• Total revenue of $15.1 million in Q1 2023 represents a 24% sequential increase over Q4 2022.
• Net Revenue in medical accounted for $6.0 million, a 61% sequential increase over Q4 2022.
• Color Cannabis captured a 5.3% national market share in the pre-roll segment.¹
• Management will host a conference call on May 30, 2023, at 10 a.m. Eastern Time.

TORONTO, May 30, 2023 (GLOBE NEWSWIRE) -- Entourage Health Corp. (TSX-V: ENTG) (OTCQX: ETRGF) (FSE:4WE) (“Entourage” or the “Company”), a Canadian producer and distributor of award-winning cannabis products, announced today its financial results for the three months ended March 31, 2023. The Company reported total revenue of $15.1 million (net revenue of $11.8 million, before excise duties and discounts), up 24% sequentially from Q4 2022.  The Company will host a conference call to discuss its financial and business highlights on Tuesday, May 30, 2023, at 10 a.m. Eastern Time.

"Over the first quarter, we noted significant growth in our medical stream representing a 61% increase compared to the previous quarter. This aligns with the escalating demand, fueled by the introduction of innovative products, a rise in new patient acquisitions, and substantial renewal rates,” CEO and Executive Chairman George Scorsis affirmed. "Additionally, our pre-rolls sales in the adult-use segment witnessed a notable rise, with Color capturing approximately 5% of the pre-roll market. Our revenue growth and the successful implementation of our strategic transformation initiatives and cost improvements propel our business toward enhanced profitability. This allows us to accomplish our financial objectives and paves the way to expand our market reach and diversify our product offerings. Through this calculated approach, we are establishing a solid foundation for sustainable growth and long-term success in the cannabis market."

Summary of Results

*Net revenue defined as revenue (i.e., gross revenue less discounts and customer incentives but inclusive of freight) less excise taxes
**Adjusted EBITDA is not a recognized measurement under International Financial Reporting Standards (“IFRS”) and this data may not be comparable to data presented by other companies. Management defines Adjusted EBITDA as EBITDA adjusted to exclude interest, tax, and depreciation, stock compensation, fair value changes and other non-cash items, and non-recurring items. This data is furnished to provide additional information and does not have any standardized meaning prescribed by IFRS. The Company uses this non-IFRS measure to provide shareholders and others with supplemental measures of its operating performance. The Company also believes that securities analysts, investors and other interested parties, frequently use this non-IFRS measure in the evaluation of companies, many of which present similar metrics when reporting their results. As other companies may calculate Adjusted EBITDA differently than the Company, this metric may not be comparable to similarly titled measures reported by other companies. We caution readers that Adjusted EBITDA should not be substituted for determining net loss as an indicator of operating results, or as a substitute for cash flows from operating and investing activities. See the Company’s management’s discussion and analysis for the three months ended March 31, 2023 (the “Q1 2023 MD&A”) for a detailed reconciliation of Adjusted EBITDA to Net Income / (Loss). The Company’s financial statements for the three months ended March 31, 2023 and the Q1 2023 MD&A are available on SEDAR at www.sedar.com

"Through our strategic emphasis on revenue generation from our high-performing products and our commitment to reinforcing financial discipline, we have established a strong position for future growth and fortified our balance sheet," stated Vaani Maharaj, CFO of Entourage. "As we consistently enhance operational efficiencies, optimize costs of sale, and minimize cash burn, we are well-prepared to amplify revenue growth and strengthen our financial stability. Our steadfast commitment to creating value for our stakeholders remains at the forefront of our efforts.”

Revenue Highlights   

Financial Highlights

• For the quarter that ended March 31, 2023, Entourage recorded total revenue of $15.1 million compared to $12.1 million for the fourth quarter ended December 31, 2022, representing a 24% increase.
  
  
• Gross profit before changes in fair value was $3.0 million for Q1 2023, representing an increase in gross profit of $10.5 million compared to Q4 2022 due to improved operational efficiencies and partly due to lower inventory write-down in Q1 2023. 
  
  
• Gross margins were 25% in Q1 2023 compared to (86%) for Q4 2022 and 22% in Q1 2022. The improvement in Q1 2023 over Q4 2022, resulted from increased automation in the production process of finished and semi-finished goods, resulting in lower direct labour costs.
  
  
• The cost of goods sold was reduced by $7.4 million for the three months ended March 31, 2023, compared to Q4 2022. This reduction was achieved by continued efforts to optimize our operational platform and further automation initiatives.
  
  
• Adjusted EBITDA improved by $5,890,211 to $(3,374,484) in Q1, 2023, compared with $(9,264,695) in Q4, 2022, primarily driven by strategic transformation initiatives to lower costs and partly due to generating higher-margin revenue.

Corporate Highlights During and Subsequent to First Quarter 2023

• In January, the Company signed an amendment to its senior secured amended and restated credit facility entered into on October 28, 2022 (the "Credit Facility"). The amendment provides a waiver to the breach of certain financial covenants for the period that ended September 30, 2022, and modifies certain financial covenants set out in the Credit Facility.
  
  
• Also in January, the Company announced the closing of the second $15 million tranche of its upsized Credit Facility with an affiliate of the LiUNA Pension Fund of Central and Eastern Canada (LPF), as announced on October 31, 2022.
  
  
• In March, Entourage announced it had added a new union group to its full-service, proprietary medical cannabis program in partnership with leading benefits provider Union Benefits - the administrator of union group benefits to over 12,000 members. With these additions, Entourage confirms it has ten union groups, five insurance providers and 24 clinics under agreement for preferred medical cannabis coverage.
  
