GOLD FLORA CORPORATION Grew Revenue 13% Sequentially to
Achieved Adjusted Gross Profit of
Conference Call to be Held
Q1 2024 Financial Highlights:
- Total revenue was
$32.2 million , representing a 13% sequential growth;
- Q1 2024 gross profit was $10.0 Million, representing a 31% gross margin;
- Q1 2024 adjusted gross profit1 of
$17.4 million , representing a 54% adjusted gross margin. Adjusted gross profit excludes operating expenses (including depreciation and amortization) related toU.S. tax code 280E adjustments, and non-recurring inventory adjustments;
- Net quarterly loss of
$13.7 million ;
- Adjusted EBITDA1 of
$(1.8) million for Q1 2024.
- Cash used in operating activities reduced to
$4.4 million from$6.4 million from the fourth quarter of 2023, a sequential improvement of 31.3%;
- Cash and cash equivalents totaled
$14.2 million as ofMarch 31, 2024 .
Q1 2024 Operating Highlights:
- With the prior cultivation expansion projects completed at the Company's facilities in
Desert Hot Springs andSan Jose , Gold Flora has commenced building its inventory and scaling its post-harvest production activities to ensure sufficient supply to meet the high market demand for its latest brand Gramlin, whose new genetic strains are grown in-house. As a result, inventory grew by$1.7 million in the quarter ahead of the late Q1 2024 launch of Gramlin. The Company incurred additional costs to expand cultivation which compressed the realized Q1 2024 gross margin. The Company believes it will realize efficiencies from the cultivation expansion over time. - Validated the Company's vertical infrastructure with the successful launch Gramlin, a disruptive brand targeted towards high-volume consumers. Gramlin initially launched with an assortment of premium flower products, with vape and pre-rolls expected to be introduced in the coming weeks. Since its introduction in
March 2024 , Gramlin has been incredibly successful at both the Company's first-party retail chain and in third-party retail through Stately Distribution acrossCalifornia . - Continued to focus on refining and optimizing cultivation methods and strains to further enhance both profitability and productivity across the Company's cultivation facility footprint. The active cultivation canopy is now 107,000 square feet, with increased volume and margin expected in the second half of 2024 as a full quarter contribution is realized at each facility.
- Subsequent to quarter-end, entered into agreements to lease an additional 53,000 square feet of cultivation space at two facilities located near the Company's
Desert Hot Springs campus, bringing the active cultivation footprint to 160,000 square feet and adding approximately 25,000 lbs of annual flower production. The turn-key facility will be delivered ready for operations and the lease will commence upon receipt of the necessary state licenses. - The Company expanded its production and manufacturing capabilities to capture additional margin across the value chain. This included initiating in-house live rosin production utilizing Gold Flora's own indoor grown cannabis as well as adding increased kitchen resources for the production of the Company's Mirayo and Cruisers gummies. Live rosin products are expected to be introduced to the market in the third quarter of 2024.
