CANSORTIUM INC. - Q2 Revenue up 9% Sequentially and YoY to
- Q2 Cash from Operations of
“We continued to drive revenue growth and cash flow generation during the second quarter through a combination of organic growth as well as new store openings in Florida,” said CEO
“In Pennsylvania, we generated another quarter of organic growth as our inventory optimization and expanded product assortment continues to resonate with patients. And in
Q2 2023 Financial Highlights (vs. Q2 2022)
- Revenue increased 9% to
$24.4 million compared to$22.4 million . Florida revenue increased 11% to$20.1 million compared to$18.2 million .- Adjusted gross profit1 increased 5% to
$15.8 million or 64.6% of revenue, compared to$15.0 million or 67.0% of revenue. - Adjusted EBITDA was
$8.6 million compared to$10.2 million , with the decrease primarily driven by increased SG&A related to new store openings that are still ramping. - Cash flow from operations for the three months ended
June 30, 2023 was$4.8 million compared to$5.8 million in the prior year. - At
June 30, 2023 the Company had approximately$8.8 million of cash and cash equivalents and$59.3 million of total debt, with approximately 298 million shares outstanding.
Recent Operational Highlights
- In
Florida ,Cansortium currently operates 33 stores and anticipates opening an additional 1-2 new stores by the end of 2023. - The Company appointed
John Mazarakis to the Board of Directors, who brings over 25 years of entrepreneurial, operational and managerial experience toCansortium . - The Company completed its headquarters relocation from
Miami toTampa, Florida , and will create more than 30 new jobs in administration, finance, human resources, marketing, sales, operations and other key areas. - In
Texas , the Company completed its first B2B sale and expects to open its brick-and-mortar delivery center inHouston by the end of the year.
1 Adjusted gross profit is a non-IFRS financial measure that does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. The Company calculates adjusted gross profit from gross profit plus (minus) the changes in fair value of biological assets, as presented in the consolidated statement of operations.
Conference Call
The Company will host a conference call and live audio webcast today at
Date:
Time:
Toll-free dial-in number: (800) 319-4610
International dial-in number: (604) 638-5340
Conference ID: 10022237
Link: Cansortium Conference Call
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Elevate IR at (720) 330-2829.
The conference call will also be available for replay via the News & Events section of the Company’s investor relations website at https://investors.getFLUENT.com/.
About
Forward-Looking Information
Certain information in this news release may constitute forward-looking information within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. In some cases, but not necessarily in all cases, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "targets", "expects" or "does not expect", "is expected", "an opportunity exists", "is positioned", "estimates", "intends", "assumes", "anticipates" or "does not anticipate" or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", "will" or "will be taken", "occur" or "be achieved". In addition, any statements that refer to expectations, projections, or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent the Company's expectations, estimates, and projections regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of the Company's control.
Forward-looking information is necessarily based on many opinions, assumptions, and estimates that, while considered reasonable by the Company as of the date of this news release, are subject to known and unknown risks, uncertainties, assumptions, and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to the factors described in the public documents of the Company available at www.sedar.com. These factors are not intended to represent a complete list of the factors that could affect the Company; however, these factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct. The forward-looking statements contained in this news release are made as of the date of this news release, and the Company expressly disclaims any obligation to update or alter statements containing any forward-looking information, or the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by law.
