Avenir Wellness Solutions Reports Third Quarter 2023 Results

New Campaigns Showing Encouraging Results

SHERMAN OAKS, CA / ACCESSWIRE / November 14, 2023 / Avenir Wellness Solutions, Inc. (OTCQB:AVRW) ("Avenir" or the "Company"), a proprietary broad platform technology and wellness company, today announced results for the third fiscal quarter ended September 30, 2023.

Key financial highlights for the second quarter included the following:

Net revenue in the third quarter of 2023 increased sequentially from Q2 2023 to $1.0 million but decreased year-over-year due to the delay in receiving the expected remainder of the asset sale proceeds. Sales are expected to increase during the fourth quarter and into 2024.

Gross margin increased 80 basis points quarter-to-quarter with further expansion expected in the fourth quarter of 2023 with an increase in higher margin direct-to-consumer sales and the launch of our new beauty product releases as well as our new marketing initiatives.

Gross margin for the third quarter decreased by 740 basis points to 72.6% in 2023 compared to the same period in 2022 due to a shift in sales channel mix with a higher proportion of wholesale sales to Amazon and Walmart which have benefitted in 2023 from our advertising initiatives.

SG&A expenses (excluding non-cash charges) for the third quarter decreased by $721 thousand in 2023 compared to 2022 driven by increased spend on advertising and promotion of $74 thousand, offset in part by lower overhead by $795 thousand.

Net operating loss from continuing operations (excluding non-cash charges) improved by $30 thousand in 2023. Cost reductions and operating leverage are expected to help narrow the operating loss (excluding non-cash charges) in the fourth quarter.

"Our products continue to maintain sales levels which is encouraging given that we have been unable to fully execute on our marketing initiatives pending receipt of the balance of the proceeds from the July 2022 asset sale. As mentioned in our second quarter earnings announcement, the proceeds from the July 2022 asset sale allow us to invest in the future of the Company, but the delay in receiving the balance of the proceeds continued to have an impact on our operating performance. We expect accelerating sales will reaffirm the improving overall trajectory of the business. Further, our margin expansion initiatives continue to deliver results with improvement from second quarter, and we are moving forward with our efforts to further reduce SG&A expenses and to maximize operating leverage.