C21 Investments Announces Record Q3 Revenue of $10.58 Million
Adjusted EBITDA up 175%; Adjusted Operating Income up 1,900%
VANCOUVER, Dec. 29, 2019 /CNW/ – C21 Investments Inc. (“C21”) (CSE: CXXI and OTCQB: CXXIF) today reported unaudited financial results for the third quarter of fiscal 2020 ending October 31, 2019. Unless otherwise stated, all currency is in US dollars, and all results are preliminary.
Third Quarter Highlights (unaudited)
- Q3 revenue was $10.58 million, an increase of 7.5% versus Q2.
- Nine months year-to-date revenue of $28.2 million.
- Adjusted EBITDA¹ of $2.2 million, up 175% from Q2; the third consecutive positive quarter.
- Adjusted Operating Income¹ totalled $1.2 million, an increase of 1,900% over Q2.
Gross Margins continued steady at 42% (44% in Q2; 43% in Q1).
- Commenced trading on the OTCQB® Venture Market under the symbol “CXXIF”.
We delivered impressive third quarter results reflective of the significant progress we made toward our strategic objectives. We rationalized our operations, achieved improved efficiencies, and have sharpened our focus on leveraging the strong brand awareness of our product portfolio. The positive changes we are making better position C21 for success over the long-term.
Sonny Newman, President and CEO, C21 Investments
Additional Operating Highlights:
- Q3 reported a record 172,694 customer transactions at Silver State Relief dispensaries, an 8% increase over Q2, and a 24% increase from Q1. Year-to-date customer transactions now exceed 580,000.
- C21’s Q3 market share now represents 5% of total State of Nevada cannabis sales.²
- After launching Oregon brand Hood Oil in Nevada in June, sales have now surpassed 84,000 units generating revenues of $2.4 million. Hood Oil vape cartridges continue to outsell all other vape cartridges combined in Silver State dispensaries.
- C21 continues to leverage the vertical integration of its businesses by bringing our strong Oregon brands online in Nevada, which now include Phantom Farms CBD line of products, pre-rolls, with Phantom flower awaiting state approval of packaging.
- Phantom Farms’ indoor A-grade flower prices rebounded strongly this fall to $1,400 per pound, from a low of $500 per pound earlier this year.
- Phantom Farms successfully completed a bountiful fall outdoor harvest. Outdoor flower prices have rebounded to $850 per pound, from a low of $250 per pound earlier this year.
“Strategically we set a course to become an efficient and profitable business with strong fundamentals. This has resulted in significant growth in adjusted EBITDA and operating cash flow results for the quarter, positioning the company to become profitable in the near term.” said Michael Kidd, Chief Financial Officer, C21 Investments.
As part of the restructure and integration of the Oregon operations, C21 Investments undertook an appraisal of the Oregon leaseholds and real estate assets. This resulted in a write-down of $4.2 million in the quarter. This one-time charge reduces Q3 earnings per share by 5 cents to ($0.06). Excluding one-time charges, earnings are ($0.01) per share.
C21 Investments continues to assess strategic opportunities to achieve the financial flexibility necessary to capitalize on growth opportunities and meet its future debt obligations.
Key Performance Measures:
About C21 Investments Inc.
C21 Investments 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, and Phantom Farms, Swell Companies, Eco Firma Farms, and Pure Green in Oregon. 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 Investments can be found at www.sedar.com and www.cxxi.ca.
¹Adjusted EBITDA and Adjusted Operating Income are non-IFRS financial measures, in which IFRS does not prescribe any standard definitions. As a result, the Company’s Adjusted EBITDA and Adjusted Operating Income included herein are not necessarily comparable to similar measures presented by other issuers
²Includes State of Nevada data for August and September. Nevada Sales for October are not yet available. https://tax.nv.gov/uploadedFiles/taxnvgov/Content/TaxLibrary/NV-Marijuana-Revenue-FY20(2).pdf
³Adjusted EBITDA, Adjusted Operating Income, and Gross Margin do not include the net effect of changes in the fair value of biological assets