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1 Adjusted Gross Profit and Adjusted EBITDA are non-GAAP financial measures. See "Non-GAAP Financial Measures" at the end of this press release for a reconciliation and discussion of non-GAAP financial measures. |
Management Commentary
"Our Q1 2024 results reflect the work we have done to scale our operations to leverage the solid foundation we have built and realize the significant benefits of our vertical integration," said
Q1 2024 Financial Results
(in thousands) | Q1 2024 | Q4 2023 | % Change | ||
Total Revenue | $ 32,153 | $ 28,395 | 13 % | ||
Wholesale Revenue | $ 5,236 | $ 3,036 | 72 % | ||
Retail Revenue | $ 26,917 | $ 25,359 | 6 % | ||
Gross Profit | $ 10,029 | $ 13,174 | (24) % | ||
Gross Margin | 31 % | 46 % | |||
Adjusted Gross Profit (1) | $ 17,398 | $ 18,731 | (7) % | ||
Adjusted Gross Margin | 54 % | 66 % | |||
Net Loss | $ (13,704) | $ (42,173) | (68) % | ||
Adjusted EBITDA (2) | $ (1,801) | $ 105 | * |
* Information is not meaningful. |
(1) Adjusting for depreciation & amortization, operating expense related to |
(2) Adjusted EBITDA is defined as EBITDA adjusted to exclude extraordinary items, non-recurring items and, other non-cash items, including, but not limited to (i) stock-based compensation expense, (ii) change in fair value of the earn out liability, (iii) non-recurring legal and professional fees, human-resources, inventory and collections-related expenses, (iv) intangible and goodwill impairments and loss on disposal of assets, (v) transaction costs related to merger and acquisition activities, (vi) retail and cultivation pre-opening costs and, (vii) non-recurring inventory adjustments. Adjusted EBITDA is a non-GAAP financial measure. See "Non-GAAP Financial Measures" at the end of this press release for a reconciliation and discussion of non-GAAP financial measures. |
The Company's consolidated financial statements, as well as its accompanying management discussion and analysis of financial condition and results of operations ("MD&A") will be included in its Annual Report on Form 10-K filed on EDGAR (www.sec.gov) as well as SEDAR (www.sedar.com). Please refer to
Conference Call
The Company will host a conference call to discuss the results on
CONFERENCE CALL DETAILS
| |
DATE: | |
TIME: | |
WEBCAST: | |
DIAL-IN NUMBER: | 1 (416) 764-8609 or 1 (888) 390-0605 |
CONFERENCE ID: | 88900835 |
REPLAY:
| 1 (416) 764-8677 or 1 (888) 390-0541 Available until 12:00 Replay Code: 900835 # |
For more information on
About
Gold Flora Corporation is a female-led, vertically-integrated cannabis leader that owns and operates a robust portfolio of 10 cannabis brands, which are sold through its 16 retail dispensaries and, through its Stately Distribution business, to retailers throughout
Gold Flora Corporation operates an indoor cultivation canopy of approximately 107,000 square feet across three facilities in its
With hubs throughout the state, the Company distributes many prominent brands, including its own premium lines of Gold Flora, Gramlin, Cruisers, CURRENT, Roll Bleezy, Sword & Stoned, Aviation Cannabis, Jetfuel Cannabis, Caliva, Mirayo by Santana, and Monogram. Third party brands are increasingly contacting the Company in search of reliable input sources and established distribution.
References to information included on, or accessible through, websites and social media platforms do not constitute incorporation herein by reference of the information contained at or available through such websites or social media platforms, and the reader should not consider such information to be part of this press release.
For the latest news, activities, and media coverage, please visit www.goldflora.com.
Non-GAAP Financial Measures
This news release contains the non-GAAP financial measure "Adjusted EBITDA," and "Adjusted Gross Profit" which are not recognized under GAAP and do not have a standardized meaning prescribed by GAAP. As a result, these measures may not be comparable to similar measures presented by other companies. For a reconciliation of "Adjusted EBITDA" and "Adjusted Gross Profit" to the most directly comparable financial information presented in the Financial Statements in accordance with GAAP, see the section entitled "Reconciliation of Non-GAAP Measures" below.
Adjusted EBITDA
Our management believes Adjusted EBITDA is a useful measure for investors to assess the performance of the Company as it provides more meaningful operating results by excluding the effects of expenses that are not reflective of our underlying business performance and other one-time or non-recurring expenses. We define "Adjusted EBITDA" as EBITDA adjusted to exclude extraordinary items, non-recurring items and, other non-cash items, including, but not limited to (i) stock-based compensation expense, (ii) change in fair value of the earn out liability, (iii) non-recurring legal and professional fees, human-resources, inventory and collections-related expenses, (iv) intangible and goodwill impairments and loss on disposal of assets, (v) transaction costs related to merger and acquisition activities, (vi) retail and cultivation pre-opening costs, and (vii) non-recurring inventory adjustments.
