/NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO
UNITED STATES WIRE SERVICES/
Fiscal 2021
Highlights:
- Consolidated revenue for fiscal year 2021 increased 37%
to a record $175.5
million
- Consolidated Adjusted EBITDA for fiscal 2021 was
$5.1 million, consistent with the
prior year
- Hifyre™ cannabis consumer technology platform generated a
record $14.3 million for the fiscal
year, an increase of 129% year-over-year
- Retail revenue increased 29% to a record $130.8 million for fiscal 2021, with more than
100 retail stores opened and operating at January 29, 2022
- Acquired Pineapple Express Delivery, PotGuide and
Wikileaf to expand logistics capabilities and web traffic as part
of the asset light e-commerce strategy
Fourth Quarter 2021 and Recent
Highlights:
- Consolidated revenue and Adjusted EBITDA for the fourth
quarter of fiscal 2021 was $42.7
million and negative $2.4
million, respectively
- Hifyre™ revenue for the fourth quarter generated a record
of $4.1 million representing a 7%
sequential increase quarter-over-quarter
- Completed one of the final steps in preparation for
listing on the NASDAQ including filing of the 40-F registration
statement and DTC eligibility for common shares
- Announced intent to exercise Series B warrants by
strategic partner Alimentation Couche-Tard, owner of Circle K
convenience stores
- Announced an expansion of the industry-first Spark Select
program, a new highly competitive product and pricing strategy to
drive an expanded customer base, in a proactive response to the
fast growing value-oriented cannabis consumer segment
TORONTO, April 26,
2022 /CNW/ - Fire & Flower Holdings Corp. ("Fire
& Flower" or the "Company") (TSX: FAF) (OTCQX: FFLWD), today
announced its financial and operational results for the fiscal year
and fourth quarter ended January 29,
2022.
"Fiscal 2021 has been a year of significant advancement and
growth for Fire & Flower and we have delivered meaningful
year-over-year revenue growth. The Hifyre Digital Platform has
exhibited impressive 129% annual and 7% quarterly sequential growth
and is the core value proposition of our business. This year, we
have refined our vision to, 'Deliver Cannabis to the World'
positioning our business as a consumer e-commerce platform,
supported by a distributed retail network enhanced by our Circle K
store co-location program. This position is enabled through the
acquisition of Pineapple Express Delivery, one of the largest
cannabis delivery platforms in the world," shared Trevor Fencott, Chief Executive Officer of Fire
& Flower.
"In the fourth quarter of fiscal 2021, while we have continued
to see growth in our Hifyre digital business segment, we saw a
decline in our retail revenue due to increased competitive
pressures within the Canadian cannabis retail landscape. We
announced a further competitive price and product strategy aimed at
continuing to build an expanded consumer base. As we look out
to fiscal 2022, we anticipate continued growth in our digital
business and driving further revenue opportunities in the U.S. We
look forward to greater continued alignment with our partners at
Alimentation Couche-Tard through the retail store co-location
program which will be important in delivering a clear,
convenience-oriented value proposition to our customers in
brick-and-mortar retail and e-commerce."
Consolidated Financial
Highlights
|
Thirteen weeks
ended
|
Fifty-two weeks
ended
|
(In thousands of
Canadian dollars,
|
29-Jan-22
|
30-Jan-21
|
29-Jan-22
|
30-Jan-21
|
except per share
amounts)
|
|
|
|
|
Total
Revenue
|
42,697
|
43,219
|
175,499
|
128,053
|
Gross Profit
|
13,705
|
16,429
|
62,094
|
45,419
|
Gross Profit
Percentage
|
32.1%
|
38.0%
|
35.4%
|
35.5%
|
Adjusted
EBITDA
|
(2,410)
|
3,455
|
5,120
|
5,154
|
Net loss
|
(19,461)
|
(11,417)
|
(63,592)
|
(78,959)
|
Basic loss per
share
|
(0.54)
|
(0.55)
|
(1.89)
|
(4.54)
|
Financial and Operational
Highlights for the 2021 Fiscal Year and for the Fourth Quarter
Period Ended January 29,
2022
- Revenue of $42.7 million and
$175.5 million for the fourth quarter
and fiscal year ended January 29,
2022, representing a modest decrease of 1% for the
comparable quarter (from $43.2
million) and a 37% increase year-over-year (from
$128.1 million).
- While all business segments contributed to the year-over-year
revenue increase, the quarter-over-quarter revenue decrease was
primarily due to increasing competition from new licences issued
and pricing pressures in the retail market.
- Gross profit of $13.7 million and
$62.1 million for the fourth quarter
and fiscal year ended January 29,
2022 represented a decrease of 17% for the comparable
quarter (from $16.4 million) and a
37% increase year-over-year (from $45.4
million).
