Second Quarter Fiscal 2022 and Recent Highlights:
Fire & Flower Holdings Corp. ("Fire & Flower" or the "Company") (TSX: FAF) (OTCQX: FFLWD), today announced its financial and operational results for the fiscal 2022 second quarter ended July 30, 2022.
"Fire & Flower remains focused on the transformation of our business and strategic opportunities with a goal to deliver positive Adjusted EBITDA and Free Cash Flow. We are focusing on near-term initiatives such as the Spark Perks Member Pricing program and opportunities to generate additional consolidated gross profit dollars as competitive pressures, and license expansion outpacing market growth create challenging market conditions across the industry. Our Member Pricing program has generated success by getting customers back in our stores and we will look to maximize the margin opportunities from all programs focused on driving gross profit dollars," said Stéphane Trudel, Chief Executive Officer of Fire & Flower.
"We continue to invest in our end-to-end Hifyre cannabis consumer technology platform and integrate our Wholesale and Logistics segment to deliver greater sustainable value across our business as one of the leading cannabis retailers. Alongside our strategic partner, Alimentation Couche-Tard, Fire & Flower remains focused on our long term, global outlook on technology-enabled cannabis retail both through our Spark Perks member program and Firebird rapid delivery service, which brings cannabis products to consumers' doors within hours. To deliver on our long term vision, we are focused on how we sustainably grow the business while also improving on near term financial performance and prudent use of capital."
Consolidated Financial Highlights
Thirteen weeks ended | Twenty-Six weeks ended | |||
(In thousands of Canadian dollars, | July 30, 2022 | July 31, 2021 | July 30, 2022 | July 31, 2021 |
except per share amounts) | ||||
Total Revenue | 40,742 | 43,306 | 81,686 | 87,390 |
Gross Profit | 9,699 | 16,173 | 21,865 | 32,691 |
Gross Profit Percentage | 23.8 % | 37.3 % | 26.8 % | 37.4 % |
Adjusted EBITDA | (6,037) | 3,146 | (8,348) | 5,453 |
Net loss | (21,557) | 19,450 | (31,463) | (42,148) |
Basic loss per share | (0.48) | 0.58 | (0.76) | (1.33) |
Thirteen weeks ended | Twenty-Six weeks ended | |||
(In thousands of Canadian dollars unaudited) | July 30, 2022 | July 31, 2021 | July 30, 2022 | July 31, 2021 |
Revenue | ||||
Retail | 30,357 | 31,842 | 59,913 | 65,461 |
Wholesale | 8,464 | 7,797 | 16,923 | 15,425 |
Digital Platform | 1,921 | 3,667 | 4,850 | 6,504 |
Total Revenue | 40,742 | 43,306 | 81,686 | 87,390 |
Thirteen weeks ended | Twenty-Six weeks ended | |||
(In thousands of Canadian dollars unaudited) | July 30, 2022 | July 31, 2021 | July 30, 2022 | July 31, 2021 |
Adjusted EBITDA | ||||
Retail | (4,540) | (741) | (7,229) | 361 |
Wholesale | (405) | 1,323 | (513) | 2,339 |
Digital Platform | 641 | 3,308 | 2,358 | 5,604 |
Corporate | (1,733) | (744) | (2,964) | (2,851) |
Total Adjusted EBITDA | (6,037) | 3,146 | (8,348) | 5,453 |
Thirteen Weeks ended | Twenty-six Weeks ended | |||
(in thousands of dollars) | July 30, 2022 ($) | July 31, 2021 ($) | July 30, 2022 ($) | July 31, 2021 ($) |
Net loss – as reported | (21,557) | 19,450 | (31,463) | (42,148) |
(Gain) loss on revaluation of derivative liability | (59) | (25,321) | (320) | 28,789 |
Finance costs, net | 1,355 | 1,096 | 3,096 | 4,407 |
Income taxes, net | 607 | 1,368 | 1,226 | 2,055 |
Share-based compensation | 678 | 1,319 | 1,310 | 1,851 |
Acquisition and strategic initiative professional fees | 459 | 259 | 559 | 1,048 |
Depreciation & amortization | 6,110 | 4,182 | 10,874 | 8,511 |
Restructuring, impairment and other costs, net | 6,370 | 793 | 6,370 | 940 |
Adjusted EBITDA | (6,037) | 3,146 | (8,348) | 5,453 |
Lease liability cash payments for the thirteen and twenty-six weeks ended July 30, 2022 was $2.5 million and $4.9 million, respectively (July 31, 2021: $2.1 million and $4.3 million, respectively). |
Non-IFRS Measures – Adjusted EBITDA
"Adjusted EBITDA" is a Non-IFRS metric used by management that does not have any standardized meaning prescribed by IFRS and may not be fully comparable to similar measures presented by other companies. Management defines the Adjusted EBITDA as the Income (loss) for the period, as reported, before income taxes and other expense (income) items such as finance costs, finance income, gains and losses related to derivative liability revaluations and debt extinguishments, and adjusted for share-based compensation, depreciation and amortization, impairment expense, impairment of right-of-use ("ROU") assets net of lease liabilities remeasurement, restructuring charges, professional fees associated with acquisitions, financing and strategic initiatives.