  
• In April, the Company announced the issuance of deferred share units and entered into shares-for-debt agreements, effectively promoting share ownership and incentive for management.
  
  
• In April, the Company entered into a firm agreement to sell the Strathroy facility to a third party for $9,400,000, less customary transaction costs, land transfer tax, and brokerage fees. The facility is collateral for the senior credit facility payable to BMO. The sale of the Strathroy facility closed on May 18, 2023.

Commercial Highlights

• In April, Entourage, in partnership with the Boston Beer Company (BBC), expanded distribution of cannabis-infused iced tea beverage, known as TeaPot, into the Quebec market.
  
  
• The Company has expanded its Color and Saturday adult-use product portfolio, introducing several noteworthy additions, including Mint Cookie Kush and Baked Grape Pie, bringing unique flavours to the market. Furthermore, the Company has unveiled infused pre-rolls, launching Night Sweet & Sour Berry. The Company remains dedicated to consistently offering diverse products and formats that cater to consumers' varied preferences.
  
  
• Starseed Medicinal's active patient base experienced a notable 11% growth. The Company also reported an increase of 20% in patient renewals. These substantial increases highlight the Company's ability to attract and retain a growing customer base.
  
  
• Additionally, Starseed has been consistently enhancing its product portfolio. Among these notable additions, the Company recently announced the launch of CBD Chewing Gum. This expansion not only broadens the selection available to medical cannabis patients but also showcases Starseed's continuous efforts to offer innovative products.
  
  
• Recently, Irwin Naturals Cannabis, a reputable nutraceuticals and herbal supplement formulator, partnered with Entourage to introduce an exclusive range of softgel products for medical patients through Starseed.

Company Update - Equity Grant

The Company is pleased to announce that its Board of Directors has approved a one-time grant of Performance Share Units (PSUs) to certain members of the Company’s management team under the Company’s Amended and Restated Omnibus Equity Incentive Plan. In total, the Board approved a grant of 6,200,000 PSUs, of which 5,100,000 will be granted to officers of the Company.

Earlier this year, the Board of Directors approved a cap limiting the number of Deferred Share Units (DSUs) each Director receives as part of their compensation for the 2023 year; and the reduction in Directors’ DSU entitlements was intended to be used to create equity incentives for management. The PSUs will vest only if and to the extent the Company achieves certain financial objectives, as approved by the Board of Directors, in the 2023 fiscal year, thereby directly aligning management incentives with shareholders' interests.

Conference Call Details

A conference call will be hosted by Mr. Scorsis and Ms. Maharaj, with management available for questions following opening remarks:

⁽¹⁾ Source data: Buddi Retail Data, as of March 31, 2023.

About Entourage Health Corp.

Entourage Health Corp. is the publicly traded parent Company of Entourage Brands Corp. and CannTx Life Sciences Inc., licence holders producing and distributing cannabis products for both the medical and adult-use markets. The Company owns and operates a fully licensed 26,000 sq. ft. Aylmer, ON processing facility. With its Starseed Medicinal medical-centric brand, Entourage has expanded its multi-channeled distribution strategy. Starseed’s industry-first, exclusive partnership with LiUNA, the largest construction union in Canada, along with employers and union groups complements Entourage’s direct sales to medical patients. With the launch of Syndicate, Entourage now hosts another unique medical marketplace that offers patients a collective of Canadian micro-cultivators’ products, along with Entourage’s family of brands. Entourage’s elite adult-use product portfolio includes Color Cannabis and Saturday Cannabis – sold across eight provincial distribution agencies. It is the exclusive Canadian producer and distributor of award-winning U.S.-based wellness brand Mary’s Medicinals sold in both medical and adult-use channels. Under a collaboration with The Boston Beer Company subsidiary, Entourage is also the exclusive distributor of cannabis-infused beverages ‘TeaPot’ in Canada, which launched in summer 2022, starting in select provinces. In addition, Entourage also entered into an exclusive agreement with Irwin Naturals, a renowned nutraceutical and herbal supplement formulator of popular branded wellness products sold across North America. The new line of CBD soft gels is now available on Starseed’s medical platform.

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For Investor & Media Enquiries:
Catherine Flaman
Senior Director, Communications & Corporate Affairs
416-910-0279
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Forward Looking Information This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation which are based upon Entourage's current internal expectations, estimates, projections, assumptions and beliefs and views of future events. Forward-looking information can be identified using forward-looking terminology such as "expect", "likely", "may", "will", "should", "intend", "anticipate", "potential", "proposed", "estimate" and other similar words, including negative and grammatical variations thereof, or statements that certain events or conditions "may", "would" or "will" happen, or by discussions of strategy.

The forward-looking information in this news release is based upon the expectations, estimates, projections, assumptions, and views of future events which management believes to be reasonable in the circumstances. Forward-looking information includes estimates, plans, expectations, opinions, forecasts, projections, targets, guidance, or other statements that are not statements of fact. Forward-looking information necessarily involve known and unknown risks, including, without limitation, risks associated with general economic conditions; adverse industry events; loss of markets; future legislative and regulatory developments; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the cannabis industry in Canada generally; the ability of Entourage to implement its business strategies; the COVID-19 pandemic; competition; crop failure; and other risks.

Any forward-looking information speaks only as of the date on which it is made, and, except as required by law, Entourage does not undertake any obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Entourage to predict all such factors. When considering this forward-looking information, readers should keep in mind the risk factors and other cautionary statements in Entourage’s disclosure documents filed with the applicable Canadian securities' regulatory authorities on SEDAR at www.sedar.com. The risk factors and other factors noted in the disclosure documents could cause actual events or results to differ materially from those described in any forward-looking information.

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE