CALGARY, AB, Aug. 26, 2020 /CNW/ - YSS Corp. (the
"Company" or "YSS") (TSXV: YSS) (WKN: A2PMAX), a
premier Canadian cannabis retailer with operations under the
YSSTM and Sweet TreeTM brands and a trusted
destination to explore and discover cannabis in Canada, is
pleased to announce Q2 2020 financial results, a Q3 2020
outlook and provide an operational update.
Q2 2020 Highlights
- Revenue of $4.7 million increased
12% over Q1 2020 and exceeded the Company's Q2 2020 outlook of
$4.6 million.
- Gross margin of $1.4 million grew
by 6% compared to Q1 2020 and exceeded the Company's Q2 2020
outlook of $1.3 million.
- Store-Level EBITDA1 of $359
thousand represented a 132% increase over the previous
quarter.
- General and administrative costs of $670
thousand were $150 thousand
(18%) lower than in Q1 2020 and represented 14% of revenue, down
from 20% of revenue in Q1 2020.
- At the end of Q2 2020, YSS had successfully increased the
number of EBITDA1 positive stores to 15, compared to 13
at the end of the previous quarter.
- Cash balance of $4.1 million as
at June 30, 2020 positions YSS with
ample capital to support ongoing store ramp-up and complete the
construction of planned new stores in Alberta and Ontario, while maintaining the financial
flexibility to pursue strategic acquisition opportunities.
- Record quarterly results were driven solely by existing store
growth, as no new stores were opened in Q2 2020.
Q3 2020 Outlook
- Growth has continued into Q3 2020 with YSS achieving record
results in July, surpassing $1.9
million in monthly revenue.
- Forecast revenue for Q3 2020 is expected to exceed $5.6 million, representing growth of
approximately 18% to 20% over Q2 2020.
- Forecast gross margin for Q3 2020 is expected to exceed
$1.6 million, an increase of
approximately 20% to 22% relative to Q2 2020.
YSS Operational Update
- YSS remains focused on fundamental retail principles as the
keys to success while continuing to build a fiscally-conservative
organization that is focused on sustainability and measured growth
through 2020 and beyond.
- Planning and construction activities are underway on three
locations, including two in Alberta and one in Ontario, with a forecasted aggregate budget of
$850 thousand.
Positive growth trends have prevailed through the first half of
2020 and have continued into Q3 2020, for both YSS and the industry
as a whole. Concurrent with this growth, YSS has taken steps to
improve operational efficiencies which, when combined with
increased existing store sales, have resulted in store-level
EBITDA1 margin improvement from 4% in Q1 2020 to 8% in
Q2 2020. The Company remains on target to exit 2020 with positive
run-rate corporate EBITDA1.
"Expansion of product selection, coupled with improving product
quality and value, has promoted meaningful expansion of the legal
market year-to-date in 2020," said Theo
Zunich, President and CEO of YSS. "Consistent with this
trend, YSS' Q2 2020 existing store growth surpassed the increase in
the overall market, which reflects advancing corporate market share
and increasing profitability against a backdrop of industry-wide
growth."
1
|
Non-International
Financial Reporting Standards ("IFRS") measure. Store-Level
EBITDA is defined as revenue less cost of goods sold and operating
costs before corporate general & administrative
expenses.
|
Additional Information
Selected financial and operational information is outlined in
this press release and should be read in conjunction with YSS'
audited consolidated financial statements for the quarter ended
June 30, 2020 and the related
management's discussion and analysis ("MD&A"), each of
which is filed on SEDAR at www.sedar.com and posted to the
Company's website at www.ysscorp.ca/.
For information on store locations, updates on promotions, store
openings and to access the Company's click and collect service
please visit www.ysscorp.ca, www.sweettreecannabis.com and follow
us on social media.
For additional information regarding YSS Corp., please see the
Company's website at www.ysscorp.ca/investors and filings available
under the Company's profile on SEDAR at www.sedar.com.
About YSS Corp.
With retail operations under the YSSTM and
Sweet TreeTM brands, YSS Corp. is a premium
cannabis retailer and the trusted destination to explore and
discover cannabis in Canada. YSS
operates 17 locations across Alberta and in Saskatchewan under the YSS and Sweet Tree
brands. In addition, YSS maintains a strategic portfolio of
under construction, secured and prospective locations that
represent future organic growth potential for the Company. YSS
management brings proven expertise across capital markets, retail
operations, hospitality, cannabis, financial management and a
strong commitment to deliver shareholder value by leveraging
high-quality opportunities within this exciting new industry. The
YSS retail experience is built on our five fundamental pillars:
convenience, value, selection, team, and above all else, trust.
