Cansortium Inc. Reports First Quarter 2019 Financial Results; Reaffirms Full Year Outlook
MIAMI, May 30, 2019 /PRNewswire/ – Cansortium Inc. (CSE:TIUM.U) (“Cansortium” or the “Company”), a vertically-integrated, global provider of premium-quality medical cannabis, today announced financial results of the first quarter ended March 31, 2019. The Company’s unaudited consolidated quarterly financial statements and accompanying notes are available under the Company’s profile on SEDAR at www.sedar.com and are also accessible through a link on the Investor Relations section of the Company’s website at www.cansortium.com.
Selected First Quarter 2019 Financial Highlights Versus First Quarter 2018 Pro-Forma Results(¹)
- Consolidated revenue totaled $5.5 million, a 65% increase from pro-forma revenues of $3.3 million for the first quarter of 2018
- Consolidated net loss totaled $(16.6) million, compared to pro-forma net loss of $(6.5) million for the first quarter of 2018
- Consolidated EBITDA(²) totaled $(9.1) million, compared to pro-forma EBITDA(²) of $(5.6) million for the first quarter of 2018
- Consolidated Adjusted EBITDA(²) totaled $(4.0) million, compared to Adjusted pro-forma EBITDA(²) of $(1.6) million for the first quarter of 2018
Selected Events Subsequent to March 31, 2019
- Raised $27 million through a private placement of convertible debt, using proceeds for continued investment in expanding U.S. operations and working capital
- Launched a new global brand platform – Fluent™ – to replace Knox Medical across all physical and digital operations
- Opened the Company’s 10th medical cannabis dispensary in Florida with plans to have a total of 30 Florida locations secured by the end of 2019
- Tripled the Company’s Florida cultivation capacity with the addition of 60,000 square feet of cultivation volume in Tampa
- Received a cannabis cultivation, processing and medical sales license from Health Canada, pursuant to the Cannabis Act
- Approved to begin dispensing medical cannabis in dried flower form in Florida
We are committed to earning the trust of physicians, customers and regulators in every market where we choose to compete. During the first quarter of 2019, we completed a $56 million initial public offering along with a private placement of $10 million of convertible debt. This funding enabled us to strengthen our capital structure and balance sheet, which positioned us to issue $27 million in convertible debt to further support scaling of our cultivation and dispensary platforms.
Cansortium’s Chief Executive Officer Jose Hidalgo
We recently launched a new global brand platform – Fluent™ – a name inspired by the fact that we are committed to helping our customers become more fluent about cannabis and its potential health and wellness properties.
Mr. Hidalgo continued, “Since the end of the first quarter, we have tripled our Florida cultivation capacity with the opening of a 60,000 square-foot facility in Tampa, and we are also working to triple our Florida dispensary network from 10 locations today to having 30 locations secured by the end of this year. In early May, we were granted a cultivation, processing and medical sales license by Health Canada, enabling us to activate our strategies to establish the Fluent brand in that important market. As one of only three existing medical cannabis licensees in the state of Texas, the nation’s second-most-populous state, our company is well-positioned to capitalize on what is expected to become a larger Texas market. And in Michigan, our in-market partners, after receiving required approvals from various planning commissions, have begun preparing for full cultivation activities and secured pre-qualifications to open and operate up to eight dispensaries in this high-potential market.”
Mr. Hidalgo concluded, “We expect 2019 to be a year of expansive growth and we are reaffirming our previous full year outlook. Our team is focused on positioning the Company and the Fluent brand to capitalize on rapidly expanding opportunities in the U.S., while laying important groundwork for future expansion in international markets.”
