- April 1, 2021 closed the acquisition of Mankind, a valued and long standing California retail cannabis brand located in San Diego (“Mankind Acquisition”) helping GABY achieve:
- Q4 and YTD revenue in 2021 of $8.2 million and $32.4 million, respectively, both up 7 times over comparative periods
- Q4 and YTD gross profit margin of 47% and 36%, respectively, improved from 3% and negative 4% of the respective periods last year
- Q4 and YTD Adjusted EBITDA1 of $0.9 million and $1.4 million, respectively, up from negative $1.4 million and negative $6.7 million of respective periods last year
- Pro forma Adjusted EBITDA, $3.2 million, assuming unprofitable divisions were closed January 1 instead of August 31.
- Cut costs by US $3.0 million which will be realized in 2022
- Continued rationalization and closing of unprofitable divisions also contributed to gross profit margin and Adjusted EBITDA1 improvements helping to reduce net loss by 42% and 12% to $3.8 million and $6.7 million for Q4 2021 and FY 2021, respectively.
- Margins were further enhanced by launching GABY branded products like Kind RepublicTM, which generate gross profit margin of 75%
- The rationalization and cost cutting program along with new branded products establishes a strong platform for positive EBITDA, Cash flow and profitability into 2022
SAN DIEGO, CA / ACCESSWIRE / May 2, 2022 / GABY Inc. (“GABY” or the “Company”) (CSE: GABY) (OTCQB: GABLF), a California consolidator of cannabis dispensaries and the parent company of San Diego’s Mankind Dispensary (“Mankind Dispensary”), today reported its financial and operating results for the fourth quarter and year ended December 31, 2021. All financial information is provided in Canadian dollars unless otherwise indicated. GABYs financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”).
As part of GABY’s rationalization strategy, Sonoma Pacific (“Sonoma”) was shut down in Q3 of 2021. Sonoma generated the majority of its revenue through high volume, low margin bulk sales. Although revenue decreased after Sonoma was wound down, gross profit margin increased from 34% in Q2 to 35% and 47% in subsequent quarters. Adjusted EBITDA1 was impacted in Q4 by one-time costs associated with the Sonoma closure.
Management expects continued improvement in profitability in 2022 with:
- Annual cost savings of USD 3 million on payroll and operating costs implemented late Q4 2021 which should more fully materialize in Q1 2022 and beyond.
- Higher volume sales in the second half of the year through restructuring of its delivery business which is expected to increase revenue by 1 million over the next 12 months, commencing Q4 2021 along with marketing analytics and remerchandising efforts increasing both physical and virtual shopping basket sizes
- Continued growth in margin with merchandising prioritizing higher margin and proprietary products
- Continued streamlining of shared overhead costs
2021 was a game changer for us with the acquisition of Mankind, which generated significant financial improvements at GABY, but 2022 is where our integration efforts should really start to shine with higher revenue, higher margins and lower costs – the triple crown of organic growth.
Margot Micallef, Founder and Chief Executive Officer of GABY
What’s more, is that the Mankind Acquisition has readied us for acquisition growth with our completion of a finely tuned operations manual by which future acquired dispensaries will operate and prosper.
“I see the realization of the incremental benefits of the Mankind acquisition akin to nocking and aiming an arrow at a target. We readied the bowstring with the acquisition of Mankind. We drew it tight in Q2, as we observed, learned, and rationalized Q3. We released the arrow in Q4 as we started to realize our implementation efforts of driving profit from a combination of higher margin sales, higher volume and rationalization of costs. Our goal is to hit the bullseye and become cashflow positive in 2022” Margot added. “I am so proud of our team and what they have accomplished in delivery, merchandising, marketing and operational efficiencies and am looking forward to all of us being rewarded with continued improved results throughout 2022 and beyond.”
Paul Stacey, CFO commented, “I am very impressed with the highly motivated and competitive attitude of the GABY team. The entire team from the sales floor to C-Suite is pulling on the necessary levers to deliver improvements in the customer experience and streamlining of operations. I am excited to be at the forefront of this opportunity where GABY is poised to realize impressive organic and acquisitive growth.”
GABY Inc. is a California-focused retail consolidator and the owner of Mankind Dispensary, one of the oldest licensed dispensaries in California. Mankind Dispensary is a well-known and highly respected dispensary with deep roots in the California cannabis community operating in San Diego. GABY curates and sells a diverse portfolio of products, including its own proprietary brands, Kind Republic™ Dank Space™ and Lulu’s™ through Mankind, A pioneer in the industry with a strong management team with experience in retail, consolidation, and cannabis, GABY is poised to grow its retail operations both organically and through acquisition.
GABY’s common shares trade on the Canadian Securities Exchange (“CSE”) under the symbol “GABY” and on the OTCQB under the symbol “GABLF”. For more information on GABY, visit www.GABYInc.com or the Company’s SEDAR profile at www.sedar.com.
For further inquiries, please contact:
Margot Micallef, Founder & CEO or Investor Relations at IR@GABYinc.com
Senior Communications Manager
Unless otherwise indicated, all references to “$” or “C$” in this press release refer to Canadian dollars and all references to “US$” in this Listing Statement refer to United States dollars.
(1) Adjusted EBITDA (from continuing operations) does not have any standardized meaning as prescribed by IFRS , and, therefore, is considered a non-GAAP measure and may not be comparable to similar measures presented by other issuers. Management of GABY believe that the non-GAAP measure of Adjusted EBITDA combined with IFRS measures, such as revenue and net loss, is a useful measure to GABY’s investors as management relies on it to provide a measure of operating cash flows before servicing debt, income taxes, capital expenditures and other gains and losses. As referenced and reconciled in GABY’s December 31, 2021 financial statements as filed on www.sedar.com, Adjusted EBITDA (from continuing operations) is gross profit (loss) less selling, general and administrative expenses, and therefore excludes charges or income items of: share-based compensation and expenses, depreciation and amortization, interest income, interest expense and other items of income (expense). See Non-GAAP Disclosure in the Company’s December 31, 2021 MD&A on www.sedar.com for a full explanation of the use of the non-GAAP measure Adjusted EBITDA from continuing operations for which there is a reconciliation to the nearest GAAP measure below: