CALGARY, AB,
June 23,
2022 /CNW/ - CanadaBis Capital Inc. (the "Company" or
"CanadaBis") (TSXV: CANB) a premium vertically integrated Canadian
cannabis company, is pleased to announce record fiscal Q3 2022
financial results for the three and nine-month period ending
April 30, 2022.
"The successful expansion of our overall product selection to
date in 2022 coupled with strong sales growth across our integrated
portfolio of brands supports the generation of meaningful
profitability in 2022," said Travis
McIntyre, CEO of Canadabis. "We are excited to carry this
momentum throughout the balance of our fiscal year and beyond,
maintaining our 'consumer-first' approach to drive growth while
continuing to reduce costs across our supply chain, promoting
sustained earnings. We feel the Company is well positioned to
execute our strategy of building long term corporate
sustainability, offering investors an extremely compelling
opportunity to gain exposure to this exciting and evolving
sector."
Q3/22 FINANCIAL HIGHLIGHTS: ANOTHER PROFITABLE
QUARTER
- Continued Profitability in Q3/22 – Recorded a second
consecutive profitable quarter, with net income of $123,137 compared to a net loss of $225,326 in the same period in 2021, attributable
to increased sales of products derived from our butane hydrocarbon
(BHO) extraction process, along with the introduction of several
new SKUs (Stock Keeping Unit, a unique code that identifies a
product).
- Record Gross Revenue – Gross revenue of $4.3 million in Q3/22 and $10.6 million in the nine-month period was a
corporate record, increasing 64% and 81%, respectively, over the
same periods in 2021. This reflects a 10% increase in
quarter-over-quarter sales driven by 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.
- Positive Adjusted EBITDA[1] - Adjusted
EBITDA1 totaled $0.47
million in Q3 and was $1.04
million for the nine-month period in 2022, reflecting
enhanced awareness of our brands, continued growth of the Dab Bod
products and the launch of our new High Priestess brand,
complemented by the Company's input cost reductions stemming from
successful negotiations with cultivators.
- Higher Unit Sales and Brands Selling Out – During Q3/22,
unit sales of combined concentrate and dry flower totaled more than
194,000, reflecting 66% growth over Q3/21. In addition, our Dab Bod
and High Priestess brands have been well received by the market and
increased orders from provincial purchasers have resulted in brands
selling-out multiple times, a trend that is expected to continue
through fiscal Q4/22 based on strong demand for products such as
moon rocks, infused pre-rolls, live resin vapes and high CBD
cartridges.
- Driving Down Input Costs – We have realized
significantly reduced input costs and enhanced margins stemming
from several areas. In addition to renegotiating material pricing
with cannabis cultivators and other suppliers, a trend that is
expected to continue into 2023 as incremental cultivators join the
industry, we have also revised procedures in our production lines
to better manage operational costs and we are receiving better
pricing and terms when making higher volume bulk purchases.
- Aligning Products with Evolving Customer Preferences -
We have continued to re-formulate our concentrate lines to align
our offerings more closely with shifting customer preferences for
larger terpene profiles.
QUARTERLY HIGHLIGHTS
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Three months
ended
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Nine months
ended
|
|
April 30,
2022
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April 30,
2021
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April 30,
2022
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April 30,
2021
|
Gross
revenue
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$4,303,673
|
$2,617,788
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$10,640,526
|
$5,864,480
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Excise
duty
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$1,435,758
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$404,481
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$3,149,999
|
$661,805
|
Net
revenue
|
$2,867,915
|
$2,213,307
|
$7,490,527
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$5,202,675
|
Cost of
sales
|
$1,599,701
|
$1,179,306
|
$3,819,403
|
$3,217,919
|
Gross profit
(loss)
|
$1,268,214
|
$1,034,001
|
$3,671,124
|
$1,984,756
|
Net income (loss)
and comprehensive income (loss)
|
$123,137
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($225,326)
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$126,193
|
($1,485,004)
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Per share (basic
and diluted)
|
$0.00
|
$0.00
|
$0.00
|
($0.01)
|
Adjusted
EBITDA1
|
$468,536
|
Not
assessed
|
$1,043,334
|
Not
assessed
|
SEGMENT OVERVIEW
Extraction and Tolling
Our Extraction and Tolling segment provides cannabinoid
extraction services to other licensed producers and represented 91%
of our total net revenue in Q3/22. Net revenue from this segment
for the three and nine months ended April
30, 2022 was $2.6 million and
$6.6 million, respectively,
reflecting increases of 43% and 62% over the same periods in 2021.
This growth is attributable to significantly increased sales from
extract products in the provinces of Alberta, Ontario, Manitoba, Saskatchewan and British Columbia, driven in part by our
product awareness campaign and the launch of several new SKUs that
received extremely positive market reception. Sales expansion
has continued for flavoured infused pre-rolls, new flavours of our
vapes under the NGL brand and our moon rocks products.
Cultivation and Wholesale
Net cultivation and wholesale revenue represented approximately
4% of total revenue in Q3/22, and was $59,144 and $346,454 for the three and nine-month periods
ended April 30, 2022, respectively,
reflecting growth of 18% and 214% over the corresponding periods in
2021. During the third quarter, this segment represented CanadaBis
increased our pre-roll sales across all provinces. Going
forward, we intend to re-establish our presence of cultivating
cannabis flowers in the Alberta
market with our own premium bud, which is anticipated to launch in
Q4/22 and position CanadaBis within a unique category of providing
quality product at a lower price.
Retail Operations
With increased competition in the retail market following
significant growth in retail stores across Alberta, our retail operations have
experienced lower sales and fewer customers. In Q3/22, our net
retail revenue was $154,061,
representing approximately 5% of our total net revenue, reflecting
a decline of 15% compared to the previous quarter. In light of this
competitive landscape, we plan to continue rebranding ourselves and
undertaking more aggressive marketing initiatives to increase
market share and drive higher expectations for growth in Q4/22 and
into 2023.
OUTLOOK
CanadaBis has numerous competitive advantages we can leverage to
support our long-term success in this expanding and evolving
industry. Over the short-term, we plan to continue differentiating
ourselves by virtue of our butane hydrocarbon (BHO) extraction
process, which allows for the highly concentrated extraction of
cannabis, producing some of the world's most potent marijuana
concentrate. In addition, the Company continues to undertake
exploratory work to formulate various new concentrate products to
meet the demands of our customers and help diversify our sales
offerings into a competitive marketplace
The Company's positive sales performance in Q3/22 is expected
carry forward into the next quarter based on sustained high demand
and increased purchase orders on our new products such as moon
rocks, infused pre-rolls, live resin vapes and high CBD cartridges.
Given our position as a vertically integrated Cannabis company, we
intend to continue introducing new Canadian concentrate products
under our own, 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.
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.
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1 Adjusted
EBITDA is a Non-GAAP performance measure. Refer to "Cautionary
Statement Regarding Certain Non-GAAP Performance Measures" for
further details. Presenting Adjusted EBITDA only for the three and
nine months ended April 30, 2022. Within the Company's MD&A,
EBITDA calculation is shown by entity to demonstrate the breakdown
of each entity.
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SOURCE CanadaBis Capital Inc.