Fire & Flower books $22.3M loss for Q4
Loss comes in part from impairment and restructuring charges
Michelle Gamage
Cannabis retailer Fire & Flower Holdings Corp. (TSX: FAF) booked a net loss of $22.3 million through impairment and restructuring charges for the quarter ended Feb. 1, 2020.
Company shares sank 3 per cent on the news to $0.62 per share Thursday, and fell a further 10 per cent on Friday morning to $0.56.
For Q4, Fire & Flower brought in a total revenue of $16.8 million at a gross profit of 36.6 per cent, which was up from $13.7 million in revenue, with a gross profit of 34.7 per cent for the previous quarter, the company said in a statement Thursday.
Read more: Fire & Flower will no longer cover its windows, says it promotes theft
But the company took on a $6.5 million restructuring charge and a $4.6 million impairment charge to write down certain long-term assets, which booked an overall loss.
The company also closed a strategic investment with Alimentation Couche-Tard, Inc., known in English Canada as Mac’s, of $25.9 million. This will give Couche-Tard a controlling interest in Fire & Flower if it exercises or converts all of the issued securities.
For fiscal year ended Feb. 1, 2020, the company reported revenue of $51.1 million at a gross profit of 36.4 per cent.
Fire & Flower said it met its goal of having 45 stores open by the end of the fiscal year. In a February interview, Fire & Flower VP Nathan Mison told Mugglehead the company is aiming to have 85 stores open by the end of 2020 and 135 stores open by the end of 2021.
Flowr also reports losses
Small licensed producer The Flowr Corp. (TSX: FLWR) also reported a $27 million loss for the quarter in its Wednesday earnings report.
Flowr reported a gross revenue of $1.6 million for the quarter ended Dec. 31, 2019, in a press release. For 2019, the company said it sold 993 kilograms, with an annual gross revenue of $8.2 million.
For Q4, Flowr said it harvested 3,985 kilograms from its two facilities, and sold 251 kilograms of cannabis with an average price of $6.10 per gram. Excluding wholesale sales, the price per gram inched up to $6.61 per gram.
Earlier today we shared that we have closed our previously announced non-brokered private placement for gross proceeds of CAD$20 million. Discover more: fal.cn/37Mhw #CultivateBetter #Cannabis #CannabisBusiness
To strengthen its finances, the company said it closed a non-brokered $20 million convertible debenture April 27, 2020, lead by company CEO Vinay Tolia, who committed over $10 million.
Company stock rose a couple cents on the news but sank back to $0.64 a share Thursday.
Top image via unaffiliated Cannabis NB
michelle@mugglehead.com
@missmishelle
