SIMPLY SOLVENTLESS EXCEEDS GUIDANCE AND ANNOUNCES Q2 2024 RECORD GROSS REVENUE OF $4.23 MILLION, RECORD EBITDA OF $1.3 MILLION, RECORD NET INCOME OF $1.2 MILLION AND ANNUALIZED NET INCOME OF $0.096 PER SHARE
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Q2 2024 Financial Highlights:
-
Q2 2024 Net Income per Share (EPS):
$0.024 (Q1 2024 -$0.01 ), an increase of 140%. -
Q2 2024 Annualized Net Income per Share (EPS):
$0.096 (Q1 2024 -$0.04 ), an increase of 140%. -
Q2 2024 Cash Flow from Operations Before Working Capital Changes:
$952,896 (Q1 2024 -$610,843 ), an increase of 56%. -
Q2 2024 Gross Revenue:
$4,232,663 (Q1 2024 -$3,122,232 ), increase of 36%. -
Q2 2024 Net Revenue:
$2,902,206 (Q1 2024 -$2,298,273 ), an increase of 26%. -
Q2 2024 Gross Margin:
$1,720,920 (Q1 2024 -$1,117,387 ), an increase of 54%. - Q2 2024 Gross Margin Percentage: 59% of net revenue (Q1 2024 – 49%), an increase of 20%.
-
Q2 2024 EBITDA:
$1,282,969 (Q1 2024 -$567,602 ), an increase of 126%. See TABLE 1 below. -
Q2 2024 Adjusted EBITDA:
$952,986 (Q1 2024 -$611,571 ), an increase of 56%. -
Q2 2024 Net Income:
$1,220,798 (Q1 2024 -$502,536 ), an increase of 143%. -
Q2 2024 Normalized Net Income(1):
$890,815 (Q1 2024 -$546,505 ), an increase of 63%. -
Q2 2024 Working Capital(1): 5,909,655 (Q1 2024 -
$4,233,711 ), an increase of 40%. - Q2 2024 Inventory Turnover: 0.48x (Q1 2024 – 0.50x). Expected Q3 2024 inventory turnover of 0.70x and expected Q4 2024 inventory turnover of 1.00x, reflecting planned increases in revenue.
- Q2 2024 Current Ratio: 1.74 (Q1 2024 – 1.64), an improvement of 6%.
-
Q2 2024 Financing: On
April 17, 2024 , SSC issued 5,333,334 units at a price of$0.15 per unit for net proceeds of$800,000 . See the following news release datedApril 17, 2024 for details: OVER SUBSCRIBED$800,000 UNIT FINANCING, which is also available on SSC's SEDAR+ profile at www.sedarplus.ca. -
CannMart Services & Acquisition Agreements: On
June 24, 2024 , SSC entered into services and acquisition agreements regarding the operating and acquisition of CannMart Inc. See the following news release dated June 25, 2024 for details of this transaction: CANNMART SERVICES & ACQUISITION AGREEMENTS, which is also available on SSC's SEDAR+ profile at www.sedarplus.ca. -
Q3 2024 Financing: On
July 17, 2024 , SSC issued 15,400,000 units at a price of$0.25 per unit for gross proceeds of$3,850,000 . See the following news release datedJuly 17, 2024 for details: OVER SUBSCRIBED$3,850,000 UNIT FINANCING, which is also available on SSC's SEDAR+ profile at www.sedarplus.ca. -
Warrant Exercises: Subsequent to Q2 2024 up until
August 14, 2024 , 3,311,959 common share purchase warrants of SSC have been exercised at$0.20 per warrant for proceeds of$662,392 .
(1) Non-IFRS financial measure. See discussion in the Non-IFRS Financial Measures advisories section of this press release below. |
Please see TABLE 1 below for a summary of SSC's quarterly EBITDA, adjusted EBITDA, net income, and normalized net income since SSC received its
TABLE 1: QUARTERLY EBITDA AND |
|||||
Quarter Ended |
EBITDA(1) |
Adjusted |
Net Income (Loss) |
Normalized |
|
|
206,020 |
158,334 |
43,940 |
(3,746) |
|
|
529,645 |
598,201 |
276,898 |
345,454 |
|
|
876,296 |
958,807 |
758,828 |
841,337 |
|
|
1,261,830 |
938,060 |
1,161,241 |
837,471 |
|
|
200,326 |
270,009 |
121,215 |
190,896 |
|
|
(936,605) |
80,050 |
(1,000,968) |
15,687 |
|
|
567,602 |
611,571 |
502,536 |
546,505 |
|
|
1,282,969 |
952,986 |
1,220,798 |
890,815 |
|
(1) |
Non-IFRS financial measure. See discussion in the Non-IFRS Financial Measures advisories section of this press release below. |
(2) |
Q4 2023 negative EBITDA and net loss due to one-time non-recurring expense that was booked related to the go-public transaction ("Go-Public Expense") through Dash Capital Corp. Adjusting for the Go-Public Expense, SSC has been EBITDA positive for eight straight quarters and normalized net income positive for seven straight quarters. |
The financial information in this press release has been reviewed and approved by the board of directors of SSC.
