/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES
OR FOR DISSEMINATION IN THE UNITED
STATES./
CALGARY,
AB, Aug. 15, 2024 /CNW/ - Simply Solventless
Concentrates Ltd. (TSXV: HASH) ("SSC") is pleased to
announce its Q2 2024 results, including record gross revenue of
$4,232,663, record EBITDA of
$1,282,6961 (adjusted
EBITDA of $952,986), record net
income of $1,220,708 (normalized net
income of $890,725), and annualized
net income of $0.096 per share. All
Q2 2024 results exceed the Q2 2024 guidance provided by SSC in
its news release dated May 27, 2024.
The information set out in this press release should be read in
conjunction with SSC's financial statements as at and for the three
and six months ended June 30, 2024
and the related management's discussion and analysis, which are
available for review on SSC's SEDAR+ profile at
www.sedarplus.ca.
![Simply Solventless Concentrates Ltd. Logo (CNW Group/Simply Solventless Concentrates Ltd.) Simply Solventless Concentrates Ltd. Logo (CNW Group/Simply Solventless Concentrates Ltd.)](https://mma.prnewswire.com/media/2482846/Simply_Solventless_Concentrates_Ltd__SIMPLY_SOLVENTLESS_EXCEEDS.jpg)
Jeff Swainson, President &
CEO of SSC, stated: "SSC has established a track record of revenue
growth and profitability which has resulted in strong strategic
positioning within the Canadian cannabis industry. We will seek to
continue to leverage this positioning to capitalize on
opportunities resulting from industry headwinds, and to finish the
second half of 2024 stronger than the first half."
Mr. Swainson added: "Our team is doing a fantastic job
integrating CannMart Inc. into our operations as planned. Revenue
growth is being fuelled by the proceeds of our recent over
subscribed $3.85 million financing,
and we are capitalizing on synergies and cost reductions with
CannMart which are expected to drive profitability. We will provide
Q3 2024 guidance in the coming weeks; however, on a preliminary
basis, we are projecting Q3 2024 annualized gross revenue of
approximately $27.0 million
($0.40/share), September 2024 annualized gross revenue of
approximately $33.0 million
($0.45/share), Q4 2024 annualized
gross revenue of approximately $37.0
million ($0.50/share), and
December 2024 annualized gross
revenue of approximately $42.0
million ($0.55/share), up from
our record $16.8 million of
annualized gross revenue achieved in Q2 2024."
Q2 2024 Financial Highlights:
- Q2 2024 Net Income per Share (EPS): $0.024 (Q1 2024 - $0.01), an increase of 140%.
- Q2 2024 Annualized Net Income per Share (EPS): $0.096 (Q1 2024 - $0.04), an increase of 140%.
- Q2 2024 Cash Flow from Operations Before Working Capital
Changes: $952,896 (Q1 2024 -
$610,843), an increase of 56%.
- Q2 2024 Gross Revenue: $4,232,663
(Q1 2024 - $3,122,232), increase of
36%.
- Q2 2024 Net Revenue: $2,902,206
(Q1 2024 - $2,298,273), an increase
of 26%.
- Q2 2024 Gross Margin: $1,720,920
(Q1 2024 - $1,117,387), an increase
of 54%.
- Q2 2024 Gross Margin Percentage: 59% of net revenue (Q1 2024 –
49%), an increase of 20%.
- Q2 2024 EBITDA: $1,282,969 (Q1
2024 - $567,602), an increase of
126%. See TABLE 1 below.
- Q2 2024 Adjusted EBITDA: $952,986
(Q1 2024 - $611,571), an increase of
56%.
- Q2 2024 Net Income: $1,220,798
(Q1 2024 - $502,536), an increase of
143%.
- Q2 2024 Normalized Net Income(1): $890,815 (Q1 2024 - $546,505), an increase of 63%.
- Q2 2024 Working Capital(1): 5,909,655 (Q1 2024 -
$4,233,711), an increase of 40%.
- Q2 2024 Inventory Turnover: 0.48x (Q1 2024 – 0.50x). Expected
Q3 2024 inventory turnover of 0.70x and expected Q4 2024 inventory
turnover of 1.00x, reflecting planned increases in
revenue.
- Q2 2024 Current Ratio: 1.74 (Q1 2024 – 1.64), an improvement of
6%.
- Q2 2024 Financing: On April 17,
2024, SSC issued 5,333,334 units at a price of $0.15 per unit for net proceeds of $800,000. See the following news release dated
April 17, 2024 for details: OVER
SUBSCRIBED $800,000 UNIT FINANCING,
which is also available on SSC's SEDAR+ profile at
www.sedarplus.ca.
- CannMart Services & Acquisition Agreements: On June 24, 2024, SSC entered into services and
acquisition agreements regarding the operating and acquisition of
CannMart Inc. See the following news release dated
June 25, 2024 for details of
this transaction: CANNMART SERVICES & ACQUISITION
AGREEMENTS, which is also available on SSC's SEDAR+ profile at
www.sedarplus.ca.
