The Limestone Boat Company Limited has announced its financial results for the three and nine months ended September 30, 2022 (“Q3 FY 2022"). All dollar amounts are in Canadian dollars unless otherwise noted.
Limestone has started to see the effects of management decisions taken in Q2 2022 concerning wholesale pricing and labor realignment with improvements in margin. These are attributable, in large part, to price increases implemented in April (10.3%) and a further increase in August (+/-10%) of this year.
Unit production decreased due to ongoing supply chain delays and financial constraints with 27 units shipped in Q3 2022 vs. 38 in Q2 2022, revenues decreased 33% from $4,366,888 in Q2 2022 to $2,913,667 in Q3 2022. Additionally, average gross revenue per unit increased by 14% in Q3 vs. Q2 2022. Stated gross margins continued to improve from a gross margin of +4.4% in Q2 2022 to a gross margin of +4.7% in Q3 2022, with the Company generating a modest gross profit for the third consecutive period since acquiring Ebbtide in May of 2021.
Q3 2022 Financial Highlights:
- The Company generated revenues of $2,913,677 and $11,045,153 for the three and nine months ended September 30, 2022, from continuing unit sales, production and expansion of operations.
- The Company generated gross margin of 4.7% and 4.3%, resulting in a gross profit of $139,550 and $475,697 for the three and nine months ended September 30, 2022.
- The Company incurred operating expenses of $3,147,528 and $8,429,822, during the three and nine months ended September 30, 2022 in its operations.
- Included in operating expenses were non-cash costs in the amount of $(474,300) and $470,796 for the three and nine months ended September 30, 2022 relating to amortization and depreciation, accrued interest expense, accretion expense and deferred tax recovery related to convertible debentures, unrealized foreign exchange gain and stock based compensation.
- The Company incurred an operating loss of $3,007,978 and $7,954,125 for the three and nine months ended September 30, 2022.
- The Company incurred a Comprehensive Loss of $2,529,599 and $7,011,831 for the three and nine months ended September 30, 2022 which includes foreign exchange loss, deferred tax recovery and currency translation adjustment.
- As of Sept. 30, 2022, the Company had outstanding 119,565,940 common shares, 10,816,867 common share purchase warrants and 6,400,000 stock options.
- There are several risk factors facing the Company including but not limited to the suspension of manufacturing operations in its White Bluff, Tenn. facility Nov. 1, 2022 pending completion of a financing.