- Oops!Something went wrong.Please try again later.
CALGARY, Alberta, May 19, 2021 (GLOBE NEWSWIRE) -- Sugarbud Craft Growers Corp. (TSXV: SUGR, SUGR.DB, SUGR.WR, SUGR.WS, SUGR.WT) (OTCQB: SBUDF) ("Sugarbud") is pleased to announce that the Company has recorded its second consecutive quarterly positive EBITDA result in Q1 2021 and the filing of its unaudited condensed consolidated interim financial statements ("Financial Statements") for the three months ended March 31, 2021 and related management's discussion and analysis ("MD&A"). Sugarbud's Financial Statements and MD&A are available on SEDAR at www.sedar.com and on Sugarbud's website here: Sugarbud Q1, 2021 Financials and MD&A
Key Operating Highlights for Q1 2021
Net Revenue Growth | Sugarbud continued the growth of top-line sales in Q1 2021. Net revenue for the quarter ending March 31, 2021 was $518,016, which represents a 50% increase over Q4 2020.
Net Volume Growth | The Company shipped 78,626 grams of dried cannabis in Q1 2021 compared to 52,000 grams in Q4 2020.
Gross Profit Growth | Gross profit before fair market value adjustments was 24% in Q1 2021; 4% higher than Q4 2020.
Price/Gram Stability | Sugarbud bucked the industry-wide trend of average selling price ("ASP") declines in Q1 2021 - evidence that its focus on total quality and value in the premium craft sector is aligned with consumer expectations and demand. Average net selling price per gram remained stable in Q1 2021 at $6.59/g - up marginally ($0.05) from a net ASP of $6.54 in Q4 2020.
Net Profit from Operations | The Company achieved its first net profit from operations during Q1 2021 – a key milestone achieved within the first 9 months of revenue-generating operations.
Material and Consistent Improvements in EBITDA Across the Last 5 Quarters | Sugarbud improved EBITDA in Q1 2021 by 158% over Q4 2020 and by more than $1.76MM over Q1 2020 – the Company's fifth consecutive quarter of EBITDA growth. Sugarbud remains on track for further growth in 2021.
Harvest Consistency | During the three months ended March 31, 2021, the Company successfully completed two harvests - resulting in a total of 288,384 grams harvested. Sugarbud's cultivation and processing operations continue to deliver consistent yields (average 90.5g per plant during Q1 2021) while simultaneously maintaining exceptional terpene content (2-5%) and total potency (THC 19-21%) – a testament to our focus on exceptional genetics, plant health and best practice cultivation and post-harvest processing techniques.
Established Distribution and Reach | Established new supply agreements in the Province of Ontario and the Yukon Territory, as well as entered into a registered medical patient supply agreement with CannMart to provide access to the Company's cannabis products to patients nationwide via CannMart's online medical platform, Vendorlink.
Cannabis 2.0 Launch Acceleration | The Company also entered into a national purchase and supply agreement for the Company's Cannabis 2.0 products with CannMart Inc. in Q1 2021.
Over-Subscribed Public Offering | On March 16, 2021, the Company closed a bought-deal public offering of units for aggregate gross proceeds of $4,600,230.
Upgraded to the OTCQB Venture Market | Subsequent to March 31, 2021, the Company was approved by FINRA for quotation in the United States on the OTCQB Venture Market which the Company expects will help maximize long-term shareholder value by increasing visibility and improving liquidity for investors.
"We are delighted to share another quarter of positive progress against our operating plan – with tangible improvements achieved across all our key operating metrics – most notably revenue growth and gross profit – culminating in our 5th consecutive quarter of EBITDA growth," stated Sugarbud President and CEO, John Kondrosky.
"Despite significant challenges industry-wide, we view our ability to deliver meaningful growth and stability in our Q1 2021 results as a further testament to our disciplined and focused approach to cost management, operational excellence and exceptional, consumer-driven, craft cannabis products," Mr. Kondrosky added.
"Together with continued operating discipline, entry into Ontario, further expansion of our dried cannabis product offerings, the upcoming launch of our Cannabis 2.0 products, and our continuous improvements in cultivation and processing techniques, Sugarbud remains on track to deliver sustainable growth and long-term shareholder value moving forward," concluded Mr. Kondrosky.
On May 17th, 2021, Mr. Joseph Dietrich was appointed as a member of the board of directors of Sugarbud. Mr. Dietrich brings 40+ years of technical, management, investment, and business experience, including practical knowledge of cannabis flower and hashish production, extraction, breeding, and genetics. Mr. Dietrich holds MBA (financing and marketing) and Science degrees, and certificates in cannabis Plant Production & Facility Management and Teaching. Mr. Dietrich also sits on the board of Alberta petroleum producer Concrest Corporation Ltd, and co-founded TSX-listed TDG Gold Corp. Prior to his appointment as a Director, Mr. Dietrich had been a special adviser to the Company.
Sugarbud is an Alberta-based, consumer-driven boutique craft cannabis company focused on the cultivation and production of superior, select-batch, craft cannabis products. Our vision and mission are to become a trusted and well-respected consumer brand renowned for providing exceptional high-quality craft cannabis products to legal markets by delighting the most discerning of cannabis consumers.
The Sugarbud Craft Cannabis Collection offers consumers "Hand-Crafted Cannabis for a New Era". The Company is proudly Albertan and is proud to share Western Canada's long tradition of exceptional craft cannabis with the most discerning of enthusiasts. Sugarbud strives to define the intersection of product craftsmanship, quality, and value for consumers in the Canadian craft cannabis space.
