Cansortium Posts US$15.6 Million In Revenue For Q3 2021, Lowers Annual Revenue Guidance

Cansortium Inc. (CSE: TIUM.U) reported on Tuesday its financial results for Q3 2021. The cannabis firm, which operates the Fluent brand, earned $15.6 million in revenue, down from Q2 2021’s revenue of US$16.5 million but up from Q3 2020’s revenue of US$14.3 million.

The firm attributes the lower sales to maintaining its pricing amidst a price disruption in the market. “During the quarter, there was a well-publicized merger between two MSOs in Florida that created a product liquidation event, which disrupted pricing in the market. We nevertheless stood our ground on pricing, which impacted sales but enabled us to hold margins relatively well,” explained Cansortium CEO Robert Beasley.

On October 1, 2021, Florida-based multi-state operator Trulieve Cannabis (CSE: TRUL) announced the completion of its acquisition of Arizona-based operator Harvest Health (CSE: HARV).

The company’s gross profit for the quarter hit US$10.8 million, partly due to a realized fair value of increments on inventory sold amounting to US$5.1 million. In the previous quarter, the gross profit came to US$4.8 million while it reached US$7.7 million last year.

Further down, the firm recorded an operating income of US$2.3 million for the quarter, up from the operating losses in Q2 2021 and Q3 2020 of US$3.4 million and US$1.9 million, respectively.

Still, the company was able to record a net income of US$7.4 million due to a US$10.8 million gain on debt settlement. This figure compares to last quarter’s net loss of US$25.0 million, also affected by a US$10.8 million loss on debt settlement, and last year’s net loss of US$8.7 million. The quarterly income translates to US$0.02 earnings per diluted share.

Calibrating for financial items, the adjusted EBITDA ended at US$4.9 million, down from last quarter’s US$5.2 million but up from last year’s US$3.6 million.

The company ended the quarter with US$13.8 million in cash and cash equivalents, coming from a balance of US$26.0 million at the beginning of the three-month period. The cash burn is partly due to property and equipment purchases amounting to approximately US$6.8 million and unrealized changes in the fair value of biological assets amounting to US$6.1 million.

Current assets and liabilities ended at US$33.5 million and US$14.8 million, respectively.

Due to lower sales, the firm is revising its 2021 revenue guidance to US$63.0 million – US$66.0 million from US$70.0 million – US$80.0 million. It is keeping its adjusted EBITDA guidance at US$18.0 million – US$26.0 million but relayed that it anticipates achieving the lower end of the range.

Cansortium Inc. last traded at $0.77 on the CSE.

Information for this briefing was found via Sedar and Cansortium Inc. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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