- Adjusted EBITDA of negative $2.4
million for the fourth quarter and positive $5.1 million for the fiscal year ended
January 29, 2022.
- Net loss of $19.5 million for the
quarter and $63.6 million for the
fiscal year ended January 29, 2022,
compared to a net loss of $11.4
million for the comparable quarter and $79.0 million for the fiscal year ended
January 30, 2021.
- An increase of 32 stores during the fiscal year, with 105
stores open and operating at the fiscal year end.
- Alimentation Couche-Tard increased its equity ownership to
20.8% with $20 million outstanding on
the ACT Loan and $2.4 million in
convertible debentures outstanding.
- As part of the Company's continued digital strategy, completed
the acquisitions of Pineapple Express Delivery, PotGuide and
Wikileaf.
- Amended the strategic licensing agreement with Fire &
Flower U.S. Holdings (formerly American Acres Managers) to derive
additional U.S. based digital revenue.
Segment Revenue
|
Thirteen weeks
ended
|
Fifty-two weeks
ended
|
(In thousands of
Canadian dollars unaudited)
|
29-Jan-22
|
30-Jan-21
|
29-Jan-22
|
30-Jan-21
|
Revenue
|
|
|
|
|
Retail
|
31,670
|
33,156
|
130,823
|
101,497
|
Wholesale
|
6,969
|
7,002
|
30,336
|
20,300
|
Digital
Platform
|
4,058
|
3,061
|
14,340
|
6,256
|
Total
Revenue
|
42,697
|
43,219
|
175,499
|
128,053
|
Segment Adjusted
EBITDA
|
Thirteen weeks
ended
|
Fifty-two weeks
ended
|
(In thousands of
Canadian dollars unaudited)
|
29-Jan-22
|
30-Jan-21
|
29-Jan-22
|
30-Jan-21
|
Adjusted
EBITDA
|
|
|
|
|
Retail
|
(2,077)
|
1,930
|
1,223
|
7,539
|
Wholesale
|
1,010
|
1,126
|
4,725
|
2,905
|
Digital
Platform
|
1,885
|
1,581
|
7,708
|
1,767
|
Corporate
|
(3,228)
|
(1,182)
|
(8,536)
|
(7,057)
|
Total Adjusted
EBITDA
|
(2,410)
|
3,455
|
5,120
|
5,154
|
Retail
- Retail revenue for the 2021 fiscal year increased 29% to
$130.8 million from $101.5 million in fiscal year 2020.
- Retail revenue for the fourth quarter, decreased 5% to
$31.7 million from $33.2 million in the prior year comparative
period. Revenue decreased $2.0
million or 6% sequentially from Q3 fiscal 2021.
- Gross profit for the 2021 fiscal year was $41.5 million compared to $35.1 million in 2020 fiscal year.
- Gross profit for the fourth quarter was $8.2 million, a decrease of 31% compared to
$11.9 million for the prior year
comparative period.
- Gross profit margin was 25.8% for the fourth quarter ended
January 29, 2022 and 31.7% for the
2021 fiscal year.
- Segment Adjusted EBITDA for the 2021 fiscal year was
$1.2 million compared to $7.5 million in fiscal year 2020. Segment
Adjusted EBITDA decreased to negative $2.1
million in the fourth quarter 2021 from positive
$1.9 million in the same quarter the
prior year.
- The Company had 105 stores open and in operation at the end of
January 29, 2022, compared to 73
stores at the end of January 30,
2021.
Wholesale
- Wholesale distribution revenue for the 2021 fiscal year
increased 49% to $30.3 million
compared to $20.3 million in 2020
fiscal year.
- Wholesale distribution revenue in Q4 fiscal 2021 of
$7.0 million was approximately flat
compared to the same quarter of the prior year.
- Gross profit was $6.4 million for
the 2021 fiscal year compared to $4.1
million in 2020 fiscal year.
- Gross profit in Q4 fiscal 2021 increased to $1.6 million year-over-year from $1.4 million in the same quarter of the prior
year.
- Segment Adjusted EBITDA for the 2021 fiscal year was
$4.7 million compared to $2.9 million in 2020 fiscal year. Segment
Adjusted EBITDA decreased to $1.0
million in Q4 2021 from $1.1
million in the same quarter of the prior year.
Hifyre™ Digital Platform
- Hifyre Digital Platform revenue for the 2021 fiscal year
increased 129% to $14.3 million
compared to $6.3 million in 2020
fiscal year.
- Q4 2021 Hifyre revenue was $4.1
million compared to $3.1
million in the same quarter of the prior year.
