High Tide Reports First Quarter 2024 Financial Results Featuring Record Revenue, Record Adjusted EBITDA, and Third Consecutive Quarter of Positive Free Cash Flow as well as Break-Even Net Income
First Quarter Results Include Revenue of
This news release constitutes a "designated news release" for the purposes of the Company's prospectus supplement dated
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The Company is Now the Second-Largest Cannabis Retailer in
North America by Store Count1 -
High Tide Remains the Highest Revenue Generating Cannabis Company Reporting in Canadian Dollars2 -
The Company Generated
$3.6 Million of Positive Free Cash Flow3 in the Quarter, Despite a$5.4 Million Reduction in Accounts Payable and Accrued Liabilities. Over the Last Three Quarters, the Company Generated$13.3 Million Dollars in Free Cash Flow -
The Company Generated Breakeven Net Income With Fully Diluted Earnings Per Share of
$0.00 Versus$(0.05) in the First Fiscal Quarter of 2023. The Company Also Generated Record Income From Operations of$2.8 Million , Versus$(3.9) Million in the First Fiscal Quarter of 2023 -
16th Consecutive Quarter of Positive Adjusted EBITDA4, Representing a 90% Increase Year-Over-Year and 25% Sequentially, Marking the Company's 6th
Straight Quarter of Record Positive Adjusted EBITDA - The Company's Adjusted EBITDA Margin of 8.1% Marked Large Increases vs 4.7% Year-Over-Year, and From 6.6% Sequentially
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During the First Fiscal Quarter of 2024, Canna Cabana Held Over 19% of the Cannabis Retail Market Share in
Alberta and 9% inOntario . Across the Five Provinces in Which the Company Has a Presence, Canna Cabana Represented Over 10% of the Market Share in Dollars While Only Representing Approximately 4.7% of the Total Cannabis Retail Store Count in Those Provinces5 -
The Company Remains the Largest Non-Franchised Cannabis Retailer in
Canada With 165 locations and Over 1.32 Million Cabana Club Members, Approximately 32,000 ELITE Members and a Global Customer Database Surpassing 5 Million
First Fiscal Quarter 2024 – Financial Highlights:
- Revenue increased to
$128.1 million in the first fiscal quarter of 2024 compared to$118.1 million during the same period in 2023, representing an increase of 8% year-over-year and 1% sequentially - Gross profit increased to
$36.0 million in the first fiscal quarter of 2024 compared to$32.2 million during the same period in 2023, representing an increase of 12% year-over-year and 9% sequentially - Gross profit margin in the three months ended
January 31, 2024 , was 28%, representing an increase from 26% in the fourth fiscal quarter of 2023 and 27% during the entirety of 2023 - Adjusted EBITDA increased to
$10.4 million in the first fiscal quarter of 2024 compared to$5.5 million during the same period last year, representing an increase of 90% compared to the same period in 2023 and 25% sequentially. Adjusted EBITDA margin increased to 8.1%, representing a significant increase from 4.7% year-over-year and 6.6% sequentially - Salaries, wages, and benefits represented 12% of revenue in the first fiscal quarter of 2024, which was consistent year-over-year and sequentially
- Given the strong cost controls the Company has been implementing, general and administrative expenses represented 4.4% of revenue in the first fiscal quarter of 2024, which improved from 6.3% year-over-year and 5.3% sequentially
- Revenue from the Cabanalytics Business Data and Insights platform, including ad revenue, was a record
$7.3 million for the first fiscal quarter of 2024, compared to$6.6 million year-over-year, and$6.8 million sequentially, representing increases of 11% and 8% respectively - For locations operational throughout the first fiscal quarter of 2024 and 2023, same-store sales increased by 7% year-over-year. Sequentially, same-store sales remained consistent across Canna Cabana while total cannabis retail sales across
Canada , excludingQuebec , were down 6%, including the impact of new store growth6 - The Company continued the rollout of ELITE, the first-of-its-kind cannabis paid loyalty program in
Canada , with membership reaching approximately 32,000, representing an increase of 237% year-over-year and 14% sinceJanuary 29, 2024 , which is the fastest pace of onboarding since ELITE was launched in late 2022 - Cash on hand as of
January 31, 2024 , totalled$28.7 million compared to$23.7 million as ofJanuary 31, 2023 , and$30.1 as ofOctober 31, 2023 . This includes the impact of a$2.8 million one-time cash payment to pay down a convertible debenture in the first fiscal quarter of 2024
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1
As reported by |
2
Based on reporting by |
3 The Company defines free cash flow as net cash provided by (used in) operating activities minus sustaining capex minus lease liability payments. Sustaining Capex is defined as leasehold improvements and maintenance spending required in the existing business. The most directly comparable financial measure is net cash provided by operating activities, as disclosed in the consolidated statement of cash flows. It should not be viewed as a measure of liquidity or a substitute for comparable metrics prepared in accordance with IFRS. |
4 Adjusted EBITDA is a non-IFRS financial measure |
5
Based on data for the months of |
6
Based on data for the months of August to |
"I am very proud to announce that High Tide has reached break-even net income this quarter, which is a critical milestone in our ongoing corporate trajectory and is a rarity in the global cannabis space. While there has been industry-wide softening of Canadian cannabis sales in the post-holiday months and having made essentially no acquisitions in over a year, I am proud to report that our Company continues to grow organically and has never had a sequential decline in revenue since going public in 2018. Our focus on responsible growth is leading to robust free cash flow generation, which has totalled over
