- Flora generated $37.2 million in revenue in FY2022, a 314%
increase YoY
- Record Q4 2022 revenue increased to $11.5 million, a 7%
sequential increase from Q3 2022
- Gross profit for FY2022 increased by 494%, from $2.4 million to
$14.4 million YoY
- Company reaffirms its 2023 revenue guidance to range between
$90 million - $105 million
- Flora management to host a webcast Monday, April 3, at 8:00 am
ET
Flora Growth Corp. (NASDAQ: FLGC) (“Flora'' or the “Company”), a
leading cultivator, manufacturer and distributor of global cannabis
products and brands, reported today its financial and operating
results for the fiscal year ended December 31, 2022. All financial
information is provided in U.S. dollars unless indicated
otherwise.
“In 2022, we not only met our revenue guidance but reported both
quarterly and annual record revenue. This accomplishment was thanks
to the successful completion and integration of our M&A
transactions, the compelling value proposition of our products in
our House of Brands and the operational milestones we achieved
throughout the year,” said Luis Merchan, Chairman and CEO of Flora.
"It is important to note that we have accomplished all this despite
having to navigate one of the most hostile business environments to
date, especially for the cannabis industry. Nonetheless, we
achieved both quarterly and annual record revenue, improved margins
and increased our gross profits - all while cutting costs and
improving operational efficiencies.”
“Today, I remain more confident than ever in Flora’s opportunity
to not only be one of the largest players in the international
cannabis industry but to change the global landscape of cannabis. I
am proud to reaffirm the 2023 revenue guidance we shared earlier in
the year of between $90 million and $105 million,” Merchan
added.
FY2022 Financial
Highlights
- For the FY2022, Flora generated $37.2 million in revenue, a
314% increase year-over-year. This was primarily driven by the
House of Brands businesses. Additionally, in Q4 2022, revenue was
$11.5 million, a 7% sequential increase from Q3 2022, driven
primarily by organic growth.
- Gross profit for FY2022 increased by 494% year-over-year to
$14.4 million.
- Gross margin improved year-over-year from 27% in FY2021 to 39%
FY2022.
- Adjusted EBITDA loss for FY2022 was $18.3 million, up from
$16.5 million in FY2021.
- Adjusted EBITDA margin for FY2022 improved to -49.3% from
-184.2% in FY2021.
- Net loss for FY2022 was $52.6 million as compared to $21.4
million for FY2021 and net loss margin for FY2022 improved to
-141.6% from -237.9% in FY2021.
- FY2022 capex decreased to $1.3 million from $4 million in the
prior year. This decrease was primarily driven by the completion of
larger projects in 2021, such as the build-out of the Company’s
Colombian cannabis production facility, Cosechemos, while 2022
capital expenditures included smaller-scale projects focused on
realizing operations at Cosechemos and Flora’s labs.
- Operating expenses for FY2022 were $67.7 million, of which
almost half were due to non-cash charges, including an impairment
charge of $26.2 million as well as depreciation and amortization,
purchase price allocation, and share-based compensation
charges.
- As a percentage of sales, operating expenses for 2022 decreased
from 239% in FY2021 to 182% in FY2022.
- As of December 31, 2022, the Company had approximately $9.5
million in cash and cash equivalents as compared to $37.6 million
as of December 31, 2021.
Adjusted EBITDA loss and Adjusted EBITDA margin are non-U.S.
GAAP figures. A reconciliation of U.S. GAAP to non-U.S. GAAP
financial measures has been provided in the section titled “About
Non-GAAP Financial Measures”. Important disclosures regarding the
use of non-U.S. GAAP supplemental financial measures are also
included below.
2023 Outlook
- Flora’s 2023 revenue guidance of $90 million to $105 million
reflects expected organic growth in the House of Brands division
and expansion of the Commercial and Wholesale division’s
capabilities.
- House of Brands and Commercial and Wholesale divisions expect
roughly equal contributions to total revenue, while the
Pharmaceutical division is expected to contribute up to 10% of
total revenue.
- Flora continues to evaluate future M&A transactions that
align with the goal of creating one of the world's largest
end-to-end cannabis supply chains.
- The Company furthered its commitment to organizational and
financial efficiencies, implementing internal cost controls and
focusing on high-margin revenue generation.
Recent Operational
Highlights
- Acquired Franchise Global Health (FGH), an international
cannabis company with primary operations in Germany.
- Flora’s House of Brands saw an increase in customer base to
approximately 500,000 consumers and expanded distribution to over
14,000 doors.
