Grown Rogue Reports First Quarter 2022 Results, aEBITDA of $1.0M


Ryan Allway

April 4th, 2022

News, Top News


  •  Revenue of $3.73M compared to $1.05M in Q1 2021, an increase of 255%
  • Gross profit, before fair value adjustments, of $2.03M compared to $0.50M in Q1 2021, an increase of 310%
  • aEBITDA1 of $1.00M and aEBITDA1 margin of 26.9% compared to aEBITDA1 of $0.05M and aEBITDA1 margin of 4.8% in Q1 2021
  • Segmented aEBITDA1 (excluding corporate costs) of $1.43M and segmented aEBITDA1 margin of 38.3%
  • Average selling price of indoor whole flower (excluding trim) of $1,062 per pound

 

MEDFORD, Ore.–(BUSINESS WIRE)–Grown Rogue International Inc. (“Grown Rogue” or the “Company”) (CSE: GRIN) (OTC: GRUSF), a multi-state cannabis company with operations and assets in Oregon and Michigan, reports fiscal first quarter 2022 results for the three months ended January 31, 2022. All financial information is provided in U.S. dollars unless otherwise indicated.

 

First Quarter 2022 Financial Summary

  • Ninth consecutive quarter of positive aEBITDA1, including pro-forma2 results
  • Third consecutive quarter of positive operating cash flow, before changes in working capital
  • Third consecutive quarter of positive net income
  • #1 indoor flower wholesaler in Oregon, according to LeafLink’s MarketSpace data
  • Named fastest growing brand in Oregon during January, according to LeafLink; the third time in five months
  • Net assets (excluding intangibles and goodwill) of $8.23M compared to $1.5M in net liabilities in Q1 2021
  • Closed a non-brokered private placement for gross proceeds of $1.30M which included an investment from Bengal Capital, a venture capital firm with significant cannabis expertise, and the Company’s CEO
  • Subsequent to quarter end, Grown Rogue launched nitrogen sealed pre-rolls in Michigan

 

“Grown Rogue had a very strong quarter considering Q1 is typically the weakest quarter of our fiscal year”, said Obie Strickler, CEO of Grown Rogue. “Michigan was particularly strong with revenue up 10% quarter over quarter and Michigan state sales down 3% leading to large market share gains during the quarter. With our recent launch of pre-rolls in Michigan and continued build out of our 80,000 square foot facility, we expect further market share gains in 2022. I could not be more proud of our team as we were north of $1M in aEBITDA for the second consecutive quarter and established Grown Rogue as the clear leader in the Oregon flower market, one of the most competitive states in the US. With our industry leading efficiencies and rapidly expanding craft production, we are excited to kick off 2022, where we are focused on continuing to gain market share, by offering consistent quality and service, and launching into additional product categories in our states. We expect additional economies of scale will lower our breakeven costs in 2022, even as our data suggests Grown Rogue has the lowest indoor production breakeven of any public company in the U.S.”

 

Highlights by State

 

Oregon Operations

  • Revenue of $1.39M compared to $0.87M in Q1 2021, an increase of 59%
  • Gross profit, before fair value adjustments, of $0.70M compared to $0.49M in Q1 2021, an increase of 41%
  • Gross margin, before fair value adjustments, of 50.4%
  • Segmented aEBITDA1 of $0.41M and aEBITDAmargin of 29.4% compared to segmented aEBITDA1 of $0.05M and aEBITDA1 margin of 4.8% in Q1 2021
  • Average selling price of indoor whole flower of $781/pound
  • Indoor production run rate expected to increase to 1,000 pounds in Q2 2022
  • #1 indoor flower wholesaler in Oregon, according to LeafLink’s MarketSpace data
  • Named fastest growing brand in Oregon during January, according to LeafLink, and the third time in five months

 

Michigan Operations

  • Revenue of $2.34M compared to pro-formarevenue of $1.13M in Q1 2021, an increase of 108%
  • Gross margin, before fair value adjustments, of 57.0%
  • Segmented aEBITDA1 of $1.02M and aEBITDA1 margin of 43.5% compared to pro-forma2 segmented aEBITDA1 of $0.2M and aEBITDA1 margin of 18.8%
  • Average selling price of indoor whole flower of $1,322/pound
  • Indoor production run rate expected to increase to 750 pounds/month in Q2 2022
  • Top 10 flower wholesaler in Michigan, according to LeafLink’s MarketSpace data
  • Subsequent to quarter end, Grown Rogue launched nitrogen sealed pre-rolls

