EDMONTON, Alberta, Nov. 13, 2020 (GLOBE NEWSWIRE) -- Alcanna Inc. (the “Company” or “Alcanna”) (TSX: CLIQ) today reported its unaudited financial results for the three and nine months ended September 30, 2020.
Third Quarter Financial Results and Business Update
Alcanna’s business in Q3 2020 continued with the strong performance reported for the first half of 2020 with significant increases on all fronts from the prior year.
Highlights for the three months ended September 30, 2020:
- Total sales from continuing operations were 10.9% higher, rising to $211.5 million from $190.7 million in 2019.
- Same-store liquor sales for Q3 2020 were up 14.7% while enhancing gross margins in the liquor operating segment to 23.1%, compared to 22.1% in the prior year.
- Total gross margin dollars rose 17.2% to $50.5 million from $43.1 million in the prior year.
- Operating profit before amortization, remeasurements and provisions for Q3 2020 rose 86.7% to $21.3 million from $11.4 million on an adjusted basis in the prior year, and 139.9% from $8.9 million on an unadjusted basis in the prior year.
- Profit before income taxes rose to $7.3 million, compared to an adjusted loss of $2.6 million in the prior year.
Alcanna’s liquor stores in all regions continue to register sales significantly higher compared to the prior year. The Company believes this is primarily a result of (i) the change in pricing strategy that was implemented in 2019 and continued into 2020, which was designed to regain lost market share and grow the customer base, and (ii) shifting customer consumption habits due to more people dining and entertaining at home and continuing to stay away from on-premise liquor establishments (restaurants, bars, lounges, sports venues, etc.). The Company further believes these new consumer behaviour patterns have become entrenched in people’s lifestyle choices and expects consumer behaviour will continue in this manner for the foreseeable future.
Cannabis retail sales have generally been in line with Management’s pre-COVID-19 expectations throughout the third quarter.
Total cannabis store sales for the third quarter of 2020 rose 23.6% to $16.0 million from $13.0 million in the prior year, and total gross margin dollars grew 44.6% to $5.4 million from $3.7 million.
The Company’s condensed interim consolidated financial statements and management’s discussion and analysis (“MD&A”) for the three and nine months ended September 30, 2020 will be available in the “Investor Centre – Financial Reports” section of the Company’s website at www.alcanna.com and will be filed on SEDAR and available at www.sedar.com.
FINANCIAL RESULTS
| (In thousands of Canadian dollars except per share amounts, unaudited) | Three months ended September 30, | Nine months ended September 30, | ||||||
| 2020 $ | 2019 $ | 2020 $ | 2019 $ | |||||
| (Restated)(i) | (Restated)(i) | |||||||
| Sales | 211,450 | 190,740 | 589,190 | 489,838 | ||||
| Operating profit before amortization, remeasurements and provisions (ii) | 21,334 | 8,894 | 48,353 | 14,417 | ||||
| Adjusted operating profit before amortization, remeasurements and provisions (ii) | 21,334 | 11,428 | 48,353 | 16,951 | ||||
| Net earnings (loss) from continuing operations | 5,650 | (3,893 | ) | 10,291 | (19,358 | ) | ||
| Basic earnings (loss) per share from continuing operations | 0.14 | (0.12 | ) | 0.26 | (0.51 | ) | ||
| Diluted earnings (loss) per share from continuing operations | 0.14 | (0.12 | ) | 0.26 | (0.51 | ) | ||
| i) | The financial results for the three and nine months ended September 30, 2019 have been restated to exclude the results of the Company’s Alaska operations, which have been classified as discontinued operations as a result of their sale on June 1, 2020. |
| ii) | Operating profit before amortization, remeasurements and provisions and adjusted operating profit before amortization, remeasurements and provisions are non-IFRS measures that do not have a standardized meaning prescribed by IFRS. For more information and a reconciliation of non-IFRS measures to the closest IFRS measure see the ‘Non-IFRS Financial Measures’ section of the MD&A. |
CONFERENCE CALL
Alcanna Inc. will host an analyst and investor conference call on November 16, 2020 to discuss the unaudited financial results for the three and nine months ended September 30, 2020. The conference call will take place at 10:00 a.m. M.T.
