- Q3 Revenue up 14% YoY to a Record $25.3 Million -
- Q3 Cash from Operations increased 32% to a Record $7.1 Million;
8th Consecutive Quarter of Positive Cash Flow -
TAMPA, Fla., Nov. 29, 2023 (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 third quarter ended September 30, 2023. Unless otherwise indicated, all financial results are presented in U.S. dollars.
“We generated record revenue and cash flow generation during the third quarter as we continued to execute on our growth objectives despite a seasonally slow period in Florida,” said CEO Robert Beasley. “Adjusted EBITDA was offset by increased headcount to keep pace with new store openings, however these investments are critical in laying the foundation for growth and supporting our future plans.
“In Florida, we continue to ramp our four new stores opened this year while driving cultivation improvements, leading to production of more high quality, high THC products. Although the third quarter is generally the most challenging period of the year in Florida, these operating improvements have enabled us to command higher retail prices and partially offset lower volumes from the summer months in Florida.
“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 in early 2024.”
Q3 2023 Financial Highlights (vs. Q3 2022)
- Revenue increased 14% to $25.3 million compared to $22.1 million.
- Florida revenue increased 17% to $21.3 million compared to $18.2 million.
- Adjusted gross profit1 was $16.1 million or 63.9% of revenue, compared to $16.7 million or 75.5% of revenue.
- Adjusted EBITDA was $8.8 million compared to $11.7 million, with the decrease primarily driven by additional salaries and wages as well as lower average ticket per transaction. This was partially offset by the impact of increased customer transactions.
- Cash flow from operations for the three months ended September 30, 2023 was $7.1 million compared to $5.4 million in the prior year.
- At September 30, 2023 the Company had approximately $12.1 million of cash and cash equivalents and $60.3 million of total debt, with approximately 298 million shares outstanding.
Recent Operational Highlights
- In Florida, Cansortium opened its Jacksonville – Cassat store. The Company currently operates 33 stores.
- The Company anticipates opening 1 additional new store in Florida by the end of 2023.
__________________
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.
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: Wednesday, November 29, 2023
Time: 4:30 p.m. Eastern time
Toll-free dial-in number: (800) 319-4610
International dial-in number: (604) 638-5340
Conference ID: 10022610
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. If you have any difficulty connecting with the conference call, please contact Elevate IR at (720) 330-2829.
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
Sean Mansouri, CFA
Elevate IR
(720) 330-2829
investors@cansortiuminc.com
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|
| CANSORTIUM INC. |
| CONSOLIDATED STATEMENTS OF FINANCIAL POSITION |
| As of September 30, 2023 and December 31, 2022 |
| (USD '000) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2023 |
|
December 31, 2022 |
| Assets |
|
|
|
|
|
| Current assets |
|
|
|
|
|
| Cash |
|
|
$ |
12,105 |
|
|
$ |
8,359 |
|
| Trade receivable |
|
|
|
48 |
|
|
|
28 |
|
| Inventory, net |
