Cansortium Reports Third Quarter 2021 Financial Results

<br /> Cansortium Reports Third Quarter 2021 Financial Results<br />

PR Newswire


Q3 Revenue up 9% YoY to

$15.6 Million

; Adjusted EBITDA up 34% to

$4.9 million


Management to Host Conference Call Today at

5:00 P.M. Eastern Time


MIAMI

,

Nov. 30, 2021

/PRNewswire/ –

Cansortium Inc.

(CSE: TIUM.U) (OTCQX: CNTMF) (“Cansortium” or the “Company”), a vertically-integrated cannabis company operating under the Fluent™ brand, today announced financial results for the third quarter ended

September 30, 2021

. Unless otherwise indicated, all results are presented in U.S. dollars.

“We executed on several key initiatives during the quarter, including the opening of a new dispensary in

Pennsylvania

and two new dispensaries in

Florida

, bringing our total retail footprint to 29 stores,” said CEO

Robert Beasley

. “We also received approval from the Florida Department of Health to commence operation in several new bays at our recently expanded

Sweetwater

facility. In fact, products from

Sweetwater

hit the shelves in November as planned and early customer feedback has been excellent.

“During the quarter, there was a well-publicized merger between two MSOs in

Florida

that created a product liquidation event, which disrupted pricing in the market. We nevertheless stood our ground on pricing, which impacted sales but enabled us to hold margins relatively well and still increase adjusted EBTIDA by 34% to

$4.9 million

. Due to these lower sales, we are revising our 2021 revenue guidance to

$63



$66 million

, however we are holding our adjusted EBITDA guidance and expect to come in at the low end of our previously disclosed range of

$18



$26 million

.”

Beasley continued: “Pricing volatility in

Florida

has improved since the peak disruption in September, and as we enter the final month of the year, we continue to expect exiting 2021 at a strong run rate with full production from our increased capacity hitting shelves in

February 2022

. We have already seen increased yields due to environmental control enhancements across multiple facilities, and we are excited to dramatically improve our competitive positioning with greater inventory and a wider range of products to sell across our

Florida

retail footprint in 2022.”



Q3 2021 Financial Highlights (vs. Q3 2020)

  • Revenue increased 9% to

    $15.6 million

    compared to

    $14.3 million

    .

  • Florida

    revenue increased 4.3% to

    $13.1 million

    compared to

    $12.6 million

    .
  • Adjusted gross profit

    1

    increased to

    $9.8 million

    or 62.7% of revenue, compared to

    $9.5 million

    or 66.6% of revenue.
  • Adjusted EBITDA increased 34% to

    $4.9 million

    or 31.4% of revenue, compared to

    $3.6 million

    or 25.5% of revenue.



Recent Operational Highlights

  • In August, the Company opened its 2

    nd

    store in

    Pennsylvania

    in

    Mechanicsburg

    .
  • In September, the Company opened its 27

    th

    store in

    Florida

    in

    Fruitland Park

    , which is the city’s first medical marijuana dispensary.
  • Received approval from the Florida Department of Health to commence operations at several new bays at its

    Sweetwater, FL

    cultivation facility.
  • Cansortium appointed a new auditor, Baker Tilly US, LLP, in preparation for reporting financial results in accordance with U.S. GAAP in 2022.



2021 Outlook



The Company is revising its 2021 outlook for revenue and now expects it to range between

$63



$66 million

. The Company continues to expect adjusted EBITDA to range between

$18



$26 million

and anticipates achieving the lower end of the range. This compares to approximately

$52 million

of revenue and

$10 million

of adjusted EBITDA in 2020.

The Company’s unaudited consolidated financial statements and accompanying notes, along with the Management Discussion and Analysis (MD&A), will be available under the Company’s profile on SEDAR at

www.sedar.com

and are also accessible through the Investor Relations section of the Company’s website at

www.getfluent.com

.


______________________________



1

Adjusted gross profit is a non-IFRS financial measure that does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. The Company calculates adjusted gross profit from gross profit plus (minus) the changes in fair value of biological assets, as presented in the consolidated statement of operations.



Conference Call



The Company will host a conference call and live audio webcast today at

5:00 p.m. Eastern time

to discuss its financial results and operational highlights.


Toll-free

dial-in number: (800) 319-4610

International dial-in number: (604) 638-5340

Conference ID: 10017358

Link:

Cansortium Q3 2021 Earnings Call

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Elevate IR at (949) 200-4603.

The conference call will also be available for replay via the News & Events section of the Company’s investor relations website at

https://investors.getfluent.com/

.



About Cansortium Inc.



