, the duration of the disruptions have been more prolonged than anticipated and the resulting delay in new product launches has required us to reduce our 2022 calendar revenue targets to approximately $30-$40 million. We see this as a short term timing revision and do not believe that this impedes us from our ability to raise additional capital or deliver on our long-term growth strategy,” continued Mr. Smith.
Post Q3 Fiscal 2022 Updates/Highlights
Outlook
Following the launch of moto watch 100, which was announced in mid-November 2021, and the KODAK Infinio F882 Outdoor Security Camera (announced in mid-January 2022) the Company anticipates launching an additional three new products in the first half of 2022, including two additional mid-level smart watches and an outdoor security video doorbell.
Continuing supply chain disruptions, labour shortages and the ongoing direct and indirect effects COVID-19, and delays to the originally planned launch dates of both the moto watch 100 and the KODAK Infinio F882 are expected to result in revenues for the three months ending March 31, 2022 being in the $3-$4 million range which is below the October 21, 2021 forecast of approximately $8-$9 million. The Company expects that this revenue shortfall resulting from product delays will be captured in the subsequent quarters in 2022 and into calendar year 2023. As a result of the aforementioned factors, the Company now expects to generate total revenue for calendar year 2022 in the $30-$40 million range revised downward from the previously announced $50-$60 million forecast. See “Forward-Looking Information”.
The Company continues to take steps in an attempt to mitigate the impacts of the ongoing supply chain disruptions through supply-chain improvements, reductions in SG&A and strategically prioritizing the Company’s product portfolio to conserve cash and improve near-term profitability. The Company continues to believe it is in the early stages of improved sales momentum through improving product deliveries and sales.
The Company anticipates that it will require additional financing to address the Company’s working capital and other financing needs and support the Company’s product launches and sales. See “Forward-Looking Information”.
Select Financial Information
Three months ended
December 31
Nine months ended
December 31
2021 2020 2021 2020 Total revenue1,495,965 3,005,336 4,006,278 7,960,884 Gross profit255,710 262,320 827,112 1,568,799 Net loss(2,604,135)(3,625,618) (7,362,546)(10,929,504)Total comprehensive loss(2,570,909)(3,974,512) (7,336,859)(11,786,032)Basic and Diluted Loss per share(0.11)(0.22) (0.34)(0.67)
⁽¹⁾ References in this press release to the “Company” refer to eBuyNow eCommerce Ltd. (“EBN”) and its direct or indirect subsidiaries for information provided in respect of any period prior to June 18, 2021, which is the date on which the Qualifying Transaction (as defined below) was completed pursuant to which the business of EBN became the business of CE Brands. Subsequent to June 18, 2021, the “Company” refers to the consolidated operations of CE Brands Inc. and its direct or indirect subsidiaries and the historical operations of EBN and its direct or indirect subsidiaries.
For more information, please see CE Brands’ corporate presentation, which is available on CE Brands’ website at www.cebrands.ca/investors.
Shareholder Call Information
CE Brands will host a virtual-only shareholder update call on Tuesday, March 1, 2022, from 9-10am PST (12-1pm EST). The shareholder update call will be facilitated by Craig Smith, CEO and Kalvie Legat, CFO, who will review the Company’s Q3 2022 results and related financial performance.
The Company will answer pre-submitted questions at the conclusion of prepared remarks. Investors are asked to submit their questions in advance to ir@cebrands.ca.
You can join the shareholder update call via this link: CE Brands Q3 2022 Shareholder Update Call
Or by telephone in:
Webinar ID: 851 2042 1526
Passcode: 223690
A recording of the shareholder update call will be posted on the Company’s website.
About CE Brands
CE Brands Inc. develops products with leading manufacturers and iconic brand licensors by utilizing proprietary data that identifies key market opportunities. With sales today in over 70 countries, our innovative, highly repeatable process, which we call the “CE Method”, has created an optimal growth path for CE Brands to be the premier global licensed brand manufacturer.
Neither the TSX Venture Exchange nor its regulation services provider (as defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.
Numerical Amounts
The reporting and the functional currency of the Company is the Canadian dollar.
Forward-Looking Information
This press release contains forward-looking information within the meaning of applicable securities laws. In general, forward-looking information refers to disclosure about future conditions, courses of action, and events. The use of any of the words “anticipates”, “believes”, “expects”, “intends”, “plans”, “will”, “would”, and similar expressions are intended to identify forward-looking information. More particularly and without limitation, this press release includes forward-looking information with respect to the Company’s intention to pursue additional financing opportunities, including the expected timing and successful completion thereof, the Company’s production targets and related expectations around product launches, the Company’s ability to meet its revenue forecasts and anticipated product sales and the Company’s ability to manage manufacturing, supply chain and inventory constraints and continue to operate its business in the ordinary course.
Additionally, this press release includes forward-looking statements within the meaning of applicable securities laws, including with respect to, among other things, the Company’s expectation that (i) revenues for the three-month period ending March 31, 2022 will be approximately $3-$4 million, and (ii) revenues for the 12 month period ending December 31, 2022 will be approximately $30-$40 million.
The forward-looking information is based on certain key expectations and assumptions, including the continuance of manufacturing operations at the Company’s partner factories in Asia, the timing of product launches, shipments and deliveries, forecast sales price and sales volume of the Company’s products and the ability of the Company to secure additional sources of financing in 2022. There can be no assurance that any such financing will be available on reasonable terms or capable of being consummated in a timely manner or at all.
Although CE Brands believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because CE Brands cannot give any assurance that they will prove to be accurate. By its nature, forward-looking information is subject to various risks and uncertainties, which could cause the actual results and expectations to differ materially from the anticipated results or expectations expressed in this press release. Such risks and uncertainties include, among others, the impact of the evolving Covid-19 pandemic on the Company’s business, operations and sales; reliance on third party manufacturers and suppliers; the Company’s ability to stabilize its business and secure sufficient capital; the Company’s available liquidity being insufficient to operate its business and meet its financial commitments, which could result in the Company having to refinance or restructure its debt, sell assets or seek to raise additional capital, which may be on unfavorable terms; the reasonable possibility that the Company's existing cash and cash equivalents, along with cash generated from its operations, may not be sufficient to fund its current and planned operations through the next 12 months, which raises substantial doubt about the Company's ability to continue as a going concern; the inability to implement the Company’s objectives and priorities for 2022 and beyond, which could result in financial strain on the Company and continued pressure on the Company’s business; risks associated with developing and launching new products; increased indebtedness and leverage; the fact that historical and projected financial information may not be representative of the Company’s future results; the inability to position the Company for long-term growth; risks associated with issuing new equity including the possible dilution of the Company’s outstanding Common Shares; the value of existing equity following the completion of any financing transaction; the Company defaulting on its obligations, which could result in the Company having to file for bankruptcy or undertake a restructuring proceeding; the Company being put into a bankruptcy or restructuring proceeding; and the risk factors included in CE Brand’s continuous disclosure documents available on www.sedar.com. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date of this press release, and to not use such forward-looking information other than for its intended purpose. CE Brands undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events, or otherwise, except as required by applicable securities legislation.
Further Information
For further information about CE Brands or its principal operating subsidiary, eBuyNow eCommerce Ltd., please contact:
Kalvie Legat
Chief Financial Officer
778-771-0901
Rob Knowles
Manager, Investor Relations
1-855-770-2324
ir@cebrands.ca