– Q4 Revenue up 9% YoY to a Record $25.5 Million
– 9th Consecutive Quarter of Positive Cash Flow from Operations
TAMPA, Fla., April 29, 2024 (GLOBE NEWSWIRE) -- Cansortium Inc. (CSE: TIUM.U) (OTCQB: CNTMF) (“Cansortium” or the “Company”), a vertically-integrated, multi-state cannabis company operating under the FLUENT™ brand, today announced financial and operating results for the fourth quarter and full year ended December 31, 2023. Unless otherwise indicated, all financial results are presented in U.S. dollars.
“We delivered record revenue and positive cash flow generation during the fourth quarter as we continued to execute on our growth objectives,” said CEO Robert Beasley. “We are making the critical investments needed to lay the foundation for growth and support our future plans and remain excited about the opportunities ahead.”
“In Florida, we continue to ramp our new dispensaries while driving cultivation improvements, leading to production of more high quality, high THC products. These operating improvements drove higher retail prices and higher average basket size during the quarter.”
“Looking ahead, we will continue to drive improvements across our footprint in Florida and Pennsylvania, while capitalizing on our first mover advantage in Texas as we plan to open our brick-and-mortar delivery center in Houston by early 2025.”
Q4 2023 Financial Highlights (vs. Q4 2022)
- Revenue increased 9% to $25.5 million compared to $23.4 million.
- Florida revenue increased 11% to $21.6 million compared to $19.4 million.
- Adjusted gross profit¹ was $12.6 million or 49.4% of revenue, compared to $0.7 million or 3.1% of revenue.
- Adjusted EBITDA was $6.9 million compared to $7.9 million, with the decrease primarily driven by higher SG&A spend due to additional stores.
- Cash flow from operations for the three months ended December 31, 2023 was $1.4 million compared to $3.6 million in the prior year.
- At December 31, 2023 the Company had approximately $10.5 million of cash and cash equivalents and $61.2 million of total debt, with approximately 300 million shares outstanding.
Full Year 2023 Financial Highlights (vs. Full Year 2022)
- Revenue increased 11% to $97.3 million compared to $87.7 million.
- Florida revenue increased 11% to $81.2 million compared to $73.0 million.
- Adjusted gross profit¹ was $49.5 million or 50.9% of revenue, compared to $44.0 million or 50.1% of revenue.
- Adjusted EBITDA was $27.2 million compared to $25.1 million, with the increase primarily driven by higher revenue on higher customer transactions, slightly offset by higher SG&A due to new dispensary locations.
- Cash flow from operations for the full year ended December 31, 2023 was $18.5 million compared to $19.1 million in the prior year.
Restatement of 2023 Earnings
The Audit Committee of the Board of Directors of the Company, in consultation with the Company's management, concluded that the Company's previously issued consolidated financial statements for the quarterly periods ended March 31, 2023, June 30, 2023 and September 30, 2023 contained an error related to the accounting for the following items:
- Biological assets: Process errors related to beginning of period balances resulted in a $6.7 million mis-classification of expense between COGS and Realized FV of Inventory. There is no impact to Net Income from this mis-classification, but it does impact Adjusted EBITDA. The affected periods are the first three quarters of 2023.
- Depreciation: A misclassification led to $2.4 million of Depreciation being booked to SG&A instead of COGS. There is no impact to Net Income or Adjusted EBITDA. The affected periods are the second and third quarters of 2023.
- ERTC Claim: Due to uncertainties surrounding the ERTC program, the Company has removed income from the $3.4 million sale of its ERTC to a third party. This adjustment impacts Net Income for the third quarter of 2023 but does not impact Adjusted EBITDA.
Recent Operational Highlights
- In Florida, Cansortium opened four dispensaries during 2023.
- The Company has opened 2 new locations in Florida thus far in 2024 and currently operates 35 locations in the state.
Conference Call
The Company will host a conference call and live audio webcast today at 4:30 p.m. Eastern time to discuss its financial and operational results, followed by a question-and-answer period. Interested parties may submit questions to the Company prior to the call by emailing investors@cansortiuminc.com.
