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Earning Report

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7:02 AM ET 12/14/21 | Dow Jones


   -- Quarterly revenue increased 37% year-over-year to $45.4 million 
   -- Sixth Consecutive Quarter of Positive Adjusted EBITDA of $2.1 million 
   -- Hifyre(TM) Digital Retail and Analytics Platform generated $3.8 million 
      in revenue for the quarter, an increase of 160% year-over-year 
   -- Completed the acquisiton of PotGuide and the assets of Wikileaf further 
      enhancing the Company's transformational asset-light, digital strategy 
   -- Announced the acquisition of Pineapple Express, subsequent to the 3rd 
      Quarter, positioning Fire & Flower as a true cannabis consumer technology 

TORONTO, Dec. 14, 2021 /CNW/ - Fire & Flower Holdings Corp. ("Fire & Flower" or the "Company") (TSX: FAF) (OTCQX: FFLWD), today announced its financial and operational results for the fiscal third quarter ended October 30, 2021.

Trevor Fencott, Chief Executive Officer of Fire & Flower commented, "Our progress in the third quarter was not only demonstrated by our continued strong financial performance, but by the many growth opportunities that we successfully advanced in order to solidify our high-margin, asset-light cannabis retail business model. We completed the acquisitions of PotGuide and Wikileaf, the industry's leading online cannabis platforms, setting the stage for the role out of our expanded e-commerce digtal platform strategy. In addition, we expanded our Circle K co-location program to create additional strategically-located, asset-light stores to complement our existing retail network. Finally, last week, we announced our acquisition of Pineapple Express Delivery, the cannabis industry's leading logistics provider for the delivery of legal cannabis."

"With these accomplishments, we are rapidly transforming into a cannabis consumer technology platform which allows us to deliver a seamless customer experience from online customer acquisition through to fulfillment via same-day delivery to customers at our 100+ stores across North America," concluded Fencott.

Consolidated Financial Highlights

                             Thirteen weeks ended    Thirty-Nine weeks ended 
(In thousands of Canadian 
dollars,                     30-Oct-21   31-Oct-20   30-Oct-21     31-Oct-20 
except per share amounts) 
Total Revenue                    45,412      33,119       132,802       84,834 
Gross Profit                     15,698      11,505        48,389       28,990 
Gross Profit Percentage           34.6%       34.7%         36.4%        34.2% 
Adjusted EBITDA                   2,077       1,969         7,530        1,699 
Net loss                        (1,983)    (25,723)      (44,131)     (67,542) 
Basic loss per share            ($0.06)     ($1.51)       ($1.34)      ($4.16) 

Financial Highlights for the Third Quarter period ended October 30, 2021

   -- Total revenue of $45.4 million compared to revenue of $33.1 million for 
      the third quarter of 2020, an increase of 37%; 
   -- Total gross profit $15.7 million, or 34.6% of revenue, compared to total 
      gross profit of $11.5 million, or 34.7% of revenues in the third quarter 
      of 2020; 
   -- Sixth consecutive quarter of positive Adjusted EBITDA of $2.1 million 
      compared to positive Adjusted EBITDA of $2.0 million for the third 
      quarter of 2020; 
   -- Total principal amount of debt outstanding at October 30, 2021 was $2.4 
   -- Cash and cash equivalents balances of $16.5 million. 

Segment Revenue

                             Thirteen Weeks Ended    Thirty-Nine Weeks Ended 
(In thousands of Canadian 
dollars unaudited)           30-Oct-21   31-Oct-20   30-Oct-21     31-Oct-20 
     Retail                      33,692      26,534        99,153       68,341 
     Wholesale                    7,942       5,130        23,367       13,298 
     Digital Platform             3,778       1,455        10,282        3,195 
Total Revenue                    45,412      33,119       132,802       84,834 

