EnWave (NWVCF 0.33%) reported fourth-quarter and full-year fiscal 2018 results before the market open on Monday, Dec. 17.

The Vancouver-based company produces and distributes all-natural dried cheese snacks and licenses, manufactures, and installs equipment for dehydrating organic materials. 

Shares declined 1.8% on Monday. We can probably attribute the stock's slight fall to tough market conditions in the United States and across the world. (EnWave's stock, which trades over the counter in the U.S, is listed on Canada's TSX Venture Exchange and Germany's Frankfort Stock Exchange.) Shares, in fact, opened the trading session up 3.2%, suggesting investors were likely at least satisfied with EnWave's results. The stock has gained 177% in 2018, through Dec. 17.

Here's how the quarter worked out for EnWave and its investors.

Close-up of an installed REV line

Image source: EnWave.

EnWave's results: The raw numbers

All monetary figures are in Canadian dollars.


Fiscal Q4 2018 

Fiscal Q4 2017

Year-Over-Year Change


CA$7.4 million

CA$3.6 million   


Operating income




Net income


(CA$1.1 million)


Earnings per share (EPS)




Data source: EnWave. Results based on International Financial Reporting Standards (IFRS). 

EnWave achieved profitability from a net income basis in the quarter and broke even from an EPS standpoint. Gross margin was 44.3%, up from 23.9% in the year-ago period.

For full-year fiscal 2018, revenue jumped 43% to 22.8 million Canadian dollars. Net loss for the year narrowed to CA$945,000, or CA$0.01 per share, from CA$3.0 million, or CA$0.04 per share, in fiscal 2017. 

Before we get into EnWave's key business highlights, here's a bit about its Radiant Energy Vacuum (REV) technology: The company touts in its recent investor presentation that this patented, proprietary vacuum-microwave dehydration technology "enables uniform drying with flexible moisture content unattainable with freeze drying or air drying." Moreover, EnWave claims that REV is faster than other dehydration or drying technologies. The company's target markets include the food, pharmaceutical, and cannabis industries.

Pertaining to cannabis, EnWave says that REV shortens its drying time from 4 to 6 days (air drying) to approximately 1 hour, and that as a combined drying and decontamination technology, REV will "eliminate [the potential for] microbial contamination and [the] need for sterilization with expensive ionization radiation." 

What happened with EnWave in the quarter?

Here's how segment results broke out for the quarter: 


Fiscal Q4 2018 Revenue

Year-Over-Year Change


CA$6.5 million


EnWave Canada (REV business)




CA$7.4 million


Data source: EnWave.

The NutraDried Food subsidiary, located in Washington State, makes and distributes Moon Cheese dried cheese products. The decrease in the REV business was due to lower sales volume for machinery relative to the year-ago period. Given the small number of machine sales, quarterly and even annual segment results can be expected to be "lumpy." 

What happened with EnWave in fiscal 2018?

Since this article represents The Motley Fool's inaugural coverage of EnWave's earnings -- and EnWave in general, for that matter -- highlights for the fiscal year are covered so investors can get a broad picture of the company. 


Fiscal 2018 Revenue

Year-Over-Year Change


CA$16.5 million


EnWave Canada (REV business)

CA$6.3 million



CA$22.8 million


Data source: EnWave.

Lumpy results for the REV business, even on an annual basis, aren't a concern at this early stage. 

NutraDried segment: 

  • In February, EnWave acquired the non-controlling 49% interest in NutraDried, bringing its ownership of the Moon Cheese maker and distributor to 100%. (Moon Cheese products are produced using REV tech. NutraDried licenses the tech from EnWave and pays it a quarterly royalty based on sales.)
  • During fiscal 2018, the company expanded distribution of Moon Cheese via "additional product rotations in a number of Costco divisions," according to the earnings release.

EnWave Canada segment (the REV business):

  • In fiscal 2018, EnWave received orders for two 60 kilowatt (kW) REV machines and sold a total of seven small-scale 10kW REV machines.
  • Royalty revenue for EnWave Canada increased 54% year over year to $571,000.
Dried cannabis buds stored in glass jars

Image source: Getty Images.

REV machine sales and agreements -- cannabis industry:

  • During fiscal 2018, EnWave launched REV technology into the cannabis industry.
  • In Oct. 2017 and April 2018, EnWave signed a royalty-bearing license agreement with Tilray (TLRY), which is one of the larger Canadian cannabis growers, providing Tilray the rights to use REV tech for processing cannabis in Canada and Portugal, respectively.
  • Sold Tilray a 10 kW REV machine and two 60kW machines. The first 60kW line is slated to be installed in early 2019. 

REV machine sales and agreements -- food industry:

  • In June 2018, EnWave signed a license agreement with Denmark-based Arla Foods, an international cooperative and the largest producer of dairy products in Scandinavia, providing it with the exclusive right to use REV tech to process dairy products in Denmark, Sweden, Finland, and Norway. Arla initially purchased a 10kW REV machine.
  • During fiscal 2018, the company sold three 10kW REV machines, which have been installed, to San Francisco-based Bare Foods, a leading snack-food company recently acquired by PepsiCo
  • Signed a royalty-bearing license with the following food companies, each of which also purchased a 10kW REV machine to start commercial production:
    • AvoLov, a U.S.-based snack company, which plans to make a new avocado snack product (Oct. 2017).
    • Howe Foods, the second largest producer of bananas in Australia (Nov. 2017).
    • Nomad Nutrition, a Canadian company focused on distributing premium, gourmet products (Feb. 2018).

REV machine sales and agreements -- U.S. Army:

  • In June 2018, EnWave sold the U.S. Army Natick Soldier Research, Development and Engineering Center a 10kW REV machine for research and development purposes. EnWave is working with the Army on "the development of nutrient-rich field rations for soldiers," according to management's discussion of the results.

REV machine sales and agreements -- pharmaceutical industry:

  • As part of a multiyear project, EnWave delivered the first scaled-up Good Manufacturing Practices (cGMP) freezeREV machine to pharmaceutical giant Merck. Merck plans to use the tech "to continuously dehydrate liquid vaccination in vials," a method that "has the potential to displace the need for lyophilisation," according to management's discussion of the results. (Lyophilisation is the technical name for freeze-drying.)
  • In July 2018, the company signed a collaboration and license option agreement with GEA Lyophil, a subsidiary of Germany-based GEA Pharma, that produces and sells freeze-drying equipment for the pharmaceutical and biotech industries. The two companies will "jointly evaluate a potential partnership to facilitate the manufacture and deployment of continuous cGMP REV lyophilization equipment into the global pharmaceutical sector," per the earnings release.

What management had to say

Management didn't provide a quote in the earnings release, nor did the company hold a conference call. This is not unusual for small companies.

On the size note, investors should realize that a stock with EnWave's characteristics (a microcap with relatively light average trading volume) can be quite volatile. It's best suited for investors comfortable with higher levels of volatility and risk.  

Looking ahead

Driven by strong revenue growth in its NutraDried segment, EnWave's key metrics all moved in the right direction in the quarter, with operating and net income turning positive, from negative in the year-ago quarter, and EPS breaking even.

The company's most interesting development in fiscal 2018 has to be the introduction of its REV tech into the cannabis industry. Given the strong projected growth dynamics for this industry, this vertical has huge growth potential. 

EnWave doesn't provide guidance.