|
|
|
8,471 |
|
|
|
8,973 |
|
| Biological assets |
|
|
|
418 |
|
|
|
996 |
|
| Prepaid expenses and other current assets |
|
|
|
1,380 |
|
|
|
883 |
|
| Total current assets |
|
|
|
22,422 |
|
|
|
19,239 |
|
|
|
|
|
|
|
| Property and equipment, net |
|
|
|
28,618 |
|
|
|
31,743 |
|
| Intangible assets, net |
|
|
|
93,327 |
|
|
|
94,291 |
|
| Right-of-use assets, net |
|
|
|
30,103 |
|
|
|
30,464 |
|
| Goodwill |
|
|
|
1,525 |
|
|
|
1,526 |
|
| Other assets |
|
|
|
4,889 |
|
|
|
768 |
|
| Total assets |
|
|
$ |
180,884 |
|
|
$ |
178,031 |
|
|
|
|
|
|
|
| Liabilities |
|
|
|
|
|
| Current liabilities |
|
|
|
|
|
| Trade payable |
|
|
|
3,675 |
|
|
|
6,931 |
|
| Accrued liabilities |
|
|
|
5,329 |
|
|
|
5,534 |
|
| Income taxes payable |
|
|
|
25,721 |
|
|
|
13,952 |
|
| Derivative liabilities |
|
|
|
8,938 |
|
|
|
8,676 |
|
| Current portion of notes payable |
|
|
|
606 |
|
|
|
741 |
|
| Current portion of lease obligations |
|
|
|
4,984 |
|
|
|
2,123 |
|
| Total current liabilities |
|
|
|
49,253 |
|
|
|
37,957 |
|
|
|
|
|
|
|
| Notes payable |
|
|
|
60,024 |
|
|
|
56,969 |
|
| Lease obligations |
|
|
|
32,164 |
|
|
|
33,922 |
|
| Deferred tax liability |
|
|
|
19,287 |
|
|
|
20,290 |
|
| Other long-term liabilities |
|
|
|
4,471 |
|
|
|
1,333 |
|
| Total liabilities |
|
|
|
165,199 |
|
|
|
150,471 |
|
|
|
|
|
|
|
| Shareholders' equity |
|
|
|
|
|
| Share capital |
|
|
|
183,576 |
|
|
|
180,954 |
|
| Share-based compensation reserve |
|
|
|
6,695 |
|
|
|
6,395 |
|
| Equity conversion feature |
|
|
|
6,677 |
|
|
|
6,677 |
|
| Warrants |
|
|
|
29,634 |
|
|
|
28,939 |
|
| Accumulated deficit |
|
|
|
(210,563 |
) |
|
|
(195,071 |
) |
| Foreign currency translation reserve |
|
|
|
(334 |
) |
|
|
(334 |
) |
| Total shareholders' equity |
|
|
|
15,685 |
|
|
|
27,560 |
|
|
|
|
|
|
|
| Total liabilities and shareholders' equity |
|
|
$ |
180,884 |
|
|
$ |
178,031 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| CANSORTIUM INC. |
| STATEMENT OF OPERATIONS |
| FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022 |
|
|
|
|
|
|
|
|
|
|
|
For the three months ended
September 30, |
|
For the nine months ended
September 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
| Revenue, net of discounts |
|
$ |
25,260 |
|
|
$ |
22,100 |
|
|
$ |
71,746 |
|
|
$ |
64,228 |
|
| Cost of goods sold |
|
|
9,121 |
|
|
|
5,419 |
|
|
|
25,730 |
|
|
|
20,990 |
|
| Gross profit before fair value adjustments |
|
|
16,139 |
|
|
|
16,681 |
|
|
|
46,016 |
|
|
|
43,238 |
|
|
|
|
|
|
|
|
|
|
| Fair value adjustments on inventory sold |
|
|
3,415 |
|
|
|
(9,605 |
) |
|
|
2,336 |
|
|
|
(25,023 |
) |
| Unrealized (loss) gain on changes in fair value of biological assets |
|
|
(3,627 |
) |
|
|
2,558 |
|
|
|
(11,719 |
) |
|
|
13,224 |
|
| Gross profit |
|
|
15,927 |
|
|
|
9,634 |
|
|
|
36,633 |
|
|
|
31,439 |
|
|
|
|
|
|
|
|
|
|
| Expenses |
|
|
|
|
|
|
|
|
| General and administrative |
|
|
2,705 |
|
|
|
2,188 |
|
|
|
7,586 |
|
|
|
7,348 |
|
| Share-based compensation |
|
|
228 |
|
|
|
53 |
|
|
|
644 |
|
|
|
153 |
|
| Sales and marketing |
|
|
5,354 |
|
|
|
4,556 |
|
|
|
14,929 |
|
|
|
12,833 |
|
| Depreciation and amortization |
|
|
3,412 |
|
|
|
1,656 |
|
|
|
8,223 |
|
|
|
5,014 |
|
| Total expenses |
|
|
11,699 |
|
|
|
8,453 |
|
|
|
31,382 |
|
|
|
25,348 |
|
|
|
|
|
|
|
|
|
|
| Income (loss) from operations |
|
|
4,228 |
|
|
