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Lifeist Wellness Inc
Symbol LFST
Shares Issued 556,346,686
Close 2023-10-27 C$ 0.015
Market Cap C$ 8,345,200
Recent Sedar Documents

Lifeist has $2.4-million continuing ops loss in Q3

2023-10-27 19:33 ET - News Release

Mr. Meni Morim reports

LIFEIST REPORTS THIRD QUARTER 2023 FINANCIAL RESULTS

Lifeist Wellness Inc. has released its financial results for the three months ended Aug. 31, 2023, compared with the same period last year.

Third quarter:

  • Net revenue of $4.8-million in third quarter 2023 compared with $6.8-million in Q3 2022;
  • The strategic focus on high-margin activities and operational efficiency continues to pay off with gross margins improving to 30 per cent in Q3 2023 compared with 20 per cent in Q3 2022;
  • Gross profit before inventory adjustment increased slightly to $1.4-million;
  • Operating costs and professional fees drop 21.4 per cent to $3.1-million in Q3 2023 compared with $3.8-million in Q3 2022.

"Our steadfast commitment to transforming Lifeist into a diversified wellness company with high-margin business units remains on track," said Meni Morim, chief executive officer of Lifeist. "Our third quarter performance, while presenting unique challenges, underscores our unwavering dedication to continuous improvement and efficiency. We have shifted our primary focus to gross profit enhancement, rather than simply revenue growth, and together with cost-efficiency measures in Q3 2023, such actions yielded promising results. With this strategic shift in focus, we will be better positioned to weather industry fluctuations, foster profitability and deliver sustainable growth. We look forward to communicating our progress within our business units as we continue to navigate the challenging path forward."

Financial summary

Net revenue was $4.8-million in Q3 2023 compared with $6.8-million in Q3 2022 due to supply chain challenges impacting CannMart's cannabis revenue in Q3 2023, as compared with Q3 2022.

Gross profit before inventory adjustment increased 2.9 per cent to $1.4-million in Q3 2023 versus the same period last year, with margins expanding to 30 per cent in Q3 2023 from 20 per cent in second quarter 2023. The increase in margins in Q3 2023 as compared with Q3 2022 reflects the success of the company's strategic focus on individual segments, geographies and products, as well as a continuous effort to improve production efficiencies across all segments.

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) loss increased to $2.1-million in Q3 2023 compared with $1.2-million in Q3 2022 and net loss from continuing operations was $2.4-million, or (0.5 cent) per diluted share, in Q3 2023 compared with loss of $1.9-million, or (0.5 cent) per share, in Q3 2022. The increase in both adjusted EBITDA loss and net loss was due largely to a significant one-time gain recorded in Q3 2022 relating to the termination of a distribution agreement. Excluding this one-time gain, adjusted EBITDA and net loss improved year over year.

Balance sheet and cash flow

Cash and cash equivalents were $1.4-million at Aug. 31, 2023, compared with $3.8-million at Nov. 30, 2022.

Inventories were $5.6-million at Aug. 31, 2023, compared with $4.5-million at Nov. 30, 2022.

The working capital position was $3.7-million at Aug. 31, 2023.

Net cash used by operations was $1.5-million in Q3 2023 compared with $3.2-million in Q3 2022, due in part to lower revenue from CannMart and reductions in overall operating costs.

Additional information

The company's complete financial statements and management's discussion and analysis for Q3 2023 are available on Lifeist's website and SEDAR+.

About Lifeist Wellness Inc.

Sitting at the forefront of the postpandemic wellness revolution, Lifeist leverages advancements in science and technology to build breakthrough companies that transform human wellness. Portfolio business units include: CannMart, which operates a business-to-business wholesale distribution business, facilitating recreational cannabis sales to Canadian provincial government control boards; CannMart Labs, a BHO extraction facility for the production of high-margin cannabis 2.0 products; Aus Vapes, Australia's largest on-line retailer of vaporizers and accessories; and Mikra, a bioscience and consumer wellness company, seeking to develop innovative therapies for cellular health.

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