Date: Monday, April 29, 2024
Time: 4:30 p.m. Eastern time
Toll-free dial-in number: (800) 319-4610
International dial-in number: (604) 638-5340
Conference ID: 10023399
Link: Cansortium Conference Call
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization.
The conference call will also be available for replay via the News & Events section of the Company’s investor relations website at https://investors.getFLUENT.com/.
About Cansortium Inc.
Cansortium is a vertically-integrated cannabis company with licenses and operations in Florida, Pennsylvania and Texas. The Company operates under the Fluent™ brand and is dedicated to being one of the highest quality cannabis companies for the communities it serves. This is driven by Cansortium’s unrelenting commitment to operational excellence in cultivation, production, distribution and retail. The Company is headquartered in Tampa, Florida.
Cansortium Inc.’s Common Shares trade on the CSE under the symbol “TIUM.U” and on the OTCQB Venture Market under the symbol “CNTMF”. For more information about the Company, please visit www.getFLUENT.com.
Forward-Looking Information
Certain information in this news release may constitute forward-looking information within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. In some cases, but not necessarily in all cases, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "targets", "expects" or "does not expect", "is expected", "an opportunity exists", "is positioned", "estimates", "intends", "assumes", "anticipates" or "does not anticipate" or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", "will" or "will be taken", "occur" or "be achieved". In addition, any statements that refer to expectations, projections, or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent the Company's expectations, estimates, and projections regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of the Company's control.
Forward-looking information is necessarily based on many opinions, assumptions, and estimates that, while considered reasonable by the Company as of the date of this news release, are subject to known and unknown risks, uncertainties, assumptions, and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to the factors described in the public documents of the Company available at www.sedar.com. These factors are not intended to represent a complete list of the factors that could affect the Company; however, these factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct. The forward-looking statements contained in this news release are made as of the date of this news release, and the Company expressly disclaims any obligation to update or alter statements containing any forward-looking information, or the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by law. For further information: www.getFLUENT.com.
Company Contact
Robert Beasley, CEO
(850) 972-8077
investors.getFLUENT.com
Investor Relations Contact
Trailblaze
investors@cansortiuminc.com
| Cansortium Inc. | ||||||||
| Consolidated Statements of Financial Position | ||||||||
| As of December 31, 2023 and 2022 | ||||||||
| (Amounts expressed in thousands of United States Dollars unless otherwise stated) | ||||||||
| December 31, | ||||||||
| 2023 | 2022 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash | $ | 10,521 | $ | 8,359 | ||||
| Trade receivable | 215 | 28 | ||||||
| Inventory, net | 9,244 | 8,973 | ||||||
| Biological assets | 331 | 996 | ||||||
| Prepaid expenses and other current assets | 1,882 | 883 | ||||||
| Total current assets | 22,193 | 19,239 | ||||||
| Property and equipment, net | 27,642 | 31,743 | ||||||
