– Q2 Revenue up 12% YoY to a record $27.3 Million
– 11th Consecutive Quarter of Positive Cash Flow from Operations
TAMPA, Fla., Aug. 22, 2024 /PRNewswire/ – Cansortium Inc. (CSE: TIUM.U) (OTCQB: CNTMF) (“Cansortium” or the “Company”), a vertically-integrated, multi-state cannabis company operating under the FLUENT™ brand, today announced financial and operating results for the quarter ended June 30, 2024. Unless otherwise indicated, all financial results are presented in U.S. dollars.
“We delivered another quarter of year-over-year revenue growth and positive cash flow generation during the second quarter as we continued to execute on our growth objectives,” said CEO Robert Beasley. “We continue to lay the foundation for growth and scalability while remaining excited about the opportunities ahead.”
“In Florida, we have focused on enhancing manufacturing efficiencies and cultivation yields, which has resulted in both an improvement of product quality and cost of goods sold. This has allowed us to retain high profit margins while price competition continues to heat up.”
“Looking ahead, we are excited about our upcoming business combination with RIV Capital and have already begun key integration steps. Our shared focus remains on driving growth and profitability by leveraging our core strengths in cultivation, operating expertise and inventory optimization to drive results for shareholders. We remain laser focused on our existing portfolio in Florida, Pennsylvania and Texas and look forward to closing the RIV Capital agreement in the fourth quarter.”
Q2 2024 Financial Highlights (vs. Q2 2023)
- Revenue increased 12% to $27.3 million compared to $24.4 million.
- Florida revenue increased 15% to $23.1 million compared to $20.1 million.
- Adjusted gross profit1 was $12.3 million or 48.6% of revenue, compared to $10.2 million or 46.4% of revenue.
- Adjusted EBITDA was $7.7 million compared to $6.8 million, with the increase primarily driven by higher revenues due to additional production and stores.
- Cash flow from operations for the three months ended June 30, 2024 was $2.8 million compared to $4.8 million in the prior year primarily due to settlement of tax payments that had been carried over from previous periods.
- On June 30, 2024, the Company had approximately $8.5 million of cash and cash equivalents and $67.5 million of total debt, with approximately 300 million shares outstanding.
Recent Operational Highlights
- In Florida, Cansortium currently operates 35 stores and anticipates opening 4 new stores by Q2 2025.
- In Pennsylvania, Cansortium completed renovations and expanded its Hanover store, refreshing its look and doubling its size. The store remained operational for the entirety of renovations.
- The company has begun integration activities with RIV Capital sharing best operational practices and driving efficiencies in advance of the business combination expected to close in Q4 2024.
About Cansortium Inc.
Cansortium is a vertically-integrated cannabis company with licenses and operations in Florida, Pennsylvania and Texas. The Company operates under the Fluent™ brand and is dedicated to being one of the highest quality cannabis companies for the communities it serves. This is driven by Cansortium’s unrelenting commitment to operational excellence in cultivation, production, distribution and retail. The Company is headquartered in Tampa, Florida.
Cansortium Inc.’s Common Shares trade on the CSE under the symbol “TIUM.U” and on the OTCQB Venture Market under the symbol “CNTMF”. For more information about the Company, please visit www.getFLUENT.com.
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________________________________________ |
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1 Adjusted gross profit is a non-IFRS financial measure that does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. The Company calculates adjusted gross profit from gross profit plus (minus) the changes in fair value of biological assets, as presented in the consolidated statement of operations. |
Forward-Looking Information
Certain information in this news release may constitute forward-looking information within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. In some cases, but not necessarily in all cases, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “targets”, “expects” or “does not expect”, “is expected”, “an opportunity exists”, “is positioned”, “estimates”, “intends”, “assumes”, “anticipates” or “does not anticipate” or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might”, “will” or “will be taken”, “occur” or “be achieved”. In addition, any statements that refer to expectations, projections, or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent the Company’s expectations, estimates, and projections regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of the Company’s control.
