C21 Investments Announces Q2 Earnings Results
September 21st, 2022
News, Top News
US$0.02 GAAP Earnings Per Share and a Thirteenth Consecutive Quarter of Positive Free Cash Flow
VANCOUVER, BC, Sept. 21, 2022 /CNW/ – C21 Investments Inc. (CSE: CXXI) (OTCQX: CXXIF) (“C21” or the “Company“), a vertically integrated cannabis company, today announced its interim financial statements and management discussion and analysis for the second quarter ended July 31, 2022. The Company’s Q2 financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP“).. All currency is reported in U.S. dollars.
Q2 Financial Highlights (May 1, 2022 to July 31, 2022):
- Revenue of $7.2 million – down 4% sequentially, in line with the 5% decline in State of Nevada sales1
- Earnings Per Share of $0.02
- Gross Margin of 53.8% – up 40 basis points sequentially
- Adjusted EBITDA2 of $2.2 million – a 31% EBITDA Margin
- Cash Flow from Operations of $1.8 million – the 13th consecutive quarter of positive Free Cash Flow
- Total Liabilities reduced by $1.6 million from Q1
Q2 Management and Operational Commentary:
“I am pleased that again this quarter, C21 reported solid results, maintaining its strong margin and cash flow profile, despite the challenging market and macro conditions that persist,” stated CEO and President, Sonny Newman. “Notwithstanding industry headwinds and state-level pricing pressures, the Nevada market appears to be showing signs of stabilizing. We believe the current industry environment will afford growth opportunities to those companies able to consistently generate positive free cash flow and that have strong balance sheets. Our strategy and focus has been to ensure C21 is well positioned to take advantage of growth opportunities that will produce long term benefits to stakeholders.”
C21’s Q2 revenue of $7.2 million was down 4% sequentially, narrowly outperforming Nevada market sales which saw an overall decline of 5% in total sales over the same period1.
Gross Margin was 53.8%, up 40 basis points from the previous quarter. The Company delivered $2.2 million of Adjusted EBITDA2 – a 31% EBITDA Margin, consistent with the previous two quarters.
C21 reported Net Income of $1.9 million, up $1.6 million from Q1, representing Earnings per Share of $0.02. This was driven by $1.5 million of Net Income from Continuing Operations and $0.3 million from Discontinued Operations in Oregon. Net Income results include a $0.6 million derivative gain.
Cash Flow from Operations was $1.8 million, up 15% over Q1 – the thirteenth consecutive quarter of positive Cash Flow from Operations.
Cash at the end of Q2 was $2.3 million, down $0.2 million from Q1. The Company’s senior secured note was reduced by $1.5 million in Q2 and Total Liabilities were reduced by $1.6 million during the quarter.
Subsequent to the quarter, the Company has paid down its senior secured note by an additional $1.0 million, with $4.1 million outstanding as of September 1, 2022. Additionally, last week the city of Sparks, Nevada approved drive-thru windows at its licensed dispensaries. Silver State Relief intends to build out this sales channel in the coming months.
|1||State of Nevada Cannabis Tax Revenue: https://tax.nv.gov/uploadedFiles/taxnvgov/Content/TaxLibrary/NV-Cannabis-Revenue-FY22(5).pdf?n=2150|
|2||See Non-GAAP Measures|
“Adjusted EBITDA” is supplemental, non-GAAP financial measures. The Company defines EBITDA as earnings before depreciation and amortization, depreciation and interest in cost of sales, income taxes, and interest. Additionally, the Company’s Adjusted EBITDA presented above excludes accretion, loss from discontinued operations, one-time transaction costs and all other non-cash items. The Company has presented “Adjusted EBITDA” because its management believes it is a useful measure for investors when assessing and considering the Company’s continuing operations and prospects for the future. Furthermore, “Adjusted EBITDA” is a commonly used measurement in the financial community when evaluating the market value of similar companies. “Adjusted EBITDA” is not a measure of performance calculated in accordance with GAAP, and these metrics should not be considered in isolation of, or as a substitute for, the measurement of the Company’s performance prepared in accordance with GAAP. “Adjusted EBITDA,” as calculated and reconciled in the table above, may not be comparable to similarly titled measurements used by other issuers and is not necessarily a measure of the Company’s ability to fund its cash needs. Figures have been restated to match current presentation.
|July 31, 2022||April 30, 2022|
|Net Income (Loss)||1,857,043||$ 306,820|
|Interest expenses, net||133,455||164,049|
|Provision for Income Taxes||485,152||498,263|
|Depreciation and Amortization||341,286||341,286|
|Depreciation and Interest in COGS||203,091||203,092|
|Change in fair value of derivative liabilities||(629,500)||–|
|Share based compensation||54,064||102,786|
|Loss from discontinued operations||(344,554)||730,325|
|One-time special project costs||89,331||50,000|
|Adjusted EBITDA||$ 2,211,340||$ 2,392,475|
Q2 Balance Sheet Summary:
|(US$)||July 31, 2022||April 30, 2022||January 31, 2022|
|Fixed Assets / Goodwill / Intangibles||51,267,819||51,596,065||51,569,000|
|Promissory note – current portion||5,066,667||6,080,000||6,080,000|
|Income taxes payable||5,182,133||4,431,808||3,658,162|
|Other notes, current lease etc.||2,396,363||2,665,427||2,481,519|
|Derivative liability and other||366,500||1,155,581||1,161,640|
|Total Liabilities and Shareholders’ Equity||61,703,793||61,580,422||61,853,474|
Q2 Financial Summary:
|(US$)||July 31, 2022||April 30, 2022|
|Cost of Sales||3,316,161||3,484,824|
|Gross Margin%||53.8 %||53.4 %|
|Income (Loss) from Operations||1,512,489||1,695,311|
|Net Income (Loss)||1,857,043||306,820|
|GAAP Earnings Per Share||0.02||0.00|
|EBITDA Margin%||30.8 %||32.0 %|
For further inquiries, please contact:
Investor contact: Company contact:
About C21 Investments Inc.
