BZAM Ltd. Reports Third Quarter 2023 Results
- Net revenues increased by 112% compared to Q3 2022
- Adjusted G&A expenses reduced by 30% vs. Q3 2022
- Implemented the final phase of the post-merger synergy plan to monetize redundant facilities, clean up inventory, and reduce expenses
- Initiated deliveries to international markets
- Loss from operations increased by $4.2 million compared to Q3 2022
Q3 2023 Highlights:
- Achieved quarterly net revenues of
for Q3 2023, an increase of$21.0 million 112% from Q3 2022, and a9% increase from Q2 2023; - Maintained adjusted G&A Expenses at
22% of gross revenue in Q3 2023, a reduction of30% vs. Q3 2022, and almost flat with the21% in Q2 2023; - Implemented the final phase of the post-merger synergy plan to monetize redundant facilities, clean up inventory, and reduce expenses;
- Initiated deliveries further to various export agreements in three international markets, leveraging the Company's EU-EMP certification obtained in Q2 2023.
Management Commentary:
Matt Milich, CEO, stated, "In Q3 we completed our extensive post-merger facility consolidation and cost reduction program, while rationalizing a number of low margin SKUs, which we expect to positively impact our operating metrics going forward."
Q3 2023 Financial Highlights:
Select key financial metrics ( | Q3 2023 | Q3 2022 | %change | Q2 2023 | |||||||||
Net revenue | 21,045 | 9,922 | 112 % | 19,284 | |||||||||
Direct gross profit(1) | 1,612 | 596 | 170 % | 3,060 | |||||||||
Adjusted G&A(1) | 6,645 | 4,191 | 59 % | 6,163 | |||||||||
Loss from operations | 12,920 | 8,718 | 48 % | 12,097 | |||||||||
(1) Direct gross profit and Adjusted G&A are non-IFRS financial measures, they do not have a standardized definition under IFRS. |
Net revenue: Net revenue increased by
Direct Gross Profit: Direct Gross Profit for the quarter was
Adjusted General and Administrative Expenses ("G&A"): Adjusted G&A increased year-over-year by
Loss from Operations: Loss from operations was
Q3 Operational Highlights:
Maximizing Facility Utilization: The Company continues to concentrate activities at its core facilities to maximize utilization and overhead absorption. In September, the Company implemented the final phase of its post-merger synergy plan, which included: (i) eliminating redundant facilities, (ii) realigning the Company's production activities across its two core sites in
International Distribution:
In Q3 2023, the Company received orders under its international distribution agreements in
Capital:
- Post quarter end, the Company secured
in borrowing from Stone Pine Capital Ltd. ("Stone Pine"), a company controlled by the Company's largest shareholder and current Chairman. The promissory notes bear interest at Prime plus$1.79 million 8.0% , mature no earlier than January 31, 2025, and are subordinate to the Company's Senior Credit Facility. - On October 27, 2023, the Company entered into a Waiver Agreement with its lender, waiving the covenant requiring positive EBITDA until January 31, 2024.
About BZAM:
BZAM Ltd. (CSE: BZAM) (US‐OTC: BZAMF) is a leading Canadian cannabis producer with a focus on branded consumer goods, innovation, quality, consistency, integrity and transparency. The BZAM family includes core brands BZAM™, TGOD™, ness™, Highly Dutch Organic™, TABLE TOP™, and partner brands Dunn Cannabis, FRESH and Wyld. BZAM operates facilities in BC,
BZAM's Common Shares and certain warrants issued under the indentures dated June 12, 2020, October 23, 2020 and December 10, 2020 currently trade on the CSE under the symbol "BZAM", "BZAM.WR", "BZAM.WA", and "BZAM.WB" respectively. BZAM's Shares trade in the
Non-IFRS Financial Measures
This Press Release contains certain financial and operational performance measures that are not recognized or defined under IFRS (the "Non-IFRS Measures"). As there are no standardized methods of calculating these Non-IFRS Measures, the Company's approaches may differ from those used by others, and this data may not be comparable to similar data presented by other licensed producers of cannabis and cannabis companies. As such, users are cautioned that these measures should not be construed as alternatives to measures determined in accordance with IFRS, including net income (loss) and gross profit, as measures of profitability or as alternatives to the Company's IFRS-based Consolidated Financial Statements. For an explanation of these measures to related comparable financial information presented in the Consolidated Financial Statements prepared in accordance with IFRS, refer to the discussion below.
The Company believes that these Non-IFRS Measures are useful indicators of operating performance and are specifically used by management to assess the financial and operating performance of the Company. These Non-IFRS Measures include, but are not limited, to the following:
- "Direct Gross Profit" is calculated by subtracting cost of sales, before the effects of (i) unrealized gain (loss) on changes in fair value of biological assets; (ii) realized fair value on inventories sold; and (iii) provisions and impairment of inventories and biological assets. Gross margin before fair value adjustments percentage is calculated by dividing gross margin before fair value adjustments (defined above) by net revenue. Management believes that these measures provide useful information to assess the profitability of our cannabis operations as it excludes the effects of non-cash fair value adjustments on inventory and biological assets, which are required by IFRS.
- "Adjusted G&A" is a Non-IFRS Measure used by management that does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. Management defines Adjusted G&A as general and administrative expenses less termination costs, restructuring costs and any one-off expenses incurred.
Non-IFRS Measures should be considered together with other data prepared in accordance with IFRS to enable investors to evaluate the Company's operating results, underlying performance and prospects in a manner similar to the Company's management. Accordingly, these Non-IFRS Measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.
Forward-looking Statements
This news release includes statements containing certain "forward–looking information" within the meaning of applicable securities law ("forward–looking statements"). Forward looking statements in this release include, but are not limited to, statements about future net revenue, margins, cost of goods, and SG&A savings, and positive cash flows, statements about future operating cashflows and EBITDA, statements about the offering of any particular products by the Company and statements regarding the future performance of the Company, statements about funding availability, statements about growth and delivery of products, statements about the level of demand for BZAM's products in
Neither the CSE nor the CSE's Regulation Services Provider (as that term is defined in the policies of CSE) accept responsibility for the adequacy or accuracy of this release.
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SOURCE BZAM LTD.
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