Audited Fiscal Year Financial Highlights (
- Revenue of
$28.9 million – down 12% year-over-year; state ofNevada cannabis sales were down 16% over the comparative period1 - Net Income from Continuing Operations of
$1.4 million (increase of$0.4 million from unaudited results reported in theJune 2, 2023 news release) - Earnings Per Share from Continuing Operations of
$0.01 - Gross Margin of 46.4%; Adjusted Gross Profit Margin2 of 49.0%
- Adjusted EBITDA2 of
$7.4 million – a 26% EBITDA Margin - Cash Flow from Operations of
$6.0 million – a fourth consecutive year of positive quarterly Free Cash Flow2 - Total Liabilities reduced by
$4.1 million ($0.3 million further reduction from unaudited results reported in theJune 2, 2023 news release) - Senior Note reduced by
$6.1 million , with remaining balance fully retired as ofJune 1, 2023
Changes to the Unaudited Year End Financial Results previously released on
The Company previously disclosed its unaudited financial results for the year ended
There are no material changes from the unaudited financial results disclosed in the Prior News Release other than the adjustments to Net Income from Continuing Operations and Net Income in the current period due to the tax provision changes previously disclosed in the Prior News Release and the news release dated
"We are pleased to announce the release of our audited year-end financial statements. We appreciate the patience of our shareholders during this delay while our tax provision changes for our previous fiscal year were corrected and restated," stated CEO and President,
_______________________________ |
1 State of Nevada Cannabis Tax Revenue: https://tax.nv.gov/Publications/Cannabis_Statistics_and_Reports/ |
2 "Free Cash Flow", "Adjusted Gross Profit", "Adjusted Gross Profit Margin" and "Adjusted EBITDA" and are non-GAAP measures. See "Non-GAAP Measures" below for a discussion of such non-GAAP measures and a reconciliation to the closest comparable GAAP measures. |
Non-GAAP Measures:
C21 reports its financial results in accordance with GAAP and uses a number of financial measures when assessing its results and measuring overall performance. Some of these financial measures and ratios are not calculated in accordance with GAAP. The Company refers to certain Non-GAAP financial measures such as "Free Cash Flow", "Adjusted Gross Profit", "Adjusted Gross Profit Margin" and "Adjusted EBITDA". These measures do not have any standardized meanings prescribed by GAAP and may not be comparable to similar measures presented by other issuers. The Company considers these measures to be an important indicator of the financial strength and performance of its business. The Company believes the adjusted results presented provide relevant and useful information for investors because they clarify the Company's actual operating performance, make it easier to compare the Company's results with those of other companies and allow investors to review performance in the same way as the management of the Company. Since these measures are not calculated in accordance with GAAP, they should not be considered in isolation of, or as a substitute for, the Company's reported results as indicators of the Company's performance, and they may not be comparable to similarly named measures from other companies. The tables below provide reconciliations of Non-GAAP measures to the most directly comparable GAAP measures.
"Free Cash Flow" is defined as Cash Provided by Operating Activities from Continuing Operations in a period minus capital expenses of property and equipment. Management believes that Free Cash Flow, which measures our ability to generate additional cash from our continuing business operations, is an important financial measure for use in evaluating the Company's financial performance. Free Cash Flow should be considered in addition to, rather than as a substitute for, consolidated net income as a measure of our performance and net cash provided by operating activities as a measure of our liquidity.
Free Cash Flow:
Fiscal Year Ended | |||
Cash Provided by Operating Activities from | 5,971,267
| 8,438,609 | |
Purchase of Property and Equipment | (442,285) | (2,562,304) | |
Free Cash Flow | 5,528,982 | 5,876,305 |
"Adjusted Gross Profit" and "Adjusted Gross Profit Margin" are defined as Gross Profit and Gross Profit Margin adjusted for certain material non-cash items including the one-time relief of fair value of inventory on acquisition, non-cash write downs of inventory, non-recurring expenses related to the strategic maintenance of cultivation facilities and other one-time adjustments to gross profit that management does not believe are reflective of ongoing operations.
Adjusted Gross Profit:
Fiscal Year Ended | |||
Gross Profit | 13,401,146 | 18,809,985 | |
Gross Profit Margin % | 46.4 % | 57.0 % | |
Production curtailment, non-cash inventory | 759,000 | - | |
Adjusted Gross Profit | 14,160,146 | 18,809,985 | |
Adjusted Gross Profit Margin% | 49.0 % | 57.0 % |
"Adjusted EBITDA" is defined as EBITDA (earnings before depreciation and amortization, depreciation and interest in cost of sales, income taxes, and interest) less accretion, loss from discontinued operations, one-time transaction costs and all other non-cash items. The Company has presented "Adjusted EBITDA" because its management believes it is a useful measure for investors when assessing and considering the Company's continuing operations and prospects for the future. Furthermore, "Adjusted EBITDA" is a commonly used measurement in the financial community when evaluating the market value of similar companies.