Segment Adjusted EBITDA

                             Thirteen Weeks Ended    Thirty-Nine Weeks Ended 
(In thousands of Canadian 
dollars unaudited)           30-Oct-21   31-Oct-20   30-Oct-21     31-Oct-20 
Adjusted EBITDA 
Retail                            2,038       3,352         4,510        5,513 
Wholesale                         1,269         682         3,608        1,875 
Digital Platform                  2,288         664         5,781          186 
Corporate                       (3,518)     (2,729)       (6,369)      (5,875) 
Total Adjusted EBITDA             2,077       1,969         7,530        1,699 


   -- Retail revenue increased by 27.0% year-over-year to $33.7 million; 
   -- Gross profit increased by 12.7% year-over-year to to $10.2 million; 
   -- Gross profit margin of 30.3% for the thirteen weeks ended October 30, 
   -- Adjusted EBITDA decreased to $2.0 million from $3.4 million in the same 
      quarter the prior year; 
   -- Adjusted EBITDA margin of 6.0% for the thirteen weeks ended October 30, 
   -- Same-store sales decreased 27% for fifty-four (54) stores in operation 
      during the comparable period in Q3 2021 due primarily to increased 
      competition as the surge in newly licensed retail cannabis stores 
      continues across Canada (in Ontario, 228 new stores were opened in the 
   -- Expanded the Company's retail network, bringing total stores currently to 


   -- Wholesale revenue increased by 54.8% year-over-year to $7.9 million; 
   -- Gross profit increased by 72.4% year-over-year to $1.7 million; 
   -- Gross profit margin of 21.7% for the thirteen weeks ended October 30, 
   -- Adjusted EBITDA increased by 86.1% year-over-year to $1.3 million; 
   -- Adjusted EBITDA margin of 16.0 % for the thirteen weeks ended October 30, 

Digital Platform

   -- Digital platform revenue increased 159.7% year-over-year to $3.8 million; 
   -- Adjusted EBITDA increased to $2.3 milion from $0.7 million in the prior 
   -- Adjusted EBITDA margin of 60.6% for the thirteen weeks ended October 30, 


   -- Fire & Flower enhanced its strategic partnership with Alimentation 
      Couche-Tard (ACT) through its "Co-Location Program" which will allow the 
      opening of new Fire & Flower cannabis retail stores adjacent to existing 
      Circle K stores in new markets across Canada; 
   -- As part of the Company's expanded digital strategy and asset-light model, 
      Fire & Flower completed the acquisitions of PotGuide and Wikileaf; 
   -- The Company repaid $2.3 million outstanding prior to maturity under a 
      term loan facility with ATB Financial. 

Subsequent Operational Highlights Post October 30, 2021

   -- The Company announced the acquisition of Pineapple Express Delivery, 
      Canada's largest delivery and logistics company serving cannabis 
   -- Spark Perks members grew from 45,000 in Q3 2020 to over 346,000 across 
      Fire & Flower's entire retail network in Q3 2021; 
   -- Continued toward a Nasdaq listing with a consolidation of Common Shares 
      on the basis of 10 pre-consolidation Common Shares for one 
      post-consolidation Common Share. The Company is targeting early first 
      quarter 2022 for its Nasdaq listing; 
   -- Announced $30 million Secured Debt Facility with strategic partner 
      Alimentation Couche-Tard. 

Non-IFRS Measures -- Adjusted EBITDA "Adjusted EBITDA" is a Non-IFRS metric used by management that does not have any standardized meaning prescribed by IFRS and may not be fully comparable to similar measures by presented by other companies. Management defines the Adjusted EBITDA as the Income (loss) for the period, as reported, before income taxes and other expense (income) items such as finance costs, finance income, gains and losses related to derivative liability revaluations and debt extinguishments, and adjusted for share-based compensation, depreciation and amortization, impairment expense, impairment of right-of-use ("ROU") assets net of lease liabilities remeasurement, restructuring charges, professional fees associated with acquisitions, financing and strategic initiatives.

Adjusted EBITDA has been calculated differently than in periods prior to Q1 2021, where the Company previously included lease liability cash payments as disclosed in accordance with IFRS 16 "Leases" accounting standards. The updated measure reflects the Company's new approach to analyzing the consolidated operating performance across the business lines. The Company believes the updated definition is an alternative measure to assess performance as it provides meaningful operating results and facilitates period-to-period operating comparisons. As other companies may calculate this non-IFRS measure differently than the Company, this metric may not be comparable to similarly titled measures reported by other companies. We caution readers that Adjusted EBITDA should not be substituted for determining net income (loss) as an indicator of operating results, or as a substitute for cash flows from operating activities. A reconciliation of net income (loss) to Adjusted EBITDA is presented below.

