Last week, EnWave (TSXV:ENW) (OTC:NWVCF) reported fourth-quarter and full-year results for fiscal 2019. For the quarter, the cannabis player's revenue soared 120% year over year. It broke even on the bottom line, just as it did in the year-ago period.   

The Canada-based company makes all-natural dried cheese snacks, and it licenses, manufactures, and installs equipment for dehydrating organic materials, including food, pharmaceuticals, and cannabis -- both marijuana and hemp. 

EnWave shares on Canada's TSX Venture Exchange (TSX) have gained 26.8% over the last year, through Dec. 13, while shares traded over the counter (OTC) in the United States are up 28.4%. These results outpace the S&P 500's 22% return over this period.

Cannabis leaf with a blue and cloudy sky in background.

Image source: Getty Images.

EnWave's Q4 key numbers

All monetary figures are in Canadian dollars.


Fiscal Q4 2019 

Fiscal Q4 2018



CA$16.2 million

CA$7.4 million   


Earnings per share 




Data source: EnWave. Results are for the period ended Sept. 30 and are based on International Financial Reporting Standards (IFRS). 

The revenue boost was driven by NutraDried's large distribution increase to Costco and EnWave Canada's growth in the number of Radiant Energy Vacuum [REV] dehydration technology machines sold.

Gross margin came in at 28.4%, down from 44.3% in the year-ago period, but unchanged from last quarter's result. Gross margin will likely be inconsistent from quarter to quarter for some time because of the lumpy nature and relatively small number of EnWave Canada's machine sales.

Annual segment results

Management breaks out segment income results on a fiscal year-to-date basis, rather than by the quarter, and that's the best way for investors to consider the results given the company's small size.


Fiscal 2019 Revenue

Year-Over-Year Change

Fiscal 2019 Segment Income

Year-Over-Year Change


CA$30.0 million


CA$3.0 million


EnWave Canada (REV dehydration business)

CA$12.8 million

103% (CA$5.0 million) N/A. Loss widened from CA$864,000 in the year-ago period. 

Segment totals

CA$42.8 million

88% (CA$2.0 million)  N/A. Loss widened from CA$945,000 in the year-ago period.

Data source: EnWave. 

EnWave Canada signed 14 new royalty-bearing commercial license agreements during fiscal 2019 through to the date of the earnings report. Seven of these licenses were in the cannabis vertical and six were in the food products vertical. (Yep, that leaves one more -- EnWave didn't specify the vertical. Pharmaceutical is a good bet.) In fiscal 2019, the segment sold more than triple the capacity of REV machinery than it sold in 2018.

The company's notable activity in 2019 in the cannabis space includes:

  • Signed a royalty-bearing licensing deal and an intellectual-property partnership with Aurora Cannabis (NASDAQ:ACB), a major Canadian marijuana grower. Moreover, Aurora made a $10 million strategic equity investment in EnWave, giving it an approximate 4.91% ownership stake.
  • Signed a royalty-bearing license with Electric Farms, which will use REV tech to dehydrate hemp flowers grown in its indoor and outdoor facilities in Tennessee. 
  • Installed the first 60kW REV machine at Tilray's (NASDAQ:TLRY) Ontario facility. This is EnWave's first commercial-scale machine installed for cannabis processing in Canada. The major Canadian grower has the exclusive right to use and sublicense EnWave's REV tech in Canada. (Aurora has a nonexclusive sublicense from Tilray to use REV tech in Canada.)

The company's U.S-based wholly owned NutraDried Food subsidiary produces Moon Cheese using EnWave Canada's REV dehydration technology. This segment's underlying profitability is notably better than the numbers above suggest. In April, the company reorganized NutraDried's sales and marketing operation, incurring a one-time restructuring charge of CA$612,000. It hired two top execs and terminated its management services agreement with an outside entity. While this resulted in a short-term hit to profitability, the company expects it will reduce its longer-term sales and marketing cost.

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