Option Grant
SSC has made its annual grant of incentive stock options to employees, management, and its board of directors. A total of 2,816,000[2] stock options were granted at an exercise price of $0.37 per share and the options expire on August 14, 2027. The option grant remains subject to the final approval of the
About
SSC is a public company incorporated under the Business Corporations Act (
Notice on Forward Looking Information
This press release contains forward-looking statements and forward-looking information (collectively, "forward-looking statements") within the meaning of applicable securities laws. Any statements that are contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "will", "estimates", "believes", "intends", "expects", "projected" and similar expressions which are intended to identify forward-looking statements. More particularly and without limitation, this press release contains forward looking statements concerning capitalizing on opportunities resulting from industry headwinds, finishing the second half of 2024 stronger than the first half of 2024, synergies and cost reductions with CannMart driving profitability, and providing Q3 2024 guidance. SSC cautions that all forward-looking statements are inherently uncertain, and that actual performance may be affected by a number of material factors, assumptions and expectations, many of which are beyond the control of SSC, including expectations and assumptions concerning SSC, the ability to realize expected revenue and cost synergies of the transactions with
The reader is cautioned not to place undue reliance on any forward-looking statements. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement.
The forward-looking statements contained in this press release are made as of the date of this press release, and SSC does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by securities law.
Non-IFRS Financial Measures
This press release includes references to "Working Capital", "EBITDA", "Adjusted EBITDA" and "Normalized Net Income", which are not defined under International Financial Reporting Standards (IFRS). The intent of these non-IFRS measures is to provide additional useful information to investors and analysts. These non-IFRS measures do not have a standardized meaning prescribed by IFRS and is therefore unlikely to be comparable to similar measures presented by other entities. As such, these non-IFRS measures should not be considered in isolation or used as a substitute for measures of performance prepared in accordance with IFRS.
Working Capital is defined as current assets less current liabilities as reported on SSC's consolidated statements of financial position. Working Capital is considered as a useful measure by management of SSC to indicate SSC's ability to service its short-term financial obligations with short-term assets.
EBITDA is calculated as income before interest, taxes, depreciation and amortization expenses. EBITDA is considered as a useful measure by management of SSC to understand the profitability of SSC excluding the effects of capital structure, taxation and depreciation, but may not be appropriate for other purposes.
Adjusted EBITDA is calculated as EBITDA less the sale of SSC's facility and settlement payment(s), plus the acquisition of
Normalized Net Income is calculated as income less the sale of SSC's facility and settlement payment(s), plus the acquisition of
The following table reconciles current assets and current liabilities to Working Capital:
As at, |
|
|
|
|
|
|
|
|
|
Current assets |
13,896,776 |
6,591,243 |
8,419,131 |
8,419,131 |
Current liabilities |
6,767,395 |
3,770,104 |
4,163,379 |
4,725,252 |
Working Capital |
7,129,381 |
2,821,139 |
4,255,752 |
3,693,879 |
The following table reconciles net income (loss) to EBITDA:
|
Three months ended |
Twelve months ended |
||
|
|
|
|
|
|
|
|
|
|
Net and comprehensive (loss) |
1,220,798 |
1,161,241 |
1,040,316 |
(1,683,799) |
Add (deduct): |
|
|
|
|
Depreciation and amortization |
13,234 |
11,549 |
48,207 |
229,854 |
Net interest (income) expense |
48,937 |
89,040 |
313,324 |
261,995 |
EBITDA |
1,282,969 |
1,261,830 |
1,401,847 |
(1,191,950) |
The following table reconciles net income (loss) to Adjusted EBITDA:
|
Three months ended |
Twelve months ended |
||
|
|
|
|
|
|
|
|
|
|
Net and comprehensive (loss) |
1,220,798 |
1,161,241 |
1,040,316 |
(1,683,799) |
Add (deduct): |
|
|
|
|
Depreciation and amortization |
13.234 |
11,549 |
48,207 |
229,854 |
Net interest (income) expense |
48,937 |
89,040 |
313,324 |
261,995 |
Gain on settlement |
(431,671) |
- |
- |
- |
Gain on disposal |
- |
(353,833) |
(417,814) |
- |
Acquisition of |
- |
- |
1,043,909 |
- |
Share compensation expense |
101,688 |
30,063 |
218,984 |
48,607 |
Adjusted EBITDA |
952,986 |
938,060 |
2,246,926 |
(1,143,343) |
The following table reconciles net income (loss) to Normalized Net Income:
|
Three months ended |
Twelve months ended |
||
|
|
|
|
|
|
|
|
|
|
Net and comprehensive (loss) |
1,220,798 |
1,161,241 |
1,040,316 |
(1,683,799) |
Add (deduct): |
|
|
|
|
Gain on settlement |
(431,671) |
- |
- |
- |
Gain on disposal |
- |
(353,833) |
(417,814) |
- |
Acquisition of |
- |
- |
1,043,909 |
- |
Share compensation expense |
101,688 |
30,063 |
218,984 |
48,607 |
Adjusted Net and comprehensive |
890,815 |
837,471 |
1,885,395 |
(1,635,192) |
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.
Neither the
SOURCE