- Quarterly revenue increased 91% to $44.1 million year-over-year
- Fourth Consecutive Quarter of Positive Adjusted EBITDA of
$2.3 million
- Hifyre™ Digital Retail and Analytics Platform generated
$2.8 million in revenue for the
quarter, an increase of 252% year-over-year
- Entered U.S. market through strategic licensing agreement
and purchase option with American Acres Managers
TORONTO, June 15, 2021 /CNW/ - Fire & Flower Holdings
Corp. ("Fire & Flower" or the "Company") (TSX:
FAF) (OTCQX: FFLWF), today announced its financial and
operational results for the fiscal first quarter ended May 1, 2021.
Trevor Fencott, Chief Executive
Officer of Fire & Flower commented, "We started 2021 off strong
by delivering our fourth consecutive quarter of positive Adjusted
EBITDA, while posting record quarterly revenues. Despite the
challenges produced by the COVID-19 pandemic, our retail business
continued to drive strong sales growth as we expanded our retail
footprint by bringing Fire & Flower to British Columbia, opening two new stores in
Vancouver and bringing our total
store count to 83 licensed cannabis stores. Our wholesale division
continued to grow in Saskatchewan
as more retailers look to our Open Fields Distribution businss to
supply their inventory. And last, driving our leadership position
in Canada, and now emerging in the
U.S., is the ongoing success of our proprietary Hifyre business, as
it becomes increasingly recognized as one of the industry's most
advanced digital retail and data analytics platforms."
Consolidated Financial Highlights
Thirteen Weeks
Ended
|
|
|
(In millions of
Canadian dollars,
except per share amounts)
|
May 1,
2021
|
May 2,
2020
|
Total
Revenue
|
44,084
|
23,122
|
Gross
Profit
|
16,518
|
7,535
|
Gross Profit
Percentage
|
37.5%
|
32.6%
|
Adjusted EBITDA
(1)
|
2,307
|
(1,410)
|
Net Loss
|
(61,598)
|
(12,738)
|
Basic-Diluted loss
per share
|
($0.21)
|
($0.08)
|
Segment Revenue
|
Thirteen Weeks
Ended
|
(In thousands of
Canadian dollars unaudited)
|
May 1,
2021
|
May 2,
2020
|
|
$
|
$
|
Revenue
|
|
|
Retail
|
33,619
|
18,449
|
Wholesale
|
7,628
|
3,867
|
Digital
Platform
|
2,837
|
806
|
Total
Revenue
|
44,084
|
23,122
|
Financial Highlights for the First Quarter period ended
May 1, 2021
- Total revenue of $44.1 million
compared to revenue of $23.1 million
for the first quarter of 2020, an increase of 90.7%;
- Gross profit percentage of 37.5% compared to 32.6% for the same
period in 2020;
- Fourth consecutive quarter of positive Adjusted EBITDA of
$2.3 million as compared to an
Adjusted EBITDA loss of $1.4 million
for the first quarter of 2020;
- Completed a $15 million
at-the-market equity offering which positions Fire &
Flower for future growth;
- Strengthened the Company's balance sheet with a $53 million debt-to-equity conversion helping to
further reduce interest costs. A wholly-owned indirect
subsidiary of Circle K owner, Alimentation Couche-Tard Inc.
converted approximately $24 million
principal amount of debentures, which increased their equity stake
in the Company to 19.9%;
- Total debt was reduced from $37.5
million at January 30, 2021 to
$7.2 million;
- The net loss of $61.6 million in
the quarter was primarily attributable to the $54.1 million loss on revaluation of
derivative liabilities in the current quarter;
- Cash balances of $32.7 million as
compared to $30.6 million at
January 30, 2021.
"We are strategically leveraging the significant growth
opportunities that exist within each of our business segments and
continue working towards listing our shares on the Nasdaq. We
expect this upcoming listing will help generate additional exposure
for our common stock in the U.S. while providing additional
liquidity to our shareholders. As we head into the second half of
the year with strong momentum from the reopening of provinces and
consumers coming back into the stores, we are confident we are
positioned to deliver sustainable growth throughout 2021 and
beyond," concluded Fencott.