For further information: www.getFLUENT.com.
Company Contact
(850) 972-8077
investors.getFLUENT.com
Investor Relations Contact
Elevate IR
(720) 330-2829
investors@cansortiuminc.com
| CONSOLIDATED STATEMENTS OF FINANCIAL POSITION | ||||||||||
| As of | ||||||||||
| (USD '000) | ||||||||||
2023 | 2022 | |||||||||
| Assets | ||||||||||
| Current assets | ||||||||||
| Cash | $ | 8,797 | $ | 8,359 | ||||||
| Trade receivable | 27 | 28 | ||||||||
| Inventory, net | 7,023 | 8,973 | ||||||||
| Biological assets | 511 | 996 | ||||||||
| Prepaid expenses and other current assets | 872 | 883 | ||||||||
| Total current assets | 17,230 | 19,239 | ||||||||
| Property and equipment, net | 30,956 | 31,743 | ||||||||
| Intangible assets, net | 93,525 | 94,291 | ||||||||
| Right-of-use assets, net | 29,148 | 30,464 | ||||||||
| 1,525 | 1,526 | |||||||||
| Other assets | 808 | 768 | ||||||||
| Total assets | $ | 173,192 | $ | 178,031 | ||||||
| Liabilities | ||||||||||
| Current liabilities | ||||||||||
| Trade payable | 6,813 | 6,931 | ||||||||
| Accrued liabilities | 4,911 | 5,534 | ||||||||
| Income taxes payable | 20,674 | 13,952 | ||||||||
| Derivative liabilities | 8,512 | 8,676 | ||||||||
| Current portion of notes payable | 339 | 741 | ||||||||
| Current portion of lease obligations | 2,586 | 2,123 | ||||||||
| Total current liabilities | 43,835 | 37,957 | ||||||||
| Notes payable | 58,925 | 56,969 | ||||||||
| Lease obligations | 32,900 | 33,922 | ||||||||
| Deferred tax liability | 18,773 | 20,290 | ||||||||
| Other long-term liabilities | 542 | 1,333 | ||||||||
| Total liabilities | 154,975 | 150,471 | ||||||||
| Shareholders' equity | ||||||||||
| Share capital | 183,577 | 180,954 | ||||||||
| Share-based compensation reserve | 6,466 | 6,395 | ||||||||
| Equity conversion feature | 6,677 | 6,677 | ||||||||
| Warrants | 29,634 | 28,939 | ||||||||
| Accumulated deficit | (207,803 | ) | (195,071 | ) | ||||||
| Foreign currency translation reserve | (334 | ) | (334 | ) | ||||||
| Total shareholders' equity | 18,217 | 27,560 | ||||||||
| Total liabilities and shareholders' equity | $ | 173,192 | $ | 178,031 | ||||||
| STATEMENT OF OPERATIONS | ||||||||||||||||
| FOR THE THREE AND SIX MONTHS ENDED | ||||||||||||||||
| For the three months ended | For the six months ended | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Revenue, net of discounts | $ | 24,430 | $ | 22,416 | $ | 46,486 | $ | 42,128 | ||||||||
| Cost of goods sold | 8,644 | 7,405 | 16,609 | 15,571 | ||||||||||||
| Gross profit before fair value adjustments | 15,786 | 15,011 | 29,877 | 26,557 | ||||||||||||
| Fair value adjustments on inventory sold | 441 | (8,594 | ) | (1,079 | ) | (15,418 | ) | |||||||||
| Unrealized (loss) gain on changes in fair value of biological assets | (3,035 | ) | 9,467 | (8,092 | ) | 10,666 | ||||||||||
| Gross profit | 13,192 | 15,884 | 20,706 | 21,805 | ||||||||||||
| Expenses | ||||||||||||||||
| General and administrative | 2,571 | 2,319 | 4,883 | 5,160 | ||||||||||||
| Share-based compensation | 177 | - | 415 | 100 | ||||||||||||
| Sales and marketing | 5,576 | 4,190 | 9,575 | 8,277 | ||||||||||||
| Depreciation and amortization | 2,963 | 1,694 | 4,811 | 3,358 | ||||||||||||
| Total expenses | 11,287 | 8,203 | 19,684 | 16,895 | ||||||||||||
| Income from operations | 1,905 | 7,681 | 1,022 | 4,910 | ||||||||||||
| Other expense (income) | ||||||||||||||||
| Finance costs, net | 4,324 | 3,843 | 8,573 | 7,500 | ||||||||||||
| Loss (gain) on change in fair value of derivative liability | (442 | ) | 3,007 | (164 | ) | 4,709 | ||||||||||
| Loss on debt settlement | - | 1,136 | - | 1,136 | ||||||||||||
| Loss on disposal of assets | - | - | 70 | - | ||||||||||||
| Loss from termination of a contract | 82 | - | 3 | - | ||||||||||||
| Other expense (income) | - | (373 | ) | 66 | (373 | ) | ||||||||||
| Total other expense | 3,964 | 7,613 | 8,549 | 12,971 | ||||||||||||
| Income (loss) before income taxes | (2,059 | ) | 68 | (7,527 | ) | (8,061 | ) | |||||||||
| Income tax expense | 3,291 | 3,504 | 5,205 | 5,516 | ||||||||||||
| Net loss from continuing operations | (5,350 | ) | (3,436 | ) | (12,732 | ) | (13,577 | ) | ||||||||
| Net loss from discontinued operations | - | 8,574 | - | 8,576 | ||||||||||||
| Net loss | $ | (5,350 | ) | $ | (12,010 | ) | $ | (12,732 | ) | $ | (22,153 | ) | ||||
