- Quarterly revenue increased 37% year-over-year to
$45.4 million
- Sixth Consecutive Quarter of Positive Adjusted EBITDA of
$2.1 million
- Hifyre™ Digital Retail and Analytics Platform generated
$3.8 million in revenue for the
quarter, an increase of 160% year-over-year
- Completed the acquisiton of PotGuide and the assets of
Wikileaf further enhancing the Company's transformational
asset-light, digital strategy
- Announced the acquisition of Pineapple Express,
subsequent to the 3rd Quarter, positioning Fire &
Flower as a true cannabis consumer technology company
TORONTO, Dec. 14, 2021 /CNW/ - Fire & Flower Holdings
Corp. ("Fire & Flower" or the "Company") (TSX:
FAF) (OTCQX: FFLWD), today announced its financial and
operational results for the fiscal third quarter ended October 30, 2021.
![fire & flower logo (CNW Group/Fire & Flower Holdings Corp.) fire & flower logo (CNW Group/Fire & Flower Holdings Corp.)](https://mma.prnewswire.com/media/1709077/Fire___Flower_Holdings_Corp__Fire___Flower_Announces_Fiscal_Thir.jpg)
Trevor Fencott, Chief Executive
Officer of Fire & Flower commented, "Our progress in the third
quarter was not only demonstrated by our continued strong financial
performance, but by the many growth opportunities that we
successfully advanced in order to solidify our high-margin,
asset-light cannabis retail business model. We completed the
acquisitions of PotGuide and Wikileaf, the industry's leading
online cannabis platforms, setting the stage for the role out of
our expanded e-commerce digtal platform strategy. In addition, we
expanded our Circle K co-location program to create additional
strategically-located, asset-light stores to complement our
existing retail network. Finally, last week, we announced our
acquisition of Pineapple Express Delivery, the cannabis industry's
leading logistics provider for the delivery of legal cannabis."
"With these accomplishments, we are rapidly transforming into a
cannabis consumer technology platform which allows us to deliver a
seamless customer experience from online customer acquisition
through to fulfillment via same-day delivery to customers at our
100+ stores across North America,"
concluded Fencott.
Consolidated Financial Highlights
|
Thirteen weeks
ended
|
Thirty-Nine weeks
ended
|
(In thousands of
Canadian dollars,
|
30-Oct-21
|
31-Oct-20
|
30-Oct-21
|
31-Oct-20
|
except per share
amounts)
|
Total
Revenue
|
45,412
|
33,119
|
132,802
|
84,834
|
Gross
Profit
|
15,698
|
11,505
|
48,389
|
28,990
|
Gross Profit
Percentage
|
34.6%
|
34.7%
|
36.4%
|
34.2%
|
Adjusted
EBITDA
|
2,077
|
1,969
|
7,530
|
1,699
|
Net loss
|
(1,983)
|
(25,723)
|
(44,131)
|
(67,542)
|
Basic loss per
share
|
($0.06)
|
($1.51)
|
($1.34)
|
($4.16)
|
|
|
|
|
|
Financial Highlights for the Third Quarter period ended
October 30, 2021
- Total revenue of $45.4 million
compared to revenue of $33.1 million
for the third quarter of 2020, an increase of 37%;
- Total gross profit $15.7 million,
or 34.6% of revenue, compared to total gross profit of $11.5 million, or 34.7% of revenues in the third
quarter of 2020;
- Sixth consecutive quarter of positive Adjusted EBITDA of
$2.1 million compared to positive
Adjusted EBITDA of $2.0 million for
the third quarter of 2020;
- Total principal amount of debt outstanding at October 30, 2021 was $2.4
million;
- Cash and cash equivalents balances of $16.5 million.
Segment Revenue
|
Thirteen Weeks
Ended
|
Thirty-Nine Weeks
Ended
|
(In thousands of
Canadian dollars unaudited)
|
30-Oct-21
|
31-Oct-20
|
30-Oct-21
|
31-Oct-20
|
Revenue
|
|
|
|
|
Retail
|
33,692
|
26,534
|
99,153
|
68,341
|
Wholesale
|
7,942
|
5,130
|
23,367
|
13,298
|
Digital
Platform
|
3,778
|
1,455
|
10,282
|
3,195
|
Total
Revenue
|
45,412
|
33,119
|
132,802
|
84,834
|
Segment Adjusted EBITDA
|
Thirteen Weeks
Ended
|
Thirty-Nine Weeks
Ended
|
(In thousands of
Canadian dollars unaudited)
|
30-Oct-21
|
31-Oct-20
|
30-Oct-21
|
31-Oct-20
|
Adjusted
EBITDA
|
|
|
|
|
Retail
|
2,038
|
3,352
|
4,510
|
5,513
|
Wholesale
|
1,269
|
682
|
3,608
|
1,875
|
Digital
Platform
|
2,288
|
664
|
5,781
|
186
|
Corporate
|
(3,518)
|
(2,729)
|
(6,369)
|
(5,875)
|
Total Adjusted
EBITDA
|
2,077
|
1,969
|
7,530
|
1,699
|
Retail
- Retail revenue increased by 27.0% year-over-year to
$33.7 million;
- Gross profit increased by 12.7% year-over-year to to
$10.2 million;
- Gross profit margin of 30.3% for the thirteen weeks ended
October 30, 2021;
- Adjusted EBITDA decreased to $2.0
million from $3.4 million in
the same quarter the prior year;
- Adjusted EBITDA margin of 6.0% for the thirteen weeks ended
October 30, 2021;
- Same-store sales decreased 27% for fifty-four (54) stores in
operation during the comparable period in Q3 2021 due primarily to
increased competition as the surge in newly licensed retail
cannabis stores continues across Canada (in Ontario, 228 new stores were opened in the
period);
- Expanded the Company's retail network, bringing total stores
currently to 102.
