Record revenue 106% higher than the same period in the prior year, with five consecutive quarters of gross margin improvement leading to first quarter of positive operating cashflow and Adjusted EBITDA(1).
HIGHLIGHTS FOR THE THREE MONTHS ENDED
- All-time high revenue of
$4.05 million , a 106% increase from the comparative period in 2022 and a 47% increase from the three months endedMarch 31, 2023 . - Record gross profit of
$1.4 million (34% of revenue), a 101% increase from$0.7 million for the comparative period in 2022 (33% of revenue). - Net loss from operations of
$0.6 million ($0.003 per share) in the Quarter compared to a net loss of$0.7 million ($0.006 per share) in the comparative period in 2022. - Adjusted EBITDA(1) for the Quarter of
$0.11 million compared to$0.05 million for the comparative period in 2022. - Cash provided by operating activities in the Quarter of
$0.08 million , a$0.8 million increase from the$0.55 million cash outflow recorded in the comparative period in 2022.
"During the first quarter ending
On
(1) | Adjusted EBITDA is a non-IFRS financial measure, see heading 'Specified Financial Measures' and 'Adjusted EBITDA' for further guidance. |
Selected Financial Information
Three Months Ended | Three Months Ended | Change | Change | |||
$ | $ | $ | % | |||
Revenue from retail sales | 4,048,641 | 1,966,340 | 2,082,301 | 106 % | ||
Revenue from wholesale accessory sales | 47,239 | 27,659 | 19,580 | 71 % | ||
Other revenue | 66,461 | 105,214 | (38,753) | 100 % | ||
Total revenue | 4,162,341 | 2,099,213 | 2,063,128 | 98 % | ||
Total gross profit | 1,411,776 | 701,271 | 710,505 | 101 % | ||
Gross profit margin from product sales | 34 % | 33 % | 0.5 % | 2 % | ||
Operating expenses | 1,022,591 | 259,944 | 762,647 | 293 % | ||
General and administrative expenses | 156,243 | 947,977 | (791,734) | (84 %) | ||
Loss from operations | (555,645) | (689,877) | 134,232 | 19 % | ||
Loss per share (basic) | (0.003) | (0.006) | 0.006 | 54 % | ||
Loss per share (diluted) | (0.003) | (0.006) | 0.006 | 54 % |
Consolidated Financial Statements and MD&A
The results discussed herein are a summary and are qualified in their entirety by reference to the Company's condensed interim consolidated financial statements and accompanying notes for three months ended
SPECIFIED FINANCIAL MEASURES
Certain specified financial measures in this earnings release, including Adjusted EBITDA, are non-IFRS measures and may not be comparable to similar measures reported by other companies. This non-IFRS financial measure should not be considered in isolation or as an alternative for measures of performance prepared in accordance with IFRS.
Adjusted EBITDA
Adjusted EBITDA is a non-IFRS financial measure that the Company uses to evaluate its operating performance. Adjusted EBITDA provides information to investors, analysts, and others to aid in understanding and evaluating the Company's operating results in a similar manner to Management. Adjusted EBITDA is defined as loss and comprehensive loss before finance costs; gains and losses on fair value adjustments; depreciation; impairments, lease remeasurements and other costs; and certain one-time transaction costs and restructuring costs, as determined by Management.
The following table reconciles Adjusted EBITDA to net loss and comprehensive loss for the periods noted:
Three Months Ended | Three Months Ended | ||
Adjusted EBITDA | |||
Net loss and comprehensive loss | (555,645) | (689,877) | |
Adjustments: | |||
Finance costs | 215,941 | 153,871 | |
Amortization and depreciation | 449,993 | 410,893 | |
Transaction costs | - | 75,371 | |
Gain on debt settlements | |||
Adjusted EBITDA | 110,290 | (49,742) |
About Trees
Trees is a cannabis company at the intersection of community, content, and commerce. Publicly traded on the
Non-IFRS Financial Measures
Throughout this MD&A, references are made to non-IFRS financial measures, including system-wide sales, same store sales, earnings before interest, taxes, and depreciation, and amortization ("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.
System-wide retail sales represents the sum of the revenue reported to Trees by (i) brand licensed retail cannabis stores, which are subject to a brand license agreement providing Trees with a royalty interest, and (ii) Company-owned retail cannabis stores. Management believes this measure is useful to the investment community in evaluating brand scale and market penetration and is used by management of Trees to assess the financial and operational performance of the Company and the strength of the Company's market position relative to its competitors.
Cautionary Note Regarding Forward-Looking Statements
This press release contains statements that constitute "forward-looking information" ("forward-looking information") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking information and are based on expectations, estimates and projections as at the date of this news release. Any statement that discusses predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking information.
Forward-looking statements in this document include, among others, statements relating to the Trees' expectations regarding the closing of the FOUR20 Transaction and receipt of shareholder, Cboe Canada, and regulatory approvals in connection therewith, expectations regarding the Company's ability to unlock and capture emerging consumer segments across its platforms, expectations regarding the Company's ability to engage its customers and new consumer segments and need states, the expectation that the Company will be successful in its growth strategy, and other statements that are not historical facts. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors and risks include, among others: (a) the Company may require additional financing from time to time in order to continue its operations which may not be available when needed or on acceptable terms and conditions acceptable; (b) compliance with extensive government regulation; (c) domestic and foreign laws and regulations could adversely affect the Company's business and results of operations; (d) the stock markets have experienced volatility that often has been unrelated to the performance of companies and these fluctuations may adversely affect the price of the Company's securities, regardless of its operating peers; (e) adverse changes in the public perception of cannabis; (f) the impact of COVID-19; and (g) general business, economic, competitive, political and social uncertainties. Accordingly, readers should not place undue reliance on the forward-looking information contained in this press release.
The forward-looking information contained in this news release represents the expectations of the Company as of the date of this news release and, accordingly, is subject to change after such date. Readers should not place undue importance on forward-looking information and should not rely upon this information as of any other date. The Company undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change.
The Cboe Canada has neither approved nor disapproved the contents of this press release and accepts no responsibility for the adequacy or accuracy of this release.
SOURCE
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