Entourage Health Corp. (
TSX-V:
ENTG) (
OTCQX: ETRGF) (
FSE:
4WE) ("
Entourage" or the
"
Company"), a Canadian producer and distributor of
award-winning cannabis products, announced today its financial
results for the fiscal year that ended December 31, 2023. The
Company reported a total revenue of $54.1 million, mirroring the
previous year's performance, demonstrating resilience in a
competitive market.
“In 2023, Entourage made significant strides,
advancing production and diversifying our market presence with
innovative products," notes George Scorsis, CEO and Executive
Chair. "Dime Bag’s success is a prime example—quickly rising to
become one of Ontario's fastest-growing pre-roll brands and
maintaining its market leadership for two consecutive quarters.
Driven by surging demand for our products and the effectiveness of
our enhanced business model, we're achieving growth while improving
cost efficiency, firmly establishing ourselves in a favourable
financial position."
Summary of Results
For the Year-Ended |
|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
|
($000’s) |
($000’s) |
Total revenue |
|
54,115 |
54,535 |
Net revenue (less
Excise Tax) |
|
40,713 |
40,892 |
Gross (loss)
before changes in fair value |
|
2,390 |
(9,189) |
Gross margin %
before changes in fair value |
|
5.9% |
(22.5%) |
Loss and
comprehensive loss |
|
(46,168) |
(123,146) |
EBITDA* |
|
(21,320) |
(99,717) |
As at |
|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
|
($000’s) |
($000’s) |
Cash and cash
equivalents |
|
11,154 |
9,075 |
Inventory |
|
10,010 |
14,089 |
Biological
assets |
|
(--) |
696 |
Working
Capital |
|
(146,909) |
(101,794) |
* EBITDA is not a recognized measurement under
International Financial Reporting Standards (“IFRS”) and this data
may not be comparable to data presented by other companies.
Management defines EBITDA as earnings before interest, taxes,
depreciation, and amortization. This data is furnished to provide
additional information and does not have any standardized meaning
prescribed by IFRS. The Company uses this non-IFRS measure to
provide shareholders and others with supplemental measures of its
operating performance. The Company also believes that securities
analysts, investors and other interested parties, frequently use
this non-IFRS measure in the evaluation of companies, many of which
present similar metrics when reporting their results. As other
companies may calculate EBITDA differently than the Company, this
metric may not be comparable to similarly titled measures reported
by other companies. We caution readers that EBITDA should not be
substituted for determining net loss as an indicator of operating
results, or as a substitute for cash flows from operating and
investing activities. See the Company’s management’s discussion and
analysis for the 12 months ended December 31, 2023 (the “2023
MD&A”) for a detailed reconciliation of EBITDA to Net Income /
(Loss). The Company’s financial statements for the 12 months ended
December 31, 2023, and the 2023 MD&A are available on SEDAR+ at
www.sedarplus.ca
"In the past year, we have achieved positive
results that are a solid reflection of the discipline we have put
into our business and the committed work of our team members,"
shared Vaani Maharaj, CFO. "We've fine-tuned our production
methodologies, identified efficiencies, and significantly reduced
expenditures, collectively forging a robust cost-saving framework.
We have also adopted a data-centric strategy, giving insights into
our consumer's evolving preferences and behaviours. The impact is
twofold: we are strengthening customer satisfaction and driving
loyalty while achieving a more agile business."
Full Year 2023 Financial Highlights
- For the twelve months ended
December 31, 2023, Entourage recorded total revenue of $54.1
million, compared to $54.5 million for the fiscal year ended
December 31, 2022. This shows stability despite significant
reductions in operating expenses.
- Cost of Goods Sold (COGS) was
($38.3 million) representing a decrease of 23% compared to the
previous year. Improved inventory management practices, strategic
sourcing, and process optimization contributed to the reduction in
COGS.
- For the twelve months ended
December 31, 2023, gross profit before changes in fair value
increased 126% to $2.4 million from ($9.2 million) in the previous
year. The reduction is attributed to the integration of automation,
premium product offerings, and decreased production costs.
Moreover, the Company has strategically aligned its market
strategies to better adapt to consumer demands, instilling
confidence in its ability to navigate changing market
conditions.
- Selling,
General, and Administrative (SG&A) expenses for 2023 totalled
$26.1 million, compared to $30.3 million in 2022. This significant
decrease was primarily due to the successful implementation of an
organization-wide restructuring plan. This plan, aimed at enhancing
efficiency and streamlining operations, not only contributed to a
decrease in selling expenses, but led to a substantial cut in
overhead costs.
