Vibe Growth Corp Reports 92% Increase in Revenue and Positive Cash Flow in 2020
2021-04-19 18:21 ET - News Release
Mr. Mark Waldron reports
VIBE REPORTS RECORD REVENUE IN 2020 AND RECORD NET INCOME
Vibe Growth Corp. has had record after-tax net income in both the fourth quarter and fiscal year ended Dec. 31, 2020, resulting from significantly higher sales volumes at its California dispensaries and increased store count and cultivation output. All financial information is provided in U.S. dollars unless otherwise indicated. The consolidated financial statements and management's discussion and analysis for the year ended Dec. 31, 2020, will be available on the company's SEDAR profile and Vibe's website.
"We are excited about continued sales growth in 2021 and increasing M&A opportunities. Vibe has become a California cannabis industry leader and set a standard for profitable cannabis operations with our outstanding financial results. Combined with the $16-million (Canadian) financing completed in March of this year, Vibe has accelerated expansion opportunities in 2021," stated Mark Waldron, chief executive officer.
Vibe's chief financial officer, Michal Holub, added: "Vibe turbocharged its growth in 2020, achieving record revenue, [earnings before interest, taxes, depreciation and amortization], adjusted funds flow, and net income. Dispensary sales and e-commerce volumes have also experienced continued growth in the first quarter of 2021 and in April to date."
Fourth quarter and 2020 annual financial highlights (a):
>Revenue in the fourth quarter was $7.05-million, a 76-per-cent increase over the fourth quarter of 2019, and $24.2-million for the fiscal year, a 92-per-cent increase over 2019.
>EBITDA in the fourth quarter was $960,000, an increase of $1.15-million over the negative EBITDA recorded during the fourth quarter of 2019, and fiscal year 2020 EBITDA was $3.36-million, compared with an EBITDA loss of $2.30-million in 2019 (a).
>After-tax net income in the fourth quarter was $188,359 versus a loss of $3,100,491 in the fourth quarter of 2019, and fiscal year 2020 net income was $728,550 versus a loss of $8,617,911 in 2019.
>Adjusted funds flow in the fourth quarter was $290,000 versus negative $330,000 in the fourth quarter of 2019 (a), and $890,000 in the 2020 fiscal year versus an adjusted funds flow loss of $1.61-million in 2019.
>Gross margin in the fourth quarter was 38.5 per cent versus 29.4 per cent in the fourth quarter of 2019.
>Same-store dispensary sales increased 41 per cent versus the fourth quarter of 2019.
>The company closed the acquisition of Portland Asset Holdings Corp. on Nov. 10, 2020, adding an exciting new retail store in Portland, Ore., and approximately $900,000 in working capital.
>In the fourth quarter of 2020, 17.4 per cent of the company's orders came through its e-commerce platform.
(a) This is a non-international financial reporting standard measure. Readers are cautioned that the amounts presented do not have standardized meanings prescribed by IFRS.
Financial highlights
The company's core cannabis business commenced upon the acquisition of the U.S. operations on Feb. 18, 2019. Consequently, the 2019 fiscal year revenue, gross margin, general and administrative, selling and marketing expense, and adjusted EBITDA amounts include results of: (i) the U.S. operations from Feb. 18, 2019, to Dec. 31, 2019; and (ii) the company's head office for the entire 2019 fiscal year. The company's key financial results for the fourth quarter and year ended 2020 and 2019 are as set out in the attached table.
FINANCIAL HIGHLIGHTS
(in U.S. dollars)
For the three months ended Dec. 31, For the year ended Dec. 31,
2020 2019 2020 2019
Total revenue (a) $7,048,294 $4,012,850 $24,240,862 $12,600,159
Gross margin $2,716,669 $1,178,152 $8,540496 $4,617,646
Net income (loss) $188,359 ($3,100,491) $728,550 ($8,617,911)
Adjusted funds flow (b) $288,512 ($331,590) $890,806 ($1,610,633)
EBITDA (a) $965,617 ($185,452) $3,360,561 ($2,302,040)
Adjusted EBITDA (a) $842,364 ($158,313) $2,965,075 $293,224
Special notes regarding non-generally accepted accounting principle financial measures:
(a) This is a non-GAAP measure. Readers are cautioned that the amounts presented do not have standardized
meanings prescribed by international financial reporting standards. See discussion of non-IFRS measures
in management's discussion and analysis for reconciliation to measures reported in the company's
consolidated financial statements.
(b) Adjusted funds flow (previously referred to as funds flow from operations) is a non-GAAP measure that
represents cash flows from operating activities as presented in the company's consolidated statements of
cash flows before the changes in non-cash working capital. The company considers adjusted funds flow a
key measure as it demonstrates the company's ability to generate the cash flow necessary to finance future
growth through capital investment and to repay debt.
Additional 2020 highlights:
+Vibe closed the acquisition of Cathedral Asset Holdings Corp. on Sept. 17, 2020, adding marijuana distribution and manufacturing assets in Santa Rosa, Calif.
+The company closed the acquisition of NGEV Inc. on June 12, 2020, whereby it acquired a 13,500-square-foot greenhouse cannabis cultivation operation. The company commenced an expansion of the site to 18,900 square feet with the project being completed in the first quarter of 2021.
+Management broadened its acquisition outreach in California and the Pacific Northwest due to increased opportunities for retail expansion through acquisitions and new location licence development.
+Vibe entered into a triple net lease agreement in July, 2020, with an option to purchase a commercial property in Ukiah, Calif. The property was previously entitled by the City of Ukiah to allow for cannabis operations inclusive of a retail cannabis dispensary and non-volatile cannabis manufacturing. In December, 2020, Vibe received the approvals from the City of Ukiah, and Vibe anticipates the company's fifth dispensary will open in the second quarter of 2021.
+Vibe engaged cultivation consultants and expanded Vibe's cultivation expertise and team for optimization and enhancement of existing cultivation facilities to further improve harvest process efficiencies, and increase yields and harvested annual volumes.
+The company improved the efficiencies of its point-of-sale process at its dispensary locations and made improvements on the methods of product delivery. This included providing on-line ordering and door-to-door delivery, along with multiple and convenient product payment and delivery methods, aimed at attracting a wider and more varied customer demographic and further increasing customer loyalty.
+The company secured delivery licences in June, 2019 (Sacramento), April, 2020 (Redding), and May, 2020 (Stockton), realizing significant benefits in 2020, especially in light of the COVID-19 pandemic.
+Management is focused on ensuring all retail dispensaries deliver an exceptional and unique Vibe By California customer experience. Capital has been invested in all dispensary locations to develop consistent customer experience and branding. Management believes the capital invested to date in corporate and product branding across all dispensaries has improved customer recognition and loyalty for the Vibe By California and Hype Cannabis Co. brands.
+The company hired a new head of retail for its next phase of expansion and to provide strategic retail store leadership.
About Vibe Growth Corp.
Vibe and its cannabis retail brand, Vibe By California, are a trusted, vertically integrated California cannabis enterprise with retail dispensaries; cannabis greenhouse cultivation; premium indoor cultivation; commercial cannabis distribution; brand sales and marketing; e-commerce platform; home delivery; and Hype Cannabis Co. marijuana and Vibe cannabidiol products. In California, Vibe is focused on maximizing shareholder value through accelerating organic growth, opportunistic acquisitions, distressed workouts and new licence applications. The company operates retail and e-commerce under its iconic Vibe by California brand.
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