Kiaro Reports 230% Increase in Revenue in Fiscal Year 2021

Published: May 5, 2021

Kiaro Reports 230% Increase in Revenue in Fiscal Year 2021

Kiaro Holdings Corp. announced its fourth quarter and year end financial results for fiscal year 2021 ended January 31, 2021. All amounts, unless specified otherwise, are expressed in Canadian dollars.

“Fiscal year 2021 was a transformational year for Kiaro where we showcased that we are one of the best-in-class cannabis retail operators,” stated Daniel Petrov, Chief Executive Officer of Kiaro. “Our significant revenue growth for fiscal year 2021 reflects the rapid scale of our business segments and the execution capabilities of the entire Kiaro team. Looking ahead into Fiscal 2022, we look forward to the continued engagement from cannabis consumers, growing our brand and market presence, and opportunities for accelerated revenue growth.”

“I want to thank the entire Kiaro team for their effort, dedication and flexibility in the face of the Covid-19 pandemic,” continued Mr. Petrov. “Safety for our staff and customers is our number one priority. Given the changing nature of safety protocols through this difficult time, the Kiaro team has been able to ensure safety while continuing to provide unforgettable customer experiences for all our customers.”

Summary of Fiscal Year 2021 Financial Results

For the twelve months ended January 31, 2021, Kiaro recorded revenues of $17.1 million, comprised of $12.1 million from the retail segment and $5.0 million from the wholesale segment. Comparatively, in the thirteen months ended January 31, 2020, the Company recorded total revenues of $5.2 million, comprised of $3.4 million from the retail segment and $1.8 million from the wholesale segment. The 230% increase in revenue in comparison to the prior year is primarily due to the opening of four new retail locations, same store sales increases and an increase in the total addressable market and market presence for the wholesale segment.

For the twelve months ended January 31, 2021, Kiaro recorded a gross profit of $5.1 million, comprised of $4.6 million from the retail segment and $0.5 million from the wholesale segment. This represents a 292% year over year increase when compared to the thirteen months ended January 31, 2020, where gross profit was $1.3 million.

Total operating expenses for the twelve months ended January 31, 2021, were $8.8 million compared to $9.7 million in the thirteen months ended January 31, 2020. The decrease in operating expenses, despite the addition of four retail stores, is a testament to the management’s controls and efforts towards operational excellence. Salaries and employee benefits decreased as a percentage of revenue to 22% compared to 64% of revenues in the thirteen months ended January 31, 2020.

For the twelve months ended January 31, 2021, Kiaro recorded adjusted EBITDA of negative $0.72 million. Comparatively, in the thirteen months ended January 31, 2020, the adjusted EBITDA was negative $5.9 million. Strong revenue increases combined with fundamental management of operating expenses relative to revenue growth resulted in the improvements towards profitability.

As at January 31, 2021, the Company had positive working capital of $1,108,870 (January 31, 2020 – $2,815,847), however, subsequent to year end, the Company closed a bought deal financing raising gross proceeds of $3,000,000.

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