To participate in the call, please dial (416) 406-0743 or toll-free (800) 898-3989 and use the required participant access code: 7494265#. An archived recording of the conference call will be available approximately four hours after the event, by dialling: (905) 694-9451 or Toll-Free Access: (800) 408-3053. The required passcode is: 3883793#.
ABOUT ALCANNA INC.
Alcanna is one of the largest private sector retailers of alcohol in North America and the largest in Canada by number of stores – operating 211 locations in Alberta and British Columbia. The Company also operates 34 cannabis retail stores, with 33 locations in Alberta and one location in Ontario.
Alcanna's common shares and convertible subordinated debentures trade on the Toronto Stock Exchange under the symbols "CLIQ" and "CLIQ.DB", respectively.
Additional information about Alcanna Inc. is available at www.sedar.com and the Company’s website at www.alcanna.com.
FORWARD-LOOKING STATEMENTS
This news release contains forward-looking statements or information (collectively "forward-looking statements") within the meaning of applicable securities legislation. Forward-looking statements are typically identified by words such as “continue”, “anticipate”, "will", "should", “plan”, “intention”, and similar words suggesting future events or future performance. All statements and information other than statements of historical fact contained in this news release are forward-looking statements. In particular, this news release contains forward-looking statements pertaining to implementing the Company’s strategy and objectives related to the growth of its liquor and cannabis brands, and the impact that the COVID-19 pandemic may have on sales and customer shopping habits in the future.
With respect to forward-looking statements contained in this news release, the Company has made assumptions regarding, among other things: the ability of management to execute the Company’s strategic plan and growth strategy, including its capital allocation strategy and specifically its ability to grow its cannabis retail store locations and enhance profitability of its liquor business, and assumptions about the COVID-19 pandemic and the impact it may have on the economies in Alberta and British Columbia.
Although the Company believes that the expectations reflected in the forward-looking statements, and the assumptions on which such forward-looking statements are made, are reasonable, especially given the unprecedented uncertainty of the full extent and impact of COVID-19, there can be no assurance that such expectations and assumptions will prove to be correct. Readers should not place undue reliance on forward-looking statements included in this news release. Forward-looking statements are not guaranteeing of future performance and involve a number of risks and uncertainties that may cause actual performance and financial results to differ materially from any estimates, forecasts or projections. These risks and uncertainties include, among other things, the duration and severity of the COVID-19 pandemic on the business, operations and financial condition of the Company; the risk that Alcanna will be unable to execute its strategic plan and growth strategy, including the capital allocation and retail cannabis strategy, as planned without significant adverse impacts from various factors beyond its control; dependence on suppliers; potential delays or changes in plans with respect to capital expenditures and the availability of capital on acceptable terms; risks inherent in the liquor retail and cannabis industries; competition for, among other things, customers, supply, capital and skilled personnel; changes in labour costs and markets; incorrect assessments of the value of acquisitions; general economic and political conditions in Canada (including Alberta), and globally; industry conditions, including changes in government regulations; fluctuations in foreign exchange or interest rates; unanticipated operating events; failure to obtain regulatory and third‐party consents and approvals when required; changes in tax and other laws that affect us and our security holders; the potential failure of counterparties to honour their contractual obligations; stock market volatility; and the other factors described in the Company’s public filings (including the Annual Information Form) available at www.sedar.com. Readers are cautioned that this list of risk factors should not be construed as exhaustive.
The forward-looking statements contained in this news release are made as of the date hereof. Except as expressly required by applicable securities legislation, Alcanna does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.
For Further Information
David Gordey
Executive Vice President and Chief Financial Officer
Alcanna Inc.
(780) 497-3262