EnWave Corp Achieves Highest Quarterly Revenue Ever – More Expected in 2019

EnWave Corporation (CA: ENW – $1.60 CAD & US: NWVCF – $1.20 USD & GER: E4U – €1.07), which offers industrial-scale dehydration technologies for organic materials, reported in the first quarter of fiscal year 2019, the highest quarterly revenue in the Company’s history.

In the first quarter of 2019, which ended December 31, 2018 the Company reached revenues of $7,806,000 compared to $4,519,000 in the same period in fiscal 2018, an increase of $3,287,000 or 73%. The Company reported a net loss of $15,000 in the first quarter of fiscal 2019, a significant reduction compared to the loss of $397,000 in the first quarter of fiscal 2018.

Continued strong sales of Moon Cheese, the crunchy cheese snacks produced by EnWave’s 100% owned subsidiary NutraDried, contributed to this outstanding performance.

Sales and distribution of Moon Cheese throughout Canada and the U.S. is building. At the end of fiscal year 2018, NutraDried commissioned its second large-scale 100kW REV machine and doubled its production capacity so satisfy increasing demand for its products.

NutraDried began selling its Moon Cheese product in a 10oz Club Pack format to Costco in the first quarter of 2018 and continues to do so as a product rotation in several of Costco’s divisions. The Company will attempt to secure additional Costco distribution as part of its overall channel strategy.

NutraDried also began national distribution into Whole Foods and Publix, two major American supermarkets. NutraDried’s strategy is to continue to grow its core distribution in the U.S. mainstream retail grocery channel by securing national retail accounts.

In August last year, Mr. Mike Pytlinski was attracted to head NutraDried. With a successful background spanning nearly 30 years in the food manufacturing industry and financial services sector, Mr. Pytlinski is doing an excellent job at increasing distribution, and expanding NutraDried’s product and flavor portfolio.

Next to the success of Moon Cheese, EnWave also sold additional REV machines to both Milne Fruit and Bare Snacks in Q1 of 2019.

Milne purchased its third 120kW REV machine for the production of an extensive portfolio of dried vegetable and fruit applications. The installation is planned towards the end of calendar year 2019, and will significantly increase Milne’s processing capacity for royalty-bearing REV products.

Also Bare Snacks purchased its third REV unit. A small-scale 10kW machine will be used to fill the increasing market demand for its REV-dried snack products. The third equipment purchase by Bare Snacks again confirms the growing commercial acceptance of EnWave’s REV technology in the rapidly-growing “better for you” snacking vertical of the consumer-packaged goods sector. Bare Snacks is a wholly-owned subsidiary of PepsiCo, Inc and distributes premium fruit snacks throughout the U.S. under its Bare brand of products.

EnWave has set the pace for 2019 in its first quarter. It wouldn’t be a surprise if EnWave surpassed total sales of $35 million in fiscal 2019.

Vast Growth Opportunities

Although EnWave is already on the right track to achieve sustained growth and profitability, it has a vast number of solid growth opportunities in its pipeline.

One of the biggest opportunities for EnWave is situated in the cannabis space. As one of the first cannabis companies to recognize the potential for REV technology in its operations, Tilray established a partnership with EnWave in 2017 to begin using REV machines process its significant cannabis production.

In May 2018, Tilray ordered a second 60kW REV machine to serve the Portuguese market, and early 2019, EnWave announced the signing of a royalty bearing license with The Green Organic Dutchman Holdings Ltd. (TGOD), another well-known Canadian cannabis producer. However, EnWave’s REV technology has so many advantages for cannabis processors, that many more of them will follow suit.

In addition, EnWave doesn’t pursue any business activities related to cannabis in the United States until the regulatory environment becomes more favorable. However, in December 2018, the U.S. government signed into law the 2018 Farm Bill, which included the Hemp Farming Act, a bill that removed hemp from the federal list of controlled substances and legalized industrial hemp production. As a consequence, EnWave is now evaluating commercial opportunities in the U.S. for legalized hemp production with its rapid dehydration technology.

EnWave Corp hemp production

Hemp is distinct from cannabis in that it only has a miniscule concentration of tetrahydrocannabinol (THC), and thus no narcotic capability. Hemp does however contain cannabidiol (CBD), a substance often produced from cannabis that has certain medicinal benefits.

Also in the U.S., further developments are expected this year in regards to the U.S. Army field ration development project. EnWave and the United States Army Natick Soldier Research, Development and Engineering Center (“NSRDEC”) are conducting a collaborative R&D project for the development of nutrient rich field rations for soldiers. The U.S. Army purchased the 10kW REV machine in 2018 to facilitate an accelerated path to improved close combat assault ration deployment. This opportunity for EnWave is enormous, as potentially hundreds of thousands of men and women in active duty could be served REV-dried rations.

In the pharmaceutical field, EnWave has completed fabrication and installation of the first scaled-up Good Manufacturing Practices (“GMP”) freezeREV for Merck as a part of a multi-year project to develop EnWave’s REV dehydration technology for the pharmaceutical industry. The first scaled-up machine was designed to provide Merck with the ability to continuously dehydrate liquid vaccination in vials, and has the potential to displace the need for lyophilisation.

The GMP freezeREV machine passed factory acceptance testing at EnWave’s facility in late 2018, and recently passed site acceptance testing at Merck’s facility. The GMP freezeREV machine is now installed and Merck plans to use the freezeREV machine to pursue GMP certification for new products; if successful Merck will potentially pursue clinical trials using the EnWave technology.

