- Record revenues of $17.1
million for fiscal year 2021, an increase of 230%, compared
to $5.2 million the year
prior
- Same store sales increase of 58% year over year
- Gross margin of 38.1% for the retail operations during
fiscal year 2021 compared to 35% the prior year
- General and administrative expense for fiscal year 2021
substantially decreased to 12% of revenue compared to 61% in the
prior year
- Total HQ salaries decreased to 10% of revenue compared to
46% in the prior year
- Convertible debt and accrued interest of $6.5M converted to equity and settlement of
$1.75M in promissory notes in fiscal
year 2021, leaving only $895K in
total principal debt remaining
- Equity Financings totaling $4M
in gross proceeds completed in fiscal year 2021 and subsequent to
year end
- Milestone completion of qualifying transaction by
reverse-take-over of DC Acquisition Corp, and listing on TSX
Venture under the symbol 'KO' in October
2020
- Appointment of Eleanor Lynch
as Chief Operating Officer, and Janet
Hoffar as Chief Financial Officer, and achieving
gender-equality on the executive leadership team
VANCOUVER, BC, May 4, 2021 /CNW/ - Kiaro Holdings Corp. (TSXV:
KO) ("Kiaro" or the "Company") today announced its fourth quarter
and year end financial results for fiscal year 2021 ended
January 31, 2021. All amounts, unless
specified otherwise, are expressed in Canadian dollars.
"Fiscal year 2021 was a transformational year for Kiaro where we
showcased that we are one of the best-in-class cannabis retail
operators," stated Daniel Petrov,
Chief Executive Officer of Kiaro. "Our significant revenue growth
for fiscal year 2021 reflects the rapid scale of our business
segments and the execution capabilities of the entire Kiaro team.
Looking ahead into Fiscal 2022, we look forward to the continued
engagement from cannabis consumers, growing our brand and market
presence, and opportunities for accelerated revenue growth."
"I want to thank the entire Kiaro team for their effort,
dedication and flexibility in the face of the Covid-19 pandemic,"
continued Mr. Petrov. "Safety for our staff and customers is our
number one priority. Given the changing nature of safety protocols
through this difficult time, the Kiaro team has been able to ensure
safety while continuing to provide unforgettable customer
experiences for all our customers."
Summary of Fiscal Year 2021 Financial Results
For the twelve months ended January 31,
2021, Kiaro recorded revenues of $17.1 million, comprised of $12.1 million from the retail segment and
$5.0 million from the wholesale
segment. Comparatively, in the thirteen months ended January 31, 2020, the Company recorded total
revenues of $5.2 million, comprised
of $3.4 million from the retail
segment and $1.8 million from the
wholesale segment. The 230% increase in revenue in comparison to
the prior year is primarily due to the opening of four new retail
locations, same store sales increases and an increase in the total
addressable market and market presence for the wholesale
segment.
For the twelve months ended January 31,
2021, Kiaro recorded a gross profit of $5.1 million, comprised of $4.6 million from the retail segment and
$0.5 million from the wholesale
segment. This represents a 292% year over year increase when
compared to the thirteen months ended January 31, 2020, where gross profit was
$1.3 million.
Total operating expenses for the twelve months ended
January 31, 2021, were $8.8 million compared to $9.7 million in the thirteen months ended
January 31, 2020. The decrease in
operating expenses, despite the addition of four retail stores, is
a testament to the management's controls and efforts towards
operational excellence. Salaries and employee benefits decreased as
a percentage of revenue to 22% compared to 64% of revenues in the
thirteen months ended January 31,
2020.
For the twelve months ended January 31,
2021, Kiaro recorded adjusted EBITDA of negative
$0.72 million. Comparatively, in the
thirteen months ended January 31,
2020, the adjusted EBITDA was negative $5.9 million. Strong revenue increases combined
with fundamental management of operating expenses relative to
revenue growth resulted in the improvements towards
profitability.
As at January 31, 2021, the
Company had positive working capital of $1,108,870 (January 31,
2020 - $2,815,847), however,
subsequent to year end, the Company closed a bought deal financing
raising gross proceeds of $3,000,000.
