• The Company achieved a total revenue of $13.3 million, driven by an 8% increase in adult-use revenue and a significant 45% increase in pre-roll revenue year-over-year
• Gross Profit Before Fair Value Changes has surged to $2.15 million, indicating a substantial margin of 21% and a considerable year-over-year increase of 354%
• Adjusted EBITDA showed a 28% improvement as the Company realizes benefits from strategic transformation initiatives
• Strathroy sale enables BMO loan repayment, bolstering the Company's financial agility
• Management will host a conference call on August 30, 2023, at 10 a.m. Eastern Time

TORONTO, Aug. 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 and six months ended June 30, 2023. The Company reported second quarter total revenue of $13.37 million and net revenue of $10.17 million, a total revenue increase of 1% and net revenue increase of 5%, showing consistent year-over-year performance. The Company will host a conference call to discuss its financial and business highlights on Wednesday, August 30, 2023, at 10 a.m. Eastern Time.

"Through the transition to a streamlined model and our strategic collaboration with our trusted supply partner, we've achieved strong results that are driving us toward a leaner and more operationally efficient framework. We're optimizing the value of every revenue dollar, magnifying our profit margins, and bolstering our cash performance. These strides enhance our financial resilience and position us to capitalize on the surging demand for our products, charting a promising path for our business growth," confirmed George Scorsis, CEO and Executive Chair.

Summary of Results

*Net revenue (less Excise Tax) and Adjusted EBITDA are not a recognized measurements under International Financial Reporting Standards (“IFRS”) and this data may not be comparable to data presented by other companies. Net revenue is defined as revenue (i.e., gross revenue less discounts and customer incentives but inclusive of freight) less excise taxes. 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 these non-IFRS measures 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 these non-IFRS measures 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 and six months ended June 30, 2023 (the “Q2 2023 MD&A”) for a detailed reconciliation of Adjusted EBITDA to Net Income / (Loss). The Company’s financial statements for the three and six months ended June 30, 2023, and the Q2 2023 MD&A are available on SEDAR+ at www.sedarplus.ca

"In Q2, we maintained a strong commitment to enhancing operational efficiency throughout our business," highlighted Vaani Maharaj, CFO of Entourage. "Our efforts translated into tangible results: they have effectively trimmed our expense base, balancing cost reduction while maintaining product quality. This marks a transition from the previous quarter, significantly strengthening our Company as we continue to stay resolute amid the ebbs and flows of the industry, underscoring our commitment to generating substantial shareholder value."

Revenue Highlights    

Financial Highlights

• For the quarter that ended June 30, 2023, Entourage recorded total revenue of $ 13.37 million compared to $13.18 million for the same quarter ended June 30, 2022, representing a 1.37% increase year-over-year. 
• Gross profit before changes in fair value was $2.15 million for Q2 2023, representing an increase of $1.68 million compared to Q2 2022. This growth can be attributed to a strategic focus on operational efficiencies supported by reduced inventory write-downs in Q2 2023.  
• Gross margins were 21% in Q2 2023, compared to 5% in Q2 2022. The improvement in Q2 2023, over Q2 2022 arises from increased automation in the production process of finished and semi-finished goods, resulting in lower direct labour costs. 
• Total cost of goods sold (COGS) decreased by $1.19 million for the three months ending June 30, 2023, compared to Q2 2022. This reduction was achieved by continued efforts to optimize our operational platform and further automation initiatives. Notably, 19% of COGS accounted for provisions and write-downs. 
• Selling, general, and administrative (SG&A) expenses declined 13% to $6.85 million. This change was primarily driven by strategic reductions in headcount, predominantly linked to the exit of cultivation activities in March 2023. Importantly, 19% of SG&A accounts for one-time restructuring charges of $1.32 million. 
• Adjusted EBITDA improved by $0.67 million to $(1.75) million in Q2 2023, compared with $(2.41) million in Q1 2023, primarily driven by strategic transformation initiatives to lower costs and partly due to generating higher-margin revenue due to the Company's cost savings initiatives. 