Operational Highlights for the First Quarter ended
May 1, 2021
- Entered the U.S. market through strategic licensing partnership
and acquisition option with American Acres Managers, gaining access
to licensing opportunities in the California, Arizona and Nevada markets;
- Hifyre subsidiary entered into a strategic agreement with U.S.
analytics company BDSA;
- Submitted an application to list its common shares on the
Nasdaq exchange;
- Same-store retail sales of the 43 stores with operations in
both 13 week periods of Q1 2020 and Q1 2021 increased by 18% due to
increased customer engagement through the Sparks membership base,
improved merchandise planning and assortment and multiple purchase
channels, such as in-store, curbside pick-up, delivery and
kiosk;
- Entered into a consulting agreement and an agreement to acquire
the assets for a cannabis retail store and its operations located
in Sarnia, Ontario;
- Strong revenue growth from Open Fields Distribution due to the
opening of the Saskatchewan market
following COVID-19 lockdowns was driven by increased orders from
legacy customers and new vendor partnerships;
- Increased the number of operated and owned retail stores to 79
as of May 1, 2021, under four banners
across the provinces of Alberta,
Saskatchewan, Manitoba and Ontario and the Yukon territory;
- Strenghtened our executive management bench strength and
alignment with the appointment of Judy
Adam as Chief Financial Officer, Nadia Vattovaz as Chief Operating Officer and
Matthew Hollingshead as Chief
Innovation Officer.
Subsequent Operational Highlights post May 1, 2021
- Entered the British Columbia
market with two retail stores opened in Vancouver bringing total stores to 83 licensed
cannabis retail stores;
- Increased Spark PerksTM members to 270,000 across
the Fire & Flower retail network;
- As of June 11, 2021, the key
cannabis market of Ontario opened
up from lockdown due to COVID-19, allowing for foot traffic into
all Fire and Flower retail stores;
- Fire & Flower entered into a definitive agreement to
acquire all of the assets of Satica Cannabis in Orangeville, Ontario as well as a consulting
services agreement, subject to customary conditions including TSX
and regulatory approvals.
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 accretion and interest, deferred tax,
and adjusted for share-based compensation expense, depreciation and
amortization, gains and losses related to derivative liability
revaluations and debt extinguishments, professional fees associated
with financing and acquisition and business development activities,
impairment charges, and restructuring charges.
Adjusted EBITDA has been calculated differently than in prior
periods, 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 a more useful 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 first quarter ended
May 1, 2021 was $2.3 million compared to a loss of $1.4 million for the thirteen weeks ended
May 2, 2020.
|
Thirteen weeks
ended
|
|
Q1
2021
|
Q1
2020
|
(in thousands of
dollars)
|
May 1, 2021
($)
|
May 2, 2020
($)
|
Net loss and
comprehensive loss – as reported
|
(61,598)
|
(12,738)
|
Loss (gain) on
revaluation of derivative liability
|
54,110
|
(3,616)
|
Interest
income
|
(38)
|
(61)
|
Finance
costs
|
3,349
|
6,727
|
Income taxes,
net
|
687
|
-
|
Share-based
compensation
|
532
|
698
|
Acquisition and
business development costs
|
411
|
184
|
Depreciation &
amortization
|
4,329
|
3,025
|
Professional fees
related to financing activities
|
378
|
92
|
Impairment expense,
net
|
-
|
880
|
Impairment of ROU
assets, net of lease liabilities remeasurement
|
-
|
3,399
|
Restructuring
charges
|
147
|
-
|
Adjusted
EBITDA
|
2,307
|
(1,410)
|
Conference Call
Fire & Flower will host a conference call with Trevor Fencott, Chief Executive Officer, and
Judy Adam, Chief Financial Officer
at 8:30 a.m. EDT on June 15, 2021. The conference call will discuss
Fire & Flower's first quarter 2021 financial and operational
results.
Dial-In Information
Toll-Free Dial-In Number: 1-888-390-0546
Replay Information (Available until July 6, 2021)
Toll-Free Dial-In Number: 1-888-390-0541; Replay
Code: 122820#
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 85 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 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 American Acres Managers 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 May 1, 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.