Mr. Robert Beasley reports
CANSORTIUM REPORTS FOURTH QUARTER AND FULL YEAR 2023 RESULTS
Cansortium Inc. has released financial and operating results for the fourth quarter and full year ended Dec. 31, 2023. Unless otherwise indicated, all financial results are presented in U.S. dollars.
"We delivered record revenue and positive cash flow generation during the fourth quarter as we continued to execute on our growth objectives," said chief executive officer Robert Beasley. "We are making the critical investments needed to lay the foundation for growth and support our future plans, and remain excited about the opportunities ahead.
"In Florida, we continue to ramp our new dispensaries while driving cultivation improvements, leading to production of more high-quality, high-[tetrahydrocannabinol] products. These operating improvements drove higher retail prices and higher average basket size during the quarter.
"Looking ahead, we will continue to drive improvements across our footprint in Florida and Pennsylvania, while capitalizing on our first-mover advantage in Texas as we plan to open our brick and mortar delivery centre in Houston by early 2025."
Q4 2023 financial highlights (versus Q4 2022):
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Revenue increased 9 per cent to $25.5-million compared with $23.4-million.
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Florida revenue increased 11 per cent to $21.6-million compared with $19.4-million.
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Adjusted gross profit was $12.6-million or 49.4 per cent of revenue, compared with $700,000 or 3.1 per cent of revenue.
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Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $6.9-million compared with $7.9-million, with the decrease primarily driven by higher selling, general and administrative spend due to additional stores.
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Cash flow from operations for the three months ended Dec. 31, 2023, was $1.4-million compared with $3.6-million in the prior year.
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At Dec. 31, 2023, the company had approximately $10.5-million of cash and cash equivalents and $61.2-million of total debt, with approximately 300 million shares outstanding.
Full-year 2023 financial highlights (versus full-year 2022):
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Revenue increased 11 per cent to $97.3-million compared with $87.7-million.
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Florida revenue increased 11 per cent to $81.2-million compared with $73.0-million.
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Adjusted gross profit was $49.5-million or 50.9 per cent of revenue, compared with $44.0-million or 50.1 per cent of revenue.
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Adjusted EBITDA was $27.2-million compared with $25.1-million, with the increase primarily driven by higher revenue on higher customer transactions, slightly offset by higher SG&A due to new dispensary locations.
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Cash flow from operations for the full year ended Dec. 31, 2023, was $18.5-million compared with $19.1-million in the prior year.
Restatement of 2023 earnings
The audit committee of the board of directors of the company, in consultation with the company's management, concluded that the company's previously issued consolidated financial statements for the quarterly periods ended March 31, 2023, June 30, 2023, and Sept. 30, 2023, contained an error related to the accounting for the following items:
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Biological assets: Process errors related to beginning of period balances resulted in a $6.7-million misclassification of expense between cost of goods sold and realized future value of inventory. There is no impact to net income from this misclassification, but it does impact adjusted EBITDA. The affected periods are the first three quarters of 2023.
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Depreciation: A misclassification led to $2.4-million of depreciation being booked to SG&A instead of COGS. There is no impact to net income or adjusted EBITDA. The affected periods are the second and third quarters of 2023.
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ERTC claim: Due to uncertainties surrounding the ERTC program, the company has removed income from the $3.4-million sale of its ERTC to a third party. This adjustment impacts net income for the third quarter of 2023 but does not impact adjusted EBITDA.
Recent operational highlights:
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In Florida, Cansortium opened four dispensaries during 2023.
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The company has opened two new locations in Florida thus far in 2024 and currently operates 35 locations in the state.
Conference call
The company will host a conference call and live audio webcast today at 4:30 p.m. Eastern Time to discuss its financial and operational results, followed by a question-and-answer period. Interested parties may submit questions to the company prior to the call by e-mailing investors@cansortiuminc.com.
Date: Monday, April 29, 2024
Time: 4:30 p.m. Eastern Time
Toll-free dial-in number: 800-319-4610
International dial-in number: 604-638-5340
Conference ID: 10023399
Please call the conference telephone number five to 10 minutes prior to the start time. An operator will register your name and organization.
The conference call will also be available for replay in the news and events section of the company's investor relations website.
About Cansortium Inc.
Cansortium is a vertically integrated cannabis company with licences 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, Fla.
Cansortium's common shares trade on the Canadian Securities Exchange under the symbol TIUM.U and on the OTCQB Venture Market under the symbol CNTMF.
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