1933 Industries Reports Fourth Quarter and 2023 Year-End Financial Results and Posts Record Revenues of $18.3 Million
VANCOUVER, BC / ACCESSWIRE / November 28, 2023 / 1933 Industries Inc. (the "Company" or "1933 Industries") (CSE:TGIF)(OTCQB:TGIFF), a Nevada-focused cannabis cultivator and producer, is pleased to announce its fourth quarter ("Q4 2023") and audited annual financial results for the year ended July 31, 2023 ("Fiscal 2023"). All amounts expressed are in Canadian dollars.
The Company owns 91% of Alternative Medicine Association (AMA), the Company's cultivation and production subsidiary focused on the medical and adult-use cannabis market, and 100% of consumer-packaged goods manufacturer Infused MFG LLC (Infused). The Company's revenue is derived from wholesale cannabis sales in Nevada (AMA), and from the sale of hemp-derived wellness products (Infused) under the Canna Hemp™ brand sold across the US via e-commerce at cannahemp.com
Management Commentary
"We are pleased to report record revenues of $18.3 million for fiscal 2023, a 46% increase from fiscal 2022", said Mr. Paul Rosen, Chairman and CEO of the Company. "We are encouraged by this milestone accomplishment, achieved despite experiencing a considerable disruption in our cultivation facility during the 3rd and 4th quarters while the Company upgraded and retrofitted its facility, which significantly reduced overall revenue during those two quarters. With those upgrades now completed, we remain focused on continuing to increase overall revenue, while also remaining committed to fine tuning our operations and continuing to cut costs. We anticipate that our disciplined approach will allow us to pursue additional growth opportunities in the future."
Fiscal 2023 and 2022 Consolidated Operating Financing Highlights
Total revenues increased by 46% to $18.3 million in fiscal 2023 from $12.5 million in fiscal 2022. AMA revenues increased by 56% during the reporting period, from $10.9 million in fiscal 2022 to $16.8 million in fiscal 2023.
Expenses were $12.8 million for fiscal 2023 compared to $20.2 million for fiscal 2022, including a non-cash goodwill impairment relating to AMA of $4.6 million.
Gross profit, excluding fair value adjustments, was $0.6 million for fiscal 2023, compared to $3.2 million during the same period in fiscal 2022. Gross profit, after fair value adjustments, was a loss of $0.6 million for fiscal 2023 and a profit of $2.7 million for fiscal 2022. The decrease in gross profit was due to increased production and cultivation costs, delayed harvests, and lower yields while the Company upgraded and retrofitted the building's complex irrigation and humidification systems during the reporting period.
Net loss and adjusted EBITDA were a loss of $14.0 million and $7.6 million, respectively, for fiscal 2023, largely attributed to the infrastructure updates to the cultivation facility, compared to a loss of $18.1 million and $4.8 million, respectively, for fiscal 2022.
Basic and diluted net loss per share was $0.03 for fiscal 2023, compared to $0.04 for fiscal 2022.
Cash was $1.1 million at the end of the reporting period, compared to $0.3 million in fiscal 2022.
Q4 2023 Compared to Q4 2022 Financing Highlights
Q4 2023 revenues increased to $5.6 million from $2.6 million during the comparable period. The 115% increase in revenue in the current period was primarily due to an increase in AMA revenues resulting from the completion of the retrofit and upgrades to the cultivation facility, and from the plant operating at full capacity. AMA generated significant revenue from the sale of whole cannabis flower.
Gross profit was $0.1 million in the current period compared to a gross loss of $1.9 million in the prior year comparable period.
Expenses were $9.2 million in Q4 2023 compared to $2.2 million in Q4 2022. Included in the increase were higher G&A expenses, a $4.6 million goodwill impairment, higher license fees, taxes, insurance, legal and auditing fees, and increased share-based compensation due to the timing of the vesting of previously issued stock options.
Outstanding Debentures
On November 14, 2023, Holders of 10% Senior Unsecured Convertible Debentures Due December 31, 2023, approved a proposed amendment, which authorizes the Company to pursue at its discretion one of the following settlement options:
The extinguishment of the Debentures upon maturity and the principal debt owed thereunder, excluding any interest in arrears, through the issuance of a new 10% unsecured convertible debenture (the "New Debenture") with a two year maturity, convertible into units at a price of $0.05 per unit, each unit comprising one common share of the Company and one share purchase warrant, subject to certain acceleration provisions as more particularly defined in the indenture governing the New Debenture, or
The extinguishment of the convertible debentures upon maturity, principal debt and excluding interest in arrears, through the issuance of a Unit to the Debenture holders, each Unit being issued at a deemed price of $0.02 per $1.00 of principal, and one share purchase warrant exercisable into one additional common share of the Company at a price of $0.05 for a period of five years from the date of issuance.
As at the date of these financial statements, the Company has not yet determined which settlement option it will choose.
Financial statements are prepared in accordance with International Financial Reporting Standards. Detailed information regarding the Company's financial results as well as management's discussion and analysis can be found at https://sedar.com/ and https://1933industries.com/investors/financial-information
Please note the next financial release dates in accordance with the continuous disclosure schedule set out by the British Columbia Securities Commission:
2023 Financial Release Dates | |
Reporting Quarter | Release Date |
Q1/2024 | January 1, 2024 |
Q2/2024 | April 2, 2024 |
Q3/2024 | July 2, 2024 |
Q4/YE 2024 | November 28, 2024 |
About 1933 Industries Inc.
1933 Industries is a Nevada-based company, focusing on the cultivation and manufacturing of a large portfolio of cannabis consumer-packaged goods in a variety of formats for both the wholesale and retail markets. Its product offerings through its in-house brands include: wholesale flower, pre-rolls, and extracted products under the AMA and Level X brands for the Nevada market; and Canna Hemp™, a national cannabidiol (CBD) brand of wellness products that includes tinctures, gummies, topicals and sports recovery products. The Company owns 91% of Alternative Medicine Association, LC (AMA) and 100% of Infused MFG LLC (Infused). For more information, please visit www.1933industries.com
For further information please contact:
Alexia Helgason, VP, IR, Marketing, Media
604-728-4407
Paul Rosen, CEO
paul@1933industries.com
Neither the Canadian Securities Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this release.
Notice regarding Forward Looking Statements: This news release contains forward-looking statements. The use of any of the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe" and similar expressions are intended to identify forward-looking statements. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. These statements speak only as of the date of this news release. Actual results could differ materially from those currently anticipated due to a number of factors and risks including various risk factors discussed in the Company's disclosure documents, which can be found under the Company's profile on www.sedar.com. 1933 Industries undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
SOURCE: 1933 Industries Inc.
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