| Other comprehensive gain (loss) that may be reclassified to profit or loss in subsequent years | ||||||||||||||||
| Exchange differences on translation of foreign operations and reporting currency | - | 62 | - | 87 | ||||||||||||
| Comprehensive loss | $ | (5,350 | ) | $ | (11,948 | ) | $ | (12,732 | ) | $ | (22,066 | ) | ||||
| Net loss per share | ||||||||||||||||
| Basic and diluted - continuing operations | $ | (0.02 | ) | $ | (0.05 | ) | $ | (0.04 | ) | $ | (0.09 | ) | ||||
| Weighted average number of shares | ||||||||||||||||
| Basic number of shares | 296,938,910 | 352,230,174 | 286,804,241 | 252,698,567 | ||||||||||||
| Diluted number of shares | 352,230,174 | 307,984,934 | 339,972,379 | 308,498,834 | ||||||||||||
| STATEMENTS OF CASH FLOWS | ||||||
| (USD '000) | ||||||
| For the six months ended | ||||||
| 2023 | 2022 | |||||
| Operating activities | ||||||
| Net loss from continuing operations | $ | (12,732 | ) | $ | (22,153 | ) |
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||
| Unrealized gain (loss) on changes in fair value of biological assets | 8,092 | (10,666 | ) | |||
| Realized gain on changes in fair value of biological assets | 1,079 | 15,418 | ||||
| Share-based compensation | 415 | 100 | ||||
| Depreciation and amortization | 8,042 | 6,072 | ||||
| Accretion and interest of convertible debentures | 266 | - | ||||
| Accretion and interest of term loan | 6,262 | 6,219 | ||||
| Interest income on notes receivable | - | (71 | ) | |||
| Interest of equipment loan | 13 | - | ||||
| Loss on disposal of assets | 70 | - | ||||
| Loss on debt settlement | - | 1,136 | ||||
| Discontinued operations | - | 8,576 | ||||
| Change in fair market value of derivative | (164 | ) | 4,709 | |||
| Interest on lease liabilities | 2,037 | 1,310 | ||||
| Deferred tax expense | (1,517 | ) | (304 | ) | ||
| Changes in operating assets and liabilities: | ||||||
| Trade receivable | 1 | (33 | ) | |||
| Inventory | 1,770 | 1,044 | ||||
| Biological assets | (8,886 | ) | (9,290 | ) | ||
| Prepaid expenses and other current assets | 11 | 117 | ||||
| Right of Use Assets/Liabilities | 67 | - | ||||
| Other assets | (40 | ) | 5 | |||
| Trade payable | (135 | ) | 374 | |||
| Accrued liabilities | (623 | ) | 1,877 | |||
| Other long-term liabilities | (791 | ) | - | |||
| Income taxes payable | 6,722 | 5,627 | ||||
| Net cash provided by operating activities | 9,960 | 10,067 | ||||
| Investing activities | ||||||
| Purchases of property and equipment | (4,339 | ) | (4,214 | ) | ||
| Payment of notes receivable | - | 119 | ||||
| Advances for notes receivable | - | (94 | ) | |||
| Net cash used in investing activities | (4,339 | ) | (4,189 | ) | ||
| Financing activities | ||||||
| Net proceeds from issuance of shares and warrants | 2,993 | 4,656 | ||||
| Payment of lease obligations | (3,188 | ) | (2,521 | ) | ||
| Exercise of Options | - | 135 | ||||
| Principal repayments of notes payable | (4,988 | ) | (8,401 | ) | ||
| Net cash used in financing activities | (5,183 | ) | (6,131 | ) | ||
| Effect of foreign exchange on cash and cash equivalents | - | 87 | ||||
| Net increase (decrease) in cash | 438 | (166 | ) | |||
| Cash, beginning of period | 8,359 | 9,024 | ||||
| Cash, end of period | 8,797 | 8,858 | ||||
| Adjusted EBITDA Calculation | |||||||||
| (USD '000) | |||||||||
| Three months ended | |||||||||
| June 30, 2023 | June 30, 2022 | Variance | |||||||
| Net loss | $ | (5,350 | ) | $ | (12,010 | ) | $ | 6,660 | |
| Finance costs, net | 4,324 | 3,843 | 481 | ||||||
| Income taxes | 3,291 | 3,504 | (213 | ) | |||||
| Depreciation and amortization | 3,888 | 3,366 | 522 | ||||||
| EBITDA | $ | 6,153 | $ | (1,297 | ) | $ | 7,450 | ||
| Three months ended | |||||||||
| June 30, 2023 | June 30, 2022 | Variance | |||||||
| EBITDA | $ | 6,153 | $ | (1,297 | ) | $ | 7,450 | ||
| Change in fair value of biological assets | 2,594 | (873 | ) | 3,467 | |||||
| Change in fair market value of derivative | (442 | ) | 3,007 | (3,449 | ) | ||||
| Loss on debt settlement | - | 1,136 | (1,136 | ) | |||||
| Gain on termination of a contract | 82 | - | 82 | ||||||
| Share-based compensation | 177 | - | 177 | ||||||
| Discontinued operations | - | 8,574 | (8,574 | ) | |||||
| Other non-recurring expense/(income) | - | (373 | ) | 373 | |||||
| Adjusted EBITDA | $ | 8,563 | $ | 10,174 | $ | (1,611 | ) | ||
Source: 2023 GlobeNewswire, Inc., source