Adjusted EBITDA for the fiscal third quarter ended October 30, 2021 was $2.1 million compared to Adjusted EBITDA of $2.0 million for the thirteen weeks ended October 31, 2020.

2021-12-14 1200 GMT Fire & Flower Announces Fiscal Third Quarter 2021 -2- Adjusted EBITDA

                 Thirteen Weeks ended           Thirty-nine Weeks ended 
(in thousands    October 30,    October 31,     October 30,     October 31, 
of dollars)      2021 ($)       2020 ($)        2021 ($)        2020 ($) 
Net loss -- as 
 reported              (1,983)        (25,723)        (44,131)        (67,542) 
(Gain) loss on 
 revaluation of 
 liability            (12,686)        (35,796)          16,103        (21,082) 
Loss on 
 revaluation of 
 debentures                  -          53,862               -          53,862 
Finance costs, 
 net                     1,333           5,972           5,740          20,829 
Income taxes, 
 net                     (933)           1,218           1,122           1,218 
 compensation              855             581           2,706           1,990 
Acquisition and 
 fees                      740           1,060           1,788           1,338 
Depreciation & 
 amortization            5,074           2,914          13,585           8,926 
 impairment and 
 other costs, 
 net                     9,677         (2,119)          10,617           2,160 
Adjusted EBITDA          2,077           1,969           7,530           1,699 
     Lease liability cash payments during the thirteen and thirty-nine weeks 
     ended October 30, 2021 were $2.3 million and $6.6 million, respectively 
     (October             31, 2020: $0.8 million and $3.2 million, 

Webcast & Conference Call

Fire & Flower will host a webcast and conference call with Trevor Fencott, Chief Executive Officer, and Judy Adam, Chief Financial Officer at 8:30 a.m. EDT on December 14, 2021. The webcast will discuss Fire & Flower's third quarter 2021 financial and operational results.

Webcast URL

Dial-In Information

Toll-Free (Canada): 1-833-950-0062

Toll-Free (United States): 1-844-200-6205

Access code: 621339

Replay Information (Available until January 4, 2022)

Toll-Free (Canada): 1-226-828-7578

Toll-Free (United States): 1-866-813-9403

Replay Code: 831677

Upon completion of the live conference call, a replay of the conference call will be accessible on Fire & Flower's website at

Fire & Flower's financial statements and management discussion and analysis for the period are available on Fire & Flower's SEDAR profile at and on Fire & Flower's website at

About Fire & Flower

Fire & Flower is a leading, technology-powered, adult-use cannabis retailer with more than 100 corporate-owned stores in its network. The Company leverages its wholly-owned technology development subsidiary, Hifyre Inc., to continually advance its proprietary retail operations model while also providing additional independent high-margin revenue streams. Fire & Flower guides consumers through the complex world of cannabis through education-focused, best-in-class retailing while the Hifyre(TM) digital and analytics platform empowers retailers to optimize their connections with consumers. The Company's leadership team combines extensive experience in the technology, cannabis and retail industries.

Through the strategic investment of Alimentation Couche-Tard Inc. (owner of Circle K convenience stores), the Company has set its sights on global expansion as new cannabis markets emerge and is poised to expand into the United States when permitted through its strategic licensing agreement with Fire & Flower U.S. Holdings upon the occurrence of certain changes to the cannabis regulatory regime.

D. H. Taylor
Member Admin
Joined: 1 year ago
Posts: 533

@gtosali1967 Thanks for posting this.  I LOOOOVE this company and their approach with the Circle-K dispensaries.  That will be huge.  And, there may be built in profits as the company that owns a big chunk of them are required to buy up to 51% between $2.00 - $6.00 which means the stock has built-in upward possibilities

TheQueen liked

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