We Take Pride, We Take Our Time…………. Experience the Difference
Forward Looking and Cautionary Statements
This news release contains forward-looking statements. More particularly, and without limitation, this news release contains statements concerning: the Company's business strategy and future operations; ability to cultivate and produce premium cannabis products; the distribution and sale of Sugarbud's cannabis products; future product offerings, including the development, commercialization and sale of Cannabis 2.0 products; and the Company's expectations regarding its revenues generated from sales of the Company's product lines. When used in this document, the words "will," "anticipate," "believe," "estimate," "expect," "intent," "may," "project," "should," and similar expressions are intended to be among the statements that identify forward-looking statements.
The forward-looking statements are founded on the basis of expectations and assumptions made by Sugarbud, including, but not limited to: the success of the Company's business strategy, including organic growth, partnerships and other strategic activities; ability to manage growth in the Company's business; the ability to maintain licenses and necessary approvals for Sugarbud to cultivate cannabis at the Stavely facility; ability to cultivate premium cannabis products; ability to sell cannabis products; access to market for the Company's future cannabis products; impact of increasing competition; ability to keep pace with changing consumer preferences; ability to protect the Company's intellectual property; timing and amount of capital expenditures; operating costs; government regulations, including future legislative and regulatory developments involving recreational and medical cannabis and the timing thereto; changes to laws regarding the recreational and medical use of cannabis and the impact on the Company's business strategy; demand for cannabis products and corresponding forecasted increase in revenues; size of the recreational and medical cannabis markets in Canada; legislative and regulatory environments of the jurisdictions where the Company carries on business; ability of the Company to obtain qualified staff, services, supplies and equipment in a timely and cost-efficient manner; the Company's competitive advantages; and conditions in general economic and financial markets.
Forward-looking statements are subject to a wide range of risks and uncertainties, and although Sugarbud believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will be realized. Any number of important factors could cause actual results to differ materially from those in the forward-looking statements including, but not limited to: the global public health crises in respect of the outbreak of a novel strain of coronavirus (COVID-19), including volatility and disruptions in global supply chains and financial markets, as well as declining trade and market sentiment and reduced mobility of people; success of the operations of the Company; ability of the Company to execute its business strategy; the effect consumer perception of the medical and recreational use of cannabis will have on the market price of cannabis products; the premium segment of the medical and recreational cannabis markets; consumer's attraction to premium cannabis products and changes in consumer preference; development of the cannabis industry in ways that differ from the Company's expectations; legislative and regulatory environments of the jurisdictions where the Company carries on business or has operations; ability of Sugarbud to develop or maintain a brand that attracts or retains customers; any failure by the Company to comply with applicable regulations could prevent it from being able to carry on its business, and there may be additional costs associated with any such failure; federal, provincial and municipal government cannabis regulation and changes thereto; actions taken by governmental authorities, including increases in taxes and changes in government regulations; any failure by the Company or its suppliers to comply with supplier standards established by provincial or territorial distributors could prevent the Company from accessing certain markets in Canada; constraints by law in the Company's ability to market its products in Canada; development of the Stavely facility, including construction delays; availability of sufficient financial resources to fund the Company's capital expenditures; stock market volatility and market valuations; changes in general economic, market and business conditions; the effect of any future litigation proceedings on the Company's business; impact of competition and the competitive response to the Company's business strategy; competition for, among other things, licences, capital, skilled personnel and customers the risks of the cannabis industry, such as regulatory risks and increasing competition; timing and amount of capital and other expenditures; the availability of capital on acceptable terms or at all; cyber-security issues; and, in relation to the Company's expectations regarding revenues, assumptions relating to production and production capacity, growth in the number of product offerings and store locations in which the Company's products are sold, growth in total sales, consumer demand for the Company's products, market pricing of cannabis products, cost of sales, general and administrative expenses (including sales and marketing expenses), the pace of opening of and increase in the total number of recreational cannabis retail stores across Canada, and the total size of the Canadian recreational and medical cannabis markets over that time period. Please refer to Sugarbud's most recent annual information form and management's discussion and analysis for additional risk factors relating to Sugarbud, which can be accessed under Sugarbud's profile on www.sedar.com. Except as required by applicable Canadian securities laws, Sugarbud does not undertake any obligation to publicly update or revise any forward-looking statements.
This news release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about the Company's reasonably estimated prospective results of operations, cannabis production capacity and volumes, ASP, average net selling price per gram, revenue, expenses, profit, EBITDA and components thereof, all of which are subject to the same assumptions, risk factors, limitations and qualifications as set forth in the above paragraphs, including with respect to economic conditions and proposed courses of action, based on management's assessment of the relevant information available as of the date of this news release. Sugarbud disclaims any intention or obligation to update or revise any FOFI contained in this news release, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law.
This news release provides certain financial measures that do not have a standardized meaning prescribed by International Financial Reporting Standards ("IFRS"). These non-IFRS financial measures may not be comparable to similar measures presented by other issuers. EBITDA (meaning earnings before interest, taxes, depreciation and amortization) is not a recognized measure under IFRS. Management uses certain industry benchmarks, such as EBITDA to analyze financial and operating performance. These metrics are useful to investors and research securities analysts in evaluating operating performance. These benchmarks do not have any standardized meaning prescribed by IFRS and therefore may not be comparable with the calculation of similar measures for other entities. Please refer to the MD&A for additional information relating to non-IFRS measures, including the Company's calculation of EBITDA.
Neither the TSXV nor its regulation services provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.