Rubicon Organics Inc., a licensed producer focused on cultivating and selling organic certified and premium cannabis, today reported its financial results for the first quarter ended March 31, 2021 (“Q1 2021”). All amounts are expressed in Canadian dollars.
“Rubicon Organics has maintained its market share leadership position in the organic cannabis segment and remains a top selling premium brand in all major Canadian provinces. We remain focused on superior product quality and we have rapidly implemented efficiencies to our production process that position us to maximize our profitability. Our unique expertise in cultivating and marketing premium cannabis remains a significant competitive advantage and we firmly believe we have the right team and the right strategy to deliver long-term value for our shareholders,” said Jesse McConnell, Chief Executive Officer.
Q1 2021 Highlights:
- Earned $4.1 million of net revenue, an increase of $3.7 million versus the prior year;
- Received a Health Canada license amendment which authorizes the direct sale of cannabis topical, edible and concentrate products to provincially authorized distributors/retailers and registered patients;
- Closed a bought deal offering of 6,052,631 units for aggregate gross proceeds of $23.0 million;
- Entered into an agreement with The Valens Company (TSX:VLNS) for organic certified extraction services;
- Received purchase orders from distributors in Ontario, British Columbia, Alberta and Saskatchewan for Wildflower CBD Relief Sticks and Wildflower CBD Cool Sticks; and
- Fully repaid a $5.0 million first mortgage loan that had matured.
Highlights Subsequent to Q1 2021:
- Announced a Cannabis Purchase and Sale Agreement with the YCL for the distribution of its portfolio of cannabis products to consumers in Yukon territory;
- Fully repaid a $3.4 million second mortgage loan that had matured; and
- Fully repaid a $5.0 million second mortgage loan originally due on May 27, 2021.
Q1 2021 Select Financial and Operational Results:
| Three months ended March 31, 2021 $ |
Three months ended March 31, 2020 $ |
Three months ended December 31, 2020 $ |
||||
| Net revenue | 4,110,563 | 454,043 | 4,774,488 | |||
| Other income | — | 131,173 | — | |||
| Loss from continuing operations | (3,987,316 | ) | (3,696,245 | ) | (4,805,606 | ) |
| Loss from discontinuing operations | — | (111,926 | ) | (237,096 | ) | |
| Net loss for the period | (3,987,316 | ) | (3,808,171 | ) | (5,042,702 | ) |
| Adjusted EBITDA* | (3,375,368 | ) | (3,036,260 | ) | (2,958,525 | ) |
| Cash | 20,213,416 | 1,650,313 | 12,136,459 | |||
| Working Capital | 20,534,187 | 2,476,598 | 4,166,180 | |||
* Adjusted EBITDA is a non-GAAP measure that is calculated as earnings (losses) from operations before interest, tax, depreciation and amortization, share-based compensation expense, and fair value changes. See Selected Financial Information in the Q1 2021 Management’s Discussion & Analysis for details on the Adjusted EBITDA calculation.
In Q1 2021, Rubicon Organics earned $4.1 million of net revenue, an increase of $3.7 million from Q1 2020, which is attributable to an increased product offering, including the launch of new brands, and expanded distribution channels across Canada. Net revenue declined $0.7 million from Q4 2020 due to ongoing restrictions by provincial governments on retail store operations.
The Company reported an Adjusted EBITDA loss of $3.4 million in Q1 2021, as compared to a loss of $3.0 million in Q4 2020 and $3.0 million in Q1 2020. The sequential change in Adjusted EBITDA is attributable to the decline in net revenue described above and the variance over the prior year is due to higher operating costs incurred to support the ramp up of the Company’s operations.
The Company reported a net loss of $4.0 million in Q1 2021, as compared to a net loss of $5.0 million in Q4 2020 and $3.8 million in Q1 2020. The sequential change in profitability reflects fair value changes in the Company’s cannabis assets and the year-over-year variance reflects higher net revenue offset by increased production and overhead costs, as well as a foreign currency translations benefit in the prior year.
