Cansortium Reports Third Quarter 2023 Results

Rhea-AI Summary

Cansortium Inc. (TIUM.U) (CNTMF) reported a record Q3 revenue of $25.3 million, a 14% YoY increase, with cash from operations up 32% to a record $7.1 million. The company's adjusted EBITDA was $8.8 million, with 33 stores operating in Florida and plans to open more. The company's total debt was $60.3 million, with approximately 298 million shares outstanding.

- Q3 Revenue up 14% YoY to a Record $25.3 Million -

- Q3 Cash from Operations increased 32% to a Record $7.1 Million;
8^th Consecutive Quarter of Positive Cash Flow -

TAMPA, Fla., Nov. 29, 2023 (GLOBE NEWSWIRE) -- Cansortium Inc. (CSE: TIUM.U) (OTCQB: CNTMF) (“Cansortium” or the “Company”), a vertically-integrated, multi-state cannabis company operating under the FLUENT™ brand, today announced financial and operating results for the third quarter ended September 30, 2023. Unless otherwise indicated, all financial results are presented in U.S. dollars.

“We generated record revenue and cash flow generation during the third quarter as we continued to execute on our growth objectives despite a seasonally slow period in Florida,” said CEO Robert Beasley. “Adjusted EBITDA was offset by increased headcount to keep pace with new store openings, however these investments are critical in laying the foundation for growth and supporting our future plans.

“In Florida, we continue to ramp our four new stores opened this year while driving cultivation improvements, leading to production of more high quality, high THC products. Although the third quarter is generally the most challenging period of the year in Florida, these operating improvements have enabled us to command higher retail prices and partially offset lower volumes from the summer months in Florida.

“Looking ahead, we will continue to drive improvements across our footprint in Florida and Pennsylvania, while capitalizing on our first mover advantage in Texas as we plan to open our brick-and-mortar delivery center in Houston in early 2024.”

Q3 2023 Financial Highlights (vs. Q3 2022)

• Revenue increased 14% to $25.3 million compared to $22.1 million.
• Florida revenue increased 17% to $21.3 million compared to $18.2 million.
• Adjusted gross profit¹ was $16.1 million or 63.9% of revenue, compared to $16.7 million or 75.5% of revenue.
• Adjusted EBITDA was $8.8 million compared to $11.7 million, with the decrease primarily driven by additional salaries and wages as well as lower average ticket per transaction. This was partially offset by the impact of increased customer transactions.
• Cash flow from operations for the three months ended September 30, 2023 was $7.1 million compared to $5.4 million in the prior year.
• At September 30, 2023 the Company had approximately $12.1 million of cash and cash equivalents and $60.3 million of total debt, with approximately 298 million shares outstanding.

Recent Operational Highlights

• In Florida, Cansortium opened its Jacksonville – Cassat store. The Company currently operates 33 stores.
• The Company anticipates opening 1 additional new store in Florida by the end of 2023.

__________________
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 4:30 p.m. Eastern time to discuss its financial and operational results, followed by a question-and-answer period. Interested parties may submit questions to the Company prior to the call by emailing investors@cansortiuminc.com.

Date: Wednesday, November 29, 2023
Time: 4:30 p.m. Eastern time
Toll-free dial-in number: (800) 319-4610
International dial-in number: (604) 638-5340
Conference ID: 10022610
Link: Cansortium Conference 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 (720) 330-2829.

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 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 Tampa, Florida.

Cansortium Inc.’s Common Shares trade on the CSE under the symbol “TIUM.U” and on the OTCQB Venture 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 within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. 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 the Company's expectations, estimates, and projections regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of the Company's control.