- Became a domestic reporter with respect to Securities and
Exchange Commission (the “SEC”) filings under the Exchange Act of
1934, as amended (the “Exchange Act”) and transitioned to financial
reporting under U.S. Generally Accepted Accounting Principles
(“U.S. GAAP”).
- JustCBD achieved record-breaking sales during the Black Friday
Sales Event in 2022, making it the most successful sales event in
the Company's history.
- Completed construction of Bogota, Colombia-based Flora Lab 4, a
laboratory specializing in prescription cannabis formulations.
- As a result of the FGH acquisition, Flora appointed former FGH
CEO Clifford Starke as President of Flora and member of the Board
of Directors and former FGH Chief Operating Officer Edward Woo as a
member of the Board of Directors.
- Completed its first extraction of CBD isolate through Flora Lab
1, and successful importation to the United States.
- Received 2022 export quota from the Colombian government for
43,600kg of high-THC cannabis.
- Colombian government released regulations allowing for THC
export, with export to partners beginning in Q4 2022 - broadening
the Company's opportunity for international export.
- Awarded best M&A transaction at Benzinga Capital Conference
for the acquisition of JustBrands.
Earnings Call: April 3, 2023, at 8:00AM
ET
Live Webcast Details
Date: Monday, April 3, 2023
Time: 8:00 a.m. ET
Online Participant Link:
https://us02web.zoom.us/webinar/register/WN_Y0I1RwIISN6Y2sn8I5QEYQ
After registering, you will receive a confirmation email
containing information about joining the webinar.
The live webcast will be available online through the above
participant link and will be archived and available on the investor
page of the Company’s website within approximately 24 hours, until
April 2024.
About Flora Growth Corp.
Flora Growth Corp. is a global cannabis company dedicated to
bringing the benefits of cannabis to people worldwide. Our
commitment is to create, master and connect the international
cannabis supply chain by setting the standard for world-class
cultivation and manufacturing, thoughtful brand development, and
rigorous research and development of medical-grade cannabis
products that meet the highest standards of quality, safety, and
efficacy. Our mission is to create a world where the benefits of
cannabis are accessible to everyone, and we are working toward that
goal by becoming a leading importer and exporter of cannabis to
meet demand in every corner of the market. Visit
www.floragrowth.com or follow @floragrowthcorp on social media for
more information.
Cautionary Statement Concerning Forward-Looking
Statements
This press release contains ‘‘forward-looking statements,’’ as
defined by federal securities laws. Forward-looking statements
reflect Flora’s current expectations and projections about future
events at the time, and thus involve uncertainty and risk. The
words “believe,” “expect,” “anticipate,” “will,” “could,” “would,”
“should,” “may,” “plan,” “estimate,” “intend,” “predict,”
“potential,” “continue,” and the negatives of these words and other
similar expressions generally identify forward looking statements.
Such forward-looking statements are subject to various risks and
uncertainties, including those described under the section entitled
“Risk Factors” in Flora’s Annual Report on Form 10-K for year ended
December 31, 2022 filed with the SEC on March 31, 2023, as such
factors may be updated from time to time in Flora’s periodic
filings with the SEC, which are accessible on the SEC’s website at
www.sec.gov and under the Company’s SEDAR profile at www.sedar.com.
Accordingly, there are or will be important factors that could
cause actual outcomes or results to differ materially from those
indicated in these statements. These factors should not be
construed as exhaustive and should be read in conjunction with the
other cautionary statements that are included in this release and
in Flora’s filings with the SEC. While forward-looking statements
reflect Flora’s good faith beliefs, they are not guarantees of
future performance. Flora disclaims any obligation to publicly
update or revise any forward-looking statement to reflect changes
in underlying assumptions or factors, new information, data or
methods, future events or other changes after the date of this
press release, except as required by applicable law. You should not
place undue reliance on any forward-looking statements, which are
based only on information currently available to Flora (or to third
parties making the forward-looking statements).
About Non-U.S. GAAP Measures
Adjusted EBITDA is a non-U.S. GAAP financial measure that does
not have any standardized meaning prescribed by U.S. GAAP and may
not be comparable to similar measures presented by other companies.
We calculate Adjusted EBITDA as total net loss, plus (minus) income
taxes (benefit), plus (minus) interest expense (income), plus
depreciation and amortization, plus (minus) non-operating expense
(income), plus share based compensation expense, plus goodwill and
other asset impairment charges, plus (minus) unrealized loss
(gains) from changes in fair value, plus charges related to the
flow-through of inventory step-up on business combinations, plus
other acquisition and transaction costs. Management believes that
Adjusted EBTIDA provides meaningful and useful financial
information as this measure demonstrates the operating performance
of the business.