- Q3 2024 Financing: On July 17,
2024, SSC issued 15,400,000 units at a price of $0.25 per unit for gross proceeds of $3,850,000. See the following news release dated
July 17, 2024 for details: OVER
SUBSCRIBED $3,850,000 UNIT FINANCING,
which is also available on SSC's SEDAR+ profile at
www.sedarplus.ca.
- Warrant Exercises: Subsequent to Q2 2024 up until August 14, 2024, 3,311,959 common share purchase
warrants of SSC have been exercised at $0.20 per warrant for proceeds of $662,392.
(1) Non-IFRS
financial measure. See discussion in the Non-IFRS Financial
Measures advisories section of this press release below.
|
Please see TABLE 1 below for a summary of SSC's quarterly EBITDA,
adjusted EBITDA, net income, and normalized net income since SSC
received its Health Canada licenses:
TABLE 1: QUARTERLY
EBITDA AND NET INCOME
|
Quarter
Ended
|
EBITDA(1)
|
Adjusted
EBITDA(1)
|
Net
Income
(Loss)
|
Normalized
Net Income
(Loss) (1)
|
|
September 30,
2022
|
206,020
|
158,334
|
43,940
|
(3,746)
|
|
December 31,
2022
|
529,645
|
598,201
|
276,898
|
345,454
|
|
March 31,
2023
|
876,296
|
958,807
|
758,828
|
841,337
|
|
June 30,
2023
|
1,261,830
|
938,060
|
1,161,241
|
837,471
|
|
September 30,
2023
|
200,326
|
270,009
|
121,215
|
190,896
|
|
December 31,
2023(2)
|
(936,605)
|
80,050
|
(1,000,968)
|
15,687
|
|
March 31,
2024
|
567,602
|
611,571
|
502,536
|
546,505
|
|
June 30,
2024
|
1,282,969
|
952,986
|
1,220,798
|
890,815
|
|
(1)
|
Non-IFRS financial
measure. See discussion in the Non-IFRS Financial Measures
advisories section of this press release below.
|
(2)
|
Q4 2023 negative EBITDA
and net loss due to one-time non-recurring expense that was booked
related to the go-public transaction ("Go-Public Expense") through
Dash Capital Corp. Adjusting for the Go-Public Expense, SSC
has been EBITDA positive for eight straight quarters and normalized
net income positive for seven straight quarters.
|
The financial information in this press release has been reviewed
and approved by the board of directors of SSC.
Option Grant
SSC has made its annual grant of incentive stock options to
employees, management, and its board of directors. A total of
2,816,000[2] stock options were granted at an exercise price
of $0.37 per share and the options expire on August
14, 2027. The option grant remains subject to the final approval of
the TSX Venture Exchange.
About Simply Solventless Concentrates Ltd.
SSC is a public company incorporated under the Business
Corporations Act (Alberta).
SSC's mission is to provide pure, potent, terpene-rich ready to
consume cannabis products to discerning cannabis consumers. For
more information regarding SSC, please see
www.simplysolventless.ca.
Notice on Forward Looking Information
This press release contains forward-looking statements and
forward-looking information (collectively, "forward-looking
statements") within the meaning of applicable securities laws. Any
statements that are contained in this press release that are not
statements of historical fact may be deemed to be forward-looking
statements. Forward-looking statements are often identified by
terms such as "may", "should", "anticipate", "will", "estimates",
"believes", "intends", "expects", "projected" and similar
expressions which are intended to identify forward-looking
statements. More particularly and without limitation, this press
release contains forward looking statements concerning capitalizing
on opportunities resulting from industry headwinds, finishing the
second half of 2024 stronger than the first half of 2024, synergies
and cost reductions with CannMart driving profitability, and
providing Q3 2024 guidance. SSC cautions that all forward-looking
statements are inherently uncertain, and that actual performance
may be affected by a number of material factors, assumptions and
expectations, many of which are beyond the control of SSC,
including expectations and assumptions concerning SSC, the ability
to realize expected revenue and cost synergies of the transactions
with CannMart Inc. on the timelines expected, the risk that the
business of CannMart will not be integrated successfully, the
ability to maintain relationships with customers, employees and
suppliers, the timing and market acceptance of products,
competition in SSC's markets, SSC's reliance on customers,
fluctuations in interest rates, SSC's ability to maintain good
relations with its customers, employees and other stakeholders,
changes in law or regulations, SSC's ability to protect its
intellectual property, as well as other risks and uncertainties,
including those described in SSC's filings available on SEDAR+ at
www.sedarplus.ca. The reader is cautioned that assumptions
used in the preparation of any forward-looking statements may prove
to be incorrect. Events or circumstances may cause actual results
to differ materially from those predicted as a result of numerous
known and unknown risks, uncertainties and other factors, many of
which are beyond the control of SSC.
The reader is cautioned not to place undue reliance on any
forward-looking statements. Such information, although considered
reasonable by management at the time of preparation, may prove to
be incorrect and actual results may differ materially from those
anticipated. Forward-looking statements contained in this press
release are expressly qualified by this cautionary statement.
The forward-looking statements contained in this press release
are made as of the date of this press release, and SSC does not
undertake any obligation to update publicly or to revise any of the
included forward-looking statements, whether as a result of new
information, future events or otherwise, except as expressly
required by securities law.
