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CALGARY, AB, Sept. 17, 2024 /CNW/ - Simply Solventless Concentrates Ltd. (TSXV: HASH) ("SSC") is pleased to provide Q3 2024 gross revenue, adjusted EBITDA and normalized net income guidance including record projected quarterly gross revenue and the continuation of SSC's quarterly positive adjusted EBITDA and normalized net income streak to ten and eight quarters respectively. SSC is also pleased to announce its upcoming product launches.
Jeff Swainson, President and CEO of SSC, stated: "Q3 2024 is shaping up to be a transformative quarter for SSC with strong organic revenue growth in Astrolab, Frootyhooty and Lamplighter being complimented by the closing of our CannMart Inc. acquisition on September 12, 2024. The deployment of capital into CannMart Inc.'s Roilty and Zest Cannabis inventory is ramping revenue, and material cost reductions are being achieved through our CannMart restructuring efforts. Overall, Q3 2024's projected annualized gross revenue, adjusted EBITDA and normalized net income of $28,000,000, $4,000,000, and $3,600,000 respectively. SSC's projected September 2024 annualized gross revenue of $33,000,000 demonstrates our current revenue growth trajectory as we continue towards our goal of $40,000,000 annualized gross revenue, $6,200,000 annualized adjusted EBITDA and $6,000,000 annualized normalized net income."
Adjusted EBITDA and normalized net income are non-IFRS measures. See Non-IFRS Financial Measures, below.
Q3 2024 Guidance
SSC projects record quarterly gross revenue during Q3 2024 of approximately $7,000,000 (Q2 2024 - $4,232,663, Q3 2023 - $1,479,055), representing growth rates of 65% quarter over quarter and 373% compared to the same quarter last year. SSC's projected revenue growth is attributable to the organic growth of SSC's brands Astrolab and Frootyhooty and SSC's acquisition of CannMart Inc., including the brands Roilty and Zest Cannabis, on September 12, 2024.
SSC projects Q3 2024 adjusted EBITDA of approximately $1,000,000 (Q2 2024 - $952,986, Q3 2023 - $270,009) (see Non-IFRS Financial Measures, below), representing growth rates of 5% quarter over quarter and 270% compared to the same quarter last year, and normalized net income of approximately $900,000 (Q2 2024 - $890,815, Q3 2023 - $190,896) (see Non-IFRS Financial Measures, below), consistent with the prior quarter and a growth rate of 372% compared to the same quarter last year.
During Q3 2024 SSC has had slightly lower B2B and tolling revenue compared to Q2 2024 due to seasonality, as Q3 has historically lower B2B and tolling sales. This is expected to slightly reduce gross margins for Q3 2024. B2B and tolling revenue is expected to return to Q2 2024 levels during Q4 2024. SSC also expects that cost synergies related to the acquisition of CannMart Inc. will be fully realized by early Q4 2024, contributing to profitability.
SSC's streak of positive adjusted EBITDA and normalized net income is expected to extend to ten and eight quarters respectively.
Year to Date (Nine Months Ended September 30, 2024)
On a year-to-date basis, SSC projects record gross revenue for the nine months ended September 30, 2024 of approximately $14,354,895 (September 30, 2023 - $5,182,777), representing a growth rate of 177% compared to the same period in the prior year, adjusted EBITDA of approximately $2,564,557 (September 30, 2023 - $2,166,876) (see Non-IFRS Financial Measures, below), representing a growth rate of 18% compared to the same period in the prior year, and normalized net income of approximately $2,337,230 (September 30, 2023 - $1,869,706) (see Non-IFRS Financial Measures, below), representing a growth rate of 25% compared to the same period in the prior year.
Upcoming Product Launches
SSC is pleased to announce that it is launching 27 new products in Alberta in the near future, as follows:
SSC is also pleased to announce the following two products that are being launched in Ontario in November 2024:
About Simply Solventless Concentrates Ltd.
SSC is a public company incorporated under the Business Corporations Act (Alberta). SSC's mission is to provide pure, potent, terpene-rich ready to consume cannabis products to discerning cannabis consumers. For more information regarding SSC, please see www.simplysolventless.ca.
SSC has approximately 76.3 million common shares outstanding (basic), of which approximately 20% are held by insiders. Of SSC's outstanding common shares, approximately 15.7 million (21%) are escrowed pursuant to TSX Venture Exchange policies. Further details with respect to SSC's escrowed securities can be found in SSC's filing statement dated October 31, 2023. Information related to Q2 2024, including SSC's financial statements and MD&A, are available on SSC's SEDAR+ profile at www.sedarplus.ca.
