TORONTO, Oct. 27, 2023 (GLOBE NEWSWIRE) -- Lifeist Wellness Inc. (“Lifeist” or the “Company”) (TSXV: LFST) (FRANKFURT: M5B) (OTCMKTS: LFSWF), a health-tech company that leverages advancements in science and technology to build breakthrough companies that transform human wellness, today reported its financial results for the three months ended August 31, 2023 (“Q3 2023”) compared to the same period last year (“Q3 2022”). All financial figures are in Canadian dollars unless otherwise indicated.
Third Quarter
- Net revenue of $4.8 million in Q3 2023 compared to $6.8 million in Q3 2022.
- The strategic focus on high margin activities and operational efficiency continues to pay off with gross margins improving to 30% in Q3 2023 compared to 20% in Q3 2022.
- Gross profit before inventory adjustment increased slightly to $1.4 million.
- Operating costs and professional fees drop 21.4% to $3.1 million in Q3 2023 compared to $3.8 million in Q3 2022.
"Our steadfast commitment to transforming Lifeist into a diversified wellness company with high-margin business units remains on track," said Meni Morim, CEO of Lifeist. "Our third-quarter performance, while presenting unique challenges, underscores our unwavering dedication to continuous improvement and efficiency. We have shifted our primary focus to gross profit enhancement, rather than simply revenue growth, and together with cost efficiency measures in Q3 2023, such actions yielded promising results. With this strategic shift in focus, we will be better positioned to weather industry fluctuations, foster profitability, and deliver sustainable growth. We look forward to communicating our progress within our business units as we continue to navigate the challenging path forward."
Financial Summary
Net revenue was $4.8 million in Q3 2023 compared to $6.8 million in Q3 2022 due to supply chain challenges impacting CannMart’s cannabis revenue in Q3 2023, as compared to Q3 2022.
Gross profit before inventory adjustment increased 2.9% to $1.4 million in Q3 2023 versus the same period last year, with margins expanding to 30% in Q3 2023 from 20% in Q2 2023. The increase in margins in Q3 2023 as compared to Q3 2022 reflects the success of the Company’s strategic focus on individual segments, geographies, and products, as well as a continuous effort to improve production efficiencies across all segments.
Adjusted EBITDA loss increased to $2.1 million in Q3 2023 compared to $1.2 million in Q3 2022 and net loss from continuing operations was $2.4 million, or ($0.005) per diluted share, in Q3 2023 compared to a loss of $1.9 million, or ($0.005) per share, in Q3 2022. The increase in both adjusted EBITDA loss and net loss was due largely to a significant one-time gain recorded in Q3 2022 relating to the termination of a distribution agreement. Excluding this one-time gain adjusted EBITDA and net loss improved year over year.
Balance Sheet and Cash Flow
Cash and cash equivalents were $1.4 million at August 31, 2023, compared to $3.8 million at November 30, 2022.
Inventories were $5.6 million at August 31, 2023 compared to $4.5 million at November 30, 2022.
The working capital position was $3.7 million at August 31, 2023.
Net cash used by operations was $1.5 million in Q3 2023 compared to $3.2 million in Q3 2022, due in part to lower revenue from CannMart and reductions in overall operating costs.
Additional Information
The Company’s complete financial statements and management’s discussion & analysis (“MD&A”) for Q3 2023 are available on Lifeist’s website (www.lifeist.com) and SEDAR+ (www.sedarplus.ca).
About Lifeist Wellness Inc.
Sitting at the forefront of the post-pandemic wellness revolution, Lifeist leverages advancements in science and technology to build breakthrough companies that transform human wellness. Portfolio business units include: CannMart, which operates a B2B wholesale distribution business facilitating recreational cannabis sales to Canadian provincial government control boards; CannMart Labs, a BHO extraction facility for the production of high margin cannabis 2.0 products; Aus Vapes, Australia’s largest online retailer of vaporizers and accessories; and Mikra, a biosciences and consumer wellness company seeking to develop innovative therapies for cellular health.
Information on Lifeist and its businesses can be accessed through the links below:
www.lifeist.com
www.cannmart.com
www.australianvaporizers.com.au
www.wearemikra.com
Contacts
Meni Morim, CEO
Lifeist Wellness Inc.
