Fort Lauderdale, Florida--(Newsfile Corp. - November 8, 2023) - Flora Growth Corp. (NASDAQ: FLGC) ("Flora" or the "Company"), a consumer-packaged goods leader and pharmaceutical distributor serving all 50 states and 28 countries with 20,000+ points of distribution around the world, reported today its financial and operating results for the three and nine months ended September 30, 2023. All financial information is provided in U.S. dollars unless indicated otherwise.
"The third quarter was a record quarter for Flora. Our efforts to cut costs, divest unprofitable operations and focus on growing segments have begun to pay off. For the first time in the Company's history, Flora delivered a profitable, EBITDA-positive and operating cashflow-positive quarter. Further, Flora has a liquidity position that includes cash of $4.8 million and net working capital of $7.3 million," said Clifford Starke, Chief Executive Officer.
"The business transformation has been productive, and we have achieved our short-term goals. Now we will focus on execution and growing the businesses for scale and profitability," concluded Mr. Starke.
Financial and Operating Highlights for the Quarter
Net income of $1.1 million compared to a net loss of $7.4 million in the comparable quarter.
Total operating expenses of $5.5 million, compared to $9.1 million in the comparable quarter, a decrease of 40% year-over-year.
EBITDA of $0.9 million compared to an EBITDA loss of $6.1 million in the comparable quarter.
Positive cash from operating activities of $0.5 million compared to negative cash used in operating activities of $4.0 million in the comparable quarter.
Flora generated $17.3 million in revenue, a 78% increase year-over-year.
Gross profit increased 6% year-over-year, to $4.9 million.
Financial and Operating Highlights for the Year-to-Date
Management's business transformation plan commenced in the third quarter of 2023 and as such, results in the year-to-date period substantially exclude its impact.
Flora generated $58.1 million in revenue, a 154% increase year-over-year.
Gross profit increased 39% year-over-year, to $14.2 million.
Net loss of $47.3 million compared to $39.6 million in the comparable period. Net loss in the period includes the impact of impairment expenses of $34.9 million, losses on discontinued operations of $7.8 million, depreciation and amortization of $2.0 million and share-based compensation of $1.0 million.
EBITDA and Adjusted EBITDA are non-U.S. GAAP measures. A reconciliation of U.S. GAAP to non-U.S. GAAP financial measures has been provided in the section titled "About Non-GAAP Financial Measures". Important disclosures regarding the use of non-U.S. GAAP supplemental financial measures are also included below.
About Flora Growth Corp.
Flora Growth Corp. is a consumer-packaged goods leader and pharmaceutical distributor serving all 50 states and 28 countries with 20,000+ points of distribution around the world. For more information on Flora, visit www.floragrowth.com.
This press release contains "forward-looking statements," as defined by federal securities laws. Forward-looking statements reflect Flora's current expectations and projections about future events at the time, and thus involve uncertainty and risk. The words "believe," "expect," "anticipate," "will," "could," "would," "should," "may," "plan," "estimate," "intend," "predict," "potential," "continue," and the negatives of these words and other similar expressions generally identify forward-looking statements. Such forward-looking statements are subject to various and risks and uncertainties, including those described under section entitled "Risk Factors" in Flora's Annual Report on Form 10K filed with the United States Securities and Exchange Commission (the "SEC") on March 31, 2023, as such factors may be updated from time to time in Flora's periodic filings with the SEC, which are accessible on the SEC's website at www.sec.gov/edgar. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in Flora's filings with the SEC. While forward-looking statements reflect Flora's good faith beliefs, they are not guarantees of future performance. Flora disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes after the date of this press release, except as required by applicable law. You should not place undue reliance on any forward-looking statements, which are based on information currently available to Flora (or to third parties making the forward-looking statements).
About Non-U.S. GAAP Measures
EBITDA and Adjusted EBITDA are non-U.S. GAAP financial measures that do not have any standardized meaning prescribed by U.S. GAAP and may not be comparable to similar measures presented by other companies. We calculate EBITDA as total net income (loss) from continuing operations, plus (minus) income taxes (recovery), plus (minus) interest expense (income), plus depreciation and amortization. We calculate Adjusted EBITDA as EBITDA plus (minus) non-operating expense (income), plus share based compensation expense, plus asset impairment charges, plus (minus) unrealized loss (gain) from changes in fair value, plus charges related to the flow-through of inventory step-up on business combinations, plus other acquisition and transaction costs. Management believes that EBITDA and Adjusted EBITDA provide meaningful and useful financial information as these measures demonstrate the operating performance of the business.
