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Grown Rogue Reports First Quarter 2022 Results, aEBITDA of $1.0M

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Isail4fun
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Grown Rogue Reports First Quarter 2022 Results, aEBITDA of $1.0M

8:16 AM ET, 04/04/2022 - Business Wire

 Revenue of $3.73M compared to $1.05M in Q1 2021, an increase of 255%Gross profit, before fair value adjustments, of $2.03M compared to $0.50M in Q1 2021, an increase of 310%aEBITDA1 of $1.00M and aEBITDA1 margin of 26.9% compared to aEBITDA1 of $0.05M and aEBITDA1 margin of 4.8% in Q1 2021Segmented aEBITDA1 (excluding corporate costs) of $1.43M and segmented aEBITDA1 margin of 38.3%Average selling price of indoor whole flower (excluding trim) of $1,062 per pound

MEDFORD, Ore.--(BUSINESS WIRE)--Apr. 4, 2022-- Grown Rogue International Inc. (“Grown Rogue” or the “Company”) (CSE: GRIN) (OTC: GRUSF), a multi-state cannabis company with operations and assets in Oregon and Michigan, reports fiscal first quarter 2022 results for the three months ended January 31, 2022. All financial information is provided in U.S. dollars unless otherwise indicated.

First Quarter 2022 Financial Summary

Ninth consecutive quarter of positive aEBITDA1, including pro-forma2 results Third consecutive quarter of positive operating cash flow, before changes in working capital Third consecutive quarter of positive net income #1 indoor flower wholesaler in Oregon, according to LeafLink’s MarketSpace data Named fastest growing brand in Oregon during January, according to LeafLink; the third time in five months Net assets (excluding intangibles and goodwill) of $8.23M compared to $1.5M in net liabilities in Q1 2021 Closed a non-brokered private placement for gross proceeds of $1.30M which included an investment from Bengal Capital, a venture capital firm with significant cannabis expertise, and the Company’s CEO Subsequent to quarter end, Grown Rogue launched nitrogen sealed pre-rolls in Michigan

“Grown Rogue had a very strong quarter considering Q1 is typically the weakest quarter of our fiscal year”, said Obie Strickler, CEO of Grown Rogue. “Michigan was particularly strong with revenue up 10% quarter over quarter and Michigan state sales down 3% leading to large market share gains during the quarter. With our recent launch of pre-rolls in Michigan and continued build out of our 80,000 square foot facility, we expect further market share gains in 2022. I could not be more proud of our team as we were north of $1M in aEBITDA for the second consecutive quarter and established Grown Rogue as the clear leader in the Oregon flower market, one of the most competitive states in the US. With our industry leading efficiencies and rapidly expanding craft production, we are excited to kick off 2022, where we are focused on continuing to gain market share, by offering consistent quality and service, and launching into additional product categories in our states. We expect additional economies of scale will lower our breakeven costs in 2022, even as our data suggests Grown Rogue has the lowest indoor production breakeven of any public company in the U.S.”

Highlights by State

Oregon Operations

Revenue of $1.39M compared to $0.87M in Q1 2021, an increase of 59% Gross profit, before fair value adjustments, of $0.70M compared to $0.49M in Q1 2021, an increase of 41% Gross margin, before fair value adjustments, of 50.4% Segmented aEBITDA1 of $0.41M and aEBITDA1 margin of 29.4% compared to segmented aEBITDA1 of $0.05M and aEBITDA1 margin of 4.8% in Q1 2021 Average selling price of indoor whole flower of $781/pound Indoor production run rate expected to increase to 1,000 pounds in Q2 2022 #1 indoor flower wholesaler in Oregon, according to LeafLink’s MarketSpace data Named fastest growing brand in Oregon during January, according to LeafLink, and the third time in five months

Michigan Operations

Revenue of $2.34M compared to pro-forma2 revenue of $1.13M in Q1 2021, an increase of 108% Gross margin, before fair value adjustments, of 57.0% Segmented aEBITDA1 of $1.02M and aEBITDA1 margin of 43.5% compared to pro-forma2 segmented aEBITDA1 of $0.2M and aEBITDA1 margin of 18.8% Average selling price of indoor whole flower of $1,322/pound Indoor production run rate expected to increase to 750 pounds/month in Q2 2022 Top 10 flower wholesaler in Michigan, according to LeafLink’s MarketSpace data Subsequent to quarter end, Grown Rogue launched nitrogen sealed pre-rolls

 

January 31, 2022

October 31, 2021

 

$

$

ASSETS

 

 

Current assets

   

Cash

1,607,878

1,114,033

Accounts receivable

1,029,971

739,248

Biological assets

1,521,500

1,188,552

Inventory

3,808,761

3,306,312

Prepaid expenses and other assets

299,013

357,541

Total current assets

8,267,123

6,705,686

Marketable securities

426,823

610,092

Other investments and purchase deposits

750,000

750,000

Property and equipment

6,392,274

5,742,584

Intangible assets and goodwill

399,338

399,338

TOTAL ASSETS

16,235,558

14,207,700

LIABILITIES

 

 

Current liabilities

 

 

