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Cansortium
ISIN: CA13809L1094
WKN: A2PGAG
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Cansortium · ISIN: CA13809L1094 · PR Newswire (ID: 20240822C7505)
22 August 2024 10:05PM

Cansortium Reports Second Quarter 2024 Results


- Q2 Revenue up 12% YoY to a record $27.3 Million



- 11th Consecutive Quarter of Positive Cash Flow from Operations

TAMPA, Fla., Aug. 22, 2024 /CNW/ - 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  quarter ended June 30, 2024. Unless otherwise indicated, all financial results are presented in U.S. dollars.

"We delivered another quarter of year-over-year revenue growth and positive cash flow generation during the second quarter as we continued to execute on our growth objectives," said CEO Robert Beasley. "We continue to lay the foundation for growth and scalability while remaining excited about the opportunities ahead."

"In Florida, we have focused on enhancing manufacturing efficiencies and cultivation yields, which has resulted in both an improvement of product quality and cost of goods sold. This has allowed us to retain high profit margins while price competition continues to heat up."

"Looking ahead, we are excited about our upcoming business combination with RIV Capital and have already begun key integration steps. Our shared focus remains on driving growth and profitability by leveraging our core strengths in cultivation, operating expertise and inventory optimization to drive results for shareholders. We remain laser focused on our existing portfolio in Florida, Pennsylvania and Texas and look forward to closing the RIV Capital agreement in the fourth quarter."

Q2 2024 Financial Highlights (vs. Q2 2023)

  • Revenue increased 12% to $27.3 million compared to $24.4 million.
  • Florida revenue increased 15% to $23.1 million compared to $20.1 million.
  • Adjusted gross profit1 was $12.3 million or 48.6% of revenue, compared to $10.2 million or 46.4% of revenue.
  • Adjusted EBITDA was $7.7 million compared to $6.8 million, with the increase primarily driven by higher revenues due to additional production and stores. 
  • Cash flow from operations for the three months ended June 30, 2024 was $2.8 million compared to $4.8 million in the prior year primarily due to settlement of tax payments that had been carried over from previous periods.
  • On June 30, 2024, the Company had approximately $8.5 million of cash and cash equivalents and $67.5 million of total debt, with approximately 300 million shares outstanding.

Recent Operational Highlights

  • In Florida, Cansortium currently operates 35 stores and anticipates opening 4 new stores by Q2 2025.
  • In Pennsylvania, Cansortium completed renovations and expanded its Hanover store, refreshing its look and doubling its size. The store remained operational for the entirety of renovations.
  • The company has begun integration activities with RIV Capital sharing best operational practices and driving efficiencies in advance of the business combination expected to close in Q4 2024.

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.

________________________________________

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.

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

investors@cansortiuminc.com 

Cansortium Inc.

Consolidated Statements of Financial Position

As of June 30, 2024, and December 31, 2023

 (Amounts expressed in thousands of United States Dollars unless otherwise stated)











 June 30, 



 December 31, 











2024



2023



Assets















Current assets















Cash







$                  8,483



$                 10,521



Trade receivable







83



215



Inventory, net



Note 3



13,400



9,244



Biological assets



Note 4



4,279



331



Prepaid expenses and other current assets



Note 5



2,705



1,882



Total current assets







28,950



22,193



















Property and equipment, net



Note 6



26,138



27,642



Intangible assets, net



Note 7



94,845



93,593



Right-of-use assets, net



Note 12



32,187



31,943



Goodwill



Note 8



1,525



1,525



Other assets







997



907



Total assets







$           184,642



$              177,803



















Liabilities















Current liabilities















Trade payable







$                  5,676



$                     5,525



Accrued liabilities







10,445



9,779



Income taxes payable







28,666



22,009



Derivative liabilities



Note 10



1,715



9,109



Current portion of notes payable, net



Note 11



62,063



213



Current portion of lease liabilities



Note 12



3,081



2,872



Total current liabilities







111,646



49,507



















Notes payable, net



Note 11



5,489



61,189



Lease liabilities



Note 12



37,944



37,242



Deferred tax liability







20,365



17,398



Other long-term liabilities



Note 20



3,447



3,882



Total liabilities







178,891



169,218



















Shareholders' equity















Share capital



Note 13



183,690



183,690



Share-based compensation reserve







6,931



6,739



Equity conversion feature







6,867



6,677



Warrants



Notes 13



29,634



29,634



Accumulated deficit







(221,037)



(217,821)



Foreign currency translation reserve







(334)



(334)



Total shareholders' equity 







5,751



8,585



















Total liabilities and shareholders' equity







$           184,642



$              177,803

Cansortium Inc.

Statement of Operations

For the three- and six-months ending June 30, 2024 and 2023 

 (Amounts expressed in thousands of United States Dollars unless otherwise stated)









 For the three months ended



 For the six months ended









June 30,

2024



June 30,

2023



June 30,

2024



June 30,

2023

Revenue, net of discounts







$              27,269



$                 24,430



$              52,496



$                  46,486

Cost of goods sold







13,490



11,448



26,456



23,275

Gross profit before fair value adjustments







13,779



12,982



26,040



23,211























Fair value adjustments on inventory sold







(1,788)



2,211



(160)



4,552

Unrealized gain (loss) on changes

   in fair value of biological assets



Note 4



8,268



(3,035)



9,315



(8,092)