 

January 31, 2022

October 31, 2021

$

$

ASSETS

Current assets

Cash

1,607,878

1,114,033

Accounts receivable

1,029,971

739,248

Biological assets

1,521,500

1,188,552

Inventory

3,808,761

3,306,312

Prepaid expenses and other assets

299,013

357,541

Total current assets

8,267,123

6,705,686

Marketable securities

426,823

610,092

Other investments and purchase deposits

750,000

750,000

Property and equipment

6,392,274

5,742,584

Intangible assets and goodwill

399,338

399,338

TOTAL ASSETS

16,235,558

14,207,700

LIABILITIES

Current liabilities

Accounts payable and accrued liabilities

1,910,861

1,766,707

Current portion of lease liabilities

1,117,642

624,935

Current portion of long-term debt

1,192,916

843,900

Business acquisition consideration payable

360,000

358,537

Interest payable

15,000

13,750

Unearned revenue

49,007

Income tax

269,133

254,631

Total current liabilities

4,914,559

3,862,460

Accrued liabilities

60,514

123,413

Lease liabilities

1,589,584

1,735,503

Long-term debt

1,046,259

1,365,761

TOTAL LIABILITIES

7,610,916

7,087,137

EQUITY

Share capital

21,845,062

20,499,031

Shares issuable

35,806

74,338

Contributed surplus

6,462,732

6,407,935

Accumulated other comprehensive income (loss)

(104,036)

(90,378)

Accumulated deficit

(22,213,515)

(21,804,349)

Equity attributable to shareholders

6,026,049

5,086,577

Non-controlling interest

2,598,593

2,033,986

TOTAL EQUITY

8,624,642

7,120,563

TOTAL LIABILITIES AND EQUITY

16,235,558

14,207,700

 

Three months ended January 31,

2022

2021

$

$

Revenue

Product sales

3,732,713

874,824

Service revenue

176,361

Total revenue

3,732,713

1,051,185

Cost of goods sold

Cost of finished cannabis inventory sold

(1,699,026)

(470,554)

Cost of service revenues

(84,153)

Gross profit, excluding fair value items

2,033,687

496,478

Realized fair value amounts in inventory sold

(1,010,478)

(169,328)

Unrealized fair value gain (loss) on growth of biological assets

1,289,514

(186,806)

Gross profit

2,312,723

140,344

Expenses

Accretion expense

151,687

248,357

Amortization of intangible assets

4,997

Amortization of property & equipment

52,010

38,155

General and administrative

1,603,926

666,739

Share-based compensation

18,487

88,438

Total expenses

1,826,110

1,046,686

Gain (loss) from operations

482,593

(906,342)

Other income and (expense)

Interest expense

(114,660)

(8,527)

Other income

(5,440)

Gain on debt settlement

16,623

Unrealized gain (loss) on marketable securities

(167,804)

302,808

Unrealized loss on derivative liability

(319,627)

Gain (loss) on disposal of property and equipment

(6,250)

Gain from operations before taxes

192,459

(915,065)

Income tax

(37,018)

Net income (loss)

155,441

(915,065)

Other comprehensive income (items that may be subsequently

reclassified to profit & loss)

Currency translation

(13,658)

(75,934)

Total comprehensive income (loss)

141,783

(990,999)

Gain (loss) per share attributable to owners of the parent – basic & diluted

(0.01)

Weighted average shares outstanding – basic & diluted

164,976,815

108,038,431

Net income (loss) for the period attributable to:

Non-controlling interest

564,607

4,896

Shareholders

(409,166)

(919,961)

Net income (loss)

155,441

(915,065)

Comprehensive loss for the period attributable to:

Non-controlling interest

564,607

4,896

Shareholders

(422,824)

(995,895)

Total comprehensive income (loss)

141,783

(990,999)

 

