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Delta 9 Cannabis Inc
Symbol DN
Shares Issued 101,940,350
Close 2021-03-31 C$ 0.60
Recent Sedar Documents

Delta 9 loses $3.15-million in Q4

2021-03-31 17:35 ET - News Release

Mr. John Arbuthnot reports

DELTA 9 REPORTS YEAR END AND Q4 2020 RESULTS

Delta 9 Cannabis Inc. has released financial and operating results for the fourth quarter and full year ended Dec. 31, 2020.

Financial highlights for the year 2020:

  • Record net revenues of $52-million in 2020, up 64 per cent in 2020 compared with $31.8-million in 2019, including the following revenue segmentation highlights:
    • Retail revenue increased 109 per cent to $32.2-million in 2020.
    • Wholesale revenue increased 24 per cent to $11.8-million in 2020.
    • Business-to-business revenue increased 38 per cent to $8.6-million in 2020.
  • Gross profit (1) of $17.8-million in 2020 was up 105 per cent compared with $8.7-million last year.
  • Gross profit margin was 34 per cent in 2020 compared with 27 per cent last year.
  • Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) (2) was $3.8-million in 2020 compared with an adjusted EBITDA (2) (loss) of ($3.4-million) last year.
  • Income (loss) from operations of ($2.8-million) in 2020 compared with income (loss) from operations of ($5.0-million) last year.
  • Working capital was up 18 per cent to $22.9-million as at Dec. 31, 2020.

Financial highlights for fourth quarter of 2020:

  • Record quarterly net revenues of $14.15-million for the fourth quarter of 2020, up 34 per cent compared with $10.6-million for the same quarter last year:
    • Sequentially net revenues increased 8 per cent for the fourth quarter of 2020 compared with $13.1-million in the third quarter of 2020;
  • Gross profit (1) of $4.4-million for the fourth quarter of 2020, up 132 per cent compared with $1.9-million for the same quarter last year:
    • Sequentially, gross profit (1) was up 11 per cent in the fourth quarter of 2020 compared with $3.96-million in the third quarter of 2020;
  • Gross profit margin was 31 per cent for the fourth quarter of 2020;
  • Sequentially adjusted EBITDA (2) improved to $1.9-million in the fourth quarter of 2020 compared with an adjusted EBITDA (loss) of ($474,039) in the third quarter of 2020;
  • Income (loss) from operations of ($2.4-million) in the fourth quarter compared with income (loss) from operations of ($5.0-million) in the third quarter of 2020.

"Our focus on disciplined, profitable growth has paid dividends for Delta 9 as we are reporting record adjusted EBITDA and record year-over-year and sequential revenue results," said John Arbuthnot, chief executive officer. "Delta 9 Cannabis continues to execute its vertically integrated strategy as it continues to accelerate revenue growth and implement prudent control costs. We are incredibly proud of our 300-plus employees for helping make this a record year for Delta 9."

                                              SUMMARY OF QUARTERLY RESULTS
 
Consolidated statement of net income (loss)                Q1 2020          Q2 2020          Q3 2020          Q4 2020

Revenue                                                $11,753,406      $13,013,610      $13,130,320      $14,149,717
Cost of sales                                            6,858,370        8,394,239        9,168,026        9,794,536
Gross profit before unrealized gain from changes
in biological assets                                     4,895,036        4,619,371        3,962,294        4,355,181
Unrealized gain from changes in fair value of
biological assets (net)                                  2,761,873        2,460,490       (2,338,699)      (2,717,281)
Gross profit                                             7,656,909        7,079,861        1,623,595        1,637,900
Expenses
General and administrative                               3,198,840        3,676,326        4,047,063        1,600,778
Sales and marketing                                      1,243,115        1,534,875        1,753,461        2,091,947
Share-based compensation                                   314,231          174,779          776,705          353,798
Total operating expenses                                 4,756,186        5,385,980        6,577,229        4,046,523
Adjusted EBITDA (loss) (1)                               1,650,398          706,469         (474,039)       1,912,931
Income (loss) from operations                            2,900,723        1,693,881       (4,953,634)      (2,408,623)
Other income/expenses                                     (711,538)        (262,364)        (595,547)        (747,084)
Net income (loss)                                        2,189,185        1,431,517       (5,549,181)      (3,155,707)
Basic and diluted earnings (loss) per share                   0.02             0.01            (0.07)           (0.04)

(1) Adjusted EBITDA is a non-international financial reporting standard measure, and is calculated as earnings 
before interest, tax, depreciation and amortization, share-based compensation expense, fair value changes, and 
other non-cash items.

A comprehensive discussion of Delta 9's financial position and results of operations is provided in the company's management's discussion and analysis for the fourth quarter and year ended Dec. 31, 2020, filed on SEDAR and can be found at SEDAR.

Fourth quarter results 2020 conference call

Delta 9 has scheduled a conference call to discuss the results of the fourth quarter and full year ended Dec. 31, 2020. The conference call will be hosted April 1, 2020, at 9 a.m. Eastern Time, by Mr. Arbuthnot, and Jim Lawson, chief financial officer, followed by a question-and-answer period.

Date:  April 1, 2020

Time:  9 a.m. Eastern Time

Dial-in number:  1-888-886-7786

Replay:  1-877-674-6060 available until 12 a.m. Eastern Time on July 1, 2021

Replay passcode:  641689 followed by the number sign

About Delta 9 Cannabis Inc.

Delta 9 is a vertically integrated cannabis company, focused on bringing the highest-quality cannabis products to market. The company sells cannabis products through its wholesale and retail sales channels and sells its cannabis grow pods to other businesses. Delta 9's wholly owned subsidiary, Delta 9 Bio-Tech Inc., is a licensed producer of medical and recreational cannabis, and operates an 80,000-square-foot production facility in Winnipeg, Man., Canada. Delta 9 owns and operates a chain of retail stores under the Delta 9 Cannabis Store brand. Delta 9's shares trade on the Toronto Stock Exchange under the symbol DN and on the OTCQX under the symbol DLTNF.

(1) The company's gross profit is calculated before adjustments for changes in biological assets.

(2) The company's adjusted EBITDA is a measure used by management that does not have any standardized meaning prescribed by international financial reporting standards and may not be comparable with similar measures presented by other companies. Management defines adjusted EBITDA as income (loss) from operations, as reported, before interest and tax, adjusted for removing share-based compensation expense, depreciation and amortization, and the fair value effects of accounting for biological assets and inventories. Management believes that adjusted EBITDA and the attribution of adjusted EBITDA provide meaningful and useful financial information as these measures demonstrate the performance of the company's operating businesses.

We seek Safe Harbor.

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