Cansortium Reports Third Quarter 2021 Financial Results

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    <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

    PR Newswire
    November 30, 2021 – 1:05 PM PST