Gross profit







20,259



12,158



35,195



19,671























Expenses





















General and administrative



Note 14



4,607



2,571



8,570



4,883

Sales and marketing



Note 14



6,018



5,576



11,452



9,574

Depreciation and amortization



Notes 6,7



1,780



1,929



3,510



3,777

Share-based compensation







142



177



191



415

Total expenses







12,547



10,253



23,723



18,649























Income from operations







7,712



1,905



11,472



1,022























Other expense (income)





















Finance costs, net



Note 19



4,835



4,324



9,546



8,573

Gain on change in fair value of derivative liability



Notes 10



(5,707)



(442)



(7,394)



(164)

Loss on disposal of assets







-



-



212



70

Loss from termination of a contract







3



82



3



3

Other miscellaneous income







(2)



-



-



67

Total other (income) expense







(871)



3,964



2,367



8,549























Income (loss) before income taxes







8,583



(2,059)



9,105



(7,527)























Income tax expense



Note 9



7,636



3,291



12,321



5,205























Net comprehensive income (loss)







$                       947



$                  (5,350)



$               (3,216)



$               (12,732)























Net loss per share





















Basic and diluted - continuing operations







$                     0.00



$                     (0.02)



$                  (0.01)



$                      (0.05)























Weighted average  number of shares





















Basic number of shares







299,573,039



296,938,910



299,551,203



286,804,241

Diluted number of shares







341,443,706



352,230,174



341,763,315



339,972,379

Cansortium Inc.

Consolidated Statements of Cash Flow

For the six months ended June 30, 2024 and 2023 

 (Amounts expressed in thousands of United States Dollars unless otherwise stated)













 For the six months ended 





June 30,

2024

June 30,

2023



Operating activities







Net loss from continuing operations

$                              (3,216)

$                          (12,732)



Adjustments to reconcile net loss to net cash provided by operating activities:







Unrealized loss (gain)  on changes in fair value of biological assets

(9,315)

8,092



Realized loss (gain) on changes in fair value of biological assets

160

(4,552)



Share-based compensation

191

415



Depreciation and amortization

7,473

8,042



Accretion and interest of convertible debentures

284

266



Accretion and interest of term loan

6,802

6,262



Interest of equipment loan

-

13



Interest on insurance financing

30

-



Interest on convertible promissory note

49

-



Loss on disposal of assets

212

70



Change in fair market value of derivative

(7,394)

(164)



Interest on lease liabilities

2,405

2,037



Deferred tax expense

2,898

(1,517)



Changes in operating assets and liabilities:







Trade receivable

132

1



Inventory

8,132

7,402



Biological assets

(7,081)

(8,886)



Prepaid expenses and other current assets

687

11



Right of Use Assets/Liabilities

(2,525)

67



Other assets

(90)

(40)



Trade payable

152

(135)



Accrued liabilities

666

(623)



Other long-term liabilities

(435)

(791)



Income taxes payable

6,657

6,722



Net cash provided by operating activities

6,874

9,960











Investing activities







Purchases of property and equipment

(3,902)

(4,339)



Purchase of intangible assets

(1,332)

-



Net cash used in investing activities

(5,234)

(4,339)











Financing activities







Net proceeds from issuance of shares and warrants

-

2,993



Net proceeds from convertible note

3,000

-



Payment of lease obligations

(1,412)

(3,188)



Net proceeds from auto and equipment loan

48

-



Principal repayments of notes payable

(5,314)

(4,988)



Net cash used in financing activities

(3,678)

(5,183)



Net increase (decrease) in cash

(2,038)

438



Cash, beginning of period

10,521

8,359



Cash, end of period

$                                 8,483

$                                 8,797

Cansortium Inc.

Adjusted EBITDA Calculation

(Amounts expressed in thousands of United States Dollars unless otherwise stated)



Three months ended



June 30,

June 30,





2024

2023

Variance

Net loss

$                                947

$                        (5,350)

$                  6,297

Finance costs, net

4,835

4,324

511

Income taxes

7,636

3,291

4,345

Depreciation and amortization

3,771

3,887

(116)

EBITDA

$                        17,189

$                           6,152

$              11,037











Three months ended



June 30,

June 30,





2024

2023

Variance

EBITDA

$                        17,189

$                           6,152

$              11,037

Change in fair value of biological assets

(6,480)

824

(7,304)

Change in fair market value of derivative

(5,707)

(442)

(5,265)

Professional Fees

1,852

-

1,852

One-time employee costs

454

-

454

Loss on termination of contract

-

82

(82)

Share-based compensation

142

177

(35)

Other non-recurring expense/(income)

240

-

240

Adjusted EBITDA

$                           7,690

$                           6,793

$                       897











Six months ended



June 30, 

June 30,





2024

2023

Variance

Net loss

$                        (3,216)

$                     (12,732)

$                  9,516

Finance costs, net

9,546

8,573

973

Income taxes

12,321

5,205

7,116

Depreciation and amortization

7,473

7,662

(189)

EBITDA

$                        26,124

$                           8,708

$              17,416











Six months ended



June 30,

June 30,





2024

2023

Variance

EBITDA

$                        26,124

$                           8,708

$              17,416

Change in fair value of biological assets

(9,155)

3,540

(12,695)

Change in fair market value of derivative

(7,394)

(164)

(7,230)

Professional Fees

3,641

-

3,641

One-time employee costs

614

-

614

Loss on termination of contract

-

3

(3)

Share-based compensation

191

415

(224)

Loss on diposal of assets

212

-

212

Other non-recurring expense/(income)

241

137

104

Adjusted EBITDA

$                        14,474

$                        12,639

$                  1,835

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/cansortium-reports-second-quarter-2024-results-302229028.html

SOURCE Cansortium Inc.

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