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
(850) 972-8077
investors.getFLUENT.com

Investor Relations Contact
Sean Mansouri, CFA
Elevate IR
(720) 330-2829
investors@cansortiuminc.com

CANSORTIUM INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As of September 30, 2023 and December 31, 2022
(USD '000)
			September 30, 2023				December 31, 2022
Assets
Current assets
Cash			$	12,105			$	8,359
Trade receivable				48				28
Inventory, net				8,471				8,973
Biological assets				418				996
Prepaid expenses and other current assets				1,380				883
Total current assets				22,422				19,239
Property and equipment, net				28,618				31,743
Intangible assets, net				93,327				94,291
Right-of-use assets, net				30,103				30,464
Goodwill				1,525				1,526
Other assets				4,889				768
Total assets			$	180,884			$	178,031
Liabilities
Current liabilities
Trade payable				3,675				6,931
Accrued liabilities				5,329				5,534
Income taxes payable				25,721				13,952
Derivative liabilities				8,938				8,676
Current portion of notes payable				606				741
Current portion of lease obligations				4,984				2,123
Total current liabilities				49,253				37,957
Notes payable				60,024				56,969
Lease obligations				32,164				33,922
Deferred tax liability				19,287				20,290
Other long-term liabilities				4,471				1,333
Total liabilities				165,199				150,471
Shareholders' equity
Share capital				183,576				180,954
Share-based compensation reserve				6,695				6,395
Equity conversion feature				6,677				6,677
Warrants				29,634				28,939
Accumulated deficit				(210,563	)			(195,071	)
Foreign currency translation reserve				(334	)			(334	)
Total shareholders' equity				15,685				27,560
Total liabilities and shareholders' equity			$	180,884			$	178,031

 

CANSORTIUM INC.
STATEMENT OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
		For the three months ended September 30,									For the nine months ended September 30,
			2023					2022				2023				2022
Revenue, net of discounts		$	25,260				$	22,100			$	71,746			$	64,228
Cost of goods sold			9,121					5,419				25,730				20,990
Gross profit before fair value adjustments			16,139					16,681				46,016				43,238
Fair value adjustments on inventory sold			3,415					(9,605	)			2,336				(25,023	)
Unrealized (loss) gain on changes in fair value of biological assets			(3,627	)				2,558				(11,719	)			13,224
Gross profit			15,927					9,634				36,633				31,439
Expenses
General and administrative			2,705					2,188				7,586				7,348
Share-based compensation			228					53				644				153
Sales and marketing			5,354					4,556				14,929				12,833
Depreciation and amortization			3,412					1,656				8,223				5,014
Total expenses			11,699					8,453				31,382				25,348
Income (loss) from operations			4,228					1,181				5,251				6,091
Other expense (income)
Finance costs, net			4,562					4,422				13,135				11,922
Income from ERTC tax credit			(4,055	)				-				(4,055	)			-
Loss on change in fair value of derivative liability			426					313				262				5,021
Private Placement issuance expense			-					-				-				-
Loss (gain) on debt settlement			(116	)				-				(116	)			1,136
Loss (gain) on disposal of assets			-					(22	)			70				(22	)
Loss from termination of a contract			2					-				5				-
Other expense (income)			-					(1	)			67				(373	)
Total other expense			1,427					4,712				9,976				17,684
Gain (loss) before income taxes			2,800					(3,531	)			(4,726	)			(11,593	)
Income tax expense			5,561					2,026				10,766				7,542
Net loss from continuing operations			(2,761	)				(5,557	)			(15,492	)			(19,135	)
Net loss from discontinued operations			-					19				-				8,594
Net loss		$	(2,761	)			$	(5,576	)		$	(15,492	)		$	(27,729	)
Other comprehensive gain that may be reclassified to profit or loss in subsequent years
Exchange differences on translation of foreign operations and reporting currency			-					62				-				87
Comprehensive loss		$	(2,761	)			$	(5,514	)		$	(15,492	)		$	(27,642	)
Basic and diluted - continuing operations		$	(0.01	)			$	(0.02	)		$	(0.05	)		$	(0.11	)
Basic and diluted - discontinued operations		$	-				$	(0.00	)		$	-			$	(0.00	)
Weighted average number of shares
Basic number of shares			298,963,366					252,276,742				290,693,488				252,230,588
Diluted number of shares			358,650,277					309,136,061				345,906,048				308,192,639

 

