Post by
MuttleyKnows on Jun 16, 2022 12:16am
2021 Financial Results
So I have reviewed the numbers and they look great. You guys can read the news release yourselves but I would like to highlight a few things on the financial results and then give my view on they way forward for the company.
1) Revenue - Flat revenue is a great result given the overall drop in sales across the industry
2) Margins - Simply amazing ... gross margin, EBITDA and after tax cashflow ... 20%+ after tax cashflow ... this company is money printing press
3) CEO Loan - Outstanding loan balance is now at USD 5.6 million so it will likely be paid off by year end which means CXXI will be debt free by the end of 2022
4) Taxes Payable - The company has been keeping up with their tax payments ... it looks like they are current on the amount they owe uncle sam ... this cannot be said for most competitors
5) Organic Growth - It looks like they have completed work on the initial build out and retrofit of the old rooms ... this will increase capacity from around 4K pounds of high quality flower to 8K pounds ... 2021 should reflect very much in organic growth sales as it looks like they have been re-building inventory which means wholesale revenue will grow in 2022 ... say about 3K pounds at USD 1.5K per pound (i.e. USD 4.5 million dollar revenue uplift in 2022)
6) EPS - USD 0.09 of EPS which works out to about CAD 11 cents in EPS ... CXXI is trading at 4X trailing EPS ... one of the few companies that has real profits and positive after tax cashflow in this industry ... WTF man ... this stock is way undervalued so apply any reasonable multiple and do your own share price calculation
Going forward, I see a lot of industry players in big trouble. Everyone's stock price sucks but most players also carrying a lot debt they cannot service let alone pay down. Lots of assets are being put up for sale now by competitors to generate some cash just to stay alive. This is where I see CXXI being able to leverage their balance sheet and positive cash flow to buy up some choice assets. I think CXXI can easily service up to USD 50 million in debt to do deals.
Stay strong folks. Not only it the company operating like a money printing press, the company is also well positioned to take advantage of current industry environment regardless of when SAFE or MORE even get passed. Eventually I think that the market will see that valuing this company at 4X earnings is insane when most industry players have no earnings and negative cashflow.