Select Financial Information
|
|
|
|
|
|
|
|
Three
months
ended
January 31,
2021
|
Three
months
ended
October 31,
2020
|
%
Change
|
Year
ended
January 31,
2021
|
Thirteen
months
ended
January 31,
2020
|
%
Change
|
|
$
|
$
|
%
|
$
|
$
|
%
|
Revenue
|
5,214,123
|
5,190,930
|
0%
|
17,071,866
|
5,171,836
|
230%
|
Gross
profit
|
1,598,886
|
1,563,791
|
2%
|
5,114,208
|
1,341,965
|
281%
|
Operating
expense
|
(2,512,319)
|
(2,320,858)
|
-8%
|
(8,843,117)
|
(9,727,247)
|
-9%
|
Loss from
operations
|
(913,433)
|
(757,067)
|
-21%
|
(3,728,909)
|
(8,385,282)
|
56%
|
Other
expenses1
|
(275,176)
|
(2,136,725)
|
87%
|
(5,608,128)
|
(4,117,968)
|
-36%
|
Net loss
|
(1,188,609)
|
(2,893,792)
|
59%
|
(9,337,037)
|
(12,503,250)
|
25%
|
Adjusted
EBITDA2
|
(106,156)
|
29,561
|
-459%
|
(726,162)
|
(5,915,865)
|
88%
|
|
(1)
|
In the three months
ended October 31, 2020, other expenses included one-time costs
totaling $1.72 million relating to the Qualifying Transaction. Of
the $1.72 million, $0.24 million relates to transaction costs paid
and $1.48 million represents the consideration of the DCA common
shares less the net assets acquired.
|
|
(2)
|
Adjusted EBITDA is a
non-GAAP financial measure and is not a recognized, defined, or
standardized measure under IFRS. Refer to "Cautionary Note
Regarding Non-GAAP Measures".
|
Fiscal Year 2021 Fourth Quarter Highlights and Recent
Developments:
The Company:
- On December 10, 2020, the Company
announced that NCD entered into a reseller agreement with
Golden Coast Sales and Marketing
Inc. ("Golden Coast") for the exclusive distribution rights to
various edible and ingestible cannabis related products in
Saskatchewan.
- On February 11, 2021, the Company
announced that NCD entered into an exclusive reseller agreement
with Rubicon Organics (TSXV:ROMJ) for the distribution rights in
Saskatchewan.
- On February 25, 2021, the Company
announced the launch of their Ask Kiaro Anything ("A.K.A.")
program, in order to provide complimentary, one-on-one information
sessions aimed to help curious consumers of legal age enhance their
cannabis experience through a custom-tailored session that
addresses individual needs.
- On March 11, 2021, the Company
completed its previously announced bought deal private placement
with gross proceeds of $3
million.
- On March 25, 2021, the Company
completed the acquisition of a cannabis retail location in
Kelowna, British Columbia. The
Company's application for a cannabis retail store license has been
submitted to the Liquor & Cannabis Regulation Branch of the
Province of British Columbia. The
Company plans to open this location at its earliest opportunity,
with a target date of the second half of 2021.
Covid-19 Measures
Kiaro remained focused on the safety of its customers and
employees, demonstrating operational strength, resiliency and
agility while navigating the Covid-19 pandemic. Kiaro modified its
in-store experience and introduced a reserve online and pick up in
store option for consumers. Kiaro also eliminated all unnecessary
in-store touch points and is following British Columbia and Saskatchewan Health
Authority and WorkSafe guidelines. Kiaro expects to continue to
monitor direction given by applicable health authorities and adjust
its retail experience accordingly. Although there have not been any
significant impacts to the Company's operations to date, the
Company cannot provide assurance that there will not be disruptions
to its operations in the future.