Tel: 647-362-0390
Email: ir@lifeist.com
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release or has in any way approved or disapproved of the contents of this press release.
Non-IFRS Financial Measures
Management evaluates the Company’s performance using a variety of measures, including “Net loss before income tax, depreciation and amortization” and “Adjusted EBITDA”. The non-IFRS measures discussed below should not be considered as an alternative to or to be more meaningful than revenue or net loss. These measures do not have a standardized meaning prescribed by IFRS and therefore they may not be comparable to similarly titled measures presented by other publicly traded companies and should not be construed as an alternative to other financial measures determined in accordance with IFRS.
The Company believes these non-IFRS financial measures provide useful information to both management and investors in measuring the financial performance and financial condition of the Company.
Management uses these and other non-IFRS financial measures to exclude the impact of certain expenses and income that must be recognized under IFRS when analyzing consolidated underlying operating performance, as the excluded items are not necessarily reflective of the Company’s underlying operating performance and make comparisons of underlying financial performance between periods difficult. From time to time, the Company may exclude additional items if it believes doing so would result in a more effective analysis of underlying operating performance. The exclusion of certain items does not imply that they are non-recurring.
(i) Current and deferred income taxes, depreciation and amortization, and share-based compensation were excluded from the Adjusted EBITDA calculation as they do not represent cash expenditures.
(ii) Other income consisting of gain on disposal of subsidiary, interest income, realized gain on disposition of AFS investments, unrealized gain on derivatives and other miscellaneous non-recurring income were excluded from Adjusted EBITDA calculation.
(iii) Non-recurring costs related to restructuring and legacy issues were excluded from Adjusted EBITDA calculation.
(iv) Impairment loss relating to goodwill, customer list, domains and brand names were excluded from Adjusted EBITDA calculation.
(v) Impairment loss relating to receivable is a provision for expected credit loss to an associate and was excluded from Adjusted EBITDA calculation.
(vi) Share of associates loss, net of tax, is excluded due to lack of control.
Forward Looking Information
This news release contains “forward-looking information” within the meaning of applicable securities laws. All statements contained herein that are not historical in nature contain forward-looking information. Forward-looking information can be identified by words or phrases such as “may”, “expect”, “likely”, “should”, “would”, “plan”, “anticipate”, “intend”, “potential”, “proposed”, “estimate”, “believe” or the negative of these terms, or other similar words, expressions and grammatical variations thereof, or statements that certain events or conditions “may” or “will” happen.
The forward-looking information contained herein, including, without limitation, statements related to: the Company’s continuing focus and future actions to foster profitability and deliver sustainable growth, and its expectations from such actions to increase revenue growth and profitability are made as of the date of this press release and is based on assumptions management believed to be reasonable at the time such statements were made, including, without limitation, Lifeist’s ability to realize the anticipated benefits from focusing on gross profit enhancement, the Company’s expectation that the nutraceutical and wellness market will continue to develop as currently anticipated, the nutraceutical market will continue to be a multi-billion dollar high-margin market, the introduction of new products and brands will generate additional revenue, expectations that the Company’s current and future products will gain market acceptance, as well as other considerations that are believed to be appropriate in the circumstances. While we consider these assumptions to be reasonable based on information currently available to management, there is no assurance that such expectations will prove to be correct. By its nature, forward-looking information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. A variety of factors, including known and unknown risks, many of which are beyond our control, could cause actual results to differ materially from the forward-looking information in this press release. Such factors include, without limitation: the inability of the Company to develop its business as anticipated and to increase revenues and/or its profitable margin on such revenues, unanticipated changes to current regulations that would adversely impact the Company’s businesses, the unanticipated decline in demand for cannabis products, competition from others, the risk that the expected demand for nutraceutical products in general and those of Mikra in particular does not develop as anticipated, regulatory risk, risks relating to the Company’s ability to execute its business strategy and the benefits realizable therefrom and risks specifically related to the Company’s operations. Additional risk factors can also be found in the Company’s current MD&A which has been filed under the Company’s SEDAR+ profile at www.sedarplus.ca. Readers are cautioned not to put undue reliance on forward-looking information. The Company undertakes no obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable law. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement.
Source: Lifeist Wellness Inc.
