- Fiscal 2022 featured four consecutive quarters of positive
net income and significant year-over-year earnings growth
- Gross revenue of $17.1 million
and gross profit of $5.6 million are
highest in company history
- Strong momentum exiting Q4/22 lends visibility into
continued revenue, gross profit and earnings expansion through
Q1/23 and beyond
CALGARY,
AB, Nov. 29, 2022 /CNW/ - CanadaBis Capital
Inc. (the "Company" or "CanadaBis") (TSXV: CANB) along with its
subsidiaries STIGMA GROW AND INCICATIVE COLLECTION, a premium
vertically integrated Canadian cannabis company, is very pleased to
announce the results of our fourth quarter and 12-month fiscal
period ended July 31, 2022,
representing the fourth consecutive quarter realizing positive
earnings, robust revenue growth and solid Adjusted
EBITDA1, driving record annual performance for the
Company.

"The successful execution of our overall innovative product
selection through fiscal 2022 supported strong sales growth and set
the stage for CanadaBis / Stigma Grow to continue generating
meaningful profitability in 2023 across our integrated portfolio of
brands," said Travis McIntyre, CEO
of CanadaBis. "With a 'consumer-first' approach to driving our
growth coupled with a firm commitment to controlling costs across
the supply chain, we are aiming to continue aggressively executing
our strategy through fiscal 2023, offering investors a compelling
opportunity to participate in the success and value creation
initiatives being advanced by CanadaBis."
Q4 AND 2022 FINANCIAL HIGHLIGHTS: BREAKING RECORDS
- Sustained Profitability Sets the Stage for Further Success
in 2023 –Fiscal 2022 represents CanadaBis' first year since
inception to record positive net income which totaled
$607,951 compared to a net loss of $2.68 million in 2021. Income in Q4/22 was net
positive $481,758 compared to a net
loss of $1.2 million in Q4/21. Higher
product sales derived from our butane hydrocarbon (BHO) extraction
process, combined with the introduction of several new and
well-received stock keeping units (SKUs) enhanced purchase orders
and we anticipate seeing this trend continue into Q1/23.
- Record Growth in Gross and Net Revenue – Gross revenue
of $6.4 million and
$17.1 million in Q4/22 and
full year 2022 represents a corporate record, increasing
202% and 113% over the same respective periods in
2021 due to steady sales increases. In addition, stronger demand
for new and existing SKUs, including those launched under our Dab
Bod Brand into five provinces, along with continued demand for
innovative products such as our High Priestess brand and Infuse
pre-rolls, contributed to ongoing revenue expansion during fiscal
2022.
- Realizing Consistent Positive Adjusted
EBITDA1 - Adjusted EBITDA1
totaled $675,619 in Q4/22, a 71% increase over the
previous quarter, and totaled $1.73
million for the 12-month period ended July 31st, 2022. The Company's 2022
financial period marks our first fiscal year reporting on Adjusted
EBITDA, for which CanadaBis successfully generated positive
Adjusted EBITDA. The combination of expanded awareness, improved
sales and cost reductions all contributed to CanadaBis reporting
our most successful year since our inception.
- Higher Unit Sales and Brands Selling Out – The Company
sold over 300,000 units of combined concentrate and dry flower for
the quarter ended July 31, 2022, a
significant increase compared to the 90,000 units sold over the
comparative period. 900,000 units sold for the 12 months period
ended July 31, 2022, a 373% increase
over previous year.
- Capturing Cost Efficiencies to Bolster the Bottom Line –
During 2022, our cost of revenue decreased 18% over 2021 as
significantly reduced input costs drove enhanced margins. We
successfully renegotiated material prices with cannabis cultivators
and other suppliers, which afforded access to better pricing and
terms on higher volume bulk purchases, we also adjusted some of our
production line procedures to better manage operational costs while
continuing to maintain efficiencies. Into our 2023 fiscal year, we
have remained committed to cutting costs through our vertically
integrated business model and will strive to further benefit from
our growing economies of scale.
- Aligning Products with Evolving Customer Preferences -
We have continued to re-formulate our concentrate lines to ensure
CanadaBis offerings are reflective of rapidly shifting customer
preferences – particularly for larger terpene profiles.