This news release may include forward-looking statements
including opinions, assumptions, estimates, the Company's
assessment of future plans and operations, and, more particularly,
statements concerning: YSS' retail cannabis business strategy,
including organic growth and strategic activities; the Company's
operations; the Company being positioned with ample capital to
support same-store growth, construction and planning of new stores
and maintain the financial flexibility to pursue strategic
acquisition opportunities; Q3 2020 outlook; the Company's focus on
fundamental retail principals and continuing to build a
fiscally-conservative organization; the planning and construction
of new retail stores in Alberta
and Ontario and the forecasted
aggregate budget thereof; and the Company's projection of
exiting 2020 with positive run-rate corporate EBITDA.
When used in this document, the words "will," "anticipate,"
"believe," "estimate," "expect," "intent," "may," "project,"
"should," and similar expressions are intended to be among the
statements that identify forward-looking statements.
The forward-looking statements are founded on the basis of
expectations and assumptions made by the Company. Forward-looking
statements are subject to a wide range of risks and uncertainties
and, although the Company believes that the expectations
represented by such forward-looking statements are reasonable,
there can be no assurance that such expectations will be realized.
Any number of important factors could cause actual results to
differ materially from those in the forward-looking statements
including, but not limited to: risks relating to the COVID-19
pandemic, governmental responses thereto, measures taken by the
Company in response thereto and the impact thereof on the global
economy, capital markets, the cannabis retail industry and the
Company; the success of the Company's operations; ability to
execute its business strategy and future plans of operations; risks
relating to acquisitions; third party credit risks; accuracy and
reliability of data analytics relied on by the Company; ability to
obtain, amend or renew necessary licences, permits and
authorizations for the Company's operations in a timely and
cost-efficient manner; ability to obtain and maintain liability
insurance on acceptable terms; development of new stores including
construction delays; increased competition; ability to locate and
secure acceptable store sites and maintain retail leases on
acceptable terms; ability to obtain quality and diversified
cannabis products and cannabis accessories; ability to attract and
retain key personnel and customers; dependence on key personnel;
labour costs, shortages and labour relations; supply interruption
or delays; dependence on suppliers; intellectual property and
cybersecurity risks; risks related to product recalls, product
liability and health and safety; unfavourable publicity and
consumer perception with respect to cannabis, cannabis products and
cannabis accessories; industry conditions and events; the size of
the recreational cannabis market; changing customer habits; the
state of the economy including general economic conditions in
Canada, the U.S. and globally; the
unpredictability and volatility of the price of the common shares;
restrictions on potential growth; availability of sufficient
financial resources to fund the Company's capital expenditures;
changes in tax rates and government mark-ups; the state of domestic
capital markets; the ability to obtain financing on satisfactory
terms; changes in general market conditions; and other factors more
fully described from time to time in the reports and filings made
by the Company with securities regulatory authorities. Please refer
to the Company's management's discussion and analysis for the year
ended December 31, 2019 and the
Company's annual information form for the year ended December 31, 2019 for additional risk factors
relating to the Company, which can be accessed under the Company's
profile on www.sedar.com.
Except as required by applicable laws, the Company does not
undertake any obligation to publicly update or revise any
forward-looking statements.
This news release contains future-oriented financial
information and financial outlook information (collectively,
"FOFI") about the Company's revenue, gross margin and EBITDA, which
are subject to the same assumptions, risk factors, limitations, and
qualifications as set forth in the above paragraphs. FOFI contained
in this document was approved by management as of the date of this
document and was provided for the purpose of providing further
information about YSS' future business operations.
YSS disclaims any intention or obligation to update
or revise any FOFI contained in this document, whether as a result
of new information, future events or otherwise, unless required
pursuant to applicable law. Readers are cautioned that the FOFI
contained in this document should not be used for purposes other
than for which it is disclosed herein.
Store-level and corporate EBITDA (Earnings Before Interest
Tax Depreciation Amortization) are not measures recognized by IFRS
and do not have a standardized meaning prescribed by IFRS.
Investors are cautioned that these measures should not be relied on
as an indicator of the Company's financial performance, of its cash
flows from operating, investing and financing activities or be
relied on as measures of the Company's liquidity and cash flows.
The Company's method of calculating the aforementioned non-IFRS
financial measures, may differ from the methods used by other
issuers. Therefore, these measures may not be comparable to similar
measures presented by other issuers. Please refer to the MD&A
for additional information relating to non-IFRS measures.
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 news
release.
SOURCE YSS Corp.