Adjusted EBITDA has been calculated differently than in periods prior to Q1 2021, where the Company previously included lease liability cash payments as disclosed in accordance with IFRS 16 "Leases" accounting standards. The updated measure reflects the Company's new approach to analyzing the consolidated operating performance across the business lines. The Company believes the updated definition is an alternative measure to assess performance as it provides meaningful operating results and facilitates period-to-period operating comparisons. As other companies may calculate this non-IFRS measure 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 income (loss) as an indicator of operating results, or as a substitute for cash flows from operating activities.
Adjusted EBITDA for the second quarter ended July 30, 2022 was negative $6.0 million compared to positive Adjusted EBITDA of $3.1 million for the comparable quarter for 2021 fiscal year.
Fire & Flower will host a webcast and conference call with Stéphane Trudel, Chief Executive Officer, and Judy Adam, Chief Financial Officer at 8:30 a.m. EDT on September 13, 2022. The webcast will discuss Fire & Flower's Fiscal 2022 second quarter financial and operational results.
Dial-In Information
Canada dial-in number (Toll Free): 1 833 950 0062
United States (Toll Free): 1 844 200 6205
All other locations: +1 929 526 1599
Access code: 573575
Webcast Sign-Up
https://events.q4inc.com/attendee/217086686
Replay Information (Available until October 4, 2022)
US Toll Free: 1 866 813 9403
Canada: 1 226 828 7578
All other locations: +44 204 525 0658
Replay Code: 292857
Upon completion of the live conference call, a replay of the conference call will be accessible on Fire & Flower's website at https://investors.fireandflower.com/.
Fire & Flower's financial statements and management discussion and analysis for the period are available on Fire & Flower's SEDAR profile at www.sedar.com and on Fire & Flower's website at https://investors.fireandflower.com.
Fire & Flower is a cannabis consumer retail and technology platform with more than 90 corporate-owned stores in its network. The Company leverages its wholly-owned technology development subsidiary, Hifyre Inc., to continually advance its proprietary retail operations model while also providing additional independent high-margin revenue streams. Fire & Flower guides consumers through the complex world of cannabis through best-in-class retailing while the HifyreTM digital and analytics platform empowers retailers to optimize their connections with consumers. The Company's leadership team combines extensive experience in the technology, cannabis and retail industries.
Through the strategic investment of Alimentation Couche-Tard Inc. (owner of Circle K convenience stores), the Company has set its sights on global expansion as new cannabis markets emerge and is poised to expand into the United States when permitted through its strategic licensing agreement with Fire & Flower U.S. Holdings upon the occurrence of certain changes to the cannabis regulatory regime.
To learn more about Fire & Flower, visit www.fireandflower.com.
This news release contains certain forward-looking information within the meaning of applicable Canadian securities laws ("forward-looking statements"). All statements other than statements of present or historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "achieve", "could", "believe", "plan", "intend", "objective", "continuous", "ongoing", "estimate", "outlook", "expect", "project" and similar words, including negatives thereof, suggesting future outcomes or that certain events or conditions "may" or "will" occur. These forward-looking statements include statements about the sales of Common Shares under the ATM Program and the use of the net proceeds of the ATM Program. These statements are only predictions.
Forward-looking statements are based on the opinions and estimates of management of Fire & Flower at the date the statements are made based on information then available to Fire & Flower. Various factors and assumptions are applied in drawing conclusions or making the forecasts or projections set out in forward-looking statements. Forward-looking statements are subject to and involve a number of known and unknown, variables, risks and uncertainties, many of which are beyond the control of Fire & Flower, which may cause Fire & Flower's actual performance and results to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Such factors, among other things, include: final regulatory and other approvals or consents; fluctuations in general macroeconomic conditions; fluctuations in securities markets; the impact of the COVID-19 pandemic; the ability of the Company to successfully achieve its business objectives, political and social uncertainties, demand for the Common Shares, market conditions, and the use of the net proceeds of the ATM program.
No assurance can be given that the expectations reflected in forward-looking statements will prove to be correct. Although the forward-looking statements contained in this news release are based upon what management of the Company believes, or believed at the time, to be reasonable assumptions, the Company cannot assure shareholders that actual results will be consistent with such forward-looking statements, as there may be other factors that cause results not to be as anticipated, estimated or intended. Readers should not place undue reliance on the forward-looking statements and information contained in this news release. Additional information regarding risks and uncertainties relating to the Company's business are contained under the headings "Risk Factors" in the Company's Annual Information Form dated April 26, 2022 and "Risks and Uncertainties" in the management discussion and analysis for the thirteen weeks ended July 30, 2022 filed on its issuer profile on SEDAR at www.sedar.com. The forward-looking statements contained in this press release are made as of the date of this press release, and the Company does not undertake to update any forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws.
No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.
Last Trade: | US$0.12 |
Daily Volume: | 0 |
Market Cap: | US$5.420M |
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