In July of 2018, EnWave also signed a Collaboration and License Option Agreement with GEA Lyophil GmbH of Germany. The two companies will evaluate a potential partnership to manufacture and deploy continuous cGMP REV equipment into the global pharmaceutical sector. No additional news has been announced since, but the negotiations seem to be going in the right direction.

Finally, a few weeks ago, Bonduelle launched its InFlavor dehydrofrozen vegetable product line to its food service customers and confirmed plans to launch its retail product in late 2019. Bonduelle’s InFlavor makes use of EnWave’s REV technology to provide a premium frozen vegetable offering to consumers.

In exchange for exclusive North American rights to use EnWave’s technology to produce dehydrofrozen vegetables, Bonduelle must purchase a 400kW REV machine before September 30, 2019. As consideration for the extension, Bonduelle agreed to pay a milestone payment to EnWave and agreed to buy-out the operating lease on the 120kW quantaREV machine currently operating at Bonduelle’s plant in Sainte-Martine, Quebec.

First Quarter Financials and Balance Sheet

EnWave generates revenue from two business segments: EnWave Canada and NutraDried. EnWave Canada sells REV machinery to royalty partners, rents REV units to prospective royalty partners, and earns royalties from customers that sell REV dried products. Note that royalties are payable to EnWave as a percentage of the value of products sold or based on the number of units produced by its royalty partners. NutraDried, on the other hand, sells Moon Cheese snacks into retail and wholesale distribution channels.

Three Months Ended
December 31
Amounts in $000’s
Net Sales
Direct Costs
Net Income (Loss)
Earnings (Loss) Per Share
Most important income statement data for the quarters ended December 31, 2018 and December 31, 2017. Source: Company Filing

EnWave Canada reported revenues of $1,478,000 for the three months ended December 31, 2018 compared to $2,121,000 for the three months ended December 31, 2017, a decrease of $643,000. The decrease in revenues was due to a lower number of machine sales. Royalties, on the other hand, reached $251,000 during the three months ended December 31, 2018 compared to $203,000 for the three months ended December 31, 2017 an increase of $48,000 or 23%.

All in all, EnWave Canada reported a loss of $1,161,000 for the three months ended December 31, 2018 compared to a loss of $398,000 for the three months ended December 31, 2017, an increase of $763,000.

NutraDried reported revenues of $6,328,000 for the three months ended December 31, 2018, compared to $2,398,000 for the three months ended December 31, 2017, an increase of $3,930,000 or 164%. NutraDried reported income of $1,146,000 for the three months ended December 31, 2018, compared to $68,000 for the three months ended December 31, 2017, an impressive increase of $1,078,000. As mentioned above, this strong performance was mainly due to NutraDried securing additional sales at Costco, Whole Foods, and Publix.

Furthermore, the Company achieved a gross profit of $3,037,000 for Q1 2019 compared to $1,426,000 for Q1 2018, an increase of $1,611,000 or 113%. Gross margin as a percentage of revenue was 39% for Q1 2019 compared to 31% for Q1 2018.

Amounts in $000’s
December 31, 2018
December 31, 2017
Cash and Cash Equivalents
Restricted Cash
Trade Receivable
Due from Customers on Contract
Total Current Assets
Property and Equipment
Intangible Assets
Total Assets
Accounts Payable
Total Current Liabilities
Long Term Debt
Total Liabilities
Total Stockholder Equity
Selected balance sheet data for the periods ended December 31, 2018 and December 31, 2017. Source: Company Filing

On December 31, 2018, the Company had working capital of $13.30 million, compared to $12.01 million on September 30, 2018. On December 31, 2018 the cash and cash equivalents balance was $9.28 million compared to $9.10 million on September 30, 2018, an increase of $178,000. The change in cash and cash equivalents is primarily due to deposits received from customers on machine purchases as well as cash proceeds from the exercise of employee stock options. The Company had net cash outflows from operating activities of $113,000 for Q1 2019.

Inventory on December 31, 2018 includes completed machines and machine components of EnWave Canada of $1.76 million, which is an increase of $47,000 compared to September 30, 2018. The inventory of EnWave Canada relates to 10kW machines and related components. NutraDried’s food product and packaging supplies inventory was $1.54 million, which is an increase of $383,000 compared to $1.16 million on September 30, 2018 due to the increased production.


While 2018 was a breakthrough year in many ways for EnWave, it is clear that the pace of growth will continue to accelerate into 2019. We expect a strong surge in NutraDried sales to at least $25 million, a boost in royalties, and some significant machine purchase orders.

We also expect to see several agreements and orders in the cannabis space in 2019, along with continued positive developments at the US Army Natick R&D Center. Smallcaps Recommendation: BUY.

For important disclosures, please read our disclaimer.Latest Company Report (pdf)


  • Extremely worrisome that the Core business ( machine sales and royalties /) has negatieve growth y/y and such a large löss in the first quarter. I do not understand on what basis the share price target calculation is done with such bad results . Very disappointing q1 results!

    • John Peters (editor)

      Hi Jan,

      I agree that we expected machine sales to be higher. However, how high did you expect royalties to be? They grew with almost 25% compared with Q1 last year.

      In addition, you don’t have to look at one part of a company to judge if it doing well or not. You have to look at the entire company. Again, how high did you expect total revenues to be? They grew with 72% compared with Q1 last year.

      Finally, how disappointed can you be with a stock price that has gone up 34% since the start of the year?



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