Sugarbud Craft Growers Corp. (TSXV: SUGR, SUGR.DB, SUGR.WR,
SUGR.WS, SUGR.WT) (OTCQB: SBUDF) (
"Sugarbud") is
pleased to announce that the Company has recorded its second
consecutive quarterly positive EBITDA result in Q1 2021 and the
filing of its unaudited condensed consolidated interim financial
statements (
"Financial Statements") for the three
months ended March 31, 2021 and related management's discussion and
analysis (
"MD&A"). Sugarbud's Financial
Statements and MD&A are available on SEDAR
at www.sedar.com and on Sugarbud's website here: Sugarbud
Q1, 2021 Financials and MD&A
Key Operating Highlights for Q1
2021
- Net Revenue Growth
| Sugarbud continued the growth of top-line sales in Q1 2021. Net
revenue for the quarter ending March 31, 2021 was $518,016, which
represents a 50% increase over Q4 2020.
- Net Volume Growth
| The Company shipped 78,626 grams of dried cannabis in Q1 2021
compared to 52,000 grams in Q4 2020.
- Gross Profit
Growth | Gross profit before fair market value adjustments
was 24% in Q1 2021; 4% higher than Q4 2020.
- Price/Gram
Stability | Sugarbud bucked the industry-wide trend of
average selling price ("ASP") declines in Q1 2021
- evidence that its focus on total quality and value in the premium
craft sector is aligned with consumer expectations and demand.
Average net selling price per gram remained stable in Q1 2021 at
$6.59/g - up marginally ($0.05) from a net ASP of $6.54 in Q4
2020.
- Net Profit from
Operations | The Company achieved its first net profit
from operations during Q1 2021 – a key milestone achieved within
the first 9 months of revenue-generating operations.
- Material and Consistent
Improvements in EBITDA Across the Last 5 Quarters |
Sugarbud improved EBITDA in Q1 2021 by 158% over Q4 2020 and by
more than $1.76MM over Q1 2020 – the Company's fifth consecutive
quarter of EBITDA growth. Sugarbud remains on track for further
growth in 2021.
- Harvest
Consistency | During the three months ended March 31,
2021, the Company successfully completed two harvests - resulting
in a total of 288,384 grams harvested. Sugarbud's cultivation and
processing operations continue to deliver consistent yields
(average 90.5g per plant during Q1 2021) while simultaneously
maintaining exceptional terpene content (2-5%) and total potency
(THC 19-21%) – a testament to our focus on exceptional genetics,
plant health and best practice cultivation and post-harvest
processing techniques.
- Established Distribution
and Reach | Established new supply agreements in the
Province of Ontario and the Yukon Territory, as well as entered
into a registered medical patient supply agreement with CannMart to
provide access to the Company's cannabis products to patients
nationwide via CannMart's online medical platform, Vendorlink.
- Cannabis 2.0 Launch
Acceleration | The Company also entered into a national
purchase and supply agreement for the Company's Cannabis 2.0
products with CannMart Inc. in Q1 2021.
- Over-Subscribed Public
Offering | On March 16, 2021, the Company closed a
bought-deal public offering of units for aggregate gross proceeds
of $4,600,230.
- Upgraded to the OTCQB
Venture Market | Subsequent to March 31, 2021, the Company
was approved by FINRA for quotation in the United States on the
OTCQB Venture Market which the Company expects will help maximize
long-term shareholder value by increasing visibility and improving
liquidity for investors.
"We are delighted to share another quarter of
positive progress against our operating plan – with tangible
improvements achieved across all our key operating metrics – most
notably revenue growth and gross profit – culminating in our 5th
consecutive quarter of EBITDA growth," stated Sugarbud President
and CEO, John Kondrosky.
"Despite significant challenges industry-wide,
we view our ability to deliver meaningful growth and stability in
our Q1 2021 results as a further testament to our disciplined and
focused approach to cost management, operational excellence and
exceptional, consumer-driven, craft cannabis products," Mr.
Kondrosky added.
"Together with continued operating discipline,
entry into Ontario, further expansion of our dried cannabis product
offerings, the upcoming launch of our Cannabis 2.0 products, and
our continuous improvements in cultivation and processing
techniques, Sugarbud remains on track to deliver sustainable growth
and long-term shareholder value moving forward," concluded Mr.
