EnWave (ENW 2.22%) (NWVCF -5.06%) recently reported first-quarter results for fiscal 2019. Revenue soared 73% year over year, and, as with last quarter, earnings per share came in at breakeven.  

The Canada-based company makes all-natural dried cheese snacks and licenses, manufactures, and installs equipment for dehydrating organic materials, including cannabis. Its stock is listed on Canada's TSX Venture Exchange (along with the Frankfurt Stock Exchange), and also trades over the counter (OTC) in the U.S. 

Like shares of many players in the burgeoning cannabis sector, EnWave stock raced out of the gate when the calendar flipped to 2019. Shares traded on the TSX have gained 40.5% and those traded OTC are up 41.8% through March 12.

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

Dried cannabis buds in glass jars sitting on a flat surface.

Image source: Getty Images.

EnWave's results: The raw numbers

All monetary figures are in Canadian dollars.


Fiscal Q1 2019 

Fiscal Q1 2018

Year-Over-Year Change


CA$7.81 million

CA$4.52 million   


Operating income

CA$2.31 million

CA$1.46 million


Net income


(CA$397,000 million)


Earnings per share (EPS)




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

Quarterly revenue was a record, with growth driven by increased sales of Moon Cheese, produced by EnWave's wholly owned NutraDried Food subsidiary in Washington State. Royalty revenue from EnWave Canada's dehydration technology business jumped nearly 24% year over year to $251,000. 

Gross margin was 39%, up notably from 31% in the year-ago period.

What happened with EnWave in the quarter?

Here's how segment results broke out:


Fiscal Q1 2019 Revenue

Year-Over-Year Change

Fiscal Q1 2019 Segment Income

Year-Over-Year Change


CA$6.33 million


CA$1.15 million


EnWave Canada (REV dehydration business)

CA$1.48 million

(30.3%) (CA$1.16 million) N/A. Loss widened from CA$398,000 in year-ago period. 


CA$7.81 million


(CA$15,000) N/A. Loss narrowed from  CA$397,000 million in the year-ago period.

Data source: EnWave.

NutraDried's strong revenue and profitability growth was due to it "securing additional product rotations with Costco in the U.S, increased sales to Whole Foods and Publix, along with several other new points of distribution," the company said in its management discussion. 

EnWave Canada's tepid results were primarily due to fewer REV (Radiant Energy Vacuum) dehydration machine sales in the quarter compared to the year-ago period. The segment had two large-scale equipment purchase contracts open at the end of the quarter. At this stage, quarterly results can be expected to be "lumpy" since the segment's sales volumes are low. 

Notable happenings in the quarter included:

  • In October, PepsiCo subsidiary Bare Snacks purchased a third, small-scale 10kW REV machine. 
  • In November, EnWave signed a research and development license agreement with the College of Agriculture and Life Sciences at Cornell University. The school also purchased a 10kW REV machine to be used at its New York Center of Excellence in Food and Agriculture. 
  • In December, the company signed a purchase order with Milne Microdried for its third 120kW REV machine. This transaction extends Milne's exclusive right to produce REV-dried strawberries and blueberries in the U.S. Installation is slated for the end of this year.

Check out the latest earnings call transcripts for the companies we cover.

Cannabis space activity soon after the quarter ended

In January, EnWave and its licensed cannabis partner, major Canadian grower Tilray (TLRY) signed a royalty-bearing sublicense
with The Green Organic Dutchman Holdings (TGOD.F 39.53%) giving the fellow Canadian company non-exclusive rights to use REV tech to dry organic cannabis in Canada. EnWave also received a purchase order from TGOD for a large-scale 60kW REV machine. In the same month,
EnWave and Tilray signed a royalty-bearing sublicense with Your Wasabi Farms, which extends YWF's rights to include using REV tech to dry industrial hemp.

What management had to say

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

Looking ahead

As was the case last quarter, powerful growth in EnWave's NutraDried segment drove overall revenue growth and enabled the company to break even from an EPS standpoint.

EnWave doesn't provide guidance.