|
1,181 |
|
|
|
5,251 |
|
|
|
6,091 |
|
|
|
|
|
|
|
|
|
|
| Other expense (income) |
|
|
|
|
|
|
|
|
| Finance costs, net |
|
|
4,562 |
|
|
|
4,422 |
|
|
|
13,135 |
|
|
|
11,922 |
|
| Income from ERTC tax credit |
|
|
(4,055 |
) |
|
|
- |
|
|
|
(4,055 |
) |
|
|
- |
|
| Loss on change in fair value of derivative liability |
|
|
426 |
|
|
|
313 |
|
|
|
262 |
|
|
|
5,021 |
|
| Private Placement issuance expense |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Loss (gain) on debt settlement |
|
|
(116 |
) |
|
|
- |
|
|
|
(116 |
) |
|
|
1,136 |
|
| Loss (gain) on disposal of assets |
|
|
- |
|
|
|
(22 |
) |
|
|
70 |
|
|
|
(22 |
) |
| Loss from termination of a contract |
|
|
2 |
|
|
|
- |
|
|
|
5 |
|
|
|
- |
|
| Other expense (income) |
|
|
- |
|
|
|
(1 |
) |
|
|
67 |
|
|
|
(373 |
) |
| Total other expense |
|
|
1,427 |
|
|
|
4,712 |
|
|
|
9,976 |
|
|
|
17,684 |
|
|
|
|
|
|
|
|
|
|
| Gain (loss) before income taxes |
|
|
2,800 |
|
|
|
(3,531 |
) |
|
|
(4,726 |
) |
|
|
(11,593 |
) |
|
|
|
|
|
|
|
|
|
| Income tax expense |
|
|
5,561 |
|
|
|
2,026 |
|
|
|
10,766 |
|
|
|
7,542 |
|
|
|
|
|
|
|
|
|
|
| Net loss from continuing operations |
|
|
(2,761 |
) |
|
|
(5,557 |
) |
|
|
(15,492 |
) |
|
|
(19,135 |
) |
|
|
|
|
|
|
|
|
|
| Net loss from discontinued operations |
|
|
- |
|
|
|
19 |
|
|
|
- |
|
|
|
8,594 |
|
|
|
|
|
|
|
|
|
|
| Net loss |
|
$ |
(2,761 |
) |
|
|
$ |
(5,576 |
) |
|
$ |
(15,492 |
) |
|
$ |
(27,729 |
) |
|
|
|
|
|
|
|
|
|
| Other comprehensive gain that may be reclassified to profit or loss in subsequent years |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Exchange differences on translation of foreign operations and reporting currency |
|
- |
|
|
|
62 |
|
|
|
- |
|
|
|
87 |
|
|
|
|
|
|
|
|
|
|
| Comprehensive loss |
|
$ |
(2,761 |
) |
|
|
$ |
(5,514 |
) |
|
$ |
(15,492 |
) |
|
$ |
(27,642 |
) |
|
|
|
|
|
|
|
|
|
| Basic and diluted - continuing operations |
|
$ |
(0.01 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.05 |
) |
|
$ |
(0.11 |
) |
| Basic and diluted - discontinued operations |
|
$ |
- |
|
|
$ |
(0.00 |
) |
|
$ |
- |
|
|
$ |
(0.00 |
) |
|
|
|
|
|
|
|
|
|
| Weighted average number of shares |
|
|
|
|
|
|
|
|
| Basic number of shares |
|
|
298,963,366 |
|
|
|
252,276,742 |
|
|
|
290,693,488 |
|
|
|
252,230,588 |
|
| Diluted number of shares |
|
|
358,650,277 |
|
|
|
309,136,061 |
|
|
|
345,906,048 |
|
|
|
308,192,639 |
|
|
|
|
|
| CANSORTIUM INC. |
|
|
|
| STATEMENTS OF CASH FLOWS |
| (USD '000) |
|
|
|
|
For the nine months
ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
| Operating activities |
|
|
|
| Net loss from continuing operations |
$ |
(15,492 |
) |
|
$ |
(27,729 |
) |
| Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
| Unrealized gain (loss) on changes in fair value of biological assets |
|
11,719 |
|
|
|
(13,224 |
) |
| Realized (loss) gain on changes in fair value of biological assets |
|
(2,336 |
) |
|
|
25,023 |
|
| Share-based compensation |
|
644 |
|
|
|
153 |
|
| Depreciation and amortization |
|
10,961 |
|
|
|
9,534 |
|
| Accretion and interest of convertible debentures |
|
400 |
|
|
|
- |
|
| Accretion and interest of term loan |
|
9,534 |
|
|
|
9,359 |
|
| Interest income on notes receivable |
|
- |
|
|
|
(71 |
) |
| Interest of equipment loan |
|
37 |
|
|
|
- |
|
| Loss (gain) on disposal of assets |
|
70 |
|
|
|
(22 |
) |