| Intangible assets, net | 93,593 | 94,291 | ||||||
| Right-of-use assets, net | 31,943 | 30,464 | ||||||
| Goodwill | 1,525 | 1,526 | ||||||
| Other assets | 907 | 768 | ||||||
| Total assets | $ | 177,803 | $ | 178,031 | ||||
| Liabilities | ||||||||
| Current liabilities | ||||||||
| Trade payable | $ | 5,525 | $ | 6,931 | ||||
| Accrued liabilities | 9,779 | 5,534 | ||||||
| Income taxes payable | 22,009 | 13,952 | ||||||
| Derivative liabilities | 9,109 | 8,676 | ||||||
| Current portion of notes payable, net | 213 | 741 | ||||||
| Current portion of lease liabilities | 2,872 | 2,123 | ||||||
| Total current liabilities | 49,507 | 37,957 | ||||||
| Notes payable, net | 61,189 | 56,969 | ||||||
| Lease liabilities | 37,242 | 33,922 | ||||||
| Deferred tax liability | 17,398 | 20,290 | ||||||
| Other long-term liabilities | 3,882 | 1,333 | ||||||
| Total liabilities | 169,218 | 150,471 | ||||||
| Shareholders' equity | ||||||||
| Share capital | 183,690 | 180,954 | ||||||
| Share-based compensation reserve | 6,739 | 6,395 | ||||||
| Equity conversion feature | 6,677 | 6,677 | ||||||
| Warrants | 29,634 | 28,939 | ||||||
| Accumulated deficit | (217,821 | ) | (195,071 | ) | ||||
| Foreign currency translation reserve | (334 | ) | (334 | ) | ||||
| Total shareholders' equity | 8,585 | 27,560 | ||||||
| Total liabilities and shareholders' equity | $ | 177,803 | $ | 178,031 | ||||
| Cansortium Inc. | ||||||||
| Statement of Operations | ||||||||
| For the twelve months ending December 31, 2023 and 2022 | ||||||||
| (Amounts expressed in thousands of United States Dollars unless otherwise stated) | ||||||||
| For the Years Ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| Revenue, net of discounts | $ | 97,290 | $ | 87,692 | ||||
| Cost of goods sold | 47,814 | 43,731 | ||||||
| Gross profit before fair value adjustments | 49,476 | 43,961 | ||||||
| Fair value adjustments on inventory sold | 12,659 | 2,622 | ||||||
| Unrealized loss on changes in fair value of biological assets | (14,602 | ) | (9,620 | ) | ||||
| Gross profit | 47,533 | 36,963 | ||||||
| Expenses | ||||||||
| General and administrative | 10,022 | 8,288 | ||||||
| Share-based compensation | 638 | 545 | ||||||
| Sales and marketing | 20,193 | 17,510 | ||||||
| Depreciation and amortization | 7,414 | 6,765 | ||||||
| Total expenses | 38,267 | 33,108 | ||||||
| Income from operations | 9,266 | 3,855 | ||||||
| Other expense (income) | ||||||||
| Finance costs, net | 17,941 | 16,087 | ||||||
| Loss on change in fair value of derivative liability | 433 | 4,716 | ||||||
| Loss on debt settlement | - | 1,136 | ||||||
| Loss (gain) on disposal of assets | (26 | ) | 672 | |||||
| Loss on lease modifications | 67 | - | ||||||
| Loss from termination of a contract | 7 | 8,011 | ||||||
| Other expense | - | 3 | ||||||
| Total other expense | 18,422 | 30,625 | ||||||
| Loss before income taxes | (9,156 | ) | (26,770 | ) | ||||
| Income tax expense | 13,594 | 10,376 | ||||||
| Net loss from continuing operations | (22,750 | ) | (37,146 | ) | ||||
| Net loss from discontinued operations | - | 277 | ||||||
| Net loss | $ | (22,750 | ) | $ | (37,423 | ) | ||
| Other comprehensive gain that may be reclassified to profit or loss in subsequent years | ||||||||
| Exchange differences on translation of foreign operations and reporting currency | - | 88 | ||||||
| Comprehensive loss | $ | (22,750 | ) | $ | (37,335 | ) | ||
| Net loss per share | ||||||||
| Basic and diluted - continuing operations | $ | (0.08 | ) | $ | (0.15 | ) | ||
| Weighted average number of shares | ||||||||