Forward-looking information is necessarily based on many opinions, assumptions, and estimates that, while considered reasonable by the Company as of the date of this news release, are subject to known and unknown risks, uncertainties, assumptions, and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to the factors described in the public documents of the Company available at www.sedar.com. These factors are not intended to represent a complete list of the factors that could affect the Company; however, these factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct. The forward-looking statements contained in this news release are made as of the date of this news release, and the Company expressly disclaims any obligation to update or alter statements containing any forward-looking information, or the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by law.
For further information: www.getFLUENT.com.
Company Contact
Robert Beasley, CEO
(850) 972-8077
investors.getFLUENT.com
Investor Relations Contact
investors@cansortiuminc.com
Cansortium Inc.
Consolidated Statements of Financial Position
As of June 30, 2024, and December 31, 2023
(Amounts expressed in thousands of United States Dollars unless otherwise stated)
|
June 30, |
December 31, |
||||||
|
2024 |
2023 |
||||||
|
Assets |
|||||||
|
Current assets |
|||||||
|
Cash |
$ 8,483 |
$ 10,521 |
|||||
|
Trade receivable |
83 |
215 |
|||||
|
Inventory, net |
Note 3 |
13,400 |
9,244 |
||||
|
Biological assets |
Note 4 |
4,279 |
331 |
||||
|
Prepaid expenses and other current assets |
Note 5 |
2,705 |
1,882 |
||||
|
Total current assets |
28,950 |
22,193 |
|||||
|
Property and equipment, net |
Note 6 |
26,138 |
27,642 |
||||
|
Intangible assets, net |
Note 7 |
94,845 |
93,593 |
||||
|
Right-of-use assets, net |
Note 12 |
32,187 |
31,943 |
||||
|
Goodwill |
Note 8 |
1,525 |
1,525 |
||||
|
Other assets |
997 |
907 |
|||||
|
Total assets |
$ 184,642 |
$ 177,803 |
|||||
|
Liabilities |
|||||||
|
Current liabilities |
|||||||
|
Trade payable |
$ 5,676 |
$ 5,525 |
|||||
|
Accrued liabilities |
10,445 |
9,779 |
|||||
|
Income taxes payable |
28,666 |
22,009 |
|||||
|
Derivative liabilities |
Note 10 |
1,715 |
9,109 |
||||
|
Current portion of notes payable, net |
Note 11 |
62,063 |
213 |
||||
|
Current portion of lease liabilities |
Note 12 |
3,081 |
2,872 |
||||
|
Total current liabilities |
111,646 |
49,507 |
|||||
|
Notes payable, net |
Note 11 |
5,489 |
61,189 |
||||
|
Lease liabilities |
Note 12 |
37,944 |
37,242 |
||||
|
Deferred tax liability |
20,365 |
17,398 |
|||||
|
Other long-term liabilities |
Note 20 |
3,447 |
3,882 |
||||
|
Total liabilities |
178,891 |
169,218 |
|||||
|
Shareholders’ equity |
|||||||
|
Share capital |
Note 13 |
183,690 |
183,690 |
||||
|
Share-based compensation reserve |
6,931 |
6,739 |
|||||
|
Equity conversion feature |
6,867 |
6,677 |
|||||
|
Warrants |
Notes 13 |
29,634 |
29,634 |
||||
|
Accumulated deficit |
(221,037) |
(217,821) |
|||||
|
Foreign currency translation reserve |
(334) |
(334) |
|||||
|
Total shareholders’ equity |
5,751 |
8,585 |
|||||
|
Total liabilities and shareholders’ equity |
$ 184,642 |
$ 177,803 |
Cansortium Inc.