Cansortium is a vertically-integrated cannabis company with licenses and operations in

Florida

,

Pennsylvania

,

Michigan

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

Miami, Florida

.

Cansortium Inc.’s common shares trade on the CSE under the symbol “TIUM.U” and on the OTCQX Best Market under the symbol “CNTMF.” For more information about the Company, please visit

www.getfluent.com

.



Forward-Looking Information



Certain information in this news release may constitute forward-looking information. In some cases, but not necessarily in all cases, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “targets”, “expects” or “does not expect”, “is expected”, “an opportunity exists”, “is positioned”, “estimates”, “intends”, “assumes”, “anticipates” or “does not anticipate” or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might”, “will” or “will be taken”, “occur” or “be achieved”. In addition, any statements that refer to expectations, projections, or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management’s expectations, estimates, and projections regarding future events.

Forward-looking information is necessarily based on many opinions, assumptions, and estimates that, while considered reasonable by the Company as of the date of this news release, are subject to known and unknown risks, uncertainties, assumptions, and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to the factors described in the public documents of the Company available at

www.sedar.com

. These factors are not intended to represent a complete list of the factors that could affect the Company; however, these factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct. The forward-looking statements contained in this news release are made as of the date of this news release, and the Company expressly disclaims any obligation to update or alter statements containing any forward-looking information, or the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by law.

For further information:

www.getfluent.com


Company Contact



Robert Beasley

, CEO

(305) 900-6266


www.getfluent.com


Investor Relations Contact



Sean Mansouri

, CFA

Elevate IR

(949) 200-4603


[email protected]


Media Contact



Julie Dietel


Grasslands: A Journalism-Minded Agency


[email protected]


(978) 502-7705



CANSORTIUM INC.



CONSOLIDATED STATEMENTS OF FINANCIAL POSITION



As of September 30, 2021 and December 31, 2020



(USD ‘000)



September 30,

2021



December 31,

2020



Assets


Current assets


Cash and cash equivalents


$


13,808


$


3,392


Accounts receivable


301


148


Inventory, net


9,975


5,006


Biological assets


3,108


1,914


Prepaid income taxes


628




Note receivable


3,986


3,859


Prepaid expenses and other current assets


1,657


1,365


Total current assets


33,463


15,684


Investment held for sale


200


200


Property and equipment, net


30,369


19,517


Intangible assets, net


96,205


97,035


Right-of-use assets


19,290


19,094


Deposit


2,727


1,050


Goodwill


1,526


1,526


Other assets


528


425



Total assets



$



184,308



$



154,531



Liabilities


Current liabilities


Accounts payable


4,685


4,808


Accrued liabilities


7,092


7,614


Income taxes payable




8,925


Derivative liabilities




7,412


Current portion of notes payable


620


38,583


Lease obligations


2,375


1,894


Total current liabilities


14,772


69,236




Notes payable


54,693


13,182


Lease obligations, net of current portion


21,157


20,811


Deferred income taxes


21,547


23,471


Total liabilities



112,169



126,700



Shareholders’ equity


Share capital


193,020


137,835


Share-based compensation reserve


6,164


4,675


Equity conversion feature


4,933


11,044


Warrants


29,797


13,265


Accumulated deficit


(161,363)


(138,609)


Accumulated other comprehensive loss


(412)


(379)


Total shareholders’ equity


72,139


27,831



Total liabilities and shareholders’ equity



$



184,308



$



154,531



CANSORTIUM INC.



STATEMENT OF OPERATIONS



FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020



(USD ‘000)



For the three months

ended September 30,



For the nine months

ended September 30,



2021



2020



2021



2020


Revenue, net of discounts


$


15,568


$


14,313


$


47,153


$


37,718


Cost of goods sold


5,805


4,784


$


16,956


13,011


Gross profit before fair value adjustments


9,763


9,529


30,197


24,707


Realized fair value of increments on inventory sold


(5,113)


(6,051)


(14,433)


(18,566)


Unrealized change in fair value of biological assets


6,113


4,263


11,768


23,945


Gross profit


10,763


7,741


27,532


30,086


Expenses


General and administrative


2,084


2,861


8,241


9,064


Share-based compensation


731


1,689


4,248


4,938


Sales and marketing


4,033


3,561


11,094


10,162


Depreciation and amortization


1,649


1,561


4,727


4,635


Total expenses


8,497


9,672


28,310


28,799


Income (Loss) from operations


2,266


(1,931)


(778)


1,287


Other expense (income)


Interest expense, net


3,383


3,892


11,233


11,448


Change in fair market value of derivative liability




673


(1,551)


1,680


(Gain)/Loss on debt settlement


(10,794)




