Inner Spirit Holdings Announces Second Quarter 2020 Financial Results

Published: August 25, 2020

 Inner Spirit Holdings Announces Second Quarter 2020 Financial Results

Inner Spirit Holdings Ltd., a Canadian company that has established a national network of Spiritleaf retail cannabis stores, today announced it has filed its interim Financial Statements and corresponding Management’s Discussion and Analysis for the three months and six months ended June 30, 2020. The filings are available for review on the Company’s SEDAR profile at www.sedar.com and the Company’s website at www.innerspiritholdings.com.

“The Company’s financial results for this year’s second quarter show impressive year over year growth with over $20 million recorded in system-wide retail salesfor the Spiritleaf network. This performance comes at a time when the country is facing ongoing challenges related to the COVID-19 pandemic. The retail cannabis sector has been fortunate to be considered an essential service in our operating markets, and we have been able to continue advancing our business strategy this year. For the second quarter and for the first half year of 2020, we achieved positive Adjusted EDITDA1 and positive cash flow from operations. We know that operating effectively and efficiently will be key in the fast-growing retail cannabis sector, and we like our position and the positive impression we are making on our stakeholders,” said Darren Bondar, President and CEO of Inner Spirit.

Inner Spirit reported the following financial highlights for the three months and six months ended June 30, 2020:

  • System-wide retail sales1 was $20.5 million in the second quarter of 2020, an increase of 343% compared with $4.6 million in the second quarter of 2019 and an increase of 19% compared with $17.1 million in the first quarter of 2020.
  • System-wide retail sales1 was $37.6 million for the first six months of 2020, an increase of 479% compared with $6.5 million in the comparable period in 2019.
  • Total revenue was $5.4 million in the second quarter of 2020, an increase of 575% compared with $0.8 million in the second quarter of 2019 and an increase of 31% compared with $4.1 million in the first quarter of 2020.
  • Total revenue was $9.6 million for the first six months of 2020, an increase of 669% compared with $1.2 million in the comparable period in 2019.
  • Adjusted EBITDA1 was $0.5 million in the second quarter of 2020, compared with an Adjusted EBITDA1 loss of $2.5 million in the second quarter of 2019 and an Adjusted EBITDA1 loss of $0.1 million in the first quarter of 2020.
  • Gross profit was $2.5 million or a gross margin of 47% in the second quarter of 2020, compared with $0.5 million or a gross margin of 57% in the second quarter of 2019 and $2.0 million or a gross margin of 48% in the first quarter of 2020.
  • Total net loss was $1.2 million in the second quarter of 2020, or $0.01 per share, compared with $2.8 million, or $0.02 per share, in the second quarter of 2019.
  • Cash was $3.4 million at June 30, 2020.
  • Cash flow from operations for the first six months of 2020 was positive at $0.03 million compared with cash flow used in operations of $3.70 million in the comparable period in 2019.

The Company has been active with store openings and market expansion activity during the second quarter of 2020 and subsequently. New Spiritleaf stores opened recently bring the number of locations to 58 across the country – the most cannabis stores being operated under a single retail brand in Canada.

“We are continuing to expand the Spiritleaf footprint with recent store openings in AlbertaOntario, and Newfoundland and Labrador. We are able to grow the Spiritleaf network of franchised and corporate-owned stores due to the excellent support and loyalty of our customers, franchise partners, employees, investors and strategic partners. We have built a strong platform that we will further leverage as we expect to add some 20 additional store locations by the end of the year. We are focused on providing a premium and educational shopping experience to consumers and being the knowledgeable, authentic and trusted voice for the cannabis experience in our communities,” said Bondar.

Additional potential store locations have been conditionally secured in British ColumbiaAlbertaSaskatchewanManitobaOntario, and Newfoundland and Labrador. These stores will further solidify Spiritleaf as a true Canadian brand and coast-to-coast retailer. Please visit www.spiritleaf.ca for information on store locations.

Due to the COVID-19 pandemic, Spiritleaf stores are operating with enhanced customer service processes to ensure the safety of employees and customers. Spiritleaf’s Select & Collect service enables customers to pre-shop and order online prior to pick-up in store. Customers can also connect with their local Spiritleaf store through the Collective customer benefits program to further streamline and individualize the shopping experience. The fast-growing Spiritleaf Collective program now has over 95,000 members.

An updated version of Inner Spirit’s investor presentation has been added to www.innerspiritholdings.com/invest/.

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System-wide retail sales and Adjusted EBITDA are Non-IFRS financial measures. For more detail, see the “Non-IFRS Financial Measures” section below.

Inner Spirit Holdings Ltd. (CSE:ISH) is a franchisor and operator of Spiritleaf recreational cannabis stores across Canada. The Spiritleaf network includes franchised and corporate locations, all operated with an entrepreneurial spirit and with the goal of creating deep and lasting ties within local communities.