"Our ELITE program continues to be the biggest differentiator in our innovative discount club model and is yielding results ahead of our expectations. We welcomed new ELITE members at the fastest pace since inception, and our
First Quarter 2024 – Operational Highlights (
- The Company opened 7 new stores: 1 in
British Columbia , 2 inAlberta , 1 inSaskatchewan , 1 inManitoba and 2 inOntario - The Company entered
Ontario's third-largest city,Mississauga , after spearheading efforts to convince the city council to opt into cannabis retail sales - The Company successfully completed a restructuring of approximately
$8.9 million of the Company's outstanding debt held by a key industry lender under a senior secured convertible debenture issued onJuly 23, 2020 , as amended, maturing onJanuary 1, 2025 . With this move and a subsequent cash payment made during the quarter, the current balance remaining on this debenture is$1.0 million - The Company reported that certain officers, directors, and consultants led by the Company's Founder and Chief Executive Officer, in the aggregate, acquired 125,917 common shares in the capital of High Tide on the open market
between November 20 and November 21 at an average price of$1.88 per Common Share. These purchases come in addition to similar insider buying of shares, which occurred inMarch 2023
Subsequent Events (
- As of
March 15, 2024 , memberships in theCabana Club loyalty program increased to over 1.32 million, up from 975,000 members as ofMarch 18, 2023 , and 1.28 million as ofJanuary 29, 2024 , representing increases of 35% and 3%, respectively - As of
March 15, 2024 , ELITE memberships have grown to approximately 32,000 members, up from 28,000 as ofJanuary 29, 2024 , representing an increase of 14% sequentially - The Company announced the opening of 2 new stores in
Ontario - The Company strengthened its Canadian supply chain through a limited distribution agreement with
Manitoba Liquor and Lotteries - For the second time in three years, High Tide was recognized as a top 10 ranked company in the diversified industries sector by the TSX Venture 50
- The Company announced that it has entered into a definitive agreement pursuant to which High Tide will acquire all IP, including trademarks and other assets of the Queen of Bud cannabis and lifestyle brand
- The Company grew its
World Vision sponsorship support to 330 children internationally after committing to sponsoring two additional children for every new store that opens inCanada
Selected financial information for the first quarter ended
(Expressed in thousands of Canadian Dollars)
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Three months ended J anuary 31 |
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2024 |
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2023 |
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Change |
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$ |
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$ |
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Revenue |
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128,068 |
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118,076 |
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9 % |
Gross Profit |
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35,994 |
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32,181 |
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12 % |
Gross Profit Margin |
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28 % |
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27 % |
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1 % |
Total Operating Expenses |
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(33,202) |
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(36,103) |
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(8 %) |
Adjusted EBITDA |
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10,435 |
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5,500 |
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90 % |
Income (loss) from Operations |
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2,792 |
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(3,922) |
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171 % |
Net loss |
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(5) |
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(3,862) |
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100 % |
Loss per share (Basic and Diluted) |
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(0.00) |
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(0.05) |
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99 % |
The following is a reconciliation of Adjusted EBITDA to Net Loss:
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Three Months Ended |
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2024 |
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2023 |
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Net (loss) income |
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(5) |
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(3,862) |
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Incom e/deferred tax recovery |
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(233) |
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(1,236) |
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Accretion and interest |
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1,743 |
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1,814 |
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Depreciation and amortization |
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6,848 |
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7,986 |
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EBITDA 7 |
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8,353 |
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4,702 |
