CannTrust (CTST) Reports Q1 EPS of $0.12

CannTrust (NYSE: CTST) reported Q1 EPS of $0.12, versus $0.12 reported last year. Revenue for the quarter came in at $16.9 million, versus $7.84 million reported last year.

Outlook

CannTrust expects to continue to make investments in a disciplined and deliberate manner to position the Company to take advantage of future opportunities, both domestically and internationally. The Company continues to invest in people, process, technology and marketing, and is developing innovative products for the expected legalization of new product formats in Canada later in 2019. These products include vape pens, beverages, confectionaries and healthcare products. CannTrust is also making strategic investments into its operational capacity to prepare for expected increases in demand for its products. The Company believes it will be a leader in outdoor cultivation in Canada, which will leverage its proprietary genetics and will accelerate the Company's objective of low-cost production leadership.

The completed Phase 2 expansion of the Perpetual Harvest Facility is expected to increase production capacity to 50,000kg on an annualized basis by the third quarter of 2019. With this increased production capability, the Company believes revenue will increase significantly in 2019 compared to 2018 full year results, with revenue growth accelerating in the second quarter of 2019. The Company has received all necessary regulatory approvals for the Phase 2 expansion, which is now fully operational and planted. In addition, having obtained all necessary permits from the Town of Pelham for the construction of its Phase 3 expansion, the Company continues to expect its Perpetual Harvest Facility capacity to reach 100,000kg on an annualized basis in the second half of 2020. The Company has completed the design and vendor selection for its Phase 3 expansion, and is finalizing its planning to begin construction in the third quarter of 2019.

CannTrust's outdoor cultivation initiatives are targeted to deliver material future revenue contributions. The Company is planning for this initiative to yield 75,000kg of production in 2019, subject to regulatory approvals, and between 100,000kg to 200,000kg of cannabis in 2020, also subject to regulatory approvals. CannTrust's outdoor strategy is intended to support its extract-based product growth and low cost leadership.

CannTrust's investments into people, process, technology and marketing are expected to impact near-term profitability as the Company continues to scale. These are calculated investments that the Company expects will result in increasing yields, lower cost per gram and the advancement of the Company's brand and strategic initiatives. CannTrust believes that its gross margin percentage before fair value changes to biological assets should increase throughout 2019 as the Company increases its production levels and gains production efficiencies. As the Phase 2 expansion contributes to positive operating leverage, the Company is targeting a return to profitability in 2019.

For earnings history and earnings-related data on CannTrust (CTST) click here.

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