Statement of Operations
For the three- and six-months ending June 30, 2024 and 2023
(Amounts expressed in thousands of United States Dollars unless otherwise stated)
|
For the three months ended |
For the six months ended |
|||||||||
|
June 30, |
June 30, |
June 30, |
June 30, |
|||||||
|
Revenue, net of discounts |
$ 27,269 |
$ 24,430 |
$ 52,496 |
$ 46,486 |
||||||
|
Cost of goods sold |
13,490 |
11,448 |
26,456 |
23,275 |
||||||
|
Gross profit before fair value adjustments |
13,779 |
12,982 |
26,040 |
23,211 |
||||||
|
Fair value adjustments on inventory sold |
(1,788) |
2,211 |
(160) |
4,552 |
||||||
|
Unrealized gain (loss) on changes |
Note 4 |
8,268 |
(3,035) |
9,315 |
(8,092) |
|||||
|
Gross profit |
20,259 |
12,158 |
35,195 |
19,671 |
||||||
|
Expenses |
||||||||||
|
General and administrative |
Note 14 |
4,607 |
2,571 |
8,570 |
4,883 |
|||||
|
Sales and marketing |
Note 14 |
6,018 |
5,576 |
11,452 |
9,574 |
|||||
|
Depreciation and amortization |
Notes 6,7 |
1,780 |
1,929 |
3,510 |
3,777 |
|||||
|
Share-based compensation |
142 |
177 |
191 |
415 |
||||||
|
Total expenses |
12,547 |
10,253 |
23,723 |
18,649 |
||||||
|
Income from operations |
7,712 |
1,905 |
11,472 |
1,022 |
||||||
|
Other expense (income) |
||||||||||
|
Finance costs, net |
Note 19 |
4,835 |
4,324 |
9,546 |
8,573 |
|||||
|
Gain on change in fair value of derivative liability |
Notes 10 |
(5,707) |
(442) |
(7,394) |
(164) |
|||||
|
Loss on disposal of assets |
– |
– |
212 |
70 |
||||||
|
Loss from termination of a contract |
3 |
82 |
3 |
3 |
||||||
|
Other miscellaneous income |
(2) |
– |
– |
67 |
||||||
|
Total other (income) expense |
(871) |
3,964 |
2,367 |
8,549 |
||||||
|
Income (loss) before income taxes |
8,583 |
(2,059) |
9,105 |
(7,527) |
||||||
|
Income tax expense |
Note 9 |
7,636 |
3,291 |
12,321 |
5,205 |
|||||
|
Net comprehensive income (loss) |
$ 947 |
$ (5,350) |
$ (3,216) |
$ (12,732) |
||||||
|
Net loss per share |
||||||||||
|
Basic and diluted – continuing operations |
$ 0.00 |
$ (0.02) |
$ (0.01) |
$ (0.05) |
||||||
|
Weighted average number of shares |
||||||||||
|
Basic number of shares |
299,573,039 |
296,938,910 |
299,551,203 |
286,804,241 |
||||||
|
Diluted number of shares |
341,443,706 |
352,230,174 |
341,763,315 |
339,972,379 |
||||||
Cansortium Inc.
Consolidated Statements of Cash Flow
For the six months ended June 30, 2024 and 2023
(Amounts expressed in thousands of United States Dollars unless otherwise stated)
|
For the six months ended |
|||
|
June 30, |
June 30, |
||
|
Operating activities |
|||
|
Net loss from continuing operations |
$ (3,216) |
$ (12,732) |
|
|
Adjustments to reconcile net loss to net cash provided by operating activities: |
|||
|
Unrealized loss (gain) on changes in fair value of biological assets |
(9,315) |
8,092 |
|
|
Realized loss (gain) on changes in fair value of biological assets |
160 |
(4,552) |
|
|
Share-based compensation |
191 |
415 |
|
|
Depreciation and amortization |
7,473 |
8,042 |
|
|
Accretion and interest of convertible debentures |
284 |
266 |
|
|
Accretion and interest of term loan |
6,802 |
6,262 |
|
|
Interest of equipment loan |
– |
13 |
|
|
Interest on insurance financing |
30 |
– |
|
|
Interest on convertible promissory note |
49 |
– |
|
|
Loss on disposal of assets |
212 |
70 |
|
|
Change in fair market value of derivative |
(7,394) |
(164) |
|
|