Adjusted EBITDA margin % is a non-U.S. GAAP financial measure
that does not have any standardized meaning prescribed by U.S. GAAP
and may not be comparable to similar measures presented by other
companies. We calculate Adjusted EBITDA margin % as Adjusted
EBITDA, as described above, divided by revenue for the period.
The reconciliation of the Company’s Adjusted EBITDA, a non-U.S.
GAAP financial measure, to net loss, the most directly comparable
U.S. GAAP financial measure, for the year ended December 31, 2022
and 2021 is presented in the table below:
Management believes that this non-U.S. GAAP financial
information is useful as a supplement to comparable U.S. GAAP
financial information. Management reviews these non-U.S. GAAP
financial measures on a regular basis and uses them, together with
financial measures included in the Company’s financial statements,
to evaluate and manage the performance of the Company’s operations.
These measures should be evaluated in conjunction with the
comparable U.S. GAAP financial numbers reported by the Company.
Table 1. Consolidated Statements of Financial
Position
Consolidated Statements of Financial
Position
(in thousands of United States dollars,
except share amounts which are in thousands of shares)
As at:
December 31, 2022
December 31, 2021
ASSETS
Current
Cash
$
9,537
$
37,614
Restricted cash
-
2
Trade and amounts receivable, net of
$2,988 allowance ($1,252 at 2021)
6,851
5,324
Loans receivable and advances
271
273
Prepaid expenses and other current
assets
978
1,700
Indemnification receivables
3,429
-
Inventory
10,089
3,030
Total current assets
31,155
47,943
Non-current
Property, plant and equipment
4,810
3,750
Operating lease right of use assets
2,537
1,229
Intangible assets
18,096
9,736
Goodwill
23,372
20,054
Investments
730
2,670
Other Assets
287
97
Total assets
$
80,987
$
85,479
LIABILITIES
Current
Trade payables
$
7,748
$
2,415
Contingencies
5,044
2,033
Current portion of debt
1,086
18
Current portion of operating lease
liability
1,188
412
Other accrued liabilities
2,381
1,241
Total current liabilities
17,447
6,119
Non-current
Non-current operating lease liability
1,869
908
Deferred tax
1,712
1,511
Contingent purchase considerations
3,547
-
Total liabilities
24,575
8,538
SHAREHOLDERS' EQUITY
Share capital, no par value, unlimited
authorized, 135,573 issued and outstanding (65,517 at 2021)
-
-
Additional paid-in capital
150,420
116,810
Accumulated other comprehensive loss
(2,732)
(1,108)
Deficit
(90,865)
(38,536)
Total Flora Growth Corp. shareholders’
equity
56,823
77,166
Non-controlling interest in
subsidiaries
(411)
(225)
Total Shareholders' equity
56,412
76,941
Total liabilities and shareholders'
equity
$
80,987
$
85,479
Table 2. Consolidated Statements of Loss and Comprehensive
Loss
Consolidated Statements of Loss and
Comprehensive Loss
(in thousands of United States dollars,
except per share amounts which are in thousands of shares)
For the year ended December
31, 2022
For the year ended December
31, 2021
Revenue
$37,171
$8,980
Cost of sales
22,757
6,555
Gross profit
14,414
2,425
Operating expenses
Consulting and management fees
11,342
7,324
Professional fees
4,398
4,269
General and administrative
4,495
922
Promotion and communication
8,416
3,585
Travel expenses
1,055
603
Share based compensation
3,404
1,340
Research and development
430
132
Operating lease expense
1,221
316
Depreciation and amortization
2,629
501
Bad debt expense
1,607
1,335
Goodwill impairment
25,452
51
Other asset impairments
783
-
Other expenses (income), net
2,489
1,050
Total operating expenses
67,721
21,428
Operating loss
(53,307)
(19,003)
Interest (income) expense
(56)
32
Foreign exchange loss
323
79
Unrealized loss from changes in fair
value
593
2,345
Net loss before income taxes
(54,167)
(21,459)
Income tax benefit
(1,538)
(98)
Net loss for the period
$(52,629)
$(21,361)
Other comprehensive loss
Exchange differences on foreign
operations, net of income taxes of $nil ($nil in 2021)
$(1,624)
$(1,147)
Total comprehensive loss for the
period
$(54,253)
$(22,508)
Net loss attributable to:
Flora Growth Corp.
