Consecutive profitable quarters position Vibe for strong growth in 2021 and beyond
2021 Q1 Highlights:
- Revenue increased 75% compared to the first quarter of 2020
- Positive After Tax Net Income in the first quarter of 2021
- Same store sales increased 35% versus 2020
- Company continued to expand store footprint
- Completed a $16 million (CAD) equity financing
- Cash position of $13.4 million
Sacramento, California--(Newsfile Corp. - May 27, 2021) - Vibe Growth Corporation (CSE: VIBE) (OTC: VBSCF) (FSE: A061) (the "Company" or "Vibe"), a vertically integrated California cannabis enterprise, is pleased to announce after tax net income in the first quarter of 2021, resulting from significantly higher sales volumes at its California dispensaries. All financial information is provided in U.S. dollars unless otherwise indicated. The Condensed Consolidated Financial Statements and Management Discussion and Analysis ("MD&A") for the three-month period ended March 31, 2021 are available on the Company's SEDAR profile at www.sedar.com and on Vibe's website at www.vibebycalifornia.com.
"We are delighted to report another profitable quarter," stated Vibe CEO, Mark Waldron. "Our strong cash position provides us the ability to remain agile and opportunistic with our California retail expansion strategy, and as we add three new locations in Palm Springs, Ukiah and Salinas, in addition to our exciting Sacramento indoor cultivation expansion currently underway. Furthermore, we are confident the success we've achieved through exercising fiscal prudence and implementing operational efficiencies will be transferable to establishing the Vibe By California brand presence in the vibrant and growing Massachusetts cannabis market."
First Quarter 2021 Highlights
- Revenue in the first quarter was $7.54 million, a 75% increase over the first quarter of 2020;
- EBITDA in the first quarter was $0.83 million, an increase of $0.58 million over the EBITDA recorded during the first quarter of 2020(a);
- After Tax Net Income in the first quarter was $68,248 versus a loss of $222,331 in the first quarter of 2020;
- Adjusted Funds Flow in the fourth quarter was $0.20 million, versus $0.001 million in the first quarter of 2020(a);
- Same Store Dispensary Sales increased 35% versus the first quarter of 2020;
- E-commerce Orders accounted for 22.7% of transactions in the first quarter 2021;
- Equity Financing on March 16, 2021, the Company completed a CAD $15,954,435 financing via the issuance of 19,456,750 units. Each Unit was priced at CAD $0.82 and is comprised of one common share and one-half share purchase warrant with a whole warrant exercisable at CAD $1.06 until March 16, 2024. The Company issued 1,331,736 broker warrants to the Underwriters and Agents exercisable at CAD $0.82 until March 16, 2024 and 408,000 Units as partial consideration for their commission;
- Cash Position as of March 31, 2021 was US $13,401,494.
(a) This is a non-IFRS measure. Readers are cautioned that the amounts presented do not have standardized meanings prescribed by IFRS. Please see the non-GAAP Financial Measures Disclosure below.
Financial Highlights
The Company's key financial results for the first quarter ended March 31, 2021 and 2020 are as follows:
| U.S. Dollars | | For the three
months ended
March 31, 2021 | | | For the three
months ended
March 31, 2020 | |
| Total revenue(a) | $ | 7,542,735 | | $ | 4,272,598 | |
| Gross margin | $ | 2,433,712 | | $ | 1,146,759 | |
| Net income (loss) | $ | 68,245 | | $ | (222,331 | ) |
| Adjusted funds flow(b) | $ | 199,893 | | $ | 13,273 | |
| EBITDA(a) | $ | 831,432 | | $ | 247,644 | |
| Adjusted EBITDA(a) | $ | 929,372 | | $ | 335,549 | |
Special Note Regarding non-GAAP Financial Measures
(a) This is a non-GAAP measure. Readers are cautioned that the amounts presented do not have standardized meanings prescribed by IFRS. See discussion of non-IFRS Measures in the MD&A for reconciliation to measures reported in the Company's consolidated financial statements.
(b) Adjusted funds flow (previously referred to as funds flow from operations) is a non-GAAP measure that represents cash flows from operating activities as presented in the Company's Consolidated Statements of Cash Flows before the changes in non-cash working capital. The Company considers adjusted funds flow a key measure as it demonstrates the Company's ability to generate the cash flow necessary to fund future growth through capital investment and to repay debt.
Massachusetts Update:
Vibe's future expansion into Massachusetts was announced on May 14, 2021, as the Vibe-controlled entity Page Cultivation LLC, received initial approval from the City of Springfield, Massachusetts to build a sought-after new cannabis cultivation facility. Vibe projects the construction costs to build out the 47,000 square foot facility, which will be multi-tiered, to be $16 million. Once fully operational, Vibe anticipates the facility will yield more than 15,000 pounds of premium flower per annum, in addition to manufactured products including edibles, topicals, lotions, salves, oils, sprays, waxes, shatter, vape oil, tinctures and pre-rolls. The Company is currently in discussions with lenders on debt financing.
Massachusetts presents attractive opportunities for wholesalers to achieve sustainable high margins on operations, with one of the highest flower prices on a dollar-per-pound basis, trailing only Illinois. The Company is currently preparing Springfield's phase 2 host community agreement.