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Foreign exchange loss (gain) |
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5 |
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(15) |
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Transaction and acquisition costs |
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515 |
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664 |
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Gain revaluation of put option liability |
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(300) |
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(1,261) |
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Share-based compensation |
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795 |
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1,436 |
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Loss (gain) on revaluation of marketable securities |
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77 |
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(8) |
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Other losses |
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755 |
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- |
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Loss (gain) on extinguishment of financial liability |
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235 |
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(18) |
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Adjusted EBITDA 7 |
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10,435 |
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5,500 |
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___________________________ |
7 Earnings before interest, taxes, depreciation, and amortization ("EBITDA") and Adjusted EBITDA. These measures do not have a standardized meaning prescribed by IFRS and are, therefore, unlikely to be comparable to similar measures presented by other issuers. Non-IFRS measures provide investors with a supplemental measure of the Company's operating performance and, therefore, highlight trends in the Company's core business that may not otherwise be apparent when relying solely on IFRS measures. Management uses non-IFRS measures in measuring the financial performance of the Company. |
Free Cash Flow ³ |
Q1 |
Q4 |
Q3 |
Q2 |
Net cash provided by (used in) operating activities |
6,873 |
9,637 |
7,545 |
1,365 |
Sustaining Capex |
(511) |
(1,080) |
(705) |
(625) |
Lease Liability Payments |
(2,754) |
(2,870) |
(2,789) |
(2,691) |
Free Cash Flow |
3,608 |
5,687 |
4,051 |
(1,951) |
3 The Company defines free cash flow as net cash provided by (used in) operating activities minus sustaining capex minus lease liability payments. Sustaining Capex is defined as leasehold improvements and maintenance spending required in the existing business. The most directly comparable financial measure is net cash provided by operating activities, as disclosed in the consolidated statement of cash flows. It should not be viewed as a measure of liquidity or a substitute for comparable metrics prepared in accordance with IFRS. |
Outlook
High Tide continues to lead the Canadian cannabis retail landscape as the largest non-franchised retailer across
The Company currently holds an average of over 10% market share in dollars across the provinces where it operates. The Company anticipates reaching 15% market share in
The Company currently has 120 stores equipped with its Fastendr technology. The Company anticipates completing this rollout in the remainder of its store portfolio prior to the end of this fiscal year. With the recently announced acquisition of the Queen of Bud brand, the Company looks forward to developing and launching innovative high-margin cannabis and consumption accessory offerings to its
The Company has generated over
High Tide Earnings Event Webcast
The Company will host a webcast and conference call to discuss the Financial Statements at
Webcast Link for High Tide Earnings Event: https://events.q4inc.com/attendee/213860866
Participants may pre-register for the webcast by clicking on the link above prior to the beginning of the live webcast. Three hours after the live webcast, a webcast replay will be available at the same link above.
Participants who wish to ask questions during the event may do so through the call-in line, the access information for which is as follows:
Participant Details:
Global Dial-In Numbers: https://www.netroadshow.com/events/global-numbers?confId=59676
Participant Access Code: 146693
*Participants will need to enter the participant access code before being met by a live operator*
ATM PROGRAM QUARTERLY UPDATE
Pursuant to the Company's at-the-market equity offering program (the "ATM Program") that allows the Company to issue up to
Pursuant to an equity distribution agreement dated
The Company intends to use the net proceeds of the ATM Program, if any, and at the discretion of the Company, to fund strategic initiatives it is currently developing, to support the growth and development of the Company's existing operations, funding future acquisitions as well as working capital and general corporate purposes.
Common Shares issued pursuant to the ATM Program are issued pursuant to a prospectus supplement dated
The ATM Program is effective until the earlier of (i) the date that all Common Shares available for issue under the ATM Program have been sold, (ii) the date the Canadian Prospectus Supplement in respect of the ATM Program or Canadian Shelf Prospectus is withdrawn and (iii) the date that the ATM Program is terminated by the Company or Agents.
ABOUT HIGH TIDE
Bricks & Mortar Retail: Canna Cabana™ is the largest non-franchised cannabis retail chain in
Retail Innovation: Fastendr™ is a unique and fully automated technology that integrates retail kiosks and smart lockers to facilitate a better buying experience through browsing, ordering and pickup.