Kondrosky.
Corporate UpdateOn May 17th,
2021, Mr. Joseph Dietrich was appointed as a member of the board of
directors of Sugarbud. Mr. Dietrich brings 40+ years of technical,
management, investment, and business experience, including
practical knowledge of cannabis flower and hashish production,
extraction, breeding, and genetics. Mr. Dietrich holds MBA
(financing and marketing) and Science degrees, and certificates in
cannabis Plant Production & Facility Management and Teaching.
Mr. Dietrich also sits on the board of Alberta petroleum producer
Concrest Corporation Ltd, and co-founded TSX-listed TDG Gold Corp.
Prior to his appointment as a Director, Mr. Dietrich had been a
special adviser to the Company.
About Sugarbud
www.sugarbud.ca
Sugarbud is an Alberta-based, consumer-driven
boutique craft cannabis company focused on the cultivation and
production of superior, select-batch, craft cannabis products. Our
vision and mission are to become a trusted and well-respected
consumer brand renowned for providing exceptional high-quality
craft cannabis products to legal markets by delighting the
most discerning of cannabis consumers.
The Sugarbud Craft Cannabis Collection offers
consumers "Hand-Crafted Cannabis for a New Era". The Company is
proudly Albertan and is proud to share Western Canada's long
tradition of exceptional craft cannabis with the most discerning of
enthusiasts. Sugarbud strives to define the intersection of product
craftsmanship, quality, and value for consumers in the Canadian
craft cannabis space.
We Take Pride, We Take Our Time…………. Experience
the Difference
CONTACTS:John Kondrosky Chief Executive
Officer Sugarbud Craft Growers Corp. Phone: (604) 499-7847
E-mail: johnk@sugarbud.caInvestor
Relations ContactChris
MoulsonChief Financial OfficerSugarbud
Craft Growers Corp.Tel: (778) 388-8700E-mail:
chrism@sugarbud.caWebsites:
http://www.sugarbud.ca/http://craftcannabiscollection.caAddress:
Suite 620, 634 - 6th Avenue S.W., Calgary, Alberta T2P 0S4 |
|
Forward Looking and Cautionary Statements
This news release contains forward-looking
statements. More particularly, and without limitation, this news
release contains statements concerning: the Company's business
strategy and future operations; ability to cultivate and produce
premium cannabis products; the distribution and sale of Sugarbud's
cannabis products; future product offerings, including the
development, commercialization and sale of Cannabis 2.0 products;
and the Company's expectations regarding its revenues generated
from sales of the Company's product lines. When used in this
document, the words "will," "anticipate," "believe," "estimate,"
"expect," "intent," "may," "project," "should," and similar
expressions are intended to be among the statements that identify
forward-looking statements.
The forward-looking statements are founded on
the basis of expectations and assumptions made by Sugarbud,
including, but not limited to: the success of the Company's
business strategy, including organic growth, partnerships and other
strategic activities; ability to manage growth in the Company's
business; the ability to maintain licenses and necessary approvals
for Sugarbud to cultivate cannabis at the Stavely facility; ability
to cultivate premium cannabis products; ability to sell cannabis
products; access to market for the Company's future cannabis
products; impact of increasing competition; ability to keep pace
with changing consumer preferences; ability to protect the
Company's intellectual property; timing and amount of capital
expenditures; operating costs; government regulations, including
future legislative and regulatory developments involving
recreational and medical cannabis and the timing thereto; changes
to laws regarding the recreational and medical use of cannabis and
the impact on the Company's business strategy; demand for cannabis
products and corresponding forecasted increase in revenues; size of
the recreational and medical cannabis markets in Canada;
legislative and regulatory environments of the jurisdictions where
the Company carries on business; ability of the Company to obtain
qualified staff, services, supplies and equipment in a timely and
cost-efficient manner; the Company's competitive advantages; and
conditions in general economic and financial markets.