Adjusted Gross Profit
Our management believes Adjusted Gross Profit is a useful measure for investors to assess the performance of the Company as it provides more meaningful operating results by excluding the effects of expenses that are not reflective of our underlying business performance. We define "Adjusted Gross Profit" as Gross Profit adjusted to exclude operating expenses (including depreciation and amortization) related to
Reconciliation of Non-GAAP Measures
Three Months Ended | |||||
(in thousands) |
|
|
| ||
Revenues | $ 32,153 | $ 28,395 | $ 15,652 | ||
Cost of Goods Sold | 22,124 | 15,221 | 11,606 | ||
Gross Profit | 10,029 | 13,174 | 4,046 | ||
31 % | 46 % | 26 % | |||
Adjustments to Gross profit | |||||
Depreciation and Amortization | $ 892 | $ 1,110 | $ 433 | ||
Operating Expenses related to 280E adjustments | 5,179 | 3,683 | 1,811 | ||
Non-Recurring Inventory Adjustments | 1,298 | 764 | 597 | ||
Adjusted Gross Profit | $ 17,398 | $ 18,731 | $ 6,887 | ||
Adjusted Gross Profit % | 54 % | 66 % | 44 % | ||
Three Months Ended | |||||
|
|
| |||
Net Income (Loss) | $ (13,704) | $ (42,173) | $ (9,341) | ||
Debt and Convertible Debt Interest Expense, Net | 772 | 892 | 1,599 | ||
Finance Lease Liability Interest Expense, Net | 3,379 | 2,016 | 2,574 | ||
Amortization of Debt Discount Interest Expense, Net | 177 | 356 | 532 | ||
Taxes | 987 | 1,817 | 765 | ||
Depreciation and Amortization | 4,050 | 2,967 | 2,117 | ||
EBITDA | $ (4,339) | $ (34,125) | $ (1,754) | ||
Addback for Adjusted EBITDA | |||||
Noncash Operating Lease Expense | $ (143) | $ (32) | $ 219 | ||
Impairment | — | 11,068 | — | ||
Implementation Software Costs | 110 | 150 | — | ||
Change in Bargain Purchase Price | — | 18,813 | — | ||
Share-Based Compensation | 193 | 173 | 56 | ||
Bad Debt Expense | — | 255 | (27) | ||
Transaction Fees and Legal Fees | 591 | 1,166 | 759 | ||
Transaction Related Expenses | — | 44 | — | ||
Retail and Cultivation Preopening Costs | 489 | 1,829 | — | ||
Non-Recurring inventory Adjustments | 1,298 | 764 | 597 | ||
Adjusted EBITDA | $ (1,801) | $ 105 | $ (150) | ||
Forward Looking Statements
This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation and the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to the expectations or forecasts of business, operations, financial performance, prospects, and other plans, intentions, estimates and beliefs, and may include statements regarding Gold Flora's expected financial condition and performance, the current and projected market, and growth opportunities for the company. Words such as "expects," "continue," "will," "anticipates," and "intends," or similar expressions, are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements in this press release include, but are not limited to, statements relating to enhanced profitability and productivity as a result of optimized cultivation, increased volume and/or margin during the second half of 2024, the timing of the release of live rosin products, and the timing and scale of any potential benefits realized during the remainder of 2024 from scaling our platform. These forward–looking statements are based on Gold Flora's current projections and expectations about future events and financial trends that it believes might affect its financial condition, results of operations, prospects, business strategy and financial needs, and on certain assumptions and analysis made by it in light of the experience and perception of historical trends, current conditions and expected future developments and other factors it believes are appropriate. Forward-looking information and statements involve and are subject to assumptions and known and unknown risks, uncertainties, and other factors, including those risk factors in Part I, Item 1A ("Risk Factors") in our most recent Form 10-K, which may cause actual events, results, performance, or achievements to be materially different from future events, results, performance, and achievements expressed or implied by forward looking information and statements herein. Although Gold Flora believes that any forward-looking information and statements herein are reasonable, in light of the use of assumptions and the significant risks and uncertainties inherent in such information and statements, there can be no assurance that any such forward-looking information and statements will prove to be accurate, and accordingly readers are advised to rely on their own evaluation of such risks and uncertainties and should not place undue reliance upon such forward-looking information and statements. Any forward-looking information and statements herein are made as of the date hereof and, except as required by applicable laws, Gold Flora does not assume any obligation to update or revise any forward-looking information or statements contained herein or to update the reasons that actual events or results could or do differ from those projected in any forward-looking information and statements herein, whether as a result of new information, future events or results, or otherwise.
SOURCE
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