Reports $31.6
Million in Q2 2024 Revenue and Adjusted Gross Profit
of $18.2 Million, Representing a 57%
Adjusted Gross Margin
Achieves Goal of Generating in Excess of 30%
of Retail Revenue from the Company's First Party Brand
Portfolio
Recently Completed Cultivation Investments
Deliver 14% Improvement in Flower Harvest Yields
Conference Call to be Held August 14, 2024, at 6:00
p.m. (Eastern Time)
Laurie Holcomb Named Chairman of the
Board
COSTA
MESA, Calif., Aug. 14,
2024 /CNW/ - Gold Flora Corporation, ("Gold
Flora" or the "Company") (Cboe Canada: GRAM) a leading
vertically-integrated California
cannabis company, announced its financial results for the
three month period ("Q2 2024"). All amounts are expressed in U.S.
dollars.
Q2 2024 Financial Highlights:
- Total revenue of $31.6
million;
- Q2 2024 gross profit of $7.2 Million, representing a 23%
gross margin;
- Q2 2024 adjusted gross profit1 of $18.2 million, representing a 57% adjusted gross
margin. Adjusted gross profit excludes depreciation &
amortization and operating expense related to U.S. tax code 280E
adjustments, and non-recurring inventory adjustments. The
adjustments do not affect reported operating income;
- Net quarterly loss of $24.0
million;
- Adjusted EBITDA1 of $(2.0)
million for Q2 2024.
- Cash used in operating activities of $4.8 million; and
- Cash and cash equivalents totaled $10.7
million as of June 30, 2024.
Operational Highlights:
- Achieved the Company's stated goal of increasing its first
party product revenue generated at its owned retail stores to 30%
of total first party retail store sales in June 2024 and have continued to maintain this
targeted level subsequent to quarter end.
- Entered into agreements to lease an additional 53,000 square
feet of cultivation canopy at two facilities located near the
Company's Desert Hot Springs
campus, bringing the total cultivation footprint to 160,000 square
feet. The Company expects to add approximately 25,000 pounds of
annual flower production with the increased capactity2.
The turn-key facilities will be delivered ready for operations, and
the respective lease payments do not commence until a date
subsequent to receipt of all necessary state and local licenses,
the first of which is expected in the first half of
20252.
- Increased Q2 flower harvest volume by 14% over the prior
quarter through recently completed improvements that have refined
and optimized the Company's cultivation methods and strains.
- Continued the successful launch of Gramlin, currently the
5th fastest growing cannabis brand in
California. Gramlin is targeted at high-volume consumers and
includes products across the top-selling categories, including
newly launched pre-rolls and multiple vape formats. Currently,
Gramlin products are available across the Company's 16 retail
stores, through its commerce digital sites, and at over 250
third-party retailers.
- Subsequent to quarter end, the Company further expanded
the Gramlin offering with the introduction of 1G live rosin
vapes, produced from 100% indoor-grown hash rosin oil that
leverages low-temperature ceramic core hardware optimized for
premium rosin flavor preservation.
- As of July 26, Gold Flora's
Form-211 cleared the U. S. securities regulatory process and, as a
result, its U. S. market activity is no longer restricted to
unsolicited bids and asks, with Glendale Securities, Inc. acting as
the Company's initial market maker.
- Laurie Holcomb, Chief
Executive Officer of Gold Flora, was named Chairman of the Board,
effective immediately.
_________________________________
|
1 Adjusted
Gross Profit and Adjusted EBITDA are non-GAAP financial
measures. See "Non-GAAP Financial Measures" at the end of
this press release for a reconciliation and discussion of non-GAAP
financial measures.
|
2 This
is a forward-looking statement and based on a number of
assumptions. See "Forward Looking Statements" at the end of this
press release.
|
Management Commentary
"Our efficient, vertically integrated
operations have allowed us to expand our competitive position,
capture shelf-space, and enhance our brand portfolio, so we can
successfully launch new products and navigate the evolving
California market," said
Laurie Holcomb, Chief Executive
Officer and Chairman of Gold Flora. "I am proud of the work our
team has done to improve our market leadership position in our core
areas of focus. We continue to demonstrate success by bringing
high-quality, high-margin products to market that generate
excellent consumer responses."
Ms. Holcomb continued, "To do this, we leverage our strong
market insights, premier strains, and genetics, together with our
best-in-class cultivation and manufacturing capabilities, to create
innovative new products, as exemplified by our recent successful
launch of Gramlin. In July, we further expanded the Gramlin line of
products, introducing 1G Live Rosin vapes at our 16 stores, with
wholesale distribution recently commencing across the State.