ANNUAL & QUARTERLY HIGHLIGHTS
|
Three months
ended
|
12 months
ended
|
|
July 31,
2022
|
July 31,
2021
|
%
Change
|
July 31,
2022
|
July 31,
2021
|
%
Change
|
Gross
revenue
|
$6,411,808
|
$2,125,932
|
202 %
|
$17,052,334
|
$7,990,412
|
113 %
|
Excise
duty
|
$2,233,366
|
$462,302
|
383 %
|
$5,383,365
|
$1,124,107
|
379 %
|
Net
revenue
|
$4,178,442
|
$1,663,630
|
151 %
|
$11,668,969
|
$6,866,305
|
70 %
|
Cost of
sales
|
$2,277,345
|
$1,131,827
|
101 %
|
$6,096,748
|
$4,349,746
|
40 %
|
Gross profit
(loss)
|
$1,901,097
|
$531,803
|
257 %
|
$5,572,221
|
$2,516,559
|
121 %
|
Net income (loss)
and
comprehensive income (loss)
|
$481,758
|
($1,195,906)
|
-
|
$607,951
|
($2,680,910)
|
-
|
Per share (basic
and diluted)
|
$0.00
|
($0.01)
|
-
|
$0.00
|
($0.02)
|
-
|
Adjusted
EBITDA1
|
$675,619
|
Not
assessed
|
-
|
$1,727,569
|
Not
assessed
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Adjusted EBITDA is a Non-GAAP
performance measure. Refer to "Cautionary Statement Regarding
Certain Non-GAAP Performance Measures" for further details. Within
the Company's MD&A, EBITDA calculation is shown by entity to
demonstrate the breakdown of each entity.
|
SEGMENT OVERVIEW
Extraction and Tolling
Our Extraction and Tolling segment provides cannabinoid
extraction services to other licensed producers and represented 95%
and 91% of our total net revenue in Q4/22 and FY22, respectively,
and grew 54% to $4.0 million and 61%
to $10.6 million, respectively, over
the same periods in 2021. A significant increase in sales from
extract products in Alberta,
Ontario, Manitoba, Saskatchewan and British Columbia, contributed to this growth,
driven in part by our active product awareness campaign and the
launch of several new SKUs that were extremely well received in the
market.
In addition to our white label services, sales expansion has
continued for Resin infused pre-rolls, new Strains of our vapes
under the NGL brand and our moon rocks products. Continued market
demand for these custom-made products drives significant demand for
our state-of-the-art BHO extraction capabilities, and we anticipate
continued expansion into this segment as we see market share
continues to grow.
Cultivation and Wholesale
Net cultivation and wholesale revenue comprised 1% and 3% of
total revenue in Q4/22 & FY22, respectively, and declined 45%
to $32,242 and 41% to $203,178 during the three and 12-month periods
ended July 31, 2022, respectively,
relative to the same periods in 2021. With a significant
increase of licensed producers across Alberta, we saw reduced sales in our pre-roll
products, and the Company has recently shifted focused to the
expansion of our more economic Extraction and Tolling segment.
Going forward, CanadaBis intends to re-establish our position in
the Alberta market for cultivating
cannabis flowers with our own premium bud. We anticipate this will
launch in the last calendar quarter of 2022 and position CanadaBis
optimally to provide quality product at a lower price.
Notwithstanding the top line declines over the past year, margins
for this segment remain very healthy, supporting our strategy to
advance it as a viable segment of the business.
Retail Operations
As we have witnessed significant growth in total cannabis retail
stores across Alberta, our retail
operations have faced increased competition causing lower sales due
to fewer customers. In Q4/22 and full year 2022, our net retail
revenue totaled $145,211 and
$679,420, respectively, representing
approximately 3.5% and 6% of our total net revenue, respectively.
In light of the intensely competitive retail landscape, CanadaBis
intends to continue rebranding the Company and undertaking more
aggressive marketing initiatives designed to increase market share
and drive higher expectations for growth through the first fiscal
quarter of 2023 and beyond.
OUTLOOK
I am incredibly proud of the tremendous performance and progress
the team at Stigma Grow as well as Indicative Collection made
through our fiscal 2022 year as we leveraged our multifaceted
assets, enabling growth in multiple segments of the Canadian
cannabis market. The Company has clearly demonstrated the ability
to generate meaningful growth by driving operational and financial
success, and our team is confident that this momentum will continue
into future periods.
CanadaBis has numerous competitive advantages that support our
long-term success in an expanding and evolving industry. Over the
short-term, we plan to continue differentiating ourselves by virtue
of our BHO extraction process which allows for a highly
concentrated extraction of cannabis that ultimately produces some
of the world's most potent marijuana concentrate. We continue to
expand and improve these processes due to their proven and robust
contributions to corporate result, supported by a sharp focus on
exploring additional opportunities to develop the Extraction and
Tolling segment. In addition, the Company continues to undertake
exploratory work to formulate various new and exciting concentrate
products to meet the demands of our customers and help diversify
our sales offerings into a competitive marketplace.
Given our position as a vertically integrated Cannabis company,
we intend to continue introducing new Canadian concentrate products
under our own brand, as well as third-party brands, while
establishing our presence as an in-demand Licensed Producer with
unique abilities and maneuverability. Further, we will continue to
support education initiatives within the industry to help consumers
better understand how cannabis products integrate into daily life
and the various use cases. We remain excited about the opportunity
to continue capturing market share using our diverse portfolio of
brands, our unique products and services and our ability to benefit
from ongoing industry developments.
We believe the stage has been set for CanadaBis to continue on
our trajectory of strengthening financial metrics for the upcoming
year, building on the robust revenue and earnings momentum created
by our fourth consecutive quarter's positive results. The
Company's consistent growth in sales performance is expected to
carry forward into the next quarter based on sustained high demand
and significantly increased purchase orders on our new products
such as moon rocks, infused pre-rolls, live resin vapes and high
CBD cartridges, which have shown strong market acceptance in the
early going.
