- Total revenue of
$16.4 million represents a 9% increase year-over-year and a 23% sequential increase from Q4 2023. - Gross profit before fair value changes improved by 92% year-over-year, leading to a record gross margin of 45%. This achievement reflects the successful execution of last year’s transformation plans.
- EBITDA improved by
$4.4 million , marking the Company's first positive quarter and resulting in a 114% year-over-year improvement.** - Adult-use revenue reported a 10% increase year-over-year, highlighting expanding market share.
- Management will host a conference call on
May 28, 2024 , at10 a.m. Eastern Time .
“Entourage's first quarter results are a testament to our robust financial health and strategic approach to business operations, positioning us for success throughout 2024,” said
Summary of Results
For the Quarter-Ended | ||||
($000’s) | ($000’s) | |||
Total revenue | 16,418 | 15,107 | ||
*Net revenue (less Excise Tax) | 12,701 | 11,834 | ||
Gross profit before changes in fair value | 5,775 | 3,002 | ||
Gross margin % before changes in fair value | 45% | 25% | ||
Loss and comprehensive loss | (6,292) | (9,516) | ||
EBITDA** | 533 | (3,884) | ||
As at | ||||
($000’s) | ($000’s) | |||
Cash and cash equivalents | 9,370 | 11,254 | ||
Inventory | 10,925 | 10,010 | ||
Biological assets | - | - | ||
Working capital | (152,919) | (146,909) |
*Net revenue defined as revenue (i.e., gross revenue less discounts and customer incentives but inclusive of freight) less excise taxes
** EBITDA is not a recognized measurement under International Financial Reporting Standards (IFRS), and this data may not be comparable to data presented by other companies. Management defines EBITDA as adjusted to exclude interest, tax, depreciation, stock compensation, fair value changes and other non-cash items, and non-recurring items. This data is furnished to provide additional information and does not have any standardized meaning prescribed by IFRS. The Company uses this non-IFRS measure to provide shareholders and others with supplemental measures of its operating performance. The Company also believes that securities analysts, investors, and other interested parties frequently use this non-IFRS measure in evaluating companies, many of which present similar metrics when reporting their results. As other companies may calculate EBITDA differently than the Company, this metric may not be comparable to similarly titled measures reported by other companies. We caution readers that EBITDA should not be substituted for determining net loss as an indicator of operating results or as a substitute for cash flows from operating and investing activities. See the Company management's discussion and analysis for the three months ended
“Entourage delivered significant growth in the first quarter of 2024, driven by increased revenues and robust operating discipline, resulting in an impressive 92% increase in gross profit,” said
Revenue Highlights
Q1 2024 | Q1 2023 | Change YOY | ||
($000’s) | ($000’s) | % | ||
Net Revenue by Channel | ||||
Medical | 5,752 | 5,973 | (4%) | |
Adult-Use | 6,465 | 5,861 | 10% | |
Bulk | 483 | - | 100% | |
Total Net Revenue | 12,701 | 11,834 | 7% |
Financial Highlights
- For the quarter that ended
March 31, 2024 , Entourage recorded total revenue of$16.4 million compared to$15.1 million the previous year, a 9% increase, and a 23% increase from Q4 2023. - Gross profit before changes in fair value was
$5.8 million for Q1 2024, representing a$2.8 million increase compared to Q1 2023. This significant improvement is attributed to the cessation of cultivation activities and the closure of underperforming business units. - Gross margins were 45% in Q1 2024, compared to 25% in Q1 2023. This improvement resulted from several factors, including increased production automation, lower biomass costs, improved freight management, and packaging optimizations.
- Cost of Goods Sold (COGS) declined by
$1.9 million or 22% compared to Q1 2023. This reduction reflects the organization’s commitment to cost management and operational excellence, as outlined in the Company’s transformation plans. - EBITDA increased by
$4.4 million to$0.5 million in Q1 2024, a significant turnaround from ($3.9 million ) in Q1 2023.** This 114% improvement highlights the success of the Company’s strategic transformation initiatives to lower costs and a shift to a higher-margin product mix.