CANSORTIUM INC.
STATEMENTS OF CASH FLOWS
(USD '000)
	For the nine months ended September 30,
		2023				2022
Operating activities
Net loss from continuing operations	$	(15,492	)		$	(27,729	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Unrealized gain (loss) on changes in fair value of biological assets		11,719				(13,224	)
Realized (loss) gain on changes in fair value of biological assets		(2,336	)			25,023
Share-based compensation		644				153
Depreciation and amortization		10,961				9,534
Accretion and interest of convertible debentures		400				-
Accretion and interest of term loan		9,534				9,359
Interest income on notes receivable		-				(71	)
Interest of equipment loan		37				-
Loss (gain) on disposal of assets		70				(22	)
Loss on debt settlement		-				1,136
Discontinued operations		-				8,594
Change in fair market value of derivative		262				5,021
Interest on lease liabilities		3,041				2,546
Deferred tax expense		(1,003	)			(703	)
Changes in operating assets and liabilities:
Trade receivable		(20	)			(27	)
Inventory		4,632				1,185
Biological assets		(12,609	)			(15,495	)
Prepaid expenses and other current assets		(497	)			(477	)
Right of Use Assets/Liabilities		455				236
Other assets		(4,121	)			-
Trade payable		(3,277	)			333
Accrued liabilities		(205	)			2,060
Other long-term liabilities		3,141				-
Income taxes payable		11,769				8,053
Net cash provided by operating activities		17,105				15,486
Investing activities
Purchases of property and equipment		(4,500	)			(5,439	)
Payment of notes receivable		-				119
Advances for notes receivable		-				(94	)
Net cash used in investing activities		(4,500	)			(5,414	)
Financing activities
Net proceeds from issuance of shares and warrants		2,993				-
Proceeds from issuance of convertible debenture and warrants		-				4,710
Net proceeds from insurance financing		800				-
Exercise of Options		-				135
Issuance of shares for note payable extension						-
Net cash provided by (used in) financing activities		(8,859	)			(10,084	)
Net cash used in by financing activities		(8,859	)			(10,084	)
Effect of foreign exchange on cash and cash equivalents		-				87
Net increase in cash		3,746				75
Cash, beginning of period		8,359				9,024
Cash, end of period	$	12,105			$	9,099

 

Cansortium Inc.
Adjusted EBITDA Calculation
(USD '000)
	Three months ended
	September 30, 2023				September 30, 2022				Variance
Net loss	$	(2,761	)		$	(5,576	)		$	2,815
Finance costs, net		4,562				4,422				140
Income taxes		5,561				2,026				3,535
Depreciation and amortization		3,830				3,464				366
EBITDA	$	11,192			$	4,336			$	6,856
	Three months ended
	September 30, 2023				September 30, 2022				Variance
EBITDA	$	11,192			$	4,336			$	6,856
Change in fair value of biological assets		212				7,047				(6,835	)
Change in fair market value of derivative		426				313				113
Gain on debt settlement(1)		(116	)			-				(116	)
Loss on termination of contract(1)		2				-				2
Share-based compensation		228				53				175
Discontinued operations(1)		-				19				(19	)
Income from ERTC tax credit(1)		(4,055	)			-				(4,055	)
Loss on sale of ERTC tax credit(1)		608				-				608
Other non-recurring expense (income)(2)		261				(1	)			262
Adjusted EBITDA	$	8,758			$	11,745			$	(2,987	)

FAQ

What are Cansortium Inc.'s (TIUM.U) Q3 2023 financial results?

Cansortium Inc. reported a record Q3 revenue of $25.3 million, a 14% YoY increase, with cash from operations up 32% to a record $7.1 million.

How many stores does Cansortium Inc. (CNTMF) operate in Florida?

Cansortium Inc. currently operates 33 stores in Florida with plans to open more.

What was Cansortium Inc.'s (TIUM.U) adjusted EBITDA for Q3 2023?

Cansortium Inc.'s adjusted EBITDA for Q3 2023 was $8.8 million.

What was the total debt of Cansortium Inc. (CNTMF) as of September 30, 2023?

Cansortium Inc. had a total debt of $60.3 million as of September 30, 2023, with approximately 298 million shares outstanding.