- For the
twelve-month period ended December 31, 2023, the Company's EBITDA
improved by 79% to ($21.3 million) largely due to the
discontinuation of cultivation activities.
Corporate Highlights Year End December
31, 2023
2023 Financial
Restructuring
- In January 2023, the Company secured the second tranche of its
Credit Facility, valued at $15 million, with an affiliate of the
LiUNA Pension Fund of Central and Eastern Canada (“LPF”), as
previously disclosed on October 31, 2022.
- Subsequently, in May 2023, the Company completed the
divestiture of its Strathroy facility. The transaction's net
proceeds were allocated towards reducing the balance of the
Company’s existing senior secured credit facility with Bank of
Montreal (“BMO”). Following this transaction, the outstanding debt,
amounting to approximately $14.6 million, was assumed by LPF,
allowing for the full repayment of BMO.
- The Company was in breach of certain financial covenants and
other obligations under each of its Senior Credit Agreement and
Subordinated Credit Agreement with LPF as of December 31, 2023. The
Company began working collaboratively with LPF to reach an
agreement on refined debt terms. To this end, the Company received
a forbearance letter on November 17, 2023, waiving the Company's
breaches until December 8, 2023, subject to the satisfaction or
waiver of certain conditions. Subsequent to 2023, the Company
continued to work with its secured lender on debt terms and the
forbearance letter was renewed on January 15, 2024, March 8, 2024,
and April 5, 2024, and the extant forbearance letter expires on May
3, 2024.
Strengthened Operations
- The Company's streamlined operations have resulted in
annualized savings of $14.8 million, fuelled by a focused effort to
boost operational performance and continuous improvement.
- The Company's investment in pre-roll automation has
significantly increased production capacity to nearly two million
pre-rolls per month.
- Entourage's move to a third-party supplier was a strategic
decision to enhance financial stability and invest additional
capital in operations, brand awareness, and innovation.
- The Company broadened its international reach, successfully
distributing medicinal cannabis to Australia in partnership with
Lyphe Australia Pty Ltd., part of Lyphe Group Ltd.
Product Innovation and Strategic
Expansion
- In 2023, the
Company expanded its portfolio by launching over 18 innovative SKUs
across the three adult-use brands, including infused pre-rolls and
new cultivars, to meet consumer demand and provide the marketplace
with various product offerings.
- In June 2023, the Company launched
the dynamic brand Dime Bag®, which swiftly rose to become Ontario's
third fastest-growing pre-roll brand for the last two consecutive
quarters.i The Company plans to roll out nationwide throughout
2024.
- In 2023, Color Cannabis
strengthened its market presence by ranking among the top ten
pre-roll brands in Canada, achieving the 6th position.
Additionally, it established itself as the second-leading brand in
the pre-roll category in British Columbia, capturing an 8.5% market
share.
- In 2023, the Company demonstrated
its strong market presence, securing the top 8 position in national
pre-roll sales, and has emerged as the 16th largest Licensed
Producer by retail sales.
Leadership in Medical
- Committed to advancing patient well-being with quality medical
cannabis innovations via Starseed, the Company launched an
exclusive soft gel line in partnership with Irwin Naturals Cannabis
and introduced a controlled delivery inhaler in collaboration with
Remidose, offering medical patients innovative consumption
methods.
- In 2023, Union Benefits expanded the Company’s reach,
integrating a new union group into the proprietary medical cannabis
program. This expansion solidified Starseed’s commitment to
accessible healthcare, bringing the Company’s partnerships to 10
union groups, five insurance providers, and 24 clinics that endorse
the Company’s medical cannabis program.
Company Outlook 2024
The key to Entourage's success in 2024 lies in
the strategic alignment of its brands, the diverse range of its
products, and the dedication of its teams. Navigating the
dynamic cannabis landscape is central to the Company's aim of
achieving year-over-year growth. A key factor in this growth is
Entourage's strategic partnerships with external suppliers. These
partners are meticulously chosen for their commitment to
excellence, efficiency, and their alignment with the Company’s core
values.
The transformative changes implemented in 2023
positively impacted Entourage's business fundamentals as it
improved cost savings, invested in manufacturing, and developed a
data-driven approach, solidifying the Company for sustainable
growth. Entourage carefully analyzes profitability metrics to guide
financial success, ensuring every decision enhances overall
financial health and operational effectiveness.