Management believes that this non-U.S. GAAP financial information is useful as a supplement to comparable U.S. GAAP financial information. Management reviews these non-U.S. GAAP financial measures on a regular basis and uses them, together with financial measures included in the Company's financial statements, to evaluate and manage the performance of the Company's operations. These measures should be evaluated in conjunction with the comparable U.S. GAAP financial numbers reported by the Company.
The reconciliation of the Company's Adjusted EBITDA, a non-U.S. GAAP financial measure, to net income (loss), the most directly comparable U.S. GAAP financial measure, for the periods ended September 30, 2023 and 2022 is presented below:
For the quarter ended September 30, 2023 (In thousands of United States dollars)
JustCBD
Vessel
Phatebo
Corporate & Other
Consolidated
Net income (loss) from continuing operations
$
563
$
653
$
(43)
$
(543)
$
630
Income tax recovery
-
-
(23)
(28)
(51)
Interest (income) expense
(1)
1
16
-
16
Depreciation and amortization
177
16
7
105
305
EBITDA
739
670
(43)
(466)
900
Non-operating loss (1)
1
2
-
95
98
Share based compensation
-
-
-
4
4
Unrealized gain from changes in fair value (2)
(463)
-
-
(770)
(1,233)
Adjusted EBITDA
$
277
$
672
$
(43)
$
(1,137)
$
(231)
For the quarter ended September 30, 2022 (In thousands of United States dollars)
JustCBD
Vessel
Corporate & Other
Consolidated
Net income (loss) from continuing operations
$
35
$
(998)
$
(5,711)
$
(6,674)
Interest expense (income)
32
24
(61)
(5)
Depreciation and amortization
182
350
30
562
EBITDA
249
(624)
(5,742)
(6,117)
Non-operating (income) loss (1)
(28)
2
154
128
Share based compensation
-
-
162
162
Unrealized loss from changes in fair value (2)
-
-
2,177
2,177
Other acquisition and transaction costs (3)
5
18
13
36
Adjusted EBITDA
$
226
$
(604)
$
(3,236)
$
(3,614)
YTD period ended September 30, 2023 (In thousands of United States dollars)
JustCBD
Vessel
Phatebo
Corporate & Other
Consolidated
Net (loss) income from continuing operations
$
(19,194)
$
(8,440)
$
55
$
(11,969)
$
(39,548)
Income tax recovery
-
-
16
(1,263)
(1,247)
Interest expense (income)
7
2
61
(3)
67
Depreciation and amortization
578
720
21
724
2,043
EBITDA
(18,609)
(7,718)
153
(12,511)
(38,685)
Non-operating loss (income) (1)
3
2
-
(83)
(78)
Share based compensation
-
-
-
996
996
Asset impairment
20,073
7,402
-
7,466
34,941
Unrealized gain from changes in fair value (2)
(820)
-
-
(1,345)
(2,165)
Charges related to the flow-through of inventory step-up on business combinations
-
-
-
45
45
Adjusted EBITDA
$
647
$
(314)
$
153
$
(5,432)
$
(4,946)
YTD period ended September 30, 2022 (In thousands of United States dollars)
JustCBD
Vessel
Corporate & Other
Consolidated
Net loss from continuing operations
$
(639)
$
(18,137)
$
(17,205)
$
(35,981)
Interest expense (income)
59
24
(130)
(47)
Depreciation and amortization
452
1,079
81
1,612
EBITDA
(128)
(17,034)
(17,254)
(34,416)
Non-operating loss (1)
4
2
322
328
Share based compensation
-
-
2,951
2,951
Asset impairment
-
15,652
-
15,652
Unrealized loss from changes in fair value (2)
-
-
3,510
3,510
Charges related to the flow-through of inventory step-up on business combinations
1,631
-
-
1,631
Other acquisition and transaction costs (3)
614
81
28
723
Adjusted EBITDA
$
2,121
$
(1,299)
$
(10,443)
$
(9,621)
