The Company will host a conference call to discuss the results at
Third Quarter 2021 – Financial Highlights:
- Revenue increased by 99% to
$48.1 million in the three months endedJuly 31, 2021 , compared to$24.1 million in the same quarter last year. The third quarter of 2021 financial results incorporate the acquisition ofMETA Growth Corp. ("Meta") onNovember 18, 2020 ,Smoke Cartel, Inc. ("Smoke Cartel") onMarch 24, 2021 ,Fab Nutrition, LLC . ("FABCBD") onMay 10, 2021 , andDHC Supply LLC . ("DHC") onJuly 6, 2021 . - As of today,
Cabana Club membership has grown by 45% to approximately 221,127 (June 28, 2021 – 151,240) due in large part to the success of our 'One Stop Shop' accessories promotion. - Gross profit increased by 75% to
$16.7 million in the three months endedJuly 31, 2021 , compared to$9.5 million in the same quarter last year. - Gross profit margin in the three months ended
July 31, 2021 , was 35% compared to 40% in the same quarter last year. - Adjusted EBITDA(1) for the three months ended
July 31, 2021 , was$1.5 million compared to$3.4 million for the same quarter last year. The decrease in adjusted EBITDA was primarily due to expenses related to the up listing of the Company's stock to Nasdaq including directors' and officers' liability insurance premiums, Nasdaq listing fees, one-time professional fees, and additional human resources to support the integration of newly acquired companies. As a result of the up listing to Nasdaq, the Company became a non-venture issuer resulting in higher compliance requirements. - Geographically in the three months ended
July 31, 2021 ,$38.4 million of revenue was earned inCanada ,$9.6 million inthe United States and an immaterial amount internationally. - Revenue from
the United States increased to$9.6 million , compared to$5.7 million for the second quarter of 2021, representing a 69% increase sequentially. - Segment-wise in the three months ended
July 31, 2021 ,$46.3 million of revenue was generated by Retail,$1.8 million by Wholesale, and an immaterial amount by Corporate. - Cash on hand as of
July 31, 2021 , totaled$26.6 million compared to$7.5 million as ofOctober 31, 2020 .
1 Adjusted EBITDA is a non-IFRS financial measure. |
"Since our inception over a decade ago there has never been a more opportunistic time for our company's growth. Over the past year, we have been making strategic moves to successfully advance our rising portfolio of companies. We believe we can continue to build upon this momentum and capture a sizeable share of the cannabis market globally. I'm proud of our team's efforts this quarter which resulted in revenue increasing once again by 99 percent over last year and 18 percent sequentially, despite market disruptions due to pandemic related lockdowns and a very aggressive pricing strategy adopted by some value players. In Ontario, the largest cannabis market in
Third Quarter 2021 – Operational Highlights:
- The Company completed the acquisition of FABCBD on
May 10, 2021 , andDaily High Club ("DHC") onJuly 6, 2021 , enhancing the Company's e-commerce business. - The Company announced the filing of Form 40-F with the
U.S. Securities and Exchange Commission fulfilling a significant milestone for the NASDAQ listing. - The Company completed a 15:1 share consolidation on
May 14, 2021 , and began trading on the Nasdaq onJune 2, 2021 , under the symbol "HITI". - The Company was added to three prominent ETFs: Cannabis ETF ("THCX"), AdvisorShares Pure Cannabis ETF ("YOLO"), and Horizons Marijuana Life Sciences Index ETF ("HMMJ").
- The Company closed an oversubscribed bought deal equity financing on
May 26, 2021 , for gross proceeds of$23.2 million . - The Company announced the elimination of its senior secured debt.
- The Company completed the sale of KushBar retail cannabis assets to Halo for
$5.7 million . - The Company announced its plan to acquire leading online retailer
DS Distribution Inc. , ("DankStop") to continue rapid expansion into the Unites States. - The Company announced plans to increase its presence in
Saskatchewan through acquisition of a Regina retail store portfolio. - The Company opened seven cannabis retail locations under the Canna Cabana banner: two in
Ontario , four inAlberta , and one inSaskatchewan .
Subsequent Events:
- The Company completed the acquisition of all the common shares of 102105699
Saskatchewan Ltd. , (operating as 102 Saskatchewan) for$2.7 million . - The Company opened four new Canna Cabana stores, three in
Ontario , and one inAlberta . - The Company completed the acquisition of 100% of DankStop for
US$3.85 million . - The Company was added to the prominent ETF: ETFMG Alternative Harvest ETF ("MJ").
- The Company announced the elimination of all its META convertible debentures.
- The Company entered into two white label partnerships with Heritage Cannabis Holdings and
Loosh Inc. - The Company finalized and revealed the store design for its new cannabis retail value outlets, "
Cannabis Chop Club ".