Quarter ended January 31, 2022

Oregon

Michigan

Corporate

Consolidated

Sales revenues

1,388,945

2,343,768

3,732,713

Costs of goods sold, excluding fair value adjustments

(691,311)

(1,007,715)

(1,699,026)

Gross profit (loss) before fair value adjustments

697,634

1,336,053

2,033,687

Net fair value adjustments

474,511

(195,475)

279,036

Gross profit

1,172,145

1,140,578

2,312,723

Operating expenses:

General and administration

341,037

739,196

523,693

1,603,926

Depreciation and amortization

7,041

19,166

25,803

52,010

Share based compensation

18,487

18,487

Other income and expense:

Gain on sale of assets

6,250

6,250

Interest and accretion

77,387

74,494

114,466

266,347

Unrealized loss (gain) on
marketable securities

167,804

167,804

Other income and expense

5,440

5,440

Net income (loss) before tax

740,430

307,722

(855,693)

192,459

Tax

2,951

34,067

37,018

Net income after tax

737,479

273,655

(855,693)

155,441

 

Three months ended

January 31,

Adjusted EBITDA Reconciliation

2022 ($)

2021 ($)

Net income (loss), as reported

155,441

(915,065)

Add back realized fair value amounts included in inventory sold

1,010,478

169,328

Add back (deduct) unrealized fair value gain (loss) on
growth of biological assets

(1,289,514)

186,806

Add back amortization of property & equipment included in cost of sales

147,463

159,545

23,868

(399,386)

Add back interest and interest accretion expense, as reported

266,347

256,884

Add back amortization of intangible assets, as reported

4,997

Add back amortization of property and equipment, as reported

52,010

38,155

Add back share-based compensation

62,296

132,448

Add back (deduct) unrealized loss (gain) on marketable
securities, as reported

167,804

(302,808)

Add back (deduct) unrealized loss (gain) on derivative liability

319,627

Add back income tax expense

37,018

EBITDA before other adjustments

609,343

49,917

Performance incentive bonus payment

179,685

Severance and inactive employee compensation

61,077

Business development incentive bonus

153,825

Adjusted EBITDA

1,003,930

49,917

 

About Grown Rogue

Grown Rogue International (CSE: GRIN | OTC: GRUSF) is a vertically integrated, multi-state Cannabis family of brands on a mission to inspire consumers to “enhance experiences” through cannabis. We have combined an expert management team, award winning grow team, state of the art indoor and outdoor manufacturing facilities, and consumer insight-based product categorization, to create innovative products thoughtfully curated from “seed to experience.” The Grown Rogue family of products include sungrown and indoor premium flower, along with nitro sealed indoor and sungrown pre-rolls and jars.

 

NOTES:

1.

The Company’s “aEBITDA” is a non-IFRS measure used by management that does not have any prescribed meaning by IFRS and that may not be comparable to similar measures presented by other companies. The Company defines aEBITDA as the Company’s net income (loss) for a period, as reported, before interest, taxes, depreciation and amortization, and is further adjusted to remove transaction costs, stock-based compensation expense, accretion expense, gain (loss) on derecognition of derivative liabilities and the effects of fair-value accounting for biological assets and inventory, as well as the impacts of unusual or non-recurring items. The Company believes that this is a useful metric to evaluate its operating performance.

2.

The Company has provided unaudited pro-forma revenue information, which assumes that closed and pending mergers and acquisitions in 2021 are included in the Company’s financial results as of the beginning of the quarterly and annual periods in 2021 for the Company and target companies.

 

NON-IFRS FINANCIAL MEASURES

Cash production costs of Grown Rogue products, EBITDA and aEBITDA are non-IFRS measures and do not have standardized definitions under IFRS. The Company has also provided unaudited pro-forma financial information, which assumes that closed and pending mergers and acquisitions in 2021 are included in the Company’s financial results as of the beginning of the quarterly and annual periods in 2021. The Company has provided the non-IFRS financial measures, which are not calculated or presented in accordance with IFRS, as supplemental information and in addition to the financial measures that are calculated and presented in accordance with IFRS. These supplemental non-IFRS financial measures are presented because management has evaluated the financial results both including and excluding the adjusted items and believe that the supplemental non-IFRS financial measures presented provide additional perspective and insights when analyzing the core operating performance of the business. These supplemental non-IFRS financial measures should not be considered superior to, as a substitute for or as an alternative to, and should only be considered in conjunction with, the IFRS financial measures presented herein. Accordingly, the following information provides reconciliations of the supplemental non-IFRS financial measures, presented herein to the most directly comparable financial measures calculated and presented in accordance with IFRS.