According to recent BDSA data, Gramlin is now the 5th
fastest growing cannabis brand in California since launch in March 2024."
Ms. Holcomb concluded, "As one of the largest indoor cultivators
in the state, we have a unique competitive advantage that sets us
apart from the vast majority of other operators in California. We can quickly adjust our
operations to meet current market demand, and at scale, enabling us
to offer attractive price points and excellent products. With
our cultivation investments complete and subsequent harvests now
demonstrating the improved yield and product quality that we can
generate, we are incredibly well positioned to execute on the
opportunity ahead of us as we move through the second half of the
year."
Q2 2024 Financial Results
(in
thousands)
|
Q2
2024
|
|
Q1
2024
|
|
%
Change
|
Total
Revenue
|
$
31,642
|
|
$
32,153
|
|
(2) %
|
Wholesale
Revenue
|
$
5,455
|
|
$
5,236
|
|
4 %
|
Retail
Revenue
|
$
26,187
|
|
$
26,917
|
|
(3) %
|
Gross Profit
|
$
7,248
|
|
$
10,029
|
|
(28) %
|
Gross
Margin
|
23 %
|
|
31 %
|
|
|
Adjusted Gross Profit
(1)
|
$
18,176
|
|
$
17,398
|
|
4 %
|
Adjusted Gross
Margin
|
57 %
|
|
54 %
|
|
|
Net Loss
|
$
(23,954)
|
|
$
(13,704)
|
|
75 %
|
Adjusted EBITDA
(2)
|
$
(1,972)
|
|
$
(1,801)
|
|
9 %
|
(1) Adjusting for depreciation &
amortization, operating expense related to U.S. tax code 280E
adjustments and non-recurring inventory adjustments. Adjusted
Gross Profit is a non-GAAP financial measure. See "Non-GAAP
Financial Measures" at the end of this press release for a
reconciliation and discussion of non-GAAP financial
measures.
|
(2) Adjusted
EBITDA is defined as EBITDA adjusted to exclude extraordinary
items, non-recurring items and, other non-cash items, including,
but not limited to (i) stock-based compensation expense, (ii)
change in fair value of the earn out liability, (iii)
non-recurring legal and professional fees, human-resources,
inventory and collections-related expenses, (iv) intangible and
goodwill impairments and loss on disposal of assets, (v)
transaction costs related to merger and acquisition activities,
(vi) retail and cultivation pre-opening costs and, (vii)
non-recurring inventory adjustments. Adjusted EBITDA is a
non-GAAP financial measure. See "Non-GAAP Financial Measures"
at the end of this press release for a reconciliation and
discussion of non-GAAP financial measures.
|
The Company's consolidated financial statements for Q2 2024
("Financial Statements") as well as its accompanying management
discussion and analysis of financial condition and results of
operations ("MD&A") will be included in its Annual Report on
Form 10-K filed on EDGAR (www.sec.gov) as well as on SEDAR
(www.sedarplus.ca). Please refer to the MD&A for additional
detail and discussion on the Company's results from operations.
Conference Call
The Company will host a conference call to discuss the Q2 2024
financial results on August 14, 2024,
at 6:00 p.m. Eastern Time. A
question-and-answer session will follow management's prepared
remarks.
CONFERENCE CALL
DETAILS
|
DATE:
|
Wednesday, August 14,
2024
|
TIME:
|
6:00 p.m. (Eastern
Time)
|
WEBCAST:
|
https://app.webinar.net/QP2eEAdn0lp
|
DIAL-IN
NUMBER:
|
1 (416) 764-8609 or 1
(888) 390-0605
|
CONFERENCE
ID:
|
88900835
|
REPLAY:
|
1 (416) 764-8677 or 1
(888) 390-0541
Available until 12:00
midnight Eastern Time
Wednesday, May 22,
2024
Replay Code: 900835
#
|
For more information on Gold Flora Corporation, visit:
https://ir.goldflora.com/.
About Gold Flora Corporation
Gold Flora Corporation is a
female-led, vertically-integrated cannabis leader that
owns and operates multiple premium indoor cannabis cultivation
facilities, 16 retail dispensaries in strategic geographies, a
distribution business selling first party and third party brands
into hundreds of dispensaries across California, and a robust portfolio of 8
cannabis brands, including Gramlin, one of the fastest growing
brands in the state. The Company's retail operations
include Airfield Supply
Company, Caliva, Coastal, Calma, King's
Crew, Varda, Deli,
and Higher
Level, and its distribution company operates
under the name Stately Distribution.