Forward-looking statements are subject to a wide
range of risks and uncertainties, and although Sugarbud believes
that the expectations represented by such forward-looking
statements are reasonable, there can be no assurance that such
expectations will be realized. Any number of important factors
could cause actual results to differ materially from those in the
forward-looking statements including, but not limited to: the
global public health crises in respect of the outbreak of a novel
strain of coronavirus (COVID-19), including volatility and
disruptions in global supply chains and financial markets, as well
as declining trade and market sentiment and reduced mobility of
people; success of the operations of the Company; ability of the
Company to execute its business strategy; the effect consumer
perception of the medical and recreational use of cannabis will
have on the market price of cannabis products; the premium segment
of the medical and recreational cannabis markets; consumer's
attraction to premium cannabis products and changes in consumer
preference; development of the cannabis industry in ways that
differ from the Company's expectations; legislative and regulatory
environments of the jurisdictions where the Company carries on
business or has operations; ability of Sugarbud to develop or
maintain a brand that attracts or retains customers; any failure by
the Company to comply with applicable regulations could prevent it
from being able to carry on its business, and there may be
additional costs associated with any such failure; federal,
provincial and municipal government cannabis regulation and changes
thereto; actions taken by governmental authorities, including
increases in taxes and changes in government regulations; any
failure by the Company or its suppliers to comply with supplier
standards established by provincial or territorial distributors
could prevent the Company from accessing certain markets in Canada;
constraints by law in the Company's ability to market its products
in Canada; development of the Stavely facility, including
construction delays; availability of sufficient financial resources
to fund the Company's capital expenditures; stock market volatility
and market valuations; changes in general economic, market and
business conditions; the effect of any future litigation
proceedings on the Company's business; impact of competition and
the competitive response to the Company's business strategy;
competition for, among other things, licences, capital, skilled
personnel and customers the risks of the cannabis industry, such as
regulatory risks and increasing competition; timing and amount of
capital and other expenditures; the availability of capital on
acceptable terms or at all; cyber-security issues; and, in relation
to the Company's expectations regarding revenues, assumptions
relating to production and production capacity, growth in the
number of product offerings and store locations in which the
Company's products are sold, growth in total sales, consumer demand
for the Company's products, market pricing of cannabis products,
cost of sales, general and administrative expenses (including sales
and marketing expenses), the pace of opening of and increase in the
total number of recreational cannabis retail stores across Canada,
and the total size of the Canadian recreational and medical
cannabis markets over that time period. Please refer to Sugarbud's
most recent annual information form and management's discussion and
analysis for additional risk factors relating to Sugarbud, which
can be accessed under Sugarbud's profile
on www.sedar.com. Except as required by applicable
Canadian securities laws, Sugarbud does not undertake any
obligation to publicly update or revise any forward-looking
statements.
This news release contains future-oriented
financial information and financial outlook information
(collectively, "FOFI") about the Company's reasonably estimated
prospective results of operations, cannabis production capacity and
volumes, ASP, average net selling price per gram, revenue,
expenses, profit, EBITDA and components thereof, all of which are
subject to the same assumptions, risk factors, limitations and
qualifications as set forth in the above paragraphs, including with
respect to economic conditions and proposed courses of action,
based on management's assessment of the relevant information
available as of the date of this news release. Sugarbud disclaims
any intention or obligation to update or revise any FOFI contained
in this news release, whether as a result of new information,
future events or otherwise, unless required pursuant to applicable
law.This news release provides certain financial measures that do
not have a standardized meaning prescribed by International
Financial Reporting Standards ("IFRS"). These non-IFRS financial
measures may not be comparable to similar measures presented by
other issuers. EBITDA (meaning earnings before interest, taxes,
depreciation and amortization) is not a recognized measure under
IFRS. Management uses certain industry benchmarks, such as EBITDA
to analyze financial and operating performance. These metrics are
useful to investors and research securities analysts in evaluating
operating performance. These benchmarks do not have any
standardized meaning prescribed by IFRS and therefore may not be
comparable with the calculation of similar measures for other
entities. Please refer to the MD&A for additional information
relating to non-IFRS measures, including the Company's calculation
of EBITDA.
Neither the TSXV nor its regulation
services provider (as that term is defined in the policies of the
TSXV) accepts responsibility for the adequacy or accuracy of this
release.
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