Full Year 2019 Outlook
All projections related to anticipated future results are forward-looking in nature and are subject to risks and uncertainties that may cause actual results to differ, perhaps materially. Projections are predicated on the Company’s ability to successfully execute its operational expansion initiatives during 2019, which include expanding its Florida cultivation and dispensary platform and securing licenses necessary to enable expansion of its cultivation and dispensary platforms in other key markets. In addition, projections are based on the Company’s ability to secure and effectively deploy its capital resources toward those initiatives. Effective March 22, 2019, the company became subject to U.S. IRS Tax Code Section 280E, under which gross profit from the company’s U.S. retail operations is taxed at U.S. federal corporate tax rates, without the opportunity to deduct any selling, general & administrative expenses attributable to the company’s U.S. operations. The Company’s 2019 outlook also assumes that legal, regulatory and tax policies in key markets remain largely unaltered for the balance of the year. A more detailed description of the assumptions pertaining to the Company’s 2019 financial outlook can be found in the Company’s prospectus filed March 15, 2019, available under the Company’s profile on SEDAR at www.sedar.com, and accessible through a link on the Investor Relations section of the Company’s website at www.cansortium.com.
Taking the above factors into consideration, our 2019 financial outlook anticipates:
- Consolidated revenues of between approximately $80 million and $82 million,
- Consolidated net income of between approximately $6.5 million and 7.0 million, and
- EBITDA of between approximately $21 million and $23 million.
The Company will hold a conference call on Thursday, May 30, 2019 at 5:00pm (ET) to review its first-quarter 2019 financial results. The conference call can be accessed by calling 877-407-9039 (in the U.S.) or 201-689-8470 (international), conference ID 13691237. Participants should call in at least five minutes prior to the start of the call. The call also will be accessible via live webcast at www.cansortium.com. A replay of the call will be available starting May 30, 2019 at 8:00pm (ET) through June 6, 2019 at 11:59pm (ET), at 844-512-2921 (in the U.S.) or 412-317-6671 (international); conference ID 13691237. A webcast replay will also be available through May 29, 2020 at www.cansortium.com
ABOUT CANSORTIUM INC.
Cansortium is a global medical cannabis company operating in highly populous medical cannabis markets with a mission to deliver the highest standards of cannabis care from nursery to lab to shelf. Headquartered in Miami, FL and operating under the recently-launched Fluent™ brand (formerly Knox Medical), the Company through its subsidiaries operates cultivation, processing and dispensary facilities across Florida, Texas, Puerto Rico and a dispensary license in Pennsylvania. The Company also has licensed cultivation facilities in Colombia and Canada, with licensing pending in Michigan.
Cansortium Inc.’s common shares and warrants trade on the CSE under the symbol “TIUM.U” and “TIUM.WT.U” respectively.
¹During the first quarter of 2018, substantially all of the Company’s revenue-generating activity occurred in Florida and derived from a 38% minority investment in Knox Servicing, LLC. On August 15, 2018, the Company acquired the remaining 62% ownership of Knox Servicing, LLC, becoming its sole member. The Company’s pro-forma first quarter 2018 financial results are presented on a fully consolidated basis as if the Company had acquired 100% of Knox Servicing, LLC as of January 1, 2018. These results reflect activities related to Knox Servicing’s Florida operations and the company’s operations inside and outside of Florida unrelated to Knox Servicing, LLC during the three months ended March 31, 2018.
²EBITDA and Adjusted EBITDA are not recognized performance measures under IFRS. “EBITDA” is earnings before interest, taxes, depreciation and amortization. “Adjusted EBITDA” is equal to net income (loss), plus (minus) interest expense (income) and finance transactions costs, plus depreciation and amortization, plus (minus) unrealized loss (gain) on embedded derivatives, plus (minus) certain one-time non-operating expenses, as determined by management. The management of the Company believes that these non-IFRS financial measures in addition to conventional measures prepared in accordance with IFRS provides information that is helpful to understand the results of operations and financial condition of the Company. The objective is to present readers with a view of the Company from management’s perspective by interpreting the material trends and activities that affect the operating results, liquidity and financial position of the Company. These measures are not necessarily comparable to similarly titled measures used by other companies. A reconciliation of EBITDA and Adjusted EBITDA to Consolidated Net Income reported in accordance with IFRS is included in the financial tables below.
Get ahead of the crowd by signing up for 420 Investor, the largest & most comprehensive premium subscription service for cannabis traders and investors since 2013.