Adjusted EBITDA:
FY2023 | Q4 | Q3 | Q2 | Q1 | |||||||||||||
Net Income (Loss) | $ | 293,211 | $ | (2,119,159) | $ | 248,507 | $ | 1,857,043 | $ | 306,820 | |||||||
Interest expenses, net | 456,691 | 60,530 | 98,657 | 133,455 | 164,049 | ||||||||||||
Provision for Income Taxes | 2,809,768 | 672,164 | 1,154,189 | 485,152 | 498,263 | ||||||||||||
Depreciation and Amortization | 1,365,018 | 340,664 | 341,782 | 341,286 | 341,286 | ||||||||||||
Depreciation and Interest in COGS | 812,367 | 203,091 | 203,093 | 203,091 | 203,092 | ||||||||||||
EBITDA | $ | 5,737,055 | $ | (842,710) | $ | 2,046,228 | $ | 3,020,027 | $ | 1,513,510 | |||||||
Change in fair value of derivative liabilities | (742,483) | 14,830 | (127,813) | (629,500) | - | ||||||||||||
Share based compensation | 209,441 | 20,803 | 31,788 | 54,064 | 102,786 | ||||||||||||
Loss from discontinued operations | 1,088,329 | 713,712 | (11,154) | (344,554) | 730,325 | ||||||||||||
One-time special project costs | 345,790 | - | 206,459 | 89,331 | 50,000 | ||||||||||||
Production curtailment, non-cash | 759,000 | 1,012,000 | (253,000) | - | - | ||||||||||||
Other gain/loss | 49,722 | 18,723 | 13,173 | 21,972 | (4,146) | ||||||||||||
Adjusted EBITDA | $ | 7,446,854 | $ | 937,358 | $ | 1,905,681 | $ | 2,211,340 | $ | 2,392,475 |
FYE Balance Sheet Summary:
(US$) | ||
Assets | ||
Cash | 1,891,772 | 3,067,983 |
Inventory | 4,173,573 | 4,054,473 |
Other current | 2,677,027 | 3,162,018 |
Current Assets | 8,742,372 | 10,284,474 |
Fixed Assets/ | 49,569,032 | 51,559,976 |
Total Assets | 58,311,404 | 61,844,450 |
Liabilities | ||
Accounts payable | 2,921,426 | 2,508,869 |
Promissory note – current portion | 2,026,667 | 6,080,000 |
Income taxes payable | 7,736,858 | 4,870,170 |
Other notes, current lease, deferred tax etc. | 2,289,316 | 2,515,077 |
Current Liabilities | 14,974,267 | 15,974,116 |
Lease liabilities | 8,554,702 | 8,953,425 |
Promissory note | - | 2,026,667 |
Derivative liability and other | 467,359 | 1,161,640 |
Total Liabilities | 23,996,328 | 28,115,848 |
Shareholders' Equity | 34,315,076 | 33,728,602 |
Total Liabilities and Shareholders' Equity | 58,311,404 | 61,844,450 |
FY Financial Summary:
FY 2023 | FY 2022 | ||
(US$) | |||
Revenue | 28,888,410 | 32,982,976 | |
Cost of Sales | 15,487,264 | 14,172,991 | |
Gross Profit | 13,401,146 46.4% | 18,809,985 57.0% | |
Gross Margin% | |||
Total Expenses | 9,445,908 | 9,055,175 | |
Income from Operations | 3,955,238 | 9,754,810 | |
Adjusted EBITDA2 | 7,446,854 25.8% | 12,443,162 37.7% | |
EBITDA Margin% |
Changes to the Unaudited Year End Financial Results:
Audited Balance Sheet (as at year ended
- Current Assets – decrease of
$0.18 million - Total Assets – decrease of
$0.16 million - Current Liabilities – decrease of
$0.25 million - Total Liabilities – decrease of
$0.25 million - Equity – increase of
$0.09 million - Equity + Liability – decrease of
$0.16 million
Audited Income Statement (year ended
- Revenue, Gross Profit, Income from Operations - No change
- Net Income from Continuing Operations – increase of
$0.4 million - Net Income – increase of
$0.2 million
Comparative Year Audited Balance Sheet (as at
- Current Assets – no change
- Total Assets – decrease of
$0.01 million - Current Liabilities – increase of
$0.11 million - Total Liabilities – increase of
$0.11 million - Equity – decrease of
$0.12 million - Equity + Liability – decrease of
$0.01 million
Comparative Year Audited Income Statement (ended
- Revenue, Gross Profit, Income from Operations - No change
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SOURCE
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