| Loss on debt settlement |
|
- |
|
|
|
1,136 |
|
| Discontinued operations |
|
- |
|
|
|
8,594 |
|
| Change in fair market value of derivative |
|
262 |
|
|
|
5,021 |
|
| Interest on lease liabilities |
|
3,041 |
|
|
|
2,546 |
|
| Deferred tax expense |
|
(1,003 |
) |
|
|
(703 |
) |
| Changes in operating assets and liabilities: |
|
|
|
| Trade receivable |
|
(20 |
) |
|
|
(27 |
) |
| Inventory |
|
4,632 |
|
|
|
1,185 |
|
| Biological assets |
|
(12,609 |
) |
|
|
(15,495 |
) |
| Prepaid expenses and other current assets |
|
(497 |
) |
|
|
(477 |
) |
| Right of Use Assets/Liabilities |
|
455 |
|
|
|
236 |
|
| Other assets |
|
(4,121 |
) |
|
|
- |
|
| Trade payable |
|
(3,277 |
) |
|
|
333 |
|
| Accrued liabilities |
|
(205 |
) |
|
|
2,060 |
|
| Other long-term liabilities |
|
3,141 |
|
|
|
- |
|
| Income taxes payable |
|
11,769 |
|
|
|
8,053 |
|
| Net cash provided by operating activities |
|
17,105 |
|
|
|
15,486 |
|
|
|
|
|
| Investing activities |
|
|
|
| Purchases of property and equipment |
|
(4,500 |
) |
|
|
(5,439 |
) |
| Payment of notes receivable |
|
- |
|
|
|
119 |
|
| Advances for notes receivable |
|
- |
|
|
|
(94 |
) |
| Net cash used in investing activities |
|
(4,500 |
) |
|
|
(5,414 |
) |
|
|
|
|
| Financing activities |
|
|
|
| Net proceeds from issuance of shares and warrants |
|
2,993 |
|
|
|
- |
|
| Proceeds from issuance of convertible debenture and warrants |
|
- |
|
|
|
4,710 |
|
| Net proceeds from insurance financing |
|
800 |
|
|
|
- |
|
| Exercise of Options |
|
- |
|
|
|
135 |
|
| Issuance of shares for note payable extension |
|
|
|
- |
|
| Net cash provided by (used in) financing activities |
|
(8,859 |
) |
|
|
(10,084 |
) |
| Net cash used in by financing activities |
|
(8,859 |
) |
|
|
(10,084 |
) |
| Effect of foreign exchange on cash and cash equivalents |
|
- |
|
|
|
87 |
|
| Net increase in cash |
|
3,746 |
|
|
|
75 |
|
| Cash, beginning of period |
|
8,359 |
|
|
|
9,024 |
|
| Cash, end of period |
$ |
12,105 |
|
|
$ |
9,099 |
|
|
|
|
|
| Cansortium Inc. |
|
|
|
| Adjusted EBITDA Calculation |
|
|
|
| (USD '000) |
|
|
|
|
Three months ended |
|
September 30, 2023 |
September 30, 2022 |
Variance |
| Net loss |
$ |
(2,761 |
) |
|
$ |
(5,576 |
) |
|
$ |
2,815 |
|
| Finance costs, net |
|
4,562 |
|
|
|
4,422 |
|
|
|
140 |
|
| Income taxes |
|
5,561 |
|
|
|
2,026 |
|
|
|
3,535 |
|
| Depreciation and amortization |
|
3,830 |
|
|
|
3,464 |
|
|
|
366 |
|
| EBITDA |
$ |
11,192 |
|
|
$ |
4,336 |
|
|
$ |
6,856 |
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
September 30, 2023 |
September 30, 2022 |
Variance |
| EBITDA |
$ |
11,192 |
|
|
$ |
4,336 |
|
|
$ |
6,856 |
|
| Change in fair value of biological assets |
|
212 |
|
|
|
7,047 |
|
|
|
(6,835 |
) |
| Change in fair market value of derivative |
|
426 |
|
|
|
313 |
|
|
|
113 |
|
| Gain on debt settlement(1) |
|
(116 |
) |
|
|
- |
|
|
|
(116 |
) |
| Loss on termination of contract(1) |
|
2 |
|
|
|
- |
|
|
|
2 |
|
| Share-based compensation |
|
228 |
|
|
|
53 |
|
|
|
175 |
|
| Discontinued operations(1) |
|
- |
|
|
|
19 |
|
|
|
(19 |
) |
| Income from ERTC tax credit(1) |
|
(4,055 |
) |
|
|
- |
|
|
|
(4,055 |
) |
| Loss on sale of ERTC tax credit(1) |
|
608 |
|
|
|
- |
|
|
|
608 |
|
| Other non-recurring expense (income)(2) |
|
261 |
|
|
|
(1 |
) |
|
|
262 |
|
| Adjusted EBITDA |
$ |
8,758 |
|
|
$ |
11,745 |
|
|
$ |
(2,987 |
) |