| Basic number of shares | 292,622,129 | 252,698,567 | ||||||
| Diluted number of shares | 349,037,476 | 308,498,834 | ||||||
| Cansortium Inc. | ||||||||||||
| Statement of Operations | ||||||||||||
| For the three months ending December 31, 2023 and 2022 | ||||||||||||
| (Amounts expressed in thousands of United States Dollars unless otherwise stated) | ||||||||||||
| Three months ended | ||||||||||||
| December 31, 2023 | December 31, 2022 | Variance | ||||||||||
| Revenue, net of discounts | $ | 25,544 | $ | 23,464 | $ | 2,080 | ||||||
| Cost of goods sold | 12,932 | 22,738 | (9,806 | ) | ||||||||
| Gross profit before fair value adjustments(1) | 12,612 | 726 | 11,886 | |||||||||
| Gross margin before fair value adjustments(1) | 49.4 | % | 3.1 | % | 46.3 | % | ||||||
| Realized fair value of increments on inventory sold | 3,615 | 27,645 | (24,030 | ) | ||||||||
| Unrealized change in fair value of biological assets | (2,883 | ) | (22,844 | ) | 19,961 | |||||||
| Gross profit | 13,344 | 5,527 | 7,817 | |||||||||
| Gross profit margin | 52.2 | % | 23.6 | % | 28.7 | % | ||||||
| Expenses: | ||||||||||||
| General and administrative | 2,436 | 941 | 1,495 | |||||||||
| Share-based compensation | (6 | ) | 391 | (397 | ) | |||||||
| Sales and marketing | 5,265 | 4,677 | 588 | |||||||||
| Depreciation and amortization | 1,634 | 1,751 | (117 | ) | ||||||||
| Total expenses | 9,329 | 7,760 | 1,569 | |||||||||
| Income (loss) from operations | 4,015 | (2,233 | ) | 6,248 | ||||||||
| Other expense (income): | ||||||||||||
| Finance costs, net | 4,806 | 4,165 | 641 | |||||||||
| Change in fair market value of derivative | 171 | (306 | ) | 477 | ||||||||
| Loss (gain) on termination of a contract | 1 | (584 | ) | 585 | ||||||||
| Loss on debt settlement | 116 | - | 116 | |||||||||
| (Gain) loss on disposal of assets | (96 | ) | 695 | (791 | ) | |||||||
| Other expense | - | 1 | (1 | ) | ||||||||
| Total other expense | 4,997 | 3,971 | 1,027 | |||||||||
| Loss before taxes | (983 | ) | (6,204 | ) | 5,221 | |||||||
| Income taxes | 3,727 | 3,209 | 518 | |||||||||
| Loss from continuing operations | (4,710 | ) | (9,413 | ) | 4,703 | |||||||
| Loss from discontinued operations | - | 277 | (19 | ) | ||||||||
| Net loss | $ | (4,710 | ) | $ | (9,689 | ) | $ | 4,979 | ||||
| Cansortium Inc. | ||||||||
| Consolidated Statements of Cash Flow | ||||||||
| For the years ended December 31, 2023 and 2022 | ||||||||
| (Amounts expressed in thousands of United States Dollars unless otherwise stated) | ||||||||
| For the twelve months ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| Operating activities | ||||||||
| Net loss from continuing operations | $ | (22,750 | ) | $ | (37,146 | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
| Unrealized loss (gain) on changes in fair value of biological assets | 14,602 | 9,620 | ||||||
| Realized gain on changes in fair value of biological assets | (12,659 | ) | (2,622 | ) | ||||
| Share-based compensation | 619 | 545 | ||||||
| Depreciation and amortization | 15,078 | 13,428 | ||||||
| Accretion and interest of convertible debentures | 536 | 362 | ||||||
| Accretion and interest of term loan | 12,873 | 12,232 | ||||||
| Interest income on notes receivable | - | (71 | ) | |||||
| Interest on insurance financing | 48 | - | ||||||
| Loss on disposal of assets | 255 | 672 | ||||||
| Loss on debt settlement | - | 1,136 | ||||||
| Loss on termination of contract | - | 8,011 | ||||||
| Change in fair market value of derivative | 433 | 4,716 | ||||||
| Interest on lease liabilities | 4,473 | 3,612 | ||||||
| Deferred tax expense | (2,892 | ) | (1,273 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Trade receivable | (187 | ) | (2 | ) | ||||