C21 Investments Inc. is a vertically integrated cannabis company that cultivates, processes, and distributes quality cannabis and hemp-derived consumer products in the United States. The Company is focused on value creation through the disciplined acquisition and integration of core retail, manufacturing, and distribution assets in strategic markets, leveraging industry-leading retail revenues with high-growth potential multi-market branded consumer packaged goods. The Company owns Silver State Relief and Silver State Cultivation in Nevada, including legacy Oregon brands Phantom Farms, Hood Oil and Eco Firma Farms. These brands produce and distribute a broad range of THC and CBD products from cannabis flowers, pre-rolls, cannabis oil, vaporizer cartridges and edibles. Based in Vancouver, Canada, additional information on C21 can be found at www.sedar.com and www.cxxi.ca.
Certain statements contained in this news release may constitute forward-looking statements within the meaning of applicable securities legislation. These statements involve known and unknown risks, uncertainties, and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Forward looking statements in this news release include, but are not limited to, the stabilization of the Nevada cannabis market, the Company’s intention to build out its drive-thru sales channel in Sparks, Nevada, the Company’s continued focus on sustainable profitability and assessing strategic opportunities in its market and the Company’s belief that it remains well positioned for future growth.
The forward-looking statements contained in this news release are based on certain key expectations and assumptions made by the Company, including, without limitation, the ability of the Company’s management to execute its business strategy, objectives and plans. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks and uncertainties arising from general business, economic, competitive, political and social uncertainties; the impact of the COVID-19 pandemic on the Company’s operations and other factors, many of which are beyond the control of the Company
The forward-looking statements contained in this news release represent the Company’s expectations as of the date hereof and are subject to change after such date. The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required under applicable securities regulations.
Neither the Canadian Securities Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE C21 Investments Inc.
This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.
Follow Us on Social Media
About CFN Media Group
CFN Enterprises Inc. (OTCQB: CNFN) owns and operates CFN Media Group, the premier agency and financial media network reaching executives, entrepreneurs and consumers worldwide. Through its proprietary content creation, video library, and distribution via www.CannabisFN.com, CFN has built an extensive database of cannabis interest, assisting many of the world’s largest cannabis firms and CBD brands to build awareness and thrive. For more information, please visit www.cfnenterprisesinc.com.
Disclaimer: Matters discussed on this website contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. CFN Media Group, which owns CannabisFN, is not registered with any financial or securities regulatory authority and does not provide nor claims to provide investment advice or recommendations to readers of this release. CFN Media Group, which owns CannabisFN, may from time-to-time have a position in the securities mentioned herein and will increase or decrease such positions without notice. The Information contains forward-looking statements, i.e. statements or discussions that constitute predictions, expectations, beliefs, plans, estimates, or projections as indicated by such words as "expects", "will", "anticipates", and "estimates"; therefore, you should proceed with extreme caution in relying upon such statements and conduct a full investigation of the Information and the Profiled Issuer as well as any such forward-looking statements. Any forward looking statements we make in the Information are limited to the time period in which they are made, and we do not undertake to update forward looking statements that may change at any time; The Information is presented only as a brief "snapshot" of the Profiled Issuer and should only be used, at most, and if at all, as a starting point for you to conduct a thorough investigation of the Profiled Issuer and its securities and to consult your financial, legal or other adviser(s) and avail yourself of the filings and information that may be accessed at www.sec.gov, www.pinksheets.com, www.otcmarkets.com or other electronic sources, including: (a) reviewing SEC periodic reports (Forms 10-Q and 10-K), reports of material events (Form 8-K), insider reports (Forms 3, 4, 5 and Schedule 13D); (b) reviewing Information and Disclosure Statements and unaudited financial reports filed with the Pink Sheets or www.otcmarkets.com; (c) obtaining and reviewing publicly available information contained in commonlyknown search engines such as Google; and (d) consulting investment guides at www.sec.gov and www.finra.com. You should always be cognizant that the Profiled Issuers may not be current in their reporting obligations with the SEC and OTCMarkets and/or have negative signs at www.otcmarkets.com (See section below titled "Risks Related to the Profiled Issuers, which provides additional information pertaining thereto). For making specific investment decisions, readers should seek their own advice and that of their own professional advisers. CFN Media Group, which owns CannabisFN, may be compensated for its Services in the form of cash-based and/or equity-based compensation in the companies it writes about, or a combination of the two. For full disclosure, please visit: https://www.cannabisfn.com/legal-disclaimer/. A short time after we acquire the securities of the foregoing company, we may publish the (favorable) information about the issuer referenced above advising others, including you, to purchase; and while doing so, we may sell the securities we acquired. In addition, a third-party shareholder compensating us may sell his or her shares of the issuer while we are publishing favorable information about the issuer. Except for the historical information presented herein, matters discussed in this article contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. CFN Media Group, which owns CannabisFN, is not registered with any financial or securities regulatory authority, and does not provide nor claims to provide investment advice or recommendations to readers of this release. CFN Media Group, which owns CannabisFN, may from time to time have a position in the securities mentioned herein and will increase or decrease such positions without notice. For making specific investment decisions, readers should seek their own advice and that of their own professional advisers. CFN Media Group, which owns CannabisFN, may be compensated for its Services in the form of cash-based and/or equity- based compensation in the companies it writes about, or a combination of the two. For full disclosure please visit: https://www.cannabisfn.com/legal-disclaimer/.