Fire & Flower Plummets After Record 2021 Revenue

Fire & Flower Holdings Corp. (TSX: FAF) released on Tuesday its financial results for the fiscal year ended January 29, 2022. The report highlighted an annual revenue of $175.5 million, an increase from $128.1 million in revenue last year.

While the company considers this a record performance, shares saw a sharp decline of 15.79% –trading below the $4.00-mark and at its lowest in two years.

Breaking down the topline revenue figure, retail sales contributed $130.8 million, wholesale revenue contributed $30.3 million, while the remaining $14.3 million came from the firm’s digital platform sales.

The gross margin for the year came in at 35.4%, comparably unchanged from 35.5% in the previous year. The company ended with a net loss of $63.6 million compared to its net loss last year of $79.0 million.

Adjusted EBITDA for the year ended at $5.1 million, virtually unchanged from $5.2 million last year.

Annual vs. quarterly

While the annual financials spell positive performance, the quarterly numbers show a different story. For Q4 2021, quarterly revenue dipped to $42.7 million from Q3 2021’s $45.4 million and from Q4 2020’s $43.2 million. Gross margin also fell to 32.1% from last quarter’s 34.6% and last year’s 38.0%.

Further down, the firm also widened its quarterly losses to $19.5 million from a net loss of $2.0 million in the previous quarter and a net loss of $11.4 million in the year-ago period. The quarterly loss translates to $0.54 per share.

The firm also recorded its first negative adjusted EBITDA during the quarter at $2.4 million compared to last quarter’s $2.1 million gain and last year’s $3.5 million gain.

“While all business segments contributed to the year-over-year revenue increase, the quarter-over-quarter revenue decrease was primarily due to increasing competition from new licences issued and pricing pressures in the retail market,” the company said in its quarterly performance.

The company ended the year with a cash and cash equivalents balance of $19.8 million, down from the starting balance of $30.6 million. This brings the balance of the current assets to $52.7 million while current liabilities ended at $54.3 million.

The firm also said that it has completed one of the final steps in preparation for its Nasdaq listing, obtaining DTC eligibility for the common shares on April 13, 2022.

Days ago, the cannabis firm announced that Alimentation Couche-Tard is set to increase its stake in the company to 35%.

Fire & Flower Holdings last traded at $3.60 on the TSX.

Information for this briefing was found via Sedar and the companies mentioned. 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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