| Inventory | 15,596 | 11,927 | ||||||
| Biological assets | (17,145 | ) | (16,355 | ) | ||||
| Prepaid expenses and other current assets | (999 | ) | 404 | |||||
| Right of Use Assets/Liabilities | (3,698 | ) | 197 | |||||
| Other assets | 661 | (137 | ) | |||||
| Trade payable | (1,404 | ) | (1,208 | ) | ||||
| Accrued liabilities | 4,409 | (811 | ) | |||||
| Other long-term liabilities | 2,549 | - | ||||||
| Income taxes payable | 8,057 | 11,832 | ||||||
| Net cash provided by operating activities | 18,455 | 19,069 | ||||||
| Investing activities | ||||||||
| Purchases of property and equipment | (6,019 | ) | (6,799 | ) | ||||
| Purchase of intangible assets | (319 | ) | - | |||||
| Payment of notes receivable | - | 119 | ||||||
| Advances for notes receivable | - | (94 | ) | |||||
| Net cash used in investing activities | (6,338 | ) | (6,774 | ) | ||||
| Financing activities | ||||||||
| Net proceeds from issuance of shares and warrants | 2,992 | - | ||||||
| Proceeds from issuance of convertible debenture and warrants | - | 4,660 | ||||||
| Net proceeds from insurance financing | - | - | ||||||
| Payment of lease obligations | (2,381 | ) | (5,771 | ) | ||||
| Net proceeds from equipment loan | - | 748 | ||||||
| Exercise of options | - | 135 | ||||||
| Issuance of shares for note payable extension | - | 162 | ||||||
| Principal repayments of notes payable | (10,566 | ) | (12,982 | ) | ||||
| Net cash used in financing activities | (9,955 | ) | (13,048 | ) | ||||
| Effect of foreign exchange on cash and cash equivalents | - | 88 | ||||||
| Net increase (decrease) in cash | 2,162 | (665 | ) | |||||
| Cash, beginning of year | 8,359 | 9,024 | ||||||
| Cash, end of year | $ | 10,521 | $ | 8,359 | ||||
| Cansortium Inc. | ||||||||||||
| Adjusted EBITDA Calculation | ||||||||||||
| (Amounts expressed in thousands of United States Dollars unless otherwise stated) | ||||||||||||
| Year ended | ||||||||||||
| December | December | |||||||||||
| 31, 2023 | 31, 2022 | Variance | ||||||||||
| Net loss | $ | (22,750 | ) | $ | (37,423 | ) | $ | 14,673 | ||||
| Interest expense | 17,941 | 16,087 | 1,854 | |||||||||
| Income taxes | 13,594 | 10,376 | 3,218 | |||||||||
| Depreciation and amortization | 15,078 | 13,666 | 1,412 | |||||||||
| EBITDA | $ | 23,863 | $ | 2,706 | $ | 21,157 | ||||||
| Year ended | ||||||||||||
| December | December | |||||||||||
| 31, 2023 | 31, 2022 | Variance | ||||||||||
| EBITDA | $ | 23,863 | $ | 2,706 | $ | 21,157 | ||||||
| Change in fair value of biological assets | 1,943 | 6,998 | (5,055 | ) | ||||||||
| Change in fair market value of derivative | 433 | 4,716 | (4,283 | ) | ||||||||
| Gain on debt settlement(1) | - | 1,136 | (1,136 | ) | ||||||||
| Loss on termination of contract(1) | 7 | 8,011 | (8,004 | ) | ||||||||
| Share-based compensation | 638 | 545 | 93 | |||||||||
| Discontinued operations(1) | - | - | - | |||||||||
| Loss (gain) on disposal of assets(1) | (26 | ) | 673 | (699 | ) | |||||||
| Income from ERTC tax credit(1) | - | - | - | |||||||||
| Loss on sale of ERTC tax credit(1) | - | - | - | |||||||||
| Other non-recurring expense (income)(2) | 327 | 278 | 48 | |||||||||
| Adjusted EBITDA | $ | 27,183 | $ | 25,063 | $ | 2,121 | ||||||
_____________________________
¹ Adjusted gross profit is a non-IFRS financial measure that does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. The Company calculates adjusted gross profit from gross profit plus (minus) the changes in fair value of biological assets, as presented in the consolidated statement of operations.
