Entourage Health Reports Q2 Financial Results with $13.8 Million Record Revenue Representing 92% YOY Increase and Third Consecutive Quarter of Growth

Published: August 11, 2021

Entourage Health Reports Q2 Financial Results with $13.8 Million Record Revenue Representing 92% YOY Increase and Third Consecutive Quarter of Growth

Entourage Health Corp., a Canadian producer and distributor of award-winning cannabis products and brands, announced today its financial results for the three and six months ended June 30, 2021. The Company recorded second quarter 2021 total revenue of $13.8 million and net revenue of $10.6 million, a total revenue increase of 92% and net revenue increase of 81% year-over-year representing higher direct-to-consumer and patient record sales year-over-year from Q1 2020. The Company will host a conference call to discuss the financial highlights for the period today at 10:00 a.m. Eastern Time.

“Our third consecutive quarter of sequential revenue growth is indicative of our strong sales momentum and is a direct result of our strategic business transformation initiatives leveraged to increase market share and improved gross margin performance,” said George Scorsis, Interim CEO and Executive Chair, Entourage. “Our products and brands continued to stand out across Canada, with a combined year-over-year 92% record total revenue increase in adult-use and medical sales. In response to growing market demand for our Color Cannabis, Saturday Cannabis and Starseed brands, we now have over 1,300 SKUs listed nationwide, and our market share increased 55% over the quarter as we captured share from larger producers, demonstrating the value of our products. With our transformation initiatives fully implemented, Entourage has evolved into a performance-driven, quality-obsessed organization. We’re thrilled with our turnaround over the past six months – all of which we expect will contribute to a stand-out year for our shareholders.”

Summary of Results

For the Quarter-Ended June 30, 2021 June. 30, 2020
($000’s) ($000’s)
Total revenue 13,812 7,182
Net revenue 10,604 5,859
Gross (loss) profit before changes in fair value 3,112 (898)
Gross margin % before changes in fair value 29.4% (15.3%)
Income (loss) and comprehensive (loss) (9,951) (8,895)
Adjusted EBITDA* (3,296) (2,106)
As at June 30, 2021 Dec. 31, 2020
($000’s) ($000’s)
Cash and cash equivalents 15,542 22,322
Inventory 33,703 30,665
Biological assets 1,704 1,956
Working Capital 18,132 45,060

*Adjusted 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 Adjusted EBITDA as EBITDA adjusted to exclude interest, tax, and depreciation, stock compensation, fair value changes and other non-cash items, and non-recurring items. 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 Adjusted EBITDA differently than the Company, this metric may not be comparable to similarly titled measures reported by other companies. We caution readers that Adjusted 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 three months ended June 30, 2021 (the “Q2 MD&A”) for a detailed reconciliation of Adjusted EBITDA to Net Income / (Loss). The Company’s financial statements for the three months ended June 30, 2021 and the Q2 MD&A are available on SEDAR at www.sedar.com

“In Q2, our sales and production teams fulfilled record purchase orders from every province, focusing on top-performing products to drive sales resulting in a 148% increase in adult-use revenue and 21% increase in medical sales over previous year with improved gross margin of 29%,” said Beth Carreon, CFO, Entourage. “Going forward – we continue to focus on expanding our product margins and brand footprint into new markets with in-demand dried flower, pre-rolls and vapes – all of which made up 75% of our Q2 total revenue. We expect this will be a key growth segment for the rest of the year which together with our cost management initiatives, and established performance drivers will continue to keep us on the path of profitable growth.”

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