TORONTO, Aug. 29, 2023 (GLOBE NEWSWIRE) -- Red White & Bloom Brands Inc. (CSE: RWB and OTC: RWBYF) (“RWB” or the “Company”) is pleased to report it has filed its Condensed Interim Consolidated Unaudited Financial Statements, Management Discussion and Analysis and associated certifications for its second quarter ended June 30, 2023 (collectively, the “2023-Q2 Filings”). The 2023-Q2 Filings may be accessed under the Company’s SEDAR+ profile at www.sedarplus.ca.
2023-Q2 Financial Highlights
Colby De Zen, President of RWB, stated, “The Company is focused on expanding its premium, Platinum branded product offerings in existing and new markets in addition to creating new revenue opportunities across each of our distribution, retail and licensing channels. After our successful launch in Missouri last year and Arizona earlier this year, we are pleased to share that Platinum is now available in Canada with deliveries, in the third quarter, of Platinum branded products having arrived on shelves in Ontario. We continue to secure licensing opportunities for our Platinum branded products with key partners in targeted legal states and are in late-stage negotiations to add our sixth state in the early fourth quarter. In addition, through our continuing cost rationalization efforts, the Company has been able to successfully generate nearly $4 million (fiscal year to date) in reductions to its general and administrative expenses. The Company has also recently invested in the optimization of its manufacturing facilities through value-added enhancements, driven by automation and procurement strategies, designed to drive both labor and product cost efficiencies as well as an increase in overall production capacity.”
Recent Operating Highlights
Consolidated Financial Highlights
2023-Q2 | 2022-Q2 | Variance | 2023-YTD | 2022-YTD | Variance | |||||||
$ | $ | $ | $ | $ | $ | |||||||
Revenue | 21,915,629 | 27,402,453 | (5,486,824) | 48,961,717 | 55,449,254 | (6,487,537) | ||||||
Cost of goods sold, before fair value adjustments | 15,049,199 | 22,614,856 | (7,565,657) | 32,685,613 | 39,320,191 | (6,634,578) | ||||||
Gross profit before fair value adjustments | 6,866,430 | 4,787,597 | 2,078,833 | 16,276,105 | 16,129,063 | 147,041 | ||||||
Unrealized changes in fair value of biological assets | (1,287,157) | (17,973) | (1,269,184) | (1,737,952) | (2,467,978) | 730,026 | ||||||
Realized fair value amounts included in inventory sold | 616,685 | (1,351,571) | 1,968,256 | 10,201 | (1,074,644) | 1,084,845 | ||||||
Gross Profit | 6,195,958 | 3,418,053 | 2,777,905 | 14,548,353 | 12,586,441 | 1,961,912 | ||||||
Gross profit Percentage (%) | 28% | 12% | 16% | 30% | 23% | 7% | ||||||
Total operating expenses | 9,834,870 | 13,319,495 | (3,484,625) | 20,700,898 | 24,675,078 | (3,974,180) | ||||||
Loss from operations before other expenses or income | (3,638,912) | (9,901,442) | 6,262,530 | (6,152,544) | (12,088,637) | 5,936,092 | ||||||
Total other expenses | 5,677,564 | 5,935,549 | (257,985) | 12,246,949 | 12,536,719 | (289,770) | ||||||
Loss before income taxes | (9,316,476) | (15,836,991) | 6,520,515 | (18,399,494) | (24,625,356) | 6,225,862 | ||||||
Current income tax expense | (147,034) | (1,133,396) | 986,362 | (2,122,431) | (3,204,566) | 1,082,135 | ||||||
Deferred income tax recovery | - | - | - | 1,696,281 | - | 1,696,281 | ||||||
Net loss from continuing operations | (9,463,510) | (16,970,387) | 7,506,877 | (18,825,644) | (27,829,922) | 9,004,278 | ||||||
Loss from discontinued operations | (4,953) | (675,823) | 670,870 | (39,118) | (1,573,476) | 1,534,358 | ||||||
Loss for the period | (9,468,463) | (17,646,210) | 8,177,747 | (9,396,299) | (18,864,762) | 10,538,636 | ||||||
Adjusted EBITDA(1) | 252,778 | (6,305,180) | 6,557,958 | 1,045,455 | (4,002,750) | 5,048,205 | ||||||
Adjusted EBITDA
2023-Q2 | 2022-Q2 | Variance | 2023-YTD | 2022-YTD | Variance | |||||||
$ | $ | $ | $ | $ | $ | |||||||
Net Income (Loss) for the Period | (9,468,463) | (17,646,210) | 8,177,747 | (18,864,762) | (29,403,398) | 10,538,636 | ||||||
Depreciation and amortization | 1,402,809 | 1,392,394 | 10,415 | 2,069,149 | 2,873,439 | (804,290) | ||||||
Bad debt expense | 379,716 | 891,736 | (512,020) | 934,852 | 1,299,276 | (364,424) | ||||||
Accreted interest, leases | 663,549 | 1,371,148 | (707,599) | 1,345,114 | 2,000,899 | (655,785) | ||||||
Finance expense, net | 7,503,331 | 1,809,731 | 5,693,600 | 14,422,752 | 9,183,117 | 5,239,635 | ||||||
(Gain) loss on revaluation of financial instruments | (1,276,619) | - | (1,276,619) | (2,284,312) | - | (2,284,312) | ||||||
Gain on disposal of assets | 144,359 | - | 144,359 | 144,359 | - | 144,359 | ||||||
Foreign exchange | (1,020,309) | 2,754,670 | (3,774,979) | (995,992) | 1,352,703 | (2,348,695) | ||||||
Termination costs | 153,938 | 71,237 | 82,701 | 341,081 | 71,237 | 269,844 | ||||||
(i)Non-recurring expenses | 810,556 | 547,174 | 263,382 | 1,320,700 | 1,599,789 | (279,089) | ||||||
Current income tax expense | 147,034 | 1,133,396 | (986,362) | 2,122,431 | 3,204,566 | (1,082,135) | ||||||
Deferred income tax recovery | - | - | - | (1,696,281) | - | (1,696,281) | ||||||
Fair value changes in biological assets | 1,287,157 | 17,973 | 1,269,184 | 1,737,952 | 2,467,978 | (730,026) | ||||||
Realized fair value changes in inventory sold | (616,685) | 1,351,571 | (1,968,256) | (10,201) | 1,074,644 | (1,084,845) | ||||||
Share based compensation | 142,405 | - | 142,405 | 458,614 | 273,000 | 185,614 | ||||||
Adjusted EBITDA | 252,778 | (6,305,180) | 6,557,958 | 1,045,455 | (4,002,750) | 5,048,205 | ||||||
