- Quarterly revenue increased 51% year-over-year to
$43.3 million Fifth Consecutive Quarter of Positive Adjusted EBITDA of$3.1 million - Hifyre™ Digital Retail and Analytics Platform generated
$3.7 million in revenue for the quarter, an increase of 293% year-over-year
Consolidated Financial Highlights
Thirteen weeks ended | Twenty-six weeks ended | |||
(In thousands of Canadian dollars, | ||||
except per share amounts) | ||||
Total Revenue | 43,306 | 28,593 | 87,390 | 51,715 |
Gross Profit | 16,173 | 9,950 | 32,691 | 17,485 |
Gross Profit Percentage | 37.3% | 34.8% | 37.4% | 33.8% |
Adjusted EBITDA | 3,146 | 1,140 | 5,453 | (270) |
Net Income (Loss) | 19,450 | (29,081) | (42,148) | (41,819) |
Basic income (loss) per share | ( | ( | (0.26) | |
Financial Highlights for the Second Quarter period ended
- Total revenue of
$43.3 million compared to revenue of$28.6 million for the second quarter of 2020, an increase of 51.4% - Total gross profit
$16.2 million , or 37.3% of revenue, compared to total gross profit of$10.0 million , or 34.8% of revenues in the second quarter of 2020 - Fifth consecutive quarter of positive Adjusted EBITDA of
$3.1 million compared to positive Adjusted EBITDA of$1.1 million for the second quarter of 2020, representing an increase of 176% year over year - Total debt at
July 31, 2021 was$3.8 million - Cash and short-term investment balances of
$29.3 million
"As our financial results demonstrate, our Hifyre business segment is growing at a rate significantly greater than past quarters and is now driving new opporutnities for total revenue growth and stronger EBITDA. Our growth is focused on building upon these opportunities, white-labelling our e-commerce platform to drive additional high-margin revenue streams and capture new customers through our announced acquisitions of Wikileaf and PotGuide. We continue to successfully execute an e-commerce model unlike any of our competitors as we drive our leadership position in the global cannabis retail industry," concluded Fencott.
Segment Revenue
Thirteen Weeks Ended | Twenty-Six Weeks Ended | |||
(In thousands of Canadian dollars unaudited) | ||||
Revenue | ||||
Retail | 31,842 | 23,358 | 65,461 | 41,807 |
Wholesale | 7,797 | 4,301 | 15,425 | 8,168 |
Digital Platform | 3,667 | 934 | 6,504 | 1,740 |
Total Revenue | 43,306 | 28,593 | 87,390 | 51,715 |
Segment Adjusted EBITDA
Thirteen Weeks Ended | Twenty-Six Weeks Ended | |||
(In thousands of Canadian dollars unaudited) | ||||
Adjusted EBITDA | ||||
Retail | 361 | 2,490 | 2,472 | 2,259 |
Wholesale | 1,323 | 560 | 2,339 | 1,095 |
Digital Platform | 2,206 | (124) | 3,493 | (478) |
Corporate | (744) | (1,786) | (2,851) | (3,146) |
Total Adjusted EBITDA | 3,146 | 1,140 | 5,453 | (270) |
Retail
- Retail revenue increased by 36.3% year-over-year to
$31.8 million - Gross profit margin of 34.1% for the thirteen weeks ended
July 31, 2021 - Adjusted EBITDA declined to
$0.4 million from$2.5 million in the prior year - Adjusted EBITDA margin of 1% for the thirteen weeks ended
July 31, 2021 - Same-store sales decreased 14% for forty-eight (48) stores in operation during the comparable period in Q2 2021 due to a surge in newly licensed retail cannabis stores in
Ontario , from 665 atMay 1, 2021 to 981 atJuly 31, 2021 - Expanded the Company's retail network with the opening of 7 new stores in
Canada , bringing total stores to 91 - In early
June 2021 , theOntario cannabis market opened up from lockdown due to COVID-19, allowing for foot traffic into allFire & Flower retail stores
Wholesale
- Wholesale revenue increased by 81.3% year-over-year to
$7.8 million - Gross profit margin of 21.1% for the thirteen weeks ended
July 31, 2021 - Adjusted EBITDA increased by 136.3% year-over-year to
$1.3 million - Adjusted EBITDA margin of 17.0% for the thirteen weeks ended
July 31, 2021
Digital Platform
- Hifyre revenue increased 292.6% year-over-year to
$3.7 million - Adjusted EBITDA increased to
$2.2 milion from$(0.1) million in the prior year - Adjusted EBITDA margin of 60.2% for the thirteen weeks ended
July 31, 2021
Corporate
- Appointed
Matthew Hollingshead , President of Hifyre, to Chief Innovation Officer - Further strengthened strategic partnership with Alimentation Couche-Tard Inc. as they exercised warrants increasing their total ownership stake in
Fire & Flower to 22.4% - Entered partnership with Humble & Fume to offer an expanded catalogue of their portfolio of products to
Fire & Flower customers acrossNorth America both online and in-store.