Corporate Highlights During and Subsequent to Second Quarter 2023

• In May, a pivotal financial milestone was reached as the Company successfully finalized the sale of its Strathroy facility. By divesting this asset, the Company strategically strengthened the balance sheet while aligning its production infrastructure to its updated strategy. The net proceeds from the sale of the Strathroy facility paid down a significant portion of the Company’s senior secured credit facility with BMO (the “Credit Facility”).
• In June, the remaining balance of the Credit Facility, approximately $14.6 million, was assumed by the Company’s other secured lender, an affiliate of LiUNA Pension Fund of Central and Eastern Canada, who repaid the remaining balance to BMO. This step simplifies the Company’s debt structure, enhances financial stability, reduces debt exposure, and positions Entourage for future fiscal agility. 
• Additionally, in June, Entourage held its Annual General Meeting. All director nominees, including George Scorsis, Gail Paech, Bruce Croxon, Luciano Cacioppo, and Jason Alexander, were resoundingly elected, garnering a combined average shareholder approval rating of 98%. Furthermore, the Company's shareholders approved the reappointment of MNP LLP as auditor. 
• In June, the Company entered into a two-year agreement with the University of Guelph to store its genetics in-vitro and research its proprietary genetics. This collaboration allows the Company to ensure that proprietary genetics' safeguard, maintenance, and value remain a priority.
• June marked another milestone for the Company with the seamless sale, execution, and fulfillment of its first international order—an impressive 100kg of bulk medicinal cannabis dispatched to Australia through a partnership with Lyphe Australia Pty Ltd., a fully-owned subsidiary of Lyphe Group Ltd. Four of the Company's premium strains will now be available to medicinal cannabis patients through Lyphe, cementing our global market presence and accelerating our strategic growth agenda.
• In the latter part of Q2, the Company issued 1,600,000 deferred share units to its Board of Directors in line with the provisions of its omnibus equity incentive compensation plan and are granted in lieu of specific cash compensation for services provided during the second quarter of 2023.

Commercial and Sales Highlights 

• The Company has a record 3.0% national pre-roll market share, with British Columbia showing the strongest growth at 8.3% in the second quarter.
• Color Cannabis ranks among the top five pre-roll brands in Canada.
• The Company launched 18 new SKUs across the Canadian marketplace under both the Color and Saturday portfolio in various new cultivars and formats including; ‘Garlic and Gas Ready-to-Roll,’ ‘Sour Berry 1g Vape,’ and ‘Ghost Fuel Infused Pre-Rolls.’ The Company's ongoing commitment to crafting distinctive products infused with unique flavours and rare cannabinoids is poised to resonate strongly with consumers.
• In conjunction with The Boston Beer Company Inc., Teapot introduced two new flavours, 'Good Day Iced Tea Mango Green Tea' and 'Good Evening Iced Tea Blueberry Chamomile.'
• Introduced new dynamic brands, Dime Bag® and Syndicate. These additions complement beloved offerings within the Color and Saturday Cannabis brands, propelling the Company's expanding product lineup.  
• The Company launched an innovative and comprehensive education program tailored to enhance budtender engagement and elevate product knowledge. This program reflects the Company's commitment to customer satisfaction and dedication to creating a well-informed and knowledgeable cannabis community.
• Starseed Medicinal's experienced over 75% renewal rate. These substantial increases highlight the Company's ability to attract and retain a growing customer base. 
• Starseed Medicinal has expanded its medical platform, continually adding to its product portfolio. In partnership with Remidose, Starseed will introduce a range of controlled delivery inhaler products available in both a THC and balanced profile exclusively for medical patients. 

Conference Call Details

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

About Entourage Health Corp. 
Entourage Health Corp. is the publicly traded parent Company of Entourage Brands Corp., a licence holder 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-channelled 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. Entourage’s elite adult-use product portfolio includes Color Cannabis, Saturday Cannabis – and now Dime Bag and Syndicate – sold across eight provincial distribution agencies. 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, Entourage is also the exclusive distributor of cannabis-infused beverages ‘TeaPot’ in Canada. 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.

Follow Entourage and its brands on LinkedIn 
Instagram: Color Cannabis, Saturday Cannabis, Starseed, Syndicate, Dime Bag

For Investor & Media Enquiries:
Catherine Flaman
Senior Director, Communications & Corporate Affairs
416-910-0279
This email address is being protected from spambots. You need JavaScript enabled to view it.

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; 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 and available on SEDAR+ at www.sedarplus.ca. 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.

Third Party Information This press release includes market and industry data that has been obtained from third party sources, including industry publications. The Company believes that the industry data is accurate and that its estimates and assumptions are reasonable, but there is no assurance as to the accuracy or completeness of this data. Third party sources generally state that the information contained therein has been obtained from sources believed to be reliable, but there is no assurance as to the accuracy or completeness of included information. Although the data is believed to be reliable, the Company has not independently verified any of the data from third party sources referred to in this press release or ascertained the underlying economic assumptions relied upon by such sources.

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