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Simply Solventless Concentrates Ltd. Logo (CNW Group/Simply Solventless Concentrates Ltd.)
CALGARY, AB, May 8, 2024 /CNW/ - Simply Solventless Concentrates Ltd. (TSXV: HASH) ("SSC") is pleased to announce its Q1 2024 results, including record gross revenue of $3,122,232, EBITDA of $567,602 (adjusted EBITDA of $611,571), and net income of $502,536 (normalized net income of $546,505). The information set out in this press release should be read in conjunction with SSC's March 31, 2024 financial statements and the related management's discussion and analysis, which are available for review on SSC's SEDAR+ profile at www.sedarplus.ca.
Jeff Swainson, President & CEO of SSC, stated: "With positive adjusted EBITDA in eight straight quarters and normalized net income in six straight quarters, we continue to demonstrate that concurrent revenue growth and profitability is possible in the Canadian cannabis industry. We now endeavour to continue our track record of profitable revenue growth for the remainder of 2024, and we will provide Q2 2024 guidance in the coming weeks."
Q1 2024 Financial & Operational Highlights:
March 31, 2024 Working Capital(1): $4,233,711.
Q1 2024 Gross Revenue: $3,122,232 (Q4 2023 - $1,790,625), an increase of 74.4%. Continued Astrolab and Frootyhooty expansion and the Lamplighter acquisition fuelled this revenue growth.
Q1 2024 Net Revenue: $2,298,273 (Q4 2023 - $1,311,311), an increase of 75.3%.
Q1 2024 Gross Margin: $1,117,386 (Q4 2023 - $483,613), an increase of 131.0%.
Q1 2024 Gross Margin Percentage: 48.6% of net revenue (Q4 2023 – 37.0%), an increase of 31.4%.
Q1 2024 EBITDA(1): $567,602 (Q4 2023 - $936,605 loss), an increase of 160.6%. See TABLE 1 below.
Q1 2024 Adjusted EBITDA(1): $611,571 (Q4 2023 - $80,050), an increase of 664.0%.
Q1 2024 Net Income: $502,536 (Q4 2023 - $1,000,967 loss), an increase of 150.2%.
Q1 2024 Normalized Net Income(1): $546,505 (Q4 2023 - $15,687), an increase of 3,383.8%.
Lamplighter Acquisition: On January 17, 2024, SSC acquired the Lamplighter brand for proceeds of up to $600,000, which is the value of the net book value of tangible assets received.
Financing: Subsequent to Q1 2024, on April 17, 2024, SSC issued 5,333,334 units at a price of $0.15 per unit for net proceeds of $800,000. Each Unit consisted of one common share and one common share purchase warrant of SSC. Each Warrant is exercisable for one common share of SSC at a price of $0.20 per share for a period of three years from the date issued.
(1)
Non-IFRS financial measure. See discussion in the Non-IFRS Financial Measures advisories section of this press release below.
SSC took control of its Rocky View facility ("Facility") on June 29, 2022. Please see TABLE 1 below for a summary of SSC's quarterly EBITDA, adjusted EBITDA, net income, and normalized net income since taking control of the Facility:
TABLE 1: QUARTERLY EBITDA AND NET INCOME
Quarter Ended
EBITDA
Adjusted EBITDA
Net Income
(Loss)
Normalized Net Income (Loss)
September 30, 2022
125,968
134,611
(73,476)
(73,476)
December 31, 2022
554,583
623,139
276,898
345,454
March 31, 2023
876,296
958,807
758,828
841,337
June 30, 2023
1,422,160
1,098,392
1,217,641
893,873
September 30, 2023
259,140
328,822
64,814
134,496
December 31, 2023(2)
(936,605)
80,050
(1,000,968)
15,687
March 31, 2024
567,602
611,571
502,536
546,505
(2)
Q4 2023 EBITDA and net loss due to one-time non-recurring expense that was booked related to the go-public transaction ("Go-Public Expense") through Dash Capital Corp. Aside from the Go-Public Expense, SSC has been EBITDA positive every quarter since taking control of the facility and net income positive for six out of seven quarters. See discussion in the Non-IFRS Financial Measures advisories section of this press release below.
About Simply Solventless Concentrates Ltd.
SSC is a public company incorporated under the Business Corporations Act (Alberta). SSC's mission is to provide pure, potent, terpene-rich ready to consume cannabis products to discerning cannabis consumers. For more information regarding SSC, please see www.simplysolventless.ca.