Despite the challenges of the Canadian cannabis
industry and regulatory complexities, Entourage's resolve remains
optimistic. Through proactive engagement and strategic foresight,
the Company is poised to overcome these hurdles and capitalize on
emerging opportunities, unlocking new avenues for growth and
expansion in the years ahead.
The Company will defer the earnings call for the
fourth quarter and fiscal year 2023 to align with the first quarter
2024 earnings results on or before May 30, 2024.
About Entourage Health
Corp.
Entourage Health Corp. is the publicly traded
parent Company of Entourage Brands Corp., a licence holder
producing and distributing cannabis products for the medical and
adult-use markets. The Company owns and operates a fully licensed
26,000 sq. ft. Aylmer, ON processing facility. With its Starseed
Medicinal medical-centric brand, Entourage has expanded its
multi-channelled distribution strategy. Starseed's industry-first,
exclusive partnership with LiUNA, the largest construction union in
Canada, along with employers and union groups, complements
Entourage's direct sales to medical patients. Entourage's elite
adult-use product portfolio includes Color Cannabis, Saturday
Cannabis – and now Dime Bag and Syndicate – sold across eight
provincial distribution agencies. Exclusive Canadian producer and
distributor of award-winning U.S.-based wellness brand Mary's
Medicinals, sold in both medical and adult-use channels. In
addition, Entourage also entered into an exclusive agreement with
Irwin Naturals, a renowned nutraceutical and herbal supplement
formulator of branded wellness products sold across North
America.
Follow Entourage and its brands
on LinkedIn Instagram: Color
Cannabis, Saturday Cannabis, Starseed, Syndicate, Dime Bag
For additional information or investor or media
inquiries:Catherine FlamanSenior Director, Communications
& Corporate
Affairs416-910-0279catherine.flaman@entouragecorp.com
Forward Looking Information
This press release contains "forward-looking
information" within the meaning of applicable Canadian securities
legislation which are based upon Entourage's current internal
expectations, estimates, projections, assumptions and beliefs and
views of future events. Forward-looking information can be
identified using forward-looking terminology such as "expect,"
"likely," "may," "will," "should," "intend," "anticipate,"
"potential," "proposed," "estimate" and other similar words,
including negative and grammatical variations thereof, or
statements that certain events or conditions "may," "would" or
"will" happen, or by discussions of strategy.
The forward-looking information in this news
release is based upon the expectations, estimates, projections,
assumptions, and views of future events which management believes
to be reasonable in the circumstances. Forward-looking information
includes estimates, plans, expectations, opinions, forecasts,
projections, targets, guidance, or other statements that are not
statements of fact. Forward-looking information necessarily involve
known and unknown risks, including, without limitation, risks
associated with general economic conditions; adverse industry
events; loss of markets; future legislative and regulatory
developments; inability to access sufficient capital from internal
and external sources, and/or inability to access sufficient capital
on favourable terms; the cannabis industry in Canada generally; the
ability of Entourage to implement its business strategies; the
COVID-19 pandemic; competition; crop failure; and other risks.
Any forward-looking information speaks only as
of the date on which it is made, and, except as required by law,
Entourage does not undertake any obligation to update or revise any
forward-looking information, whether as a result of new
information, future events or otherwise. New factors emerge from
time to time, and it is not possible for Entourage to predict all
such factors. When considering this forward-looking information,
readers should keep in mind the risk factors and other cautionary
statements in Entourage’s disclosure documents filed with the
applicable Canadian securities' regulatory authorities on SEDAR+ at
www.sedarplus.ca The risk factors and other factors noted in
the disclosure documents could cause actual events or results to
differ materially from those described in any forward-looking
information.
Third Party Information
This press release includes market and industry data that has
been obtained from third party sources, including industry
publications. The Company believes that the industry data is
accurate and that its estimates and assumptions are reasonable, but
there is no assurance as to the accuracy or completeness of this
data. Third party sources generally state that the information
contained therein has been obtained from sources believed to be
reliable, but there is no assurance as to the accuracy or
completeness of included information. Although the data is believed
to be reliable, the Company has not independently verified any of
the data from third party sources referred to in this press release
or ascertained the underlying economic assumptions relied upon by
such sources.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
i Hifyre data on pre-roll sales encompasses the three-month
period ending December 31, 2023, as well as the subsequent quarter
concluding on March 31, 2024.
Entourage Health (TSXV:ENTG)
過去 株価チャート
から 11 2024 まで 12 2024
Entourage Health (TSXV:ENTG)
過去 株価チャート
から 12 2023 まで 12 2024