Cautionary Note Regarding Non-GAAP Measures
This news release refers to certain financial performance
measures that are not defined by and do not have a standardized
meaning under IFRS (termed "Non-GAAP measures"). These Non-GAAP
measures are defined in the MD&A. Non-GAAP measures are used by
management to assess the financial and operational performance of
the Company. The Company believes that these Non-GAAP measures, in
addition to conventional measures prepared in accordance with IFRS,
enable investors to evaluate the Company's operating results,
underlying performance and prospects in a similar manner to the
Company's management. As there are no standardized methods of
calculating these Non-GAAP measures, the Company's approaches may
differ from those used by others, and accordingly, the use of these
measures may not be directly comparable. Accordingly, these
Non-GAAP measures are intended to provide additional information
and should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with IFRS.
- Adjusted EBITDA is calculated as net loss excluding finance
income (expense), income taxes, depreciation, amortization,
share-based compensation, loss on modification and extinguishment
of debt, foreign exchange, changes in fair value of financial
instruments, lease termination loss and loss on sublease and
non-cash impairment of equity investments, loss on sale of
financial instruments, impairment of long-lived assets, goodwill,
and other assets, and the transaction cost of certain transactions.
Adjusted EBITDA is intended to provide a proxy for the Company's
operating cash flow and is widely used by industry analysts to
compare Kiaro to its competitors and derive expectations of future
financial performance for Kiaro. Adjusted EBITDA increases
comparability between comparative companies by eliminating
variability resulting from differences in capital structures,
management decisions related to resource allocation, and the impact
of fair value adjustments on financial instruments, which may be
volatile and fluctuate significantly from period to period.
Kiaro Holdings Corp.
Based in Vancouver, British
Columbia, Kiaro is an independent, omni-channel cannabis
retailer and distributor. Through existing storefronts across
British Columbia and Saskatchewan, a wholesale distribution
division servicing Saskatchewan,
and plans for national expansion, Kiaro is driven to introduce new
and experienced consumers to a lifelong exploration of cannabis.
With more than 40 years of collective retail-focused experience,
Kiaro's leadership team has a proven track record of growing retail
brands across North America and
plans to open multiple retail locations nationwide over the coming
years.
Forward-Looking Information
This news release contains statements that may constitute
"forward-looking information" within the meaning of applicable
Canadian securities legislation. Forward-looking information may
include, among others, statements regarding the future plans,
costs, objectives or performance of Kiaro, or the assumptions
underlying any of the foregoing. In this news release, words such
as "may", "would", "could", "will", "likely", "believe", "expect",
"anticipate", "intend", "plan", "estimate" and similar words and
the negative form thereof are used to identify forward-looking
statements. In this news release, forward-looking statements
relate, among other things, to: proposed retail expansion plans and
management's ability to execute on same, overall growth of the
Canadian cannabis market and retail opportunities, the award of new
operating permits and licenses in various jurisdictions.
Forward-looking statements should not be read as guarantees of
future performance or results, and will not necessarily be accurate
indications of whether, or the times at or by which, such future
performance will be achieved. No assurance can be given that any
events anticipated by the forward-looking information will
transpire or occur. Forward-looking information is based on
information available at the time and/or management's good-faith
belief with respect to future events and are subject to known or
unknown risks, uncertainties, assumptions and other unpredictable
factors, many of which are beyond Kiaro's control. These risks,
uncertainties and assumptions include, but are not limited to,
those described in Kiaro Filing Statement dated September 29, 2020, a copy of which is available
on SEDAR at www.sedar.com, and could cause actual events or results
to differ materially from those projected in any forward-looking
statements. Furthermore, any forward looking information with
respect to future expansion plans is subject to the qualification
that management of Kiaro may decide, and the assumptions that any
construction or conversion would not be cost prohibitive, required
permits will be obtained and the labour, materials and equipment
necessary to complete such construction or conversion will be
available. Accordingly, readers should not place undue reliance on
the forward-looking statements and information contained in this
news release. Kiaro does not intend, nor undertake any obligation,
to update or revise any forward-looking information contained in
this news release to reflect subsequent information, events or
circumstances or otherwise, except if required by applicable
laws.
Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in policies
of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release.
For more information, visit: www.kiaro.com
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SOURCE Kiaro Holdings Corp.