Subsequent Operational Highlights post
- Launched expanded digital strategy with the proposed acquisition of assets of
Wikileaf Techologies Inc. - Entered the
California market through strategic licensing agreement with American Acres (now calledFire & Flower U.S. Holdings ) and opening of aPalm Springs branded Fire & Flower store - Strengthened asset-light, expanded digital strategy with the proposed acquisition of PotGuide
- Spark Perks members grew from 45,000 in Q2 2020 to over 310,000 across
Fire & Flower's entire retail network in Q2 2021 - Continued with its Nasdaq application and has targeted the fourth quarter 2021 for its
U.S. listing
Non-IFRS Measures – Adjusted EBITDA "Adjusted EBITDA" is a Non-IFRS metric used by management that does not have any standardized meaning prescribed by IFRS and may not be fully comparable to similar measures by presented by other companies. Management defines the Adjusted EBITDA as the Income (loss) for the period, as reported, before accretion and interest, deferred tax, and adjusted for share-based compensation expense, depreciation and amortization, gains and losses related to derivative liability revaluations and debt extinguishments, professional fees associated with financing and acquisition and business development activities, impairment charges, and restructuring charges.
Adjusted EBITDA has been calculated differently than in periods prior to Q1 2021, where the Company previously included lease liability cash payments as disclosed in accordance with IFRS 16 "Leases" accounting standards. The updated measure reflects the Company's new approach to analyzing the consolidated operating performance across the business lines. The Company believes the updated definition is a more useful measure to assess performance as it provides meaningful operating results and facilitates period-to-period operating comparisons. As other companies may calculate this non-IFRS measure differently than the Company, this metric may not be comparable to similarly titled measures reported by other companies. We caution readers that Adjusted EBITDA should not be substituted for determining net income (loss) as an indicator of operating results, or as a substitute for cash flows from operating activities. A reconciliation of net income (loss) to Adjusted EBITDA is presented below.
Adjusted EBITDA for the fiscal second quarter ended
Adjusted EBITDA
Thirteen weeks ended | Twenty-six Weeks ended | |||
(in thousands of dollars) | ||||
Net and comprehensive income (loss) – as reported | 19,450 | (29,081) | (42,148) | (41,819) |
(Gain) Loss on revaluation of derivative liability | (25,321) | 18,330 | 28,789 | 14,714 |
Finance costs, net | 1,096 | 8,191 | 4,407 | 14,857 |
Income taxes, net | 1,368 | - | 2,055 | - |
Share-based compensation | 1,319 | 711 | 1,851 | 1,409 |
Acquisition and business development costs | 237 | 2 | 648 | 186 |
Professional fees related to financing activities | 22 | - | 400 | 92 |
Depreciation & amortization | 4,182 | 2,987 | 8,511 | 6,012 |
Restructuring charges | 793 | - | 940 | 4,279 |
Adjusted EBITDA | 3,146 | 1,140 | 5,453 | (270) |
Lease liability payments during the thirteen and twenty-six weeks ended
Webcast & Conference Call
Webcast URL
https://event.on24.com/wcc/r/3408994/D40A1ADEC0000E461FF1498F28A74F2B
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About Fire & Flower
Through the strategic investment of Alimentation Couche-Tard Inc. (owner of
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This news release contains certain forward-looking information within the meaning of applicable Canadian securities laws ("forward-looking statements"). All statements other than statements of present or historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "achieve", "could", "believe", "plan", "intend", "objective", "continuous", "ongoing", "estimate", "outlook", "expect", "project" and similar words, including negatives thereof, suggesting future outcomes or that certain events or conditions "may" or "will" occur. These statements are only predictions.
Forward-looking statements are based on the opinions and estimates of management of
No assurance can be given that the expectations reflected in forward-looking statements will prove to be correct. Although the forward-looking statements contained in this news release are based upon what management of the Company believes, or believed at the time, to be reasonable assumptions, the Company cannot assure shareholders that actual results will be consistent with such forward-looking statements, as there may be other factors that cause results not to be as anticipated, estimated or intended. Readers should not place undue reliance on the forward-looking statements and information contained in this news release. Additional information regarding risks and uncertainties relating to the Company's business are contained under the headings "Risk Factors" in the Company's Annual Information Form dated
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