Gold Flora Corporation's indoor cultivation canopy currently
comprises approximately 107,000 square feet across three facilities
in its Desert Hot Springs campus
and two San Jose cultivation
facilities. In addition, the Company has entered into leases for
two state-of-the-art indoor cultivation facilities in Palm Springs, with 53,000 square feet of
canopy to start operation once licensing is complete. The Company
also has the option to expand further in the future depending on
market demand, with already entitled acreage providing
approximately 240,000 square feet of canopy. The Desert Hot Springs campus also houses the
Company's manufacturing and extraction facilities and Stately
Distribution. This centralized location provides for optimal
security and logistics benefits and protects the product as it
moves though the Company's larger pipeline.
With hubs throughout the state, the Company distributes many
prominent brands, including its own premium lines of Gramlin, Gold
Flora, Cruisers, Roll Bleezy, Aviation Cannabis, Jetfuel Cannabis,
Mirayo by Santana, and Monogram. Third party brands are
increasingly contacting the Company in search of reliable input
sources and established distribution.
References to information included on, or accessible through,
websites and social media platforms do not constitute incorporation
herein by reference of the information contained at or available
through such websites or social media platforms, and the reader
should not consider such information to be part of this press
release.
For the latest news, activities, and media coverage, please
visit www.goldflora.com.
Non-GAAP Financial Measures
This news release contains the non-GAAP financial measure
"Adjusted EBITDA," and "Adjusted Gross Profit" which are not
recognized under GAAP and do not have a standardized meaning
prescribed by GAAP. As a result, these measures may not be
comparable to similar measures presented by other companies. For a
reconciliation of "Adjusted EBITDA" and "Adjusted Gross Profit" to
the most directly comparable financial information presented in the
Financial Statements in accordance with GAAP, see the section
entitled "Reconciliation of Non-GAAP Measures" below.
Adjusted EBITDA
Our management believes Adjusted EBITDA is a useful measure for
investors to assess the performance of the Company as it provides
more meaningful operating results by excluding the effects of
expenses that are not reflective of our underlying business
performance and other one-time or non-recurring expenses. We define
"Adjusted EBITDA" as EBITDA adjusted to exclude extraordinary
items, non-recurring items and, other non-cash items, including,
but not limited to (i) stock-based compensation expense, (ii)
change in fair value of the earn out liability, (iii)
non-recurring legal and professional fees, human-resources,
inventory and collections-related expenses, (iv) intangible and
goodwill impairments and loss on disposal of assets, (v)
transaction costs related to merger and acquisition activities,
(vi) retail and cultivation pre-opening costs, and (vii)
non-recurring inventory adjustments.
Adjusted Gross Profit
Our management believes Adjusted Gross Profit is a useful
measure for investors to assess the performance of the Company as
it provides more meaningful operating results by excluding the
effects of expenses that are not reflective of our underlying
business performance. We define "Adjusted Gross Profit" as
Gross Profit adjusted to exclude operating expenses (including
depreciation and amortization) related to U.S. tax code 280E
adjustments and non-recurring inventory adjustments.
Reconciliation of Non-GAAP Measures
|
Three Months
Ended
|
|
Six Months
Ended
|
(in
thousands)
|
June 30,
2024
|
|
June 30,
2023
|
|
June 30,
2024
|
|
June 30,
2023
|
Revenues
|
$ 31,642
|
|
$ 14,957
|
|
$ 63,795
|
|
$ 30,609
|
Cost of Goods
Sold
|
24,394
|
|
11,017
|
|
46,518
|
|
22,623
|
Gross
Profit
|
7,248
|
|
3,940
|
|
17,277
|
|
7,986
|
|
23 %
|
|
26 %
|
|
31 %
|
|
26 %
|
Adjustments to Gross
profit
|
|
|
|
|
|
|
|
Depreciation and
Amortization
|
$
946
|
|
$
966
|
|
$
1,838
|
|
$
1,399
|
Operating Expenses
related to 280E adjustments
|
5,663
|
|
1,321
|
|
10,842
|
|
3,132
|
Non-Recurring Inventory
Adjustments
|
4,319
|
|
—
|
|
5,617
|
|
597
|
Adjusted Gross
Profit
|
$ 18,176
|
|
$
6,227
|
|
$ 17,398
|
|
$
6,887
|
Adjusted Gross
Profit %
|
57 %
|
|
42 %
|
|
54 %
|
|
44 %
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June 30,
2024
|
|
June 30,
2023
|
|
June 30,
2024
|
|
June 30,
2023
|
Net
Loss
|
$
(23,954)
|
|
$
(14,106)
|
|
(37,658)
|
|