Notice on Forward Looking Information
This press release contains forward-looking statements and forward-looking information (collectively, "forward-looking statements") within the meaning of applicable securities laws. Any statements that are contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "will", "estimates", "believes", "intends", "expects", "projected", "approximately" and similar expressions which are intended to identify forward-looking statements. More particularly and without limitation, this press release contains forward looking statements concerning SSC's expected results for Q3 2024, SSC's goals for annualized revenue by 2023 exit, the synergies expected from integrating CannMart Inc. into SSC's operations, SSC's expected product releases, capitalizing on SSC's business plan and SSC's expected growth, results of operations and performance. SSC cautions that all forward-looking statements are inherently uncertain, and that actual performance may be affected by a number of material factors, assumptions and expectations, many of which are beyond the control of SSC, including expectations and assumptions concerning SSC, the timing and market acceptance of products, competition in SSC's markets, SSC's reliance on customers, fluctuations in interest rates, SSC's ability to maintain good relations with its customers, employees and other stakeholders, changes in law or regulations, SSC's ability to protect its intellectual property, as well as other risks and uncertainties, including those described in SSC's filings available on SEDAR+ at www.sedarplus.ca. The reader is cautioned that assumptions used in the preparation of any forward-looking statements may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted as a result of numerous known and unknown risks, uncertainties and other factors, many of which are beyond the control of SSC. The reader is cautioned not to place undue reliance on any forward-looking statements. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement.
The forward-looking statements contained in this press release are made as of the date of this press release, and SSC does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by securities law.
Future Oriented Financial Information
This press release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about gross revenue, adjusted EBITDA and normalized net income of SSC, which are subject to the same assumptions, risk factors, limitations and qualifications as set forth in the above paragraphs. FOFI contained in this document was approved by management as of the date of this document and was provided for the purpose of providing further information about SSC's future business operations. SSC and its management believe that FOFI has been prepared on a reasonable basis, reflecting management's best estimates and judgments, and represent, to the best of management's knowledge and opinion, the SSC's expected course of action. However, because this information is highly subjective, it should not be relied on as necessarily indicative of future results. SSC disclaims any intention or obligation to update or revise any FOFI contained in this document, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. Readers are cautioned that the FOFI contained in this document should not be used for purposes other than for which it is disclosed herein. Differences in the timing of capital expenditures or revenues and variances in production estimates can have a significant impact on the key performance measures included in SSC's guidance. SSC's actual results may differ materially from these estimates.
Non-IFRS Financial Measures
This press release includes references to "adjusted EBITDA" and "normalized net income", which are not defined under International Financial Reporting Standards (IFRS). The intent of these non-IFRS measures is to provide additional useful information to investors and analysts. These non-IFRS measures do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other entities. As such, these non-IFRS measures should not be considered in isolation or used as a substitute for measures of performance prepared in accordance with IFRS.
Adjusted EBITDA is calculated as income before interest, taxes, depreciation and amortization expenses. Adjusted EBITDA is considered as a useful measure by management of SSC to understand the profitability of SSC excluding the effects of capital structure, taxation and depreciation, but may not be appropriate for other purposes. Adjusted EBITDA is not defined under IFRS and therefore should not be considered an alternative to, or more meaningful than, income (loss) and comprehensive income (loss).
The following table reconciles net income (loss) to EBITDA:
Three months ended |
Six months ended |
|||
Jun 30, 2024 $ |
Jun 30, 2023 $ |
Jun 30, 2024 $ |
June 30, 2023 $ |
|
Net and comprehensive (loss) income |
1,220,798 |
1,161,241 |
1,723,244 |
1,920,070 |
Add (deduct): |
||||
Depreciation and amortization |
13,324 |
11,549 |
26,558 |
22,714 |
Net interest (income) expense |
48,937 |
89,040 |
100,769 |
195,344 |
EBITDA |
1,282,969 |
1,261,830 |
1,850,571 |
2,138,128 |
The following table reconciles net income (loss) to Adjusted EBITDA:
Three months ended |
Six months ended |
|||
Jun 30, 2024 $ |
Jun 30, 2023 $ |
Jun 30, 2024 $ |
Jun 30, 2023 $ |
|
Net and comprehensive (loss) income |
1,220,798 |
1,161,241 |
1,723,244 |
1,920,070 |
Add (deduct): |
||||
Depreciation and amortization |
13,324 |
11,549 |
26,558 |
22,714 |
Net interest (income) expense |
48,937 |
89,040 |
100,769 |
195,344 |
Gain on settlement |
(431,671) |
- |
(431,671) |
- |
Gain on disposal |
- |
(353,833) |
- |
(353,833) |
Share compensation expense |
101,688 |
30,063 |
145,657 |
112,576 |
Adjusted EBITDA |
952,986 |
938,060 |
1,564,557 |
1,896,871 |
Normalized net income is calculated as net income less any gain settlement or disposal, plus the share compensation expense. Normalized Net Income is considered as a useful measure by management of SSC to understand the profitability of SSC excluding the effects of certain non-operating items.
The following table reconciles net income (loss) to Normalized Net Income:
Three months ended |
Six months ended |
|||
Jun 30, 2024 $ |
Jun 30, 2023 $ |
Jun 30, 2024 $ |
Jun 30, 2023 $ |
|
Net and comprehensive (loss) income |
1,220,798 |
1,161,241 |
1,723,244 |
1,920,070 |
Add (deduct): |
||||
Gain on settlement |
(431,671) |
- |
(431,671) |
- |
Gain on disposal |
- |
(353,833) |
- |
(353,833) |
Share compensation expense |
101,688 |
30,063 |
145,657 |
112,576 |
Normalized Net Income |
890,815 |
837,471 |
1,437,230 |
1,678,813 |
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Simply Solventless Concentrates Ltd.
Simply Solventless Concentrates Ltd.: Jeff Swainson, President and CEO, Phone: 403-796-3640, Email: [email protected]
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