Selected financial information for the three and nine months ended
(Expressed in thousands of Canadian Dollars)
Three months ended | Nine months ended | |||||
2021 | 2020 | Change | 2021 | 2020 | Change | |
$ | $ | $ | $ | |||
Revenue | 48,069 | 24,103 | 99% | 127,256 | 58,389 | 118% |
Gross Profit | 16,679 | 9,539 | 75% | 46,445 | 22,087 | 110% |
Gross Profit Margin | 35% | 40% | (5)% | 36% | 38% | (2)% |
Total Operating Expenses | (23,946) | (7,915) | 203% | (60,268) | (22,424) | 169% |
Adjusted EBITDA | 1,540 | 3,397 | (55)% | 10,862 | 4,348 | 150% |
Net (loss) income from Operations | (7,267) | 1,624 | (547)% | (13,823) | (337) | 4001% |
Net (loss) income | (1,750) | 3,826 | (146)% | (30,861) | (5,031) | 513% |
(Loss) earnings per share (Basic and Diluted) | (0.03) | 0.25 | (112)% | (0.79) | (0.33) | 139% |
The following is a reconciliation of Adjusted EBITDA to Net Income/(Loss):
Three Months Ended | Nine Months Ended | |||
2021 | 2020 | 2021 | 2020 | |
Net (loss) income | (1,750) | 3,827 | (30,861) | (5,031) |
Income taxes (recovery) | 224 | 316 | 688 | 393 |
Accretion and interest | 1,095 | 2,456 | 6,635 | 6,719 |
Depreciation and amortization | 8,299 | 1,771 | 22,107 | 4,585 |
EBITDA (1) | 7,868 | 8,370 | (1,431) | 6,666 |
Foreign exchange | (28) | 4 | 66 | (17) |
Transaction and acquisition costs | 1,939 | 193 | 4,409 | 988 |
Debt restructuring gain | - | - | (1,145) | - |
Revaluation of derivative liability (2) | (5,919) | 67 | 8,553 | (247) |
(Gain) Loss on extinguishment of debenture | - | (3,576) | 516 | (3,390) |
Impairment loss | 57 | - | 57 | 247 |
Share-based compensation | 508 | 2 | 2,578 | 101 |
Revaluation of marketable securities | 112 | (1,663) | 256 | - |
Gain on disposal of property and equipment | (2,997) | - | (2,997) | - |
Adjusted EBITDA (1) | 1,540 | 3,397 | 10,862 | 4,348 |
(1) | Earnings before interest, taxes, depreciation, and amortization ("EBITDA") and Adjusted EBITDA. These measures do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. Non-IFRS measures provide investors with a supplemental measure of the Company's operating performance and therefore highlight trends in Company's core business that may not otherwise be apparent when relying solely on IFRS measures. Management uses non-IFRS measures in measuring the financial performance of the Company. |
(2) | The Company recorded a gain from the revaluation of derivative liability of |
Outlook
High Tide continues to have a leading position in the Canadian bricks and mortar cannabis market with 93 locations across the country. Given the number of locations currently being built out, most notably in
While competition has increased given material growth in store counts in
First, we entered into private label partnerships for our upcoming house-branded shatter and THC gummies. These will be our first white label products, which we expect will provide margin enhancing opportunities. We are also in negotiations with Canadian licensed producers to bring select products from the FABCBD catalogue into our store network and look forward to expanding into other categories in due course as market dynamics evolve.
Second, we announced the launch of our new retail value concept, "
E-Commerce remains a key focus for High Tide. The Company's recent acquisitions in this area are performing well, and we expect to gain more momentum on this front. We are currently in discussions with multiple parties across a variety of end markets, with a particular focus on e-commerce within the growing ancillary and hemp derived CBD markets. With a current annual run rate of revenues in the
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About
High Tide is a retail-focused cannabis company enhanced by the manufacturing and distribution of consumption accessories. The Company is the largest Canadian retailer of recreational cannabis as measured by revenue, with 93 current locations spanning
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Cautionary Note Regarding Forward-Looking Statements
Certain statements in this news release are forward-looking information or forward-looking statements, including, but not limited to (i) the Company's application to list on the NASDAQ; (ii) the Company's plans to adjust its business model and pursue expansion opportunities in
Such forward-looking statements are based on assumptions that may prove to be incorrect, including but not limited to the Company's ability to execute on its business plan and that the Company will have sufficient funds to execute on its strategic growth objectives in 2021, including the ability of the Company to pursue and finance the potential acquisitions and new store openings referenced in this release; the Company's ability to successfully list its shares on the Nasdaq; and that the Company will not be required to implement any measures to address unanticipated developments (including developments relating to COVID-19) affecting the Company's business, which could adversely affect the Company's proposed business plan. However, there can be no assurance that any one or more of the governments, industry, market, operational or financial targets as set out herein will be achieved. Inherent in the forward-looking statements are known and unknown risks, uncertainties and other factors that could cause actual results, performance or achievements, or industry results, to differ materially from any results, performance or achievements expressed or implied by such forward-looking statements.
The forward–looking statements contained herein are current as of the date of this news release. Except as required by law, High Tide does not have any obligation to advise any person if it becomes aware of any inaccuracy in or omission from any forward-looking statement, nor does it intend, or assume any obligation, to update or revise these forward-looking statements to reflect new events or circumstances. Any and all forward-looking statements included in this news release are expressly qualified by this cautionary statement, and except as otherwise indicated, are made as of the date of this news release.
Neither
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in
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