Notice on Forward Looking Information
This press release contains forward-looking statements and forward-looking information (collectively, "forward-looking statements") within the meaning of applicable securities laws. Any statements that are contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "will", "estimates", "believes", "intends", "expects", "projected" and similar expressions which are intended to identify forward-looking statements. More particularly and without limitation, this press release contains forward looking statements concerning profitably expanding SSC's market share through continued organic growth and opportunistic acquisitions, and SSC capitalizing on the opportunities resulting from industry headwinds, and the timing of releasing SSC's Q1 2024 results. SSC cautions that all forward-looking statements are inherently uncertain, and that actual performance may be affected by a number of material factors, assumptions and expectations, many of which are beyond the control of SSC, including expectations and assumptions concerning SSC, as well as other risks and uncertainties, including those described in SSC's filings available on SEDAR+ at www.sedarplus.ca. The reader is cautioned that assumptions used in the preparation of any forward-looking statements may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted as a result of numerous known and unknown risks, uncertainties and other factors, many of which are beyond the control of SSC. The reader is cautioned not to place undue reliance on any forward-looking statements. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement.
The forward-looking statements contained in this press release are made as of the date of this press release, and SSC does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by securities law.
Non-IFRS Financial Measures
This press release includes references to "Working Capital", "EBITDA", "Adjusted EBITDA" and "Normalized Net Income", which are not defined under International Financial Reporting Standards (IFRS). The intent of these non-IFRS measures is to provide additional useful information to investors and analysts. These non-IFRS measures do not have a standardized meaning prescribed by IFRS and is therefore unlikely to be comparable to similar measures presented by other entities. As such, these non-IFRS measures should not be considered in isolation or used as a substitute for measures of performance prepared in accordance with IFRS.
Working Capital is defined as current assets less current liabilities as reported on SSC's consolidated statements of financial position. Working Capital is considered as a useful measure by management of SSC to indicate SSC's ability to service its short-term financial obligations with short-term assets.
EBITDA is calculated as income before interest, taxes, depreciation and amortization expenses. EBITDA is considered as a useful measure by management of SSC to understand the profitability of SSC excluding the effects of capital structure, taxation and depreciation, but may not be appropriate for other purposes.
Adjusted EBITDA is calculated as EBITDA less the sale of SSC's facility, plus the acquisition of Dash Capital Corp. and share compensation expense. Adjusted EBITDA is considered as a useful measure by management of SSC to understand the profitability of SSC excluding the effects of certain non-operating items.
Normalized Net Income is calculated as income less the sale of SSC's facility, plus the acquisition of Dash Capital Corp. and share compensation expense. Normalized Net Income is considered as a useful measure by management of SSC to understand the profitability of SSC excluding the effects of certain non-operating items.
The following table reconciles current assets and current liabilities to Working Capital:
As at,
Mar 31, 2024
$
Mar 31, 2023
$
Dec 31, 2023
$
Dec 31, 2022
$
Current assets
10,885,404
5,197,836
8,419,131
3,467,464
Current liabilities
6,621,693
3,156,238
4,725,252
2,339,957
Working Capital
4,263,711
2,041,598
3,693,879
1,127,507
The following table reconciles net income (loss) to EBITDA:
Three months ended
Twelve months ended
Mar 31, 2024
$
Mar 31, 2023
$
Dec 31, 2023
$
Dec 31, 2022
$
Net and comprehensive (loss) income
502,536
758,828
1,040,316
(1,683,799)
Add (deduct):
Depreciation and amortization
13,234
11,166
48,207
229,854
Net interest (income) expense
51,832
106,302
313,324
261,995
EBITDA
567,602
876,296
1,401,847
(1,191,950)
The following table reconciles net income (loss) to Adjusted EBITDA:
Three months ended
Twelve months ended
Mar 31, 2024
$
Mar 31, 2023
$
Dec 31, 2023
$
Dec 31, 2022
$
Net and comprehensive (loss) income
502,536
758,828
1,040,316
(1,683,799)
Add (deduct):
Depreciation and amortization
13.234
11,166
48,207
229,854
Net interest (income) expense
51,832
106,302
313,324
261,995
Gain on disposal
-
-
(417,814)
-
Acquisition of Dash Capital
-
-
1,043,909
-
Share compensation expense
43,969
82,511
218,984
48,607
Adjusted EBITDA
611,571
958,807
2,246,926
(1,143,343)
The following table reconciles net income (loss) to Normalized Net Income:
Three months ended
Twelve months ended
Mar 31, 2024
$
Mar 31, 2023
$
Dec 31, 2023
$
Dec 31, 2022
$
Net and comprehensive (loss) income
502,536
758,828
1,040,316
(1,683,799)
Add (deduct):
Gain on disposal
-
-
(417,814)
-
Acquisition of Dash Capital
-
-
1,043,909
-
Share compensation expense
43,969
82,511
218,984
48,607
Adjusted EBITDA
546,505
841,339
1,885,395
(1,635,192)
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.
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.