 

About Grown Rogue

Grown Rogue International (CSE: GRIN | OTC: GRUSF) is a vertically integrated, multi-state Cannabis family of brands on a mission to inspire consumers to “enhance experiences” through cannabis. We have combined an expert management team, award winning grow team, state of the art indoor and outdoor manufacturing facilities, and consumer insight-based product categorization, to create innovative products thoughtfully curated from “seed to experience.” The Grown Rogue family of products include sungrown and indoor premium flower, along with nitro sealed indoor and sungrown pre-rolls and jars.

 

FORWARD-LOOKING STATEMENTS

This press release contains statements which constitute “forward‐looking information” within the meaning of applicable securities laws, including statements regarding the plans, intentions, beliefs and current expectations of the Company with respect to future business activities. Forward‐ looking information is often identified by the words “may,” “would,” “could,” “should,” “will,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “expect” or similar expressions and include information regarding: (i) statements regarding the future direction of the Company (ii) the ability of the Company to successfully achieve its business and financial objectives, (iii) plans for expansion of the Company into Michigan and securing applicable regulatory approvals, and (iv) expectations for other economic, business, and/or competitive factors. Investors are cautioned that forward‐looking information is not based on historical facts but instead reflect the Company’s management’s expectations, estimates or projections concerning the business of the Company’s future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Although the Company believes that the expectations reflected in such forward‐looking information are reasonable, such information involves risks and uncertainties, and undue reliance should not be placed on such information, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of the combined company. Among the key factors that could cause actual results to differ materially from those projected in the forward‐looking information are the following: changes in general economic, business and political conditions, including changes in the financial markets; and in particular in the ability of the Company to raise debt and equity capital in the amounts and at the costs that it expects; adverse changes in the public perception of cannabis; decreases in the prevailing prices for cannabis and cannabis products in the markets that the Company operates in; adverse changes in applicable laws; or adverse changes in the application or enforcement of current laws; compliance with extensive government regulation and related costs, and other risks described in the Company’s public disclosure documents filed on www.sedar.com.

 

Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward‐looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although the Company has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. The Company does not intend, and does not assume any obligation, to update this forward‐looking information except as otherwise required by applicable law.

 

SAFE HARBOR STATEMENT

This press release may contain forward-looking information within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including all statements that are not statements of historical fact regarding the intent, belief or current expectations of the Company, its directors or its officers with respect to, among other things: (i) the Company’s financing plans; (ii) trends affecting the Company’s financial condition or results of operations; (iii) the Company’s growth strategy and operating strategy; and (iv) the declaration and payment of dividends. The words “may,” “would,” “will,” “expect,” “estimate,” “anticipate,” “believe,” “intend” and similar expressions and variations thereof are intended to identify forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date hereof. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond the Company’s ability to control, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors including the risk disclosed in the Company’s Form 20-F and 6-K filings with the Securities and Exchange Commission.

 

The Company is indirectly involved in the manufacture, possession, use, sale and distribution of cannabis in the recreational cannabis marketplace in the United States through its indirect operating subsidiaries. Local state laws where its subsidiaries operate permit such activities however, these activities are currently illegal under United States federal law. Additional information regarding this and other risks and uncertainties relating to the Company’s business are disclosed in the Company’s Listing Statement filed on its issuer profile on SEDAR at www.sedar.com. Should one or more of these risks, uncertainties or other factors materialize, or should assumptions underlying the forward-looking information or forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected.

 

No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.

 

For further information on Grown Rogue International please visit www.grownrogue.com

 

Contacts

Obie Strickler
Chief Executive Officer
[email protected]

Investor Relations Desk Inquiries
[email protected]
(458) 226-2100

 

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.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.


Network Partners

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/.

Copyright © Accelerize Inc. · All Rights Reserved · Privacy Policy · Legal Disclaimer

loading