(23,447)
|
Debt and Convertible
Debt Interest Expense, Net
|
1,154
|
|
1,549
|
|
1,926
|
|
3,148
|
Finance Lease Liability
Interest Expense, Net
|
3,356
|
|
2,602
|
|
6,735
|
|
5,176
|
Amortization of Debt
Discount Interest Expense, Net
|
179
|
|
685
|
|
356
|
|
1,217
|
Taxes
|
736
|
|
749
|
|
1,723
|
|
1,514
|
Depreciation and
Amortization
|
4,049
|
|
2,615
|
|
8,099
|
|
4,732
|
EBITDA
|
$
(14,480)
|
|
$
(5,906)
|
|
(18,819)
|
|
(7,660)
|
Addback for Adjusted
EBITDA
|
|
|
|
|
|
|
|
Noncash Operating Lease
Expense
|
$
(119)
|
|
$
73
|
|
$
(262)
|
|
$
292
|
Implementation Software
Costs
|
—
|
|
—
|
|
110
|
|
—
|
Change in Fair Value of
Earnout Liability
|
—
|
|
4,375
|
|
—
|
|
4,375
|
Share-Based
Compensation
|
86
|
|
42
|
|
279
|
|
98
|
Bad Debt
Expense
|
411
|
|
350
|
|
411
|
|
323
|
Transaction Fees and
Legal Fees
|
2,234
|
|
787
|
|
2,825
|
|
1,546
|
Penalties and
Fines
|
5,577
|
|
—
|
|
5,577
|
|
—
|
Retail and Cultivation
Preopening Costs
|
—
|
|
—
|
|
489
|
|
—
|
Non-Recurring inventory
Adjustments
|
4,319
|
|
—
|
|
5,617
|
|
597
|
Adjusted
EBITDA
|
$
(1,972)
|
|
$
(279)
|
|
$
(3,773)
|
|
$
(429)
|
Forward Looking Statements
This press release contains "forward-looking information" within
the meaning of applicable Canadian securities legislation and the
safe harbor provisions of the United States Private Securities
Litigation Reform Act of 1995. These forward-looking statements
relate to the expectations or forecasts of business, operations,
financial performance, prospects, and other plans, intentions,
estimates and beliefs, and may include statements regarding Gold
Flora's expected financial condition and performance, the current
and projected market, and growth opportunities for the company.
Words such as "expects," "continue," "will," "anticipates," and
"intends," or similar expressions, are intended to identify
forward-looking statements, although not all forward-looking
statements contain these identifying words. Forward-looking
statements in this press release include, but are not limited to,
statements relating to enhanced profitability and productivity as a
result of optimized cultivation, increased volume and/or margin
during the second half of 2024, the timing of the release of live
rosin products, statements related to the Company leasing
additional cultivation space at the Desert Hot Springs Campus,
including the expected increase in annual flower production and
expected timing for receipt of necessary state and local approvals,
and the timing and scale of any potential benefits realized during
the remainder of 2024 from scaling our platform. These
forward–looking statements are based on Gold Flora's current
projections and expectations about future events and financial
trends that it believes might affect its financial condition,
results of operations, prospects, business strategy and financial
needs, and on certain assumptions and analysis made by it in light
of the experience and perception of historical trends, current
conditions and expected future developments and other factors it
believes are appropriate. Forward-looking information and
statements involve and are subject to assumptions and known and
unknown risks, uncertainties, and other factors, including those
risk factors in Part I, Item 1A ("Risk Factors") in our most recent
Form 10-K, which may cause actual events, results, performance, or
achievements to be materially different from future events,
results, performance, and achievements expressed or implied by
forward looking information and statements herein. Although Gold
Flora believes that any forward-looking information and statements
herein are reasonable, in light of the use of assumptions and the
significant risks and uncertainties inherent in such information
and statements, there can be no assurance that any such
forward-looking information and statements will prove to be
accurate, and accordingly readers are advised to rely on their own
evaluation of such risks and uncertainties and should not place
undue reliance upon such forward-looking information and
statements. Any forward-looking information and statements herein
are made as of the date hereof and, except as required by
applicable laws, Gold Flora does not assume any obligation to
update or revise any forward-looking information or statements
contained herein or to update the reasons that actual events or
results could or do differ from those projected in any
forward-looking information and statements herein, whether as a
result of new information, future events or results, or
otherwise.
SOURCE Gold Flora Corporation