Wholesale
- Wholesale revenue increased by 54.8% year-over-year to
$7.9 million;
- Gross profit increased by 72.4% year-over-year to $1.7 million;
- Gross profit margin of 21.7% for the thirteen weeks ended
October 30, 2021;
- Adjusted EBITDA increased by 86.1% year-over-year to
$1.3 million;
- Adjusted EBITDA margin of 16.0 % for the thirteen weeks ended
October 30, 2021.
Digital Platform
- Digital platform revenue increased 159.7% year-over-year to
$3.8 million;
- Adjusted EBITDA increased to $2.3
milion from $0.7 million in the prior
year;
- Adjusted EBITDA margin of 60.6% for the thirteen weeks ended
October 30, 2021.
Corporate
- Fire & Flower enhanced its strategic partnership with
Alimentation Couche-Tard (ACT) through its "Co-Location Program"
which will allow the opening of new Fire & Flower cannabis
retail stores adjacent to existing Circle K stores in new markets
across Canada;
- As part of the Company's expanded digital strategy and
asset-light model, Fire & Flower completed the acquisitions of
PotGuide and Wikileaf;
- The Company repaid $2.3 million
outstanding prior to maturity under a term loan facility with ATB
Financial.
Subsequent Operational Highlights Post October 30, 2021
- The Company announced the acquisition of Pineapple Express
Delivery, Canada's largest
delivery and logistics company serving cannabis consumers;
- Spark Perks members grew from 45,000 in Q3 2020 to over 346,000
across Fire & Flower's entire retail network in Q3 2021;
- Continued toward a Nasdaq listing with a consolidation of
Common Shares on the basis of 10 pre-consolidation Common Shares
for one post-consolidation Common Share. The Company is targeting
early first quarter 2022 for its Nasdaq listing;
- Announced $30 million Secured
Debt Facility with strategic partner Alimentation Couche-Tard.
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 by 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. A
reconciliation of net income (loss) to Adjusted
EBITDA is presented below.
Adjusted EBITDA for the fiscal third quarter ended
October 30, 2021 was $2.1 million compared to Adjusted EBITDA of
$2.0 million for the thirteen weeks
ended October 31, 2020.
Adjusted EBITDA
|
Thirteen Weeks
ended
|
Thirty-nine Weeks
ended
|
(in thousands of
dollars)
|
October 30, 2021
($)
|
October 31, 2020
($)
|
October 30, 2021
($)
|
October 31, 2020
($)
|
Net loss – as
reported
|
(1,983)
|
(25,723)
|
(44,131)
|
(67,542)
|
(Gain) loss on
revaluation of derivative liability
|
(12,686)
|
(35,796)
|
16,103
|
(21,082)
|
Loss on
extinguishment and revaluation of debentures
|
-
|
53,862
|
-
|
53,862
|
Finance costs,
net
|
1,333
|
5,972
|
5,740
|
20,829
|
Income taxes,
net
|
(933)
|
1,218
|
1,122
|
1,218
|
Share-based
compensation
|
855
|
581
|
2,706
|
1,990
|
Acquisition and
strategic initiative professional fees
|
740
|
1,060
|
1,788
|
1,338
|
Depreciation &
amortization
|
5,074
|
2,914
|
13,585
|
8,926
|
Restructuring,
impairment and other costs, net
|
9,677
|
(2,119)
|
10,617
|
2,160
|
Adjusted
EBITDA
|
2,077
|
1,969
|
7,530
|
1,699
|
Lease liability cash
payments during the thirteen and thirty-nine weeks ended October
30, 2021 were $2.3 million and $6.6 million, respectively
(October
31, 2020: $0.8 million and $3.2
million, respectively).
|
Webcast & Conference Call
Fire & Flower will host a webcast and conference call with
Trevor Fencott, Chief Executive
Officer, and Judy Adam, Chief
Financial Officer at 8:30 a.m. EDT on
December 14, 2021. The webcast will
discuss Fire & Flower's third quarter 2021 financial and
operational results.
Webcast URL
https://event.on24.com/wcc/r/3560110/0E01D852F2FC2D317AF59ACB09B578DF
Dial-In Information
Toll-Free (Canada):
1-833-950-0062
Toll-Free (United States):
1-844-200-6205
Access code: 621339
Replay Information (Available until January 4, 2022)
Toll-Free (Canada):
1-226-828-7578
Toll-Free (United States):
1-866-813-9403
Replay Code: 831677
Upon completion of the live conference call, a replay of the
conference call will be accessible on Fire & Flower's website
at https://fireandflower.com/investor-relations.
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 www.fireandflower.com/investor-relations/.
About Fire & Flower
Fire & Flower is a leading, technology-powered,
adult-use cannabis retailer with more than 100 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 education-focused, 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.
Fire & Flower is a multi-banner cannabis retail operator
that owns and operates the Fire & Flower™, Friendly Stranger™,
Happy Dayz™ and Hotbox™ brands. Fire & Flower Holdings
Corp. owns all issued and outstanding shares in Fire & Flower
Inc. and Friendly Stranger Holdings Corp., licensed cannabis
retailers that own and operate cannabis retail stores in the
provinces of British Columbia,
Alberta, Saskatchewan, Manitoba and Ontario, and the Yukon territory.
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 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 and political
and social uncertainties.
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 29, 2021 and "Risks and
Uncertainties" in the management discussion and analysis for the
thirteen weeks ended July 31, 2021
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.
SOURCE Fire & Flower Holdings Corp.