(i) Non-recurring expenses include expenses are those that the Company does not expect to recur in the future, such as penalties and late fees | ||||||||||||
(1) Refer to Non IFRS and supplementary financial or operating measures | ||||||||||||
About Red White & Bloom Brands Inc.
Red White & Bloom is a multi-state cannabis operator and house of premium brands in the U.S. legal cannabis sector. RWB is predominantly focusing its investments on the major U.S. markets, including Arizona, California, Florida, Massachusetts, Missouri, and Michigan.
Red White & Bloom Brands Inc. Investor and Media Relations
Edoardo Mattei, CFO
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947-225-0503, x.1003
Visit us on the web: https://www.redwhitebloom.com/.
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Neither the CSE nor its Regulation Services Provider (as that term is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this release.
FORWARD LOOKING INFORMATION
This press release contains forward-looking statements and information that are based on the beliefs of management and reflect the Company's current expectations. When used in this press release, the words "estimate", "project", "belief", "anticipate", "intend", "expect", "plan", "predict", "may" or "should" and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking statements and information. There is no assurance that these transactions will yield results in line with management expectations. Such statements and information reflect the current view of the Company with respect to risks and uncertainties that may cause actual results to differ materially from those contemplated in those forward-looking statements and information.
By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following risks: risks associated with the implementation of the Company's business plan and matters relating thereto, risks associated with the cannabis industry, competition, regulatory change, the need for additional financing, reliance on key personnel, market size, and the volatility of the Company's common share price and volume. Forward-looking statements are made based on management's beliefs, estimates and opinions on the date that statements are made, and the Company undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change. Investors are cautioned against attributing undue certainty to forward-looking statements.
There are several important factors that could cause the Company's actual results to differ materially from those indicated or implied by forward-looking statements and information. Such factors include, among others, risks related to the Company's proposed business, such as failure of the business strategy and government regulation; risks related to the Company's operations, such as additional financing requirements and access to capital, reliance on key and qualified personnel, insurance, competition, intellectual property, and reliable supply chains; risks related to the Company and its business generally; risks related to regulatory approvals. The Company cautions that the foregoing list of material factors is not exhaustive. When relying on the Company's forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. The Company has assumed a certain progression, which may not be realized. It has also assumed that the material factors referred to in the previous paragraph will not cause such forward-looking statements and information to differ materially from actual results or events. However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors. While the Company may elect to, it does not undertake to update this information at any particular time.
THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS PRESS RELEASE REPRESENTS THE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS PRESS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE THE COMPANY MAY ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME EXCEPT AS REQUIRED IN ACCORDANCE WITH APPLICABLE LAWS.
NON-IFRS AND SUPPLEMENTARY FINANCIAL OR OPERATING MEASURES
The Company references non-IFRS and supplementary financial or operating measures, including, but not limited to, Adjusted EBITDA. These measures do not have a standardized meaning prescribed by IFRS and are most likely not comparable to similar measures presented by other public company issuers including those operating in the cannabis industry. Non-IFRS measures provide investors with additional insights into the Company’s financial and operating performance which may not be garnered from traditional IFRS measures. The management of the Company, including its key decision makers, use non-IFRS measures in assessing the Company’s financial and operating performance. The Company calculates Adjusted EBITDA as net income or loss excluding current and deferred income tax expense, finance expense (net), depreciation and amortization, fair value changes in biological assets, changes in inventory sold, share based compensation, gains or losses on revaluation of debts or accounts payable and accrued liabilities, gains or losses on extinguishment of debts or accounts payable and accrued liabilities, impairments of tangible or intangible assets, impairment of goodwill, accreted interest on leases and applicable short term and long term liabilities, gains or losses on asset disposals, foreign exchange, gain or loss on earnouts, bad debt expense, and other non-recuring expenses.
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