ABOUT CANADABIS CAPITAL INC.
CanadaBis Capital Inc. (TSXV:CANB) is a vertically integrated
Canadian cannabis company focused on achieving large-scale growth,
from cultivation to retail, in the fast-emerging global cannabis
market. By targeting organic growth opportunities alongside the
right-fit partners, we remain focused on finding and capitalizing
on chances to grow, diversify and continue to lead our
industry.
Our integrated subsidiaries:
- Stigma Pharmaceuticals Inc. – 100% held
- 1998643 Alberta Ltd. (operating as "Stigma Grow") - 100%
held; www.stigmagrow.ca
- Full Spectrum Labs Ltd. (operating as "Stigma Roots") -
100% held
- 2103157 Alberta Ltd. (operating as "INDICAtive
Collection") -100% held; www.indicativecollection.ca
- Goldstream Cannabis Inc. - 95% held
ABOUT STIGMA GROW
Stigma Grow is a cutting-edge cannabis cultivation and
extraction company positioned advantageously to meet the unmet
market demands and stigmas within the legal cannabis industry head
on, with products designed to disturb the status quo and
dramatically shift the conversation surrounding Canada's legal cannabis industry.
CAUTIONARY STATEMENTS
Non-GAAP Measures
This news release contains the financial performance metric of
Adjusted EBITDA, a measure that is not recognized or defined under
IFRS (a "Non-GAAP Measure"). As a result, this data may not be
comparable to data presented by other cannabis companies. For an
explanation and reconciliation of Adjusted EBITDA to related
comparable financial information presented in the Financial
Statements prepared in accordance with IFRS, refer to the MD&A
for the three and nine months ended April 30, 2022. The
Company believes that Adjusted EBITDA is a useful indicator of
operational performance and is specifically used by management to
assess the financial and operational performance of the
Company.
Adjusted EBITDA is a measure of the Company's financial
performance. It is intended to provide a proxy for the Company's
operating cash flow and is widely used by industry analysts to
compare CanadaBis to its competitors and derive expectations of
future financial performance of the Company. Adjusted EBITDA
increases comparability between comparative companies by
eliminating variability resulting from differences in capital
structures, management decisions related to resource allocation,
and the impact of fair value adjustments on biological assets,
inventory, and financial instruments, which may be volatile on a
period-to-period basis. Adjusted EBTIDA is not a recognized,
defined, or standardized measure under IFRS. The Company calculates
Adjusted EBITDA as net income (loss) and comprehensive income
(loss) excluding changes in fair value of biological assets, change
in fair value of biological assets realized through inventory sold,
depreciation and amortization expense, share-based payments, and
finance costs.
Regarding Forward-Looking Information
This news release includes certain "forward-looking statements"
under applicable Canadian securities legislation. Forward-looking
statements include but are not limited to statements with respect
to our business and operations; timing of the Sundial products
coming to market; the demand and market for live-resin vape
cartridges, and our general business plans. Forward-looking
statements are necessarily based upon a number of assumptions
including: the ability of the Company's products to compete with
the pricing and product availability on the black-market; the
market demand for the Company's products; and assumptions
concerning the Company's competitive advantages. These assumptions,
while considered reasonable, are subject to known and unknown
risks, uncertainties, and other factors which may cause actual
results and future events to differ materially from those expressed
or implied by such forward-looking statements. Such factors
include, but are not limited to: compliance with extensive
government regulation, the general business, economic, competitive,
political and social uncertainties; ability to sustain or create a
demand for a product; requirement for further capital; delay or
failure to receive board, shareholder or regulatory approvals; the
results of operations and such other matters as set out in the
Company's continuous disclosure on SEDAR at www.sedar.com. There
can be no assurance that such statements will prove to be accurate,
as actual results and future events could differ materially from
those anticipated in such statements.
Accordingly, readers should not place undue reliance on
forward-looking statements. Investors are cautioned that
forward-looking information is not based on historical facts but
instead reflects management's expectations, estimates or
projections concerning future results or events based on the
opinions, assumptions and estimates of management considered
reasonable at the date the statements are made. Although we believe
that the expectations reflected in such forward-looking information
are reasonable, such information involves risks and uncertainties,
and undue reliance should not be placed on such information, as
unknown or unpredictable factors could have a material adverse
effect on our future results, performance or achievements.
Should one or more of these risks or uncertainties materialize,
or should assumptions underlying the forward-looking information
prove incorrect, actual results may vary materially from those
described herein as intended, planned, anticipated, believed,
estimated or expected. Although the Company has attempted to
identify important risks, uncertainties and factors which could
cause actual results to differ materially, there may be others that
cause results not to be as anticipated, estimated or intended. The
Company does not intend, and does not assume any obligation, to
update this forward-looking information except as otherwise
required by applicable law.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE CanadaBis Capital Inc.