Fire & Flower Announces Record 2020 Fiscal and Fourth Quarter Financial and Operational Results

Published: April 28, 2021

Fire & Flower Announces Record 2020 Fiscal and Fourth Quarter Financial and Operational Results

Fire & Flower Holdings Corp., announced its financial and operational results for the fiscal year and quarter ended January 30, 2021.

Financial and Operational Highlights for the 2020 Fiscal Year Ended January 30, 2021

  • Total revenue of $128.1 million at a gross profit of 35.5%, compared to revenue of $51.1 million at a gross profit of 36.4% for the 2019 fiscal year – representing a 150% increase in revenue;
  • Achieved positive Adjusted EBITDA of $0.02 million for the fiscal year 2020;
  • Cash balance of $30.6 million as compared to $22.9 million for fiscal year 2019;
  • Significant 110.4% sequential quarter over quarter growth of high margin revenue sources in the Hifyre™ Digital Retail and Analytics Platform (“Hifyre”), with $6.3 million for the fiscal year 2020;
  • Open Fields distribution business achieved 36.5% sequential quarter over quarter growth and produced $20.3 million in revenue for the fiscal year 2020;
  • Same store sales for the quarter increased 36.8% compared to the fourth quarter of 2019;
  • Closed the acquisition of Friendly Stranger Holdings Corp., a multi-store and multi-banner cannabis retail operator in Ontario. At the Company’s fiscal year end, it had 73 stores open and operating. In Q4 2020, thirteen stores commenced operations under Fire & Flower banners compared to three stores in Q3 2020;
  • Opened two co-located cannabis retail stores with Circle K as part of a pilot program;
  • Completed financings for aggregate gross proceeds of $28 million. Additionally, Alimentation Couche-Tard Inc., through an indirectly wholly-owned subsidiary, exercised its participation rights in respect of the financings;
  • Entered into a commitment letter for an aggregate amount of up to $10 million with an option for an additional $5 million for non-dilutive credit facilities with ATB Financial, a Canadian Schedule One bank;
  • Amended the provisions of certain debentures and forced conversion of all remaining principal amounts and accrued unpaid interest through the issuance of 12,223,638 common shares of the Company;
  • Maintained business continuity during the COVID-19 public health crisis through rapid innovation of the Hifyre Digital Retail and Analytics Platform including the Spark Fastlane™ click-and-collect service, curbside pickup and same-day home delivery in select provinces such as the 14 million person Ontario market;

Subsequent Financial and Operational Highlights post January 31, 2021

  • Entered into strategic licensing partnership and acquisition option with American Acres, which intends to operate dispensaries in CaliforniaArizona and Nevada with the first Fire & Flower branded store expected in Palm Springs, California this year;
  • Submitted an initial application to list its common shares on the Nasdaq exchange;
  • The Company announced the milestone achievement of 250,000 Spark PerksTM members across the Fire & Flower retail network;
  • More than 80 retail stores under four banners across the provinces of AlbertaSaskatchewanManitoba and Ontario and the Yukon territory;
  • Completed a $15 million, low cost, at-the-market equity distribution offering which further strengthened the Company’s balance sheet and positions Fire & Flower for future growth;
  • Announced planned $53 million debt-to-equity conversion which significantly improved the Company’s balance sheet and further reduced interest costs. Circle K owner, Alimentation Couche-Tard’s debenture conversion was $23.6 million, which will bring their equity stake to 19.9%;
  • Hifyre entered into strategic agreement with leading U.S. analytics company BDSA.

Financial Results for the Fourth Quarter period ended January 30, 2021

  • Total revenue of $43.2 million at a gross profit of 38.0%, compared to revenue of $16.8 million at a gross profit of 36.6% for the fourth quarter of 2019;
  • An increase in revenue of 30.5% and an increase of 42.8% in total gross profit dollars compared to the third quarter of 2020;
  • Second consecutive quarter of positive Adjusted EBITDA of $1.5 million as compared to $1.2 million of positive Adjusted EBITDA in the third quarter of 2020 and negative Adjusted EBITDA loss of $5.26 million for the fourth quarter of 2019.

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