Christina Lake Cannabis Reports Third Quarter Fiscal 2022 Results
November 02 2022 - 12:59AM
(CSE: CLC) Christina Lake Cannabis Corp. (the
"
Company" or "
Christina Lake") is
pleased to report its financial results for the third quarter
fiscal 2022 ended August 31, 2022 (“Q3’22”). All amounts are
expressed in Canadian dollars unless otherwise noted.
“I am honored to be able to report a record
quarter at Christina Lake,” said Christina Lake CEO Mark Aiken.
“This represents our highest revenue per quarter, with 25% growth
over last quarter. As one of Canada’s leading extractors, our team
remains focused on driving significant growth with our high-quality
extracts, while continuing to look for new opportunities in the
market. On top of this, we have delivered another quarter of
positive net income.”
Third Quarter 2022 Financial
Highlights The following table of financial highlights is
presented in thousands of Canadian dollars.
|
Q3’22 |
Q2’22 |
Q3’21 |
|
Three months ended August 31,
2022 |
Three months ended May 31,
2022 |
Three months ended August 31,
2021 |
Revenue |
$ |
2,912 |
|
$ |
2,321 |
|
$ |
1,291 |
|
Cost of Sales |
|
(1,512 |
) |
|
(1,027 |
) |
|
(532 |
) |
Gross Profit before fair value |
|
1,400 |
|
|
1,294 |
|
|
758 |
|
Changes in the fair value of inventory sold |
|
(504 |
) |
|
(442 |
) |
|
(743 |
) |
Gross profit |
|
895 |
|
|
852 |
|
|
16 |
|
Fair value change on growth of biological assets |
|
3,002 |
|
|
- |
|
|
5,430 |
|
General and Administrative Expenses |
|
(1,032 |
) |
|
(969 |
) |
|
(1,295 |
) |
Total other items |
|
(344 |
) |
|
139 |
|
|
(371 |
) |
Net Income |
$ |
2,521 |
|
$ |
22 |
|
$ |
3,780 |
|
Revenue grew 25% to $2.9M from $2.3M in the
prior quarter, and from $1.3M in Q3’21. Revenue growth was driven
by the growing demand in our premium distillate, extended product
offerings, and expanding customer base.
Gross Margin Before Fair Value Adjustments was
52% of net revenue for the nine-month period ended August 31, 2022,
compared with 60% in the comparative prior year period. The Company
continued to realize production efficiencies to combat price
compression in the wholesale distillate market as production and
sales continued to ramp up. This was
offset by an evolving product mix, which included the monetization
of slower moving inventory.
Total general & administrative (“G&A”)
expenses declined by 20% in Q3’22 compared to in Q3’21, driven by
year-over-year reductions in corporate development, marketing, and
share based compensation expenses. G&A decreased to 35% of
revenue during the quarter, compared with 42% in Q2’22 and 100% in
Q3’21.
Net income in Q3’22 was $2.5M which is a $1.3M
decrease from Q3’21. The year-over-year decline is primarily driven
by a decrease in the fair value change on the growth of biological
assets, which was offset by an increase in revenue and reduction in
G&A expenses.
Cash & Working CapitalAs at
August 31, 2022, the Company had working capital of $10.4M, which
consisted of $1.2M of cash, $1.7M in receivables, $4.6M of
inventory, $4.4M of biological assets, and $1.6M of current
liabilities.
The Company was able to optimize processing
techniques which lead to consistent production of high potency
distilled oils and other extracts, while adding additional
processing capacity. That improvement was a key contributor to the
significant increase in the revenue from the prior fiscal year.
Fiscal 2021 was the first year the Company established a commercial
inventory for the sale of premium extracts and cannabis products.
The Company intends to finish processing its remaining biomass and
oils in inventory, and will look to accelerate processing of its
third 2022 harvest.
ABOUT CHRISTINA LAKE
CANNABIS CORP.
Christina Lake Cannabis is a licensed producer
of cannabis under the Cannabis Act. It has secured a standard
cultivation license and corresponding processing amendment from
Health Canada (March 2020 and August 2020, respectively) as well as
a research and development license (early 2020). Christina Lake
Cannabis’ facility consists of a 32-acre property, which includes
over 950,000 square feet of outdoor grow space, offices,
propagation and drying rooms, research facilities, and a facility
dedicated to processing and extraction. Christina Lake Cannabis
also owns a 99-acre plot of land adjoining its principal site. CLC
focuses its production on creating high quality extracts and
distillate for its B2B client base with proprietary strains
specifically developed for outdoor cultivation to enhance
extraction quality.
For more information, please visit
www.christinalakecannabis.com and www.sedar.com. CLC.CN
For more
Information, please
contact:
Jennifer SmithInvestor Relations and Media Inquiries
Jennifer.Smith@loderockadvisors.com
Reader Advisory
THE CSE HAS NOT REVIEWED AND DOES NOT ACCEPT
RESPONSIBILITY FOR THE ACCURACY OR ADEQUACY OF THIS RELEASE, NOR
HAS OR DOES THE CSE’S REGULATION SERVICES PROVIDER.
This press release contains forward-looking
information and forward-looking statements within the meaning of
applicable securities laws (“Forward-Looking Statements”) including
and not limited to: the revenue growth; future crop growth and
distillate sales; production capacity; and operating expenses.
Forward-Looking Statements are based on certain expectations and
assumptions and are subject to known and unknown risks and
uncertainties and other factors that could cause actual events,
results, performance and achievements to differ materially from
those anticipated in these Forward-Looking Statements.
Forward-Looking Statements should not be read as guarantees of
future performance or results. Readers are cautioned not to place
undue reliance on these Forward-Looking Statements, which speak
only as of the date of this press release. The Company disclaims
any intention or obligation, except to the extent required by law,
to update or revise any Forward-Looking Statements as a result of
new information or future events, or for any other reason.
The press release should be read in conjunction
with the management’s discussion and analysis (“MD&A”) and
unaudited condensed consolidated interim financial statements and
notes thereto as at and for the nine months ended August 31, 2022.
Readers should also refer to the section regarding “Non-IFRS
Measures” in the immediately following section of this press
release. Additional information about Christina Lake is available
on the Company’s profile on SEDAR at www.sedar.com.
In this press release, reference is made to
gross profit/(loss) before fair value adjustments which are not
measures of financial performance under International Financial
Reporting Standards (IFRS). These metrics and measures are not
recognized measures under IFRS, do not have meanings prescribed
under IFRS and are as a result unlikely to be comparable to similar
measures presented by other companies. These measures are provided
as information complementary to those IFRS measures by providing a
further understanding of our operating results from the perspective
of management. As such, these measures should not be considered in
isolation or in lieu of a review of our financial information
reported under IFRS. Further information regarding the above can be
found in the MD&A for the nine months ended August 31, 2022,
filed under the Company’s profile on SEDAR at www.sedar.com
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