- Gross profit margin was 97.3% for the fourth quarter ended
January 29, 2022 and 99.2% for the
2021 fiscal year.
- Adjusted EBITDA for the 2021 fiscal year was $7.7 million compared to $1.8 million in 2020 fiscal year. Adjusted EBITDA
increased to $1.9 million in Q4 2021
from $1.6 million in the same quarter
the prior year.
Subsequent Operational Highlights
Post January 29, 2022
- Amended the Strategic Licensing Partnership and Option to
Acquire Fire & Flower U.S. Holdings (formerly American Acres
Managers) and the creation of an additional high margin U.S.
digital revenue stream on January 31,
2022.
- Pineapple Express Delivery launched next-day delivery services
with BC Cannabis Stores in the Vancouver region on February 24, 2022.
- Completed one of the last remaining steps in the Company's
NASDAQ listing through obtaining DTC Eligibility for the Company's
common shares on April 13, 2022.
- Expanded logistics and delivery services through a
cross-docking Distribution Agreement with Manitoba Liquor &
Lotteries on April 14, 2022.
- Announced a highly competitive product and pricing strategy to
drive an expanded customer base on April 21,
2022.
- On April 20, 2022, announced
intent to exercise Series B warrants by strategic partner
Alimentation Couche-Tard, owner of Circle K convenience stores,
resulting in a post exercise ownership stake of approximately
35%.
Non-IFRS Measures – Adjusted EBITDA
"Adjusted EBITDA" is a Non-IFRS metric used by management that does
not have any standardized meaning prescribed by IFRS and may not be
fully comparable to similar measures presented by other companies.
Management defines the Adjusted EBITDA as the Income (loss) for the
period, as reported, before income taxes and other expense (income)
items such as finance costs, finance income, gains and losses
related to derivative liability revaluations and debt
extinguishments, and adjusted for share-based compensation,
depreciation and amortization, impairment expense, impairment of
right-of-use ("ROU") assets net of lease liabilities remeasurement,
restructuring charges, professional fees associated with
acquisitions, financing and strategic initiatives.
Adjusted EBITDA has been calculated
differently than in periods prior to Q1 2021, where the Company
previously included lease liability cash payments as disclosed in
accordance with IFRS 16 "Leases" accounting standards. The updated
measure reflects the Company's new approach to analyzing the
consolidated operating performance across the business lines. The
Company believes the updated definition is an alternative measure
to assess performance as it provides meaningful operating results
and facilitates period-to-period operating comparisons. As
other companies may calculate this non-IFRS measure
differently than the Company, this metric may not be
comparable to similarly titled measures reported by other
companies. We caution readers that Adjusted EBITDA should not
be substituted for determining net income (loss) as an
indicator of operating results, or as a substitute for cash
flows from operating activities. A reconciliation of net
income (loss) to Adjusted EBITDA is presented
below.
Adjusted EBITDA for the fourth quarter ended January 29, 2022 and 2021 fiscal year was
negative $2.4 million and a positive
$5.1 million compared to positive
Adjusted EBITDA of $3.5 million for
the comparable quarter and $5.2
million for the 2020 fiscal year respectively.
Adjusted EBITDA
|
Thirteen Weeks
ended
|
Fiscal Year
ended
|
(in thousands of
dollars)
|
January 29, 2022
($)
|
January 30, 2021
($)
|
January 29, 2022
($)
|
January 30, 2021
($)
|
Net loss – as
reported
|
(19,461)
|
(11,417)
|
(63,592)
|
(78,959)
|
(Gain) loss on
revaluation of derivative liability
|
(7,558)
|
2,444
|
8,545
|
(18,638)
|
Loss on extinguishment
and revaluation of debentures
|
-
|
(710)
|
-
|
53,152
|
Finance costs,
net
|
1,505
|
4,055
|
7,245
|
24,884
|
Income taxes,
net
|
1,330
|
781
|
2,452
|
1,999
|
Share-based
compensation
|
468
|
522
|
3,174
|
2,512
|
Acquisition and
strategic initiative professional fees
|
1,306
|
1,662
|
3,094
|
3,000
|
Depreciation &
amortization
|
5,495
|
3,419
|
19,080
|
12,345
|
Restructuring,
impairment and other costs, net
|
14,505
|
2,699
|
25,122
|
4,859
|
Adjusted
EBITDA
|
(2,410)
|
3,455
|
5,120
|
5,154
|
Lease liability cash payments for the thirteen weeks and
fiscal year ended January 29, 2022
were $2.4 million and $9 million, respectively (January 30, 2021: $0.8
million and $3.2 million,
respectively).
