The Supreme Cannabis Company (TSX: FIRE) announced its fourth quarter financial results this evening, recognizing $19.0 million in net revenues for the quarter, and $41.8 million in net revenues for FY2019. The revenues increased significantly on a quarter over quarter basis, as per the prior guidance issued by the firm, as a result of additional capacity coming online.
While the firm elected to not break out the quarterly expenses, the company issued news release indicates that approximately $11.56 in expenses were recorded during the period. We were able to break out the following based on a quarter over quarter comparison of financial statements.
|Expense||Q4 2019||Q3 2019||% Change|
|Wages & benefits||3,372,000||3,838,790||-12.1%|
|Rent & facilities||603,000||235,280||156.3%|
|Sales & Marketing||2,308,000||1,564,106||47.6%|
|General & Admin||1,418,000||766,367||85.0%|
|Share based payments||1,184,000||2,093,682||-43.4%|
Looking towards the balance sheet, Supreme’s cash position feel from $75.0 million to $54.8 million over the quarter, while receivables and inventory grew from $9.2 million and $7.1 million to $21.9 million and $19.0 million respectively. Accounts payable grew from $23.2 million to $30.6 million over the period as well.
Selling prices on a per gram basis fell over the quarter from $6.28 to $6.13 for dried flower, while cannabis trim fell from $2.86 per gram to $2.44. While the selling price fell, post harvest production costs also notably fell, from $1.01 per gram in the third quarter to that of $0.42 in the fourth quarter. The firm failed to provide a figure for how much cannabis was produced during the quarter, or exactly how much was sold. For the fiscal year, Supreme indicated that 10,039 kg of cannabis was transferred to inventory, versus 2,374 kg in the year prior.
Notably, Supreme also released material information within its news release, indicating that three rooms of grow space, 30,000 square feet cumulatively in size, had to be destroyed as a result of mechanical failure. The rooms have since been reinstated after permanent repairs were made to the facility. A material cost in terms of dollar value for lost production was not provided.
The Supreme Cannabis Company closed at $1.38 per share today on the Toronto Stock Exchange.
Information for this analysis was found via Sedar and Supreme Cannabis. 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.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.