TORONTO, Aug. 29, 2024 (GLOBE NEWSWIRE) -- Red White & Bloom Brands Inc. (CSE:RWB) ("RWB" or the "Company") is pleased to report it has filed its Condensed Interim Consolidated Financial Statements ("the Financial Statements"), Management's Discussion and Analysis ("MD&A"), and associated certifications for its second quarter ended June 30, 2024.
President's Commentary
Colby De Zen, President, stated, "In the second quarter, we made notable strides on several strategic initiatives. We advanced refinancing agreements with our strategic lenders, moved closer to opening five new retail locations in Florida in anticipation of stronger legalization prospects, established key distribution partnerships in California to boost market penetration, and strengthened our vendor relationships. Additionally, we worked to mitigate supply chain risks in Michigan by securing value-added crop commitments for quality biomass."
"These initiatives and investments are expected to drive incremental EBITDA growth in the second half of fiscal 2024. This follows a substantial increase in EBITDA to $7.1 million in the first six months of 2024, representing a year-over-year improvement of over $8 million. Our EBITDA gains for 2024 do not yet include the potential synergies and improvements from the Emblem group of companies, which we expect to impact our results in the latter half of the year."
Mr. De Zen went on to comment that, "RWB management has focused on realigning and strengthening the newly acquired Emblem Cannabis Corporation ("Emblem") and its subsidiaries, with the goal of reinforcing their leadership in the Canadian cannabis industry. We have fostered a new culture centered on growth, profitability, and efficiency. We eliminated several underperforming listings and introduced new product formats, including expanded offerings from Platinum and DIVVY, now available through provincial distributors and our medical platform. Our cultivation operation in Port Perry is on track for its largest and most successful harvest to date, thanks to our cultivation team's dedication and RWB's commitment to funding key milestones. We have significantly improved operational processes at our Paris facility and invested in equipment upgrades, including automation, to enhance production capabilities. Additionally, our commercial teams have fortified relationships with key retailers nationwide, positioning us to leverage cost synergies from our upcoming harvest and processing optimization. We remain committed to cost containment while aligning our operations for sustainable growth and driving additional EBITDA growth from Emblem throughout the second half of 2024 and into 2025 as these initiatives are realized."
Recent business highlights for the Company's second quarter ended June 30, 2024 and subsequent to June 30, 2024
Completed a non-dilutive $5.8 million mortgage financing in June 2024 with a third party Canadian lender to support working capital and capital expenditures for our Emblem group of companies.
In April 2024, Platinum Vape 5/10 distillate cartridges were approved and debuted at all of our active medical retail locations in Florida.
In May 2024, Platinum vape distillate disposables were approved and debuted at all of our active medical retail locations in Florida.
Adult use sales have commenced in Ohio with Platinum Vape products now available in Ohio as part of an executed licensing agreement with a vertically integrated licensed producer and distributor in Ohio.
Since the closing of the RWB acquisition, Emblem Cannabis Corporation has been granted a total of sixty-seven (67) new Platinum and DIVVY product listings in preferred product formats across all provincial distributors, including a total of twenty-eight (28) listings approved by the Ontario Cannabis Store ("OCS") and also eliminated several listings that were negatively impacting profitability.
The Company has made forward-looking investments to secure quality biomass in Michigan for late 2024 / early 2025 deliveries and continues to work on additional opportunities for margin expansion.
Commenced the restructuring of our PharmaCo retail operations in Michigan, including rationalizing all non-profitable operations.
2024 Second Quarter ("2024-Q2") Condensed Interim Consolidated Highlights
Revenues were $22.0 million for 2024-Q2, a $0.3 million increase from restated 2023-Q2 revenues of $21.7 million.
Gross profit, before fair value adjustments, was $6.3 million for 2024-Q2, a $0.2 million decrease from restated 2023-Q2 gross profit before fair value adjustments of $6.5 million.
Gross profit, after fair value adjustments for 2024-YTD was $14.2 million for 2024-YTD, consistent with restated 2023-Q2 gross profit after fair value adjustments of 14.2 million.
EBITDA and Adjusted EBITDA was $2.0 million and $3.6 million, respectively for 2024-Q2, an increase of $2.2 million $5.6 million compared to restated 2023-Q2 EBITDA and adjusted EBITDA of negative $0.2 million and negative $2.0 million, respectively.
EBITDA and Adjusted EBITDA for 2024-YTD was $7.1 million and $5.8 million, respectively, an increase of $8.1 million and $6.7 million compared to restated 2023-YTD EBITDA and adjusted EBITDA of negative $1.0 million and negative $0.9 million, respectively.
The following is a condensed summary of the Company's results from operations for 2024-Q2 and 2024-YTD, and 2023-Q2 and 2023-YTD
2024-Q2
2023-Q2 restated
Variance
2024-YTD
2023-YTD restated
Variance
$
$
$
$
$
$
Revenue
22,022
21,727
295
44,573
48,180
(3,607
)
Gross Profit after fair market value adjustments
10,345
5,877
4,468
14,213
14,230
(17
)
General and administration
8,865
6,732
2,133
17,067
14,277
2,790
Marketing expenses
1,193
561
632
2,455
1,044
1,411
Share-based compensation
57
142
(85
)
106
459
(353
)
Depreciation and amortization
653
1,391
(738
)
1,744
2,038
(294
)
Bad debt expense(i)
731
45
686
2,219
268
1,951
Total operating expenses
11,499
8,872
2,627
23,591
18,086
5,505
Loss from operations before other expenses or income
(1,154
)
(2,995
)
1,841
(9,378
)
(3,857
)