$(52,415)
$(21,249)
Non-controlling interests in
subsidiaries
(214)
(112)
Comprehensive loss attributable to:
Flora Growth Corp.
$(54,039)
$(22,396)
Non-controlling interests in
subsidiaries
(214)
(112)
Basic and diluted loss per share
attributable to Flora Growth Corp.
$(0.68)
$(0.48)
Weighted average number of common shares
outstanding - basic and diluted
76,655
43,954
Table 3. Statement of Cash Flows
Consolidated Statement of Cash Flows
(in thousands of United States
dollars)
For the year ended December
31, 2022
For the year ended December
31, 2021
Cash flows from operating
activities:
Net loss
$
(52,629
)
$
(21,361
)
Adjustments to net loss:
Depreciation and amortization
2,629
501
Stock-based compensation
3,404
1,340
Goodwill impairment
25,452
51
Other asset impairments
783
-
Changes in fair value of investments and
liabilities
593
2,345
Bad debt expense
1,607
1,335
Interest (income) expense
(56
)
84
Interest paid
(4
)
(78
)
Income tax expense (benefit)
(1,538
)
(98
)
(19,759
)
(15,881
)
Net change in non-cash working
capital:
Trade and other receivables
143
(5,688
)
Inventory
1,219
(1,213
)
Prepaid expenses and other assets
1,372
(1,204
)
Trade payables and accrued liabilities
1,090
3,047
Net cash used in operating
activities
(15,935
)
(20,939
)
Cash flows from financing
activities:
Common shares issued
4,551
42,617
Warrants issued
449
8,706
Equity issue costs
(520
)
(5,475
)
Exercise of warrants and options
187
12,851
Common shares repurchased
(255
)
-
Loan borrowings
197
-
Loan repayments
(196
)
(302
)
Net cash provided by financing
activities
4,413
58,397
Cash flows from investing
activities:
Loans Provided
-
(273
)
Loan repayments received
-
302
Purchases of property, plant and equipment
and intangible assets
(1,294
)
(3,983
)
Purchase of investments
-
(2,509
)
Business and asset acquisitions, net of
cash acquired
(14,508
)
(8,087
)
Net cash used in investing
activities
(15,802
)
(14,550
)
Effect of exchange rate on changes on
cash
(755
)
(815
)
Change in cash during the
period
(28,079
)
22,093
Cash and restricted cash at beginning of
period
37,616
15,523
Cash and restricted cash at end of
period
$
9,537
$
37,616
Supplemental disclosure of non-cash
investing and financing activities
Common shares issued for business
combinations
$
24,712
$
20,654
Common shares issued for other
agreements
1,470
2,507
Operating lease additions to right of use
assets
2,919
1,233
Table 4. Reconciliation of GAAP to non-U.S.GAAP financial
results
Table 4
Reconciliation of GAAP to non-U.S.GAAP financial results
(In thousands of United States
dollars)
For the year ended December
31, 2022
For the year ended December
31, 2021
Net loss for the period
$
(52,629
)
$
(21,361
)
Income tax expense (benefit)
(1,538
)
(98
)
Interest (income) expense
(56
)
32
Depreciation and amortization
2,629
501
Non-operating expense (1)
323
79
Share based compensation
3,404
1,340
Goodwill and asset impairments
26,235
51
Unrealized loss from changes in fair value
(2)
593
2,345
Charges related to the flow-through of
inventory step-up on business combinations
1,676
342
Other acquisition and transaction
costs
1,055
229
Adjusted EBITDA
$
(18,308
)
$
(16,540
)
Adjusted EBITDA Margin %
-49.3
%
-184.2
%
(1)
Non-operating expense includes
foreign exchange gain (loss).
(2)
Unrealized loss from changes in
fair value includes changes in the value of the Company’s long-term
investment in an early-stage European cannabis company and the
value of the Company’s contingent consideration associated with its
acquisition of JustCBD.
The reconciliation of the Company’s Adjusted EBITDA, a non-U.S.
GAAP financial measure, to net loss, the most directly comparable
U.S. GAAP financial measure, for the year ended December 31, 2022
and 2021 is presented in the table below: For a reconciliation of
these non-U.S. GAAP financial measures to the most directly
comparable U.S. GAAP financial measures, please see Table 4 under
"Reconciliation of GAAP to non-U.S. GAAP financial results"
included at the end of this release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230331005404/en/
Investor Relations: Investor Relations ir@floragrowth.com
Public Relations: Cassandra Dowell +1 (858) 221-8001
flora@cmwmedia.com
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