E-commerce Platforms: High Tide operates a suite of leading accessory sites across the world, including Grasscity.com, Smokecartel.com, Dailyhighclub.com, and Dankstop.com.
CBD: High Tide continues to cultivate the possibilities of consumer CBD through Nuleafnaturals.com, FABCBD.com, blessedcbd.de and blessedcbd.co.uk.
Wholesale Distribution: High Tide keeps that cannabis category stocked with wholesale solutions via Valiant™.
Licensing: High Tide continues to push cannabis culture forward through fresh partnerships and license agreements under the Famous Brandz™ name.
High Tide consistently moves ahead of the currents, having been named one of
Neither the
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8
As reported by |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release may contain "forward-looking information" and "forward-looking statements" within the meaning of applicable securities legislation. The use of any of the words "could", "intend", "expect", "believe", "will", "projected", "estimated" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the Company's current belief or assumptions as to the outcome and timing of such future events. The forward-looking statements herein include, but are not limited to, statements regarding:
The Company's business objectives and milestones and the anticipated timing of, and costs in connection with, the execution or achievement of such objectives and milestones (including, without limitation, proposed acquisitions, expansions and store openings); the Company's future growth prospects and intentions to pursue one or more viable business opportunities; the development of the Company's business and future activities following the date hereof; expectations relating to market size and anticipated growth in the jurisdictions within which the Company may from time to time operate or contemplate future operations; expectations with respect to economic, business, regulatory, or competitive factors related to the Company or the cannabis industry generally; the market for the Company's current and proposed product offerings, as well as the Company's ability to capture market share; the distribution methods expected to be used by the Company to deliver its product offerings; the Company's strategic investments and capital expenditures, and related benefits; changes in general and administrative expenses; future business operations and activities and the timing and performance thereof; the future tax liability of the Company; the estimated future contractual obligations of the Company; the future liquidity and financial capacity of the Company and its ability to fund its working capital requirements and forecasted capital expenditures; the competitive landscape within which the Company operates and the Company's market share or reach; the Company adding the number of additional cannabis retail store locations the Company proposes to add to the Company's business upon the timelines indicated herein, and the Company remaining on a positive growth trajectory; same-store sales continuing to increase; the Company making meaningful increases to its revenue profile; the Company completing the development of its cannabis retail stores; the announcement of new
Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements. Although the Company believes that the expectations reflected in these statements are reasonable, such statements are based on expectations, factors, and assumptions concerning future events which may prove to be inaccurate and are subject to numerous risks and uncertainties, certain of which are beyond the Company's control, including but not limited to the risk factors discussed under the heading "Non-Exhaustive List of Risk Factors" in Schedule A to our current annual information form, and elsewhere in this press release, as such factors may be further updated from time to time in our periodic filings, available at www.sedarplus.ca and www.sec.gov, which factors are incorporated herein by reference. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement and reflect the Company's expectations as of the date hereof and are subject to change thereafter. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, estimates or opinions, future events or results, or otherwise, or to explain any material difference between subsequent actual events and such forward-looking information, except as required by applicable law.
CAUTIONARY NOTE REGARDING FUTURE ORIENTED FINANCIAL INFORMATION
This press release may contain future oriented financial information ("FOFI") within the meaning of applicable securities legislation about prospective results of operations, financial position or cash flows, which is subject to the same assumptions, risk factors, limitations, and qualifications as set out in the above "Cautionary Note Regarding Forward-Looking Statements". FOFI is not presented in the format of a historical balance sheet, income statement or cash flow statement. FOFI does not purport to present the Company's financial condition in accordance with IFRS as issued by the
Importantly, the FOFI contained in this press release are, or may be, based upon certain additional assumptions that management believes to be reasonable based on the information currently available to management, including, but not limited to, assumptions about: (i) the future pricing for the Company's products, (ii) the future market demand and trends within the jurisdictions in which the Company may from time to time conduct the Company's business, (iii) the Company's ongoing inventory levels, and operating cost estimates, and (iv) the Company's net proceeds from the ATM Program and future financings. The FOFI or financial outlook contained in this press release do not purport to present the Company's financial condition in accordance with IFRS as issued by the
Readers are cautioned not to place undue reliance on the FOFI, or financial outlook contained in this press release. Except as required by Canadian securities laws, the Company does not intend, and does not assume any obligation, to update such FOFI.
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