Corporate Highlights During and After the First Quarter of 2024
- On
April 30, 2024 , the Company announced it was in breach of certain financial covenants and other obligations under each of its Senior Credit Agreement and Subordinated Credit agreements with an affiliate of theLiUNA Pension Fund of Central andEastern Canada (“LPF”) and was working collaboratively with LPF to reach an agreement on amended debt terms. Consequently, the Company received a renewed forbearance letter onMay 3, 2024 , waiving the Company’s breaches untilAugust 2, 2024 , subject to the satisfaction or waiver of certain conditions. - In Q1 2024, Entourage increased production capacity to nearly 2.2 million pre-rolls per month.
Commercial Highlights
- Entourage continues demonstrating its market strength and consumer appeal with a 10% year-over-year increase in adult-use revenue. This impressive growth reflects the Company’s strategic initiatives and ability to adapt to the evolving market landscape.
- In Q1 2024, the Company’s Dime Bag brand in
Ontario was the 3rd fastest-growing pre-roll brand. Additionally, Dime Bag launched inAlberta , with plans for a nationwide rollout throughout 2024. - In Q1 2024, 80% of stores in
Ontario ,Alberta , andBritish Columbia continued carrying at least one Entourage SKU, maintaining a strong presence from the previous year. Furthermore, 50% of these stores featured four or more Company SKUs. - In Q1 2024, Entourage’s national pre-roll market share was 2%. Color Cannabis also ranked 12th highest pre-roll brand in national dollar sales. It secured the number 2 spot in the pre-roll category in
British Columbia , the second-largest revenue-generating market inCanada afterOntario . - The Company launched 11 new adult-use SKUs in Q1 2024, enhancing its product lineup across key markets. These SKUs included Color Cannabis “Pedro’s Sweet Sativa” and “Blueberry Seagal Live Resin Infused” pre-rolls in
Ontario , and “Phantom Sunset” whole flower inAlberta . - Additionally, Saturday unveiled “Passionfruit Lavender” and “Beached Mango” in 1 g 510 vape carts in
Ontario , further diversifying offerings and catering to consumer demand. - Starseed consistently broadens its product portfolio available to medical cannabis patients. This portfolio includes the introduction of new strains, advanced delivery methods, and specialized formulations, all designed to meet the diverse needs of the medical cannabis community.
Conference Call Details
A conference call will be hosted by
Date: | |
Time: | |
Dial-in Number: | Participants, please dial in and ask to join the Entourage call. |
Replay Access Code: 0899 Available after |
Source data: Buddi Retail Data, as of
About
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Color Cannabis, Saturday Cannabis, Starseed & Syndicate
For additional information or investor or media inquiries:
Senior Director, Communications & Corporate Affairs
416-910-0279
catherine.flaman@entouragecorp.com
Forward Looking Information
This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation which are based upon Entourage's current internal expectations, estimates, projections, assumptions and beliefs and views of future events. Forward-looking information can be identified using forward-looking terminology such as "expect", "likely", "may", "will", "should", "intend", "anticipate", "potential", "proposed", "estimate" and other similar words, including negative and grammatical variations thereof, or statements that certain events or conditions "may", "would" or "will" happen, or by discussions of strategy.
The forward-looking information in this news release is based upon the expectations, estimates, projections, assumptions, and views of future events which management believes to be reasonable in the circumstances. Forward-looking information includes estimates, plans, expectations, opinions, forecasts, projections, targets, guidance, or other statements that are not statements of fact. Forward-looking information necessarily involve known and unknown risks, including, without limitation, risks associated with general economic conditions; adverse industry events; loss of markets; future legislative and regulatory developments; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the cannabis industry in
Any forward-looking information speaks only as of the date on which it is made, and, except as required by law, Entourage does not undertake any obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Entourage to predict all such factors. When considering this forward-looking information, readers should keep in mind the risk factors and other cautionary statements in Entourage’s disclosure documents filed with the applicable Canadian securities' regulatory authorities on SEDAR+ at www.sedarplus.ca. The risk factors and other factors noted in the disclosure documents could cause actual events or results to differ materially from those described in any forward-looking information.
Third Party Information
This press release includes market and industry data that has been obtained from third party sources, including industry publications. The Company believes that the industry data is accurate and that its estimates and assumptions are reasonable, but there is no assurance as to the accuracy or completeness of this data. Third party sources generally state that the information contained therein has been obtained from sources believed to be reliable, but there is no assurance as to the accuracy or completeness of included information. Although the data is believed to be reliable, the Company has not independently verified any of the data from third party sources referred to in this press release or ascertained the underlying economic assumptions relied upon by such sources.
Neither
Source:
2024 GlobeNewswire, Inc., source