High Tide Reports Second Quarter 2020 Financial Results
Becomes the first Canadian cannabis retailer in its peer group to report positive adjusted EBITDA of $1.9M
CALGARY, AB, June 17, 2020 /CNW/ – High Tide Inc. (“High Tide” or the “Company”) (CSE: HITI) (OTCQB: HITIF) (FRA: 2LY), a retail-focused cannabis corporation enhanced by the manufacturing and distribution of smoking accessories and cannabis lifestyle products, is pleased to report its financial and operating results for the second quarter of fiscal 2020 ending April 30, 2020.
Second Quarter 2020 – Financial Highlights:
- Revenue for the three months ended April 30, 2020 increased by 197%, to $19.57 million from $6.60 million for the same quarter last year.
- Gross profit for the three months ended April 30, 2020 increased by 214%, to $7.39 million from $2.35 million for the same quarter last year.
- Gross profit margin for the three months ended April 30, 2020 increased to 38% from 36% for the same quarter last year.
- Adjusted EBITDA(1) for the three months ended April 30, 2020 increased by 156%, to $1.94 million from an
- Adjusted EBITDA loss of ($3.49 million) for the same quarter last year.
- Cash and cash equivalents as at April 30, 2020 increased to $7.04 million from $0.81 million as at October 31, 2019.
The second fiscal quarter of 2020 marks a historic moment in High Tide’s history. I am fiercely proud of our team for delivering adjusted EBITDA well ahead of the Company’s peer group and positive cash flow from operations through their unwavering commitment to our core strategy, especially throughout the pandemic. A decade of experience with cannabis consumers has been the key ingredient to our substantial year-over-year increase in revenue and enhanced gross margin.
Raj Grover, President and Chief Executive Officer.
We are grateful to the many customers, employees, shareholders and other stakeholders who believed in High Tide’s vision and today share in our success. We remain focused on continuing to strengthen our balance sheet and delivering value by furthering our retail expansion across Ontario. I am confident that our future results will continue to reinforce our position as a leading cannabis operator.
Second Quarter 2020 – Operational Highlights:
- The Company successfully acquired and integrated the branded Canna Cabana locations in Hamilton and Sudbury.
- The Company further developed its Saskatchewan retail presence by acquiring a licensed cannabis retail location in Tisdale, Saskatchewan.
- High Tide entered into an agreement with Halo Labs to sell its KushBar assets for $12 million, subject to the required regulatory approvals.
- The Company opened a Canna Cabana store in the heart of downtown Edmonton, Alberta.
- Integration of the Grasscity e-commerce platform into High Tide’s Las Vegas facility has resulted in continued growth of North American market share and daily transaction volume.
- Through the COVID-19 pandemic existing Canna Cabana locations have remained operational and efficient, despite the challenging conditions facing retail across the country.
- As of the date of this news release approximately 47,000 members have joined Cabana Club, with 55% of our average daily transactions conducted by Club members.
- To date, the Company’s portfolio includes a total of 36 branded retail cannabis locations in Ontario, Alberta, and Saskatchewan.
- The Company opened a KushBar store in Medicine Hat, Alberta.
- The Company opened four new Canna Cabana retail locations in Ontario: Niagara Falls, Toronto – Parliament, Burlington, and Toronto – Bayview Avenue, bringing the current total to 7 Ontario stores and achieving 9% provincial market share by location as of June 9, 2020.
Selected financial information for the three and six months ended April 30, 2020:
The following is a reconciliation of Adjusted EBITDA to Net Loss:
High Tide remains focused on the fundamentals of profitable retail, while continuing to leverage cannabis and its related accessories through the Company’s manufacturing and e-commerce portfolio. High Tide’s diverse mix of consumer channels provides access to layered insights and context unavailable to competitors, providing the Company with an advantage in understanding the development of North American and global cannabis user preferences in real time.
The Company believes that the senior secured credit facility advanced by Windsor Capital, the proceeds from the sale of the common shares of Halo Labs, and achieving positive cash flow from operations has positioned High Tide to execute on its strategic growth objectives in 2020. The Company is well positioned and funded to further its expansion in Ontario, as Canada’s largest and most underserved market.
About High Tide Inc.
High Tide is a retail-focused cannabis company enhanced by the manufacturing and distribution of smoking accessories and cannabis lifestyle products. Its premier Canadian retail brand Canna Cabana spans 33 locations in Ontario, Alberta, and Saskatchewan, with additional locations under development across Canada. High Tide has been serving cannabis consumers for over a decade through its numerous lifestyle accessory enterprises including e-commerce platforms Grasscity.com and CBDcity.com, lifestyle and licensed entertainment brand manufacturer Famous Brandz, and its distribution divisions RGR Canada and Valiant Distribution.
High Tide’s strategy as a parent company is to extend and strengthen its integrated value chain, while providing a complete customer experience and maximizing shareholder value. Key industry investors in High Tide include Aphria Inc. (TSX: APHA) (NYSE: APHA) and Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB).