VANCOUVER, BC , May 31, 2021 /CNW/ - Wildpack Beverage Inc. (TSXV: CANS) ("Wildpack" or the "Company") announces the unaudited financial results of its former operating entity Wildpack Beverage Alberta Inc. (the "Operating Entity") for the first quarter ended March 31, 2021 . These financial statements are for a period prior to concluding the Company's go public May 17, 2021 reverse takeover of Ponderous Panda Capital Corp. and do not represent the current consolidated financial position of the Company. All currency references herein are to US dollars.
First Quarter Highlights:
- Revenue of $6.43 million
- Direct Cost of Sales $5.36 million , including certain pre-production carrying costs for the Las Vegas Facility, which began production in the 2 nd quarter of 2021
- Operating Costs of $2.12 million , including certain Las Vegas carrying costs, and elevated professional fees related to the go-public transaction
Revenue expansion was supported by additional filling and decorating capacity, as part of planned upgrades in both our Baltimore and Sacramento Facilities. Both Facilities outperformed management's internal key performance indicators for the quarter. The Company's focus continues to be on throughput capacity expansion to capture the large backlog of demand for services, while deferring and staging planned efficiency optimization into future periods.
In our Filling Division, we completed upgrades, initiating our four-phase expansion approach, bringing our monthly capacity up from 120,000 gallons per month ("GPM") to 200,000 GPM during the 1 st quarter of 2021 and 300,000 GPM as at today's date. We are following our internal ramp-up timeline and execution protocols to grow production into our new capacity during the second and third quarters of 2021.
In the Decorating Division, we benefited from the on-going capacity upgrades completed in the nine-month period ended December 31, 2020 in both our Baltimore and Sacramento Facilities, enabling increased throughput in the 1 st quarter of 2021.
Gross profit for the 1 st quarter of 2021 was reduced by pre-production build and carrying costs of our Vegas Facility. The Vegas Facility was not-yet producing at the time and its costs were included in direct and operating costs, with no corresponding revenue in the 1 st quarter of 2021. Wildpack chose to expense these costs rather than capitalize them in line with its accounting policies. The new Las Vegas Facility, which has built-in capacity to be comparable in size to our Baltimore Facility, is now in production. We have initiated our pre-funded, pre-planned second line expansion and upgrades in the Las Vegas Facility. These expansions and improvements are scheduled for the second and third quarters, all in accordance with our internal scale up strategy.
COVID-19 protocol has and continues to be emphasized for the safety of our entire staff and customers, with no material incidents, while the USA continues to rapidly deploy vaccines. Wildpack fortunately is deemed essential; consequently, our workers received early access to vaccinations.
During the 1 st quarter of 2021, Wildpack closed equity financings for gross proceeds of $2.8 million through simple agreements for future equity. Furthermore, the Company conducted a concurrent financing with its go-public transaction. On May 17, 2021 Wildpack completed the concurrent financing, brokered private placement transaction, releasing escrow conditions on the subscription receipts. The gross proceeds of the transaction were $7.1 million . As at March 31, 2021 , a certain round of investors, converted their subscription receipts immediately into shares and warrants, for gross proceeds of $1.35 million .
"Our first quarter results validate our ability to generate substantial throughput increases in acquired and upgraded operations quickly and in a cost-effective manner. This is very exciting when considered in the context of our recently announced three letters of intent to acquire additional facilities. As we continue to execute on our strategic business plan to build and acquire more facilities, scaling overall throughput, we expect to see increasing revenue and margins. Our ecosystem including management team, employee culture, new Enterprise Resource Planning software, and supporting advisors is right sized to operate approximately 6 facilities from an operating expense perspective," commented Mitch Barnard , CEO.
Ryan Mason , CFO added, "We are happy with our strong start to the year, with revenue results ahead of internal expectations. Set against the backdrop of raising equity capital, Wildpack is well positioned for further planned revenue growth in the coming quarters. The Gross profit for the first quarter was impacted by pre-production start-up costs associated with the Las Vegas Facility which entered production subsequently to the end of the first quarter on April 19, 2021 ."
This news release should be read in conjunction with the Operating Entity's audited consolidated financial statements for the nine-month fiscal period ended December 31, 2020 and interim condensed financial statements (unaudited) and Management Discussion and Analysis for the three months ended March 31, 2021 .
WILDPACK BEVERAGE INC.
Per: "Mitch Barnard"
Mitch Barnard
Chief Executive Officer and Director
About Wildpack
Wildpack is engaged in beverage manufacturing and packaging, operating in the middle market by providing can filling and decorating services to brands throughout the United States . Wildpack currently operates indirectly through its wholly owned subsidiaries and out of facilities in Baltimore, Maryland , Sacramento, California and Las Vegas, Nevada . Wildpack commenced trading on May 19, 2021 on the TSX Venture Exchange under the symbol "CANS.V".
Forward-Looking Statements
This news release may contain "forward-looking statements" within the meaning of applicable Canadian securities laws, including, without limitation: our statements related to the Company's growth plans, including building and acquiring more facilities, scaling overall throughput, the ability to identify and enhance the value of acquisitions and the resulting impact on revenue and margins. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties, and contingencies. These statements generally can be identified by the use of forward-looking words such as "may", "should", "will", "could", "intend", "estimate", "plan", "anticipate", "expect", "believe" or "continue", or the negative thereof or similar variations. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause future results, performance or achievements to be materially different from the estimated future results, performance or achievements expressed or implied by those forward-looking statements and the forward-looking statements are not guarantees of future performance. Wildpack's statements expressed or implied by these forward-looking statements are subject to a number of risks, uncertainties, and conditions, many of which are outside of Wildpack's control, and undue reliance should not be placed on such statements. Forward-looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding the Transaction, including: that Wildpack's assumptions in making forward-looking statements may prove to be incorrect; adverse market conditions; risks inherent in the beverage manufacturing and packaging sector in general; that future results may vary from historical results; and competition in the markets where Wildpack operates. Except as required by securities law, Wildpack does not assume any obligation to update or revise any forward-looking statements, whether as a result of new information, events or otherwise.
This news release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about the Company's revenue, gross margin, operational efficiencies which are subject to the same assumptions, risk factors, limitations, and qualifications as set forth in the above paragraphs. FOFI contained in this document was approved by management as of the date of this document and was provided for the purpose of providing further information about the Company's future business operations. The Company disclaims any intention or obligation to update or revise any FOFI contained in this document, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. Readers are cautioned that the FOFI contained in this document should not be used for purposes other than for which it is disclosed herein.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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SOURCE Wildpack Beverage Inc.
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