Non-IFRS Financial Measures
This press release includes references to "Working Capital",
"EBITDA", "Adjusted EBITDA" and "Normalized Net Income", which are
not defined under International Financial Reporting Standards
(IFRS). The intent of these non-IFRS measures is to provide
additional useful information to investors and analysts. These
non-IFRS measures do not have a standardized meaning prescribed by
IFRS and is therefore unlikely to be comparable to similar measures
presented by other entities. As such, these non-IFRS measures
should not be considered in isolation or used as a substitute for
measures of performance prepared in accordance with IFRS.
Working Capital is defined as current assets less current
liabilities as reported on SSC's consolidated statements of
financial position. Working Capital is considered as a useful
measure by management of SSC to indicate SSC's ability to service
its short-term financial obligations with short-term assets.
EBITDA is calculated as income before interest, taxes,
depreciation and amortization expenses. EBITDA is considered as a
useful measure by management of SSC to understand the profitability
of SSC excluding the effects of capital structure, taxation and
depreciation, but may not be appropriate for other purposes.
Adjusted EBITDA is calculated as EBITDA less the sale of SSC's
facility and settlement payment(s), plus the acquisition of Dash
Capital Corp. and share compensation expense. Adjusted EBITDA
is considered as a useful measure by management of SSC to
understand the profitability of SSC excluding the effects of
certain non-operating items.
Normalized Net Income is calculated as income less the sale
of SSC's facility and settlement payment(s), plus the acquisition
of Dash Capital Corp. and share compensation expense. Normalized
Net Income is considered as a useful measure by management of SSC
to understand the profitability of SSC excluding the effects of
certain non-operating items.
The following table reconciles current assets and current
liabilities to Working Capital:
As
at,
|
Jun 30,
2024
|
Jun 30,
2023
|
Dec 31,
2024
|
Dec 31,
2023
|
|
|
|
|
|
Current
assets
|
13,896,776
|
6,591,243
|
8,419,131
|
8,419,131
|
Current
liabilities
|
6,767,395
|
3,770,104
|
4,163,379
|
4,725,252
|
Working
Capital
|
7,129,381
|
2,821,139
|
4,255,752
|
3,693,879
|
The following table reconciles net income (loss) to EBITDA:
|
Three months
ended
|
Twelve months
ended
|
|
Jun 30,
2024
|
Jun 30,
2023
|
Dec 31,
2023
|
Dec 31,
2022
|
|
|
|
|
|
Net and comprehensive
(loss)
income
|
1,220,798
|
1,161,241
|
1,040,316
|
(1,683,799)
|
Add
(deduct):
|
|
|
|
|
Depreciation and
amortization
|
13,234
|
11,549
|
48,207
|
229,854
|
Net interest (income)
expense
|
48,937
|
89,040
|
313,324
|
261,995
|
EBITDA
|
1,282,969
|
1,261,830
|
1,401,847
|
(1,191,950)
|
The following table reconciles net income (loss) to Adjusted
EBITDA:
|
Three months
ended
|
Twelve months
ended
|
|
Jun 30,
2024
|
Jun 30,
2023
|
Dec 31,
2023
|
Dec 31,
2022
|
|
|
|
|
|
Net and comprehensive
(loss)
income
|
1,220,798
|
1,161,241
|
1,040,316
|
(1,683,799)
|
Add
(deduct):
|
|
|
|
|
Depreciation and
amortization
|
13.234
|
11,549
|
48,207
|
229,854
|
Net interest (income)
expense
|
48,937
|
89,040
|
313,324
|
261,995
|
Gain on
settlement
|
(431,671)
|
-
|
-
|
-
|
Gain on
disposal
|
-
|
(353,833)
|
(417,814)
|
-
|
Acquisition of Dash
Capital
|
-
|
-
|
1,043,909
|
-
|
Share compensation
expense
|
101,688
|
30,063
|
218,984
|
48,607
|
Adjusted
EBITDA
|
952,986
|
938,060
|
2,246,926
|
(1,143,343)
|
The following table reconciles net income (loss) to Normalized Net
Income:
|
Three months
ended
|
Twelve months
ended
|
|
Jun 30,
2024
|
Jun 30,
2023
|
Dec 31,
2023
|
Dec 31,
2022
|
|
|
|
|
|
Net and comprehensive
(loss)
income
|
1,220,798
|
1,161,241
|
1,040,316
|
(1,683,799)
|
Add
(deduct):
|
|
|
|
|
Gain on
settlement
|
(431,671)
|
-
|
-
|
-
|
Gain on
disposal
|
-
|
(353,833)
|
(417,814)
|
-
|
Acquisition of Dash
Capital
|
-
|
-
|
1,043,909
|
-
|
Share compensation
expense
|
101,688
|
30,063
|
218,984
|
48,607
|
Adjusted Net and
comprehensive
(loss) income
|
890,815
|
837,471
|
1,885,395
|
(1,635,192)
|
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy any securities in any
jurisdiction.
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 release.
SOURCE Simply Solventless Concentrates Ltd.