Accounts payable and accrued liabilities

1,910,861

1,766,707

Current portion of lease liabilities

1,117,642

624,935

Current portion of long-term debt

1,192,916

843,900

Business acquisition consideration payable

360,000

358,537

Interest payable

15,000

13,750

Unearned revenue

49,007

-

Income tax

269,133

254,631

Total current liabilities

4,914,559

3,862,460

Accrued liabilities

60,514

123,413

Lease liabilities

1,589,584

1,735,503

Long-term debt

1,046,259

1,365,761

TOTAL LIABILITIES

7,610,916

7,087,137

EQUITY

 

 

Share capital

21,845,062

20,499,031

Shares issuable

35,806

74,338

Contributed surplus

6,462,732

6,407,935

Accumulated other comprehensive income (loss)

(104,036)

(90,378)

Accumulated deficit

(22,213,515)

(21,804,349)

Equity attributable to shareholders

6,026,049

5,086,577

Non-controlling interest

2,598,593

2,033,986

TOTAL EQUITY

8,624,642

7,120,563

TOTAL LIABILITIES AND EQUITY

16,235,558

14,207,700

 

Three months ended January 31,

 

2022

2021

 

$

$

Revenue

   

Product sales

3,732,713

874,824

Service revenue

-

176,361

Total revenue

3,732,713

1,051,185

Cost of goods sold

   

Cost of finished cannabis inventory sold

(1,699,026)

(470,554)

Cost of service revenues

-

(84,153)

Gross profit, excluding fair value items

2,033,687

496,478

Realized fair value amounts in inventory sold

(1,010,478)

(169,328)

Unrealized fair value gain (loss) on growth of biological assets

1,289,514

(186,806)

Gross profit

2,312,723

140,344

Expenses

   

Accretion expense

151,687

248,357

Amortization of intangible assets

-

4,997

Amortization of property & equipment

52,010

38,155

General and administrative

1,603,926

666,739

Share-based compensation

18,487

88,438

Total expenses

1,826,110

1,046,686

Gain (loss) from operations

482,593

(906,342)

Other income and (expense)

   

Interest expense

(114,660)

(8,527)

Other income

(5,440)

-

Gain on debt settlement

-

16,623

Unrealized gain (loss) on marketable securities

(167,804)

302,808

Unrealized loss on derivative liability

-

(319,627)

Gain (loss) on disposal of property and equipment

(6,250)

-

Gain from operations before taxes

192,459

(915,065)

Income tax

(37,018)

-

Net income (loss)

155,441

(915,065)

Other comprehensive income (items that may be subsequently

reclassified to profit & loss)

   

Currency translation

(13,658)

(75,934)

Total comprehensive income (loss)

141,783

(990,999)

Gain (loss) per share attributable to owners of the parent – basic & diluted

-

(0.01)

Weighted average shares outstanding – basic & diluted

164,976,815

108,038,431

Net income (loss) for the period attributable to:

   

Non-controlling interest

564,607

4,896

Shareholders

(409,166)

(919,961)

Net income (loss)

155,441

(915,065)

Comprehensive loss for the period attributable to:

   

Non-controlling interest

564,607

4,896

Shareholders

(422,824)

(995,895)

Total comprehensive income (loss)

141,783

(990,999)

Quarter ended January 31, 2022

Oregon

Michigan

Corporate

Consolidated

Sales revenues

1,388,945

2,343,768

-

3,732,713

Costs of goods sold, excluding fair value adjustments

(691,311)

(1,007,715)

-

(1,699,026)

Gross profit (loss) before fair value adjustments

697,634

1,336,053

-

2,033,687

Net fair value adjustments

474,511

(195,475)

-

279,036

Gross profit

1,172,145

1,140,578

-

2,312,723

Operating expenses:

-

     

General and administration

341,037

739,196

523,693

1,603,926

Depreciation and amortization

7,041

19,166

25,803

52,010

Share based compensation

-

-

18,487

18,487

Other income and expense:

 

-

-

-

Gain on sale of assets

6,250

-

-

6,250

Interest and accretion

77,387

74,494

114,466

266,347

Unrealized loss (gain) on marketable securities

-

-

167,804

167,804

Other income and expense

-

-

5,440

5,440

Net income (loss) before tax

740,430

307,722

(855,693)

192,459

Tax

2,951

34,067

-

37,018

Net income after tax

737,479

273,655

(855,693)

155,441

 

Three months ended

 

January 31,

Adjusted EBITDA Reconciliation

2022 ($)

2021 ($)

Net income (loss), as reported

155,441

(915,065)

Add back realized fair value amounts included in inventory sold

1,010,478

169,328

Add back (deduct) unrealized fair value gain (loss) on growth of biological assets

(1,289,514)

186,806

Add back amortization of property & equipment included in cost of sales

147,463

159,545

 

23,868

(399,386)

Add back interest and interest accretion expense, as reported

266,347

256,884

Add back amortization of intangible assets, as reported

-

4,997

Add back amortization of property and equipment, as reported

52,010

38,155

Add back share-based compensation

62,296

132,448

Add back (deduct) unrealized loss (gain) on marketable securities, as reported

167,804

(302,808)

Add back (deduct) unrealized loss (gain) on derivative liability

 

319,627

Add back income tax expense

37,018

-

EBITDA before other adjustments

609,343

49,917

Performance incentive bonus payment

179,685

-

Severance and inactive employee compensation

61,077

-

Business development incentive bonus

153,825

-

Adjusted EBITDA


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