Third Quarter Fiscal 2022 and Recent Highlights:
TORONTO, Dec. 13, 2022 /CNW/ - Fire & Flower Holdings Corp. ("Fire & Flower" or the "Company") (TSX: FAF) (OTCQX: FFLWF), today announced its financial and operational results for the fiscal 2022 third quarter ended October 29, 2022.
"I am excited to see that our team's hard work and focus on operations is demonstrating measurable operational and financial results at the end of the third quarter as well as in the recent weeks. The Company continues to be focused on driving the goal of positive Adjusted EBITDA and Free Cash Flow. We aim to accomplish our goal through a disciplined approach to driving topline revenue, gross profit dollars and reducing selling, general and administrative expenses," shared Stéphane Trudel, Chief Executive Officer of Fire & Flower.
"Our strategic relationship with Alimentation Couche-Tard has been strengthened through our recent license agreement for five additional co-located cannabis stores adjacent to high-traffic Circle K in the Greater Toronto market, expanding on the existing program in Western Canada. In addition, if approved by shareholders, Fire & Flower will benefit from favourable financing to execute on our plans for growth with a $5 million private placement, in addition to the non-dilutive $11 million loan that has been secured."
Consolidated Financial Highlights
Thirteen weeks ended | Thirty-nine weeks ended | |||||||
(In thousands of Canadian dollars, | 29-Oct-22 | 30-Oct-21 | 30-Jul-22 | 29-Oct-22 | 30-Oct-21 | |||
except per share amounts) | ||||||||
Total Revenue | 43,835 | 45,412 | 40,742 | 125,521 | 132,802 | |||
Gross Profit | 11,823 | 15,698 | 9,699 | 33,688 | 48,389 | |||
Gross Profit Percentage | 27.0 % | 34.6 % | 23.8 % | 26.8 % | 36.4 % | |||
Adjusted EBITDA | (2,811) | 2,077 | (6,037) | (11,159) | 7,530 | |||
Net loss | (28,085) | (1,983) | (21,557) | (59,548) | (44,131) | |||
Basic loss per share | (0.62) | (0.06) | (0.48) | (1.39) | (1.34) |
Financial & Operational Highlights for the Third Quarter Fiscal 2022
Segment Revenue
Thirteen weeks ended | Thirty-nine weeks ended | ||||
(In thousands of Canadian dollars unaudited) | 29-Oct-22 | 30-Oct-21 | 30-Jul-22 | 29-Oct-22 | 30-Oct-21 |
Revenue | |||||
Retail | 32,985 | 33,692 | 30,357 | 92,898 | 99,153 |
Wholesale and Logistics | 7,869 | 7,942 | 8,464 | 24,792 | 23,367 |
Digital Platform | 2,981 | 3,778 | 1,921 | 7,831 | 10,282 |
Total Revenue | 43,835 | 45,412 | 40,742 | 125,521 | 132,802 |
Segment Adjusted EBITDA
Thirteen weeks ended |
Thirty-nine weeks ended | ||||
(In thousands of Canadian | 29-Oct-22 | 30-Oct-21 | 30-Jul-22 | 29-Oct-22 | 30-Oct-21 |
Adjusted EBITDA | |||||
Retail | (2,779) | 918 | (4,540) | (10,008) | 1,279 |
Wholesale and | (90) | 1,269 | (405) | (603) | 3,608 |
Digital Platform | 1,449 | 3,408 | 641 | 3,807 | 9,012 |
Corporate | (1,391) | (3,518) | (1,733) | (4,355) | (6,369) |
Total Adjusted EBITDA | (2,811) | 2,077 | (6,037) | (11,159) | 7,530 |
Retail
Wholesale and Logistics
Hifyre™ Digital Platform
Subsequent Operational Highlights Post October 29, 2022
Adjusted EBITDA
Thirteen Weeks ended | Thirty-nine Weeks ended | |||
(in thousands of dollars) | October 29, 2022 | October 30, 2021 | October 29, 2022 | October 30, 2021 |
Net (loss) income – as reported | (28,085) | (1,983) | (59,548) | (44,131) |
(Gain) loss on revaluation of derivative liability | (484) | (12,686) | (804) | 16,103 |
Finance costs, net | 1,235 | 1,333 | 4,331 | 5,740 |
Income taxes, net | 669 | (933) | 1,895 | 1,122 |
Share-based compensation | 640 | 855 | 1,950 | 2,706 |
Acquisition and strategic initiative professional fees | 320 | 740 | 879 | 1,788 |
Depreciation & amortization | 5,384 | 5,074 | 16,258 | 13,585 |
Restructuring, impairment and other costs, net | 17,898 | 9,677 | 24,268 | 10,617 |
Foreign exchange gain | (388) | - | (388) | - |
Adjusted EBITDA | (2,811) | 2,077 | (11,159) | 7,530 |
Lease liability cash payments for the thirteen and thirty-nine weeks ended October 29, 2022 was $2.6 million and $7.5 million, respectively (October 30, |
Non-IFRS Measures – Adjusted EBITDA
"Adjusted EBITDA" is a 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 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 expenses, restructuring charges and acquisitions, foreign exchange differences and strategic initiative professional fees.
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 October 29, 2022 was negative $2.8 million compared to positive Adjusted EBITDA of $2.1 million for the comparable quarter for 2021 fiscal year.
Webcast & Conference Call
Fire & Flower will host a webcast and conference call with Stéphane Trudel, Chief Executive Officer, and John Chou, Interim Chief Financial Officer and Chris Bolivar, EVP Commercial and Growth at 8:30 a.m. EST on December 13, 2022. The webcast will discuss Fire & Flower's Fiscal 2022 third 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
International: +1 929 526 1599
Access code: 231739
Webcast Sign-Up
https://events.q4inc.com/attendee/402177278
Replay Information (Available until January 3, 2023)
US Toll Free: 1 866 813 9403
Canada: 1 226 828 7578
International: +1 929 458 6194
Replay Code: 152398
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.
About Fire & Flower
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.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
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 October 29, 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 |
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Market Cap: | US$5.420M |
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