Christina Lake Cannabis Reports Third Quarter Fiscal 2022 Results
November 2nd, 2022
News, Top News
- Total sales grew 25% quarter over quarter, and 126% from Q3’21
- Total revenue increased to $2.9M from $2.3M in Q2’22, and $1.3M in Q3’21
- Gross margin before fair value adjustments of 48%
- General and administrative expenses decreased to 35% of revenue
VANCOUVER, British Columbia, Nov. 02, 2022 (GLOBE NEWSWIRE) — (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.
August 31, 2022
May 31, 2022
August 31, 2021
|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||)|
|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||)|
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 Capital
As 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:
Investor Relations and Media Inquiries
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
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/.