Webcast & Conference Call
Fire & Flower will host a webcast and conference call with
Trevor Fencott, Chief Executive
Officer, and Judy Adam, Chief
Financial Officer at 8:30 a.m. EDT on
April 26, 2022. The webcast will
discuss Fire & Flower's fiscal year 2021 and fourth quarter
financial and operational results.
Dial-In Information
Toll-Free (Canada):
1-833-950-0062
Toll-Free (United States):
1-844-200-6205
All other locations: +1-929-526-1599
Access code: 013467
Webcast Sign-Up
https://event.on24.com/wcc/r/3755300/8C01528CC241A5D03166AC3EAE5D8F7D
Replay Information (Available until May 17, 2022)
Toll-Free (Canada):
1-226-828-7578
Toll-Free (United States):
1-866-813-9403
All other locations: +44-204-525-0658
Replay Code: 348644
Upon completion of the live conference call, a replay of the
conference call will be accessible on Fire & Flower's website
at https://investors.fireandflower.com/.
Fire & Flower's financial statements and management
discussion and analysis for the period are available on Fire &
Flower's SEDAR profile at www.sedar.com and on Fire &
Flower's website at https://investors.fireandflower.com.
About Fire &
Flower
Fire & Flower is a cannabis consumer retail and technology
platform with more than 100 corporate-owned stores in its network.
The Company leverages its wholly-owned technology development
subsidiary, Hifyre Inc., to continually advance its proprietary
retail operations model while also providing additional independent
high-margin revenue streams. Fire & Flower guides consumers
through the complex world of cannabis through best-in-class
retailing while the HifyreTM digital and
analytics platform empowers retailers to optimize their
connections with consumers. The Company's leadership team combines
extensive experience in the technology, cannabis and retail
industries.
Through the strategic investment of Alimentation
Couche-Tard Inc. (owner of Circle K convenience stores), the
Company has set its sights on global expansion as new cannabis
markets emerge and is poised to expand into the United States when permitted through its
strategic licensing agreement with Fire & Flower U.S. Holdings
upon the occurrence of certain changes to the cannabis regulatory
regime.
To learn more about Fire & Flower,
visit www.fireandflower.com.
CAUTIONARY STATEMENT REGARDING
FORWARD-LOOKING INFORMATION
This news release contains certain forward-looking
information within the meaning of applicable Canadian securities
laws ("forward-looking statements"). All statements other than
statements of present or historical fact are forward-looking
statements. Forward-looking statements are often, but not always,
identified by the use of words such as "anticipate", "achieve",
"could", "believe", "plan", "intend", "objective", "continuous",
"ongoing", "estimate", "outlook", "expect", "project" and similar
words, including negatives thereof, suggesting future outcomes or
that certain events or conditions "may" or "will" occur.
These statements are only predictions.
Forward-looking statements are based on the opinions and
estimates of management of Fire & Flower at the
date the statements are made based on information then available
to Fire & Flower. Various factors and
assumptions are applied in drawing conclusions or making the
forecasts or projections set out in forward-looking
statements. Forward-looking statements are subject to and
involve a number of known and unknown, variables, risks and
uncertainties, many of which are beyond the control of Fire
& Flower, which may cause Fire &
Flower's actual performance and results to differ materially
from any projections of future performance or results expressed or
implied by such forward-looking statements. Such factors, among
other things, include: final regulatory
and other approvals or consents;
fluctuations in general macroeconomic conditions;
fluctuations in securities markets; the impact of the COVID-19
pandemic; the ability of the Company
to successfully achieve its business objectives and political
and social uncertainties.
No assurance can be given that the expectations reflected in
forward-looking statements will prove to be correct. Although
the forward-looking statements contained in this news release are
based upon what management of the Company believes, or believed at
the time, to be reasonable assumptions, the Company cannot assure
shareholders that actual results will be consistent with such
forward-looking statements, as there may be other factors that
cause results not to be as anticipated, estimated or intended.
Readers should not place undue reliance on the forward-looking
statements and information contained in this news release.
Additional information regarding risks and uncertainties relating
to the Company's business are contained under the headings "Risk
Factors" in the Company's Annual Information Form dated
April 26, 2022 and "Risks and
Uncertainties" in the management discussion and analysis for the
thirteen weeks ended January 29, 2022
filed on its issuer profile on SEDAR at www.sedar.com. The
forward-looking statements contained in this press release are made
as of the date of this press release, and the Company does not
undertake to update any forward-looking statements that are
contained or referenced herein, except in accordance with
applicable securities laws.
No stock exchange, securities commission or other regulatory
authority has approved or disapproved the information contained
herein.
SOURCE Fire & Flower Holdings Corp.