Interest on lease liabilities |
2,405 |
2,037 |
|
|
Deferred tax expense |
2,898 |
(1,517) |
|
|
Changes in operating assets and liabilities: |
|||
|
Trade receivable |
132 |
1 |
|
|
Inventory |
8,132 |
7,402 |
|
|
Biological assets |
(7,081) |
(8,886) |
|
|
Prepaid expenses and other current assets |
687 |
11 |
|
|
Right of Use Assets/Liabilities |
(2,525) |
67 |
|
|
Other assets |
(90) |
(40) |
|
|
Trade payable |
152 |
(135) |
|
|
Accrued liabilities |
666 |
(623) |
|
|
Other long-term liabilities |
(435) |
(791) |
|
|
Income taxes payable |
6,657 |
6,722 |
|
|
Net cash provided by operating activities |
6,874 |
9,960 |
|
|
Investing activities |
|||
|
Purchases of property and equipment |
(3,902) |
(4,339) |
|
|
Purchase of intangible assets |
(1,332) |
– |
|
|
Net cash used in investing activities |
(5,234) |
(4,339) |
|
|
Financing activities |
|||
|
Net proceeds from issuance of shares and warrants |
– |
2,993 |
|
|
Net proceeds from convertible note |
3,000 |
– |
|
|
Payment of lease obligations |
(1,412) |
(3,188) |
|
|
Net proceeds from auto and equipment loan |
48 |
– |
|
|
Principal repayments of notes payable |
(5,314) |
(4,988) |
|
|
Net cash used in financing activities |
(3,678) |
(5,183) |
|
|
Net increase (decrease) in cash |
(2,038) |
438 |
|
|
Cash, beginning of period |
10,521 |
8,359 |
|
|
Cash, end of period |
$ 8,483 |
$ 8,797 |
|
Cansortium Inc.
Adjusted EBITDA Calculation
(Amounts expressed in thousands of United States Dollars unless otherwise stated)
|
Three months ended |
|||
|
June 30, |
June 30, |
||
|
2024 |
2023 |
Variance |
|
|
Net loss |
$ 947 |
$ (5,350) |
$ 6,297 |
|
Finance costs, net |
4,835 |
4,324 |
511 |
|
Income taxes |
7,636 |
3,291 |
4,345 |
|
Depreciation and amortization |
3,771 |
3,887 |
(116) |
|
EBITDA |
$ 17,189 |
$ 6,152 |
$ 11,037 |
|
Three months ended |
|||
|
June 30, |
June 30, |
||
|
2024 |
2023 |
Variance |
|
|
EBITDA |
$ 17,189 |
$ 6,152 |
$ 11,037 |
|
Change in fair value of biological assets |
(6,480) |
824 |
(7,304) |
|
Change in fair market value of derivative |
(5,707) |
(442) |
(5,265) |
|
Professional Fees |
1,852 |
– |
1,852 |
|
One-time employee costs |
454 |
– |
454 |
|
Loss on termination of contract |
– |
82 |
(82) |
|
Share-based compensation |
142 |
177 |
(35) |
|
Other non-recurring expense/(income) |
240 |
– |
240 |
|
Adjusted EBITDA |
$ 7,690 |
$ 6,793 |
$ 897 |
|
Six months ended |
|||
|
June 30, |
June 30, |
||
|
2024 |
2023 |
Variance |
|
|
Net loss |
$ (3,216) |
$ (12,732) |
$ 9,516 |
|
Finance costs, net |
9,546 |
8,573 |
973 |
|
Income taxes |
12,321 |
5,205 |
7,116 |
|
Depreciation and amortization |
7,473 |
7,662 |
(189) |
|
EBITDA |
$ 26,124 |
$ 8,708 |
$ 17,416 |
|
Six months ended |
|||
|
June 30, |
June 30, |
||
|
2024 |
2023 |
Variance |
|
|
EBITDA |
$ 26,124 |
$ 8,708 |
$ 17,416 |
|
Change in fair value of biological assets |
(9,155) |
3,540 |
(12,695) |
|
Change in fair market value of derivative |
(7,394) |
(164) |
(7,230) |
|
Professional Fees |
3,641 |
– |
3,641 |
|
One-time employee costs |
614 |
– |
614 |
|
Loss on termination of contract |
– |
3 |
(3) |
|
Share-based compensation |
191 |
415 |
(224) |
|
Loss on diposal of assets |
212 |
– |
212 |
|
Other non-recurring expense/(income) |
241 |
137 |
104 |
|
Adjusted EBITDA |
$ 14,474 |
$ 12,639 |
$ 1,835 |
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SOURCE Cansortium Inc.