(42)




Private placement issuance expense


890




7,530




Equity loss on investment in associate




166




381


Loss on debt restructuring








8,065


(Gain)/Loss on disposal of assets


(20)


710


30


656


Other (income) expense


7


1


(124)


7


Total other expense (income)


(6,534)


5,442


17,076


22,237


Income (Loss) before income taxes


8,800


(7,373)


(17,854)


(20,950)


Income taxes


1,437


1,281


4,868


7,422


Net income (loss)


7,363


(8,654)


(22,722)


(28,372)


(Gain)/Loss from discontinued operations


2


236


33


(106)


Net income (loss) after discontinued operations


$


7,361


$


(8,890)


$


(22,755)


$


(28,266)


Other comprehensive loss:


Foreign exchange translation gain (loss)


(22)


4


(33)


188


Comprehensive income (loss)


$


7,339


$


(8,886)


$


(22,788)


$


(28,078)


Net loss per share


Basic


$


0.03


$


(0.04)


$


(0.10)


$


(0.14)


Diluted


$


0.02


$


(0.04)


$


(0.10)


$


(0.14)



CANSORTIUM INC.



STATEMENT OF CASH FLOWS



(USD ‘000)



For the nine months ended September 30,



2021



2020



Operating activities


Net loss


$


(22,755)


$


(28,266)


Adjustments to reconcile net loss to net cash used in operating activities:


Unrealized gain on changes in fair value of biological assets


(11,768)


(23,945)


Realized gain on changes in fair value of biological assets


14,433


18,566


Share-based compensation


3,883


4,938


Depreciation and amortization


7,529


6,146


Discontinued operations


33


(106)


Accretion of convertible debentures


3,457


5,974


Interest on lease liabilities


1,911


3,324


Change in fair market value of derivative


(1,551)


1,680


Loss on investment in associate




381


Loss on debt restructuring




8,065


(Gain)/Loss on disposal of assets


30


656


Deferred tax expense


(852)


1,700


Changes in operating assets and liabilities:


Accounts receivable


(153)


79


Inventory


(4,969)


(2,930)


Biological assets


(3,859)


3,096


Prepaid expenses and other current assets


1,632


(492)


Right-of-use assets


(2,395)


(1,439)


Right-of-use liabilties


2,378




Other assets


(105)


(99)


Accounts payable


(123)


(309)


Accrued liabilities


(396)


2,205


Income taxes


(9,553)


4,909


Other liabilities




(411)


Net cash provided by (used in) operating activities


(23,193)


3,723



Investing activities


Purchases of property and equipment


(15,210)


(3,136)


Purchase of intangile assets


(318)




Payment of notes receivable


1,477


350


Proceeds from sale of property and equipment


29




Notes receivable


(1,802)


(1,375)


Proceeds from sale of subsidiary




600


Net cash used in investing activities


(15,824)


(3,561)



Financing activities


Proceeds from issuance of shares and warrants


23,730


4,351


Proceeds from issuance of debt, net of loan issuance costs


63,086


62


Payment of lease obligations


(3,342)


(3,207)


Exercise of warrants


1,365




Principal repayments of notes payable


(35,373)




Net cash provided by financing activities


49,466


1,206


Effect of foreign exchange on cash and cash equivalents


(33)


188


Net increase (decrease) in cash and cash equivalents


10,416


1,556


Cash and cash equivalents, beginning of period


3,392


2,516


Cash and cash equivalents, end of period


$


13,808


$


4,072



CANSORTIUM INC.



ADJUSTED EBITDA RECONCILIATION



(USD ‘000)



Three months ended



September 30,





2021



September 30,





2020



Variance


Net income (loss)


$


7,361


$


(8,890)


$


16,251


Interest expense


3,383


3,892


(509)


Income taxes


1,437


1,281


156


Depreciation and amortization


2,844


2,100


744


EBITDA


$


15,025


$


(1,617)


$


16,642



Three months ended



September 30,

2021



September 30,

2020



Variance


EBITDA


$


15,025


$


(1,617)


$


16,642


Change in fair value of biological assets


(1,000)


1,788


(2,788)


Change in fair market value of derivative




673


(673)


Loss on debt settlement


(10,794)




(10,794)


Private placement issuance expense


890




890


Share-based compensation


731


1,689


(958)


Discontinued operations


2


236


(234)


(Gain)/Loss on disposal of assets


(20)


$


710


(730)


Other non-recurring expense/(income)


52


166


(114)


Adjusted EBITDA


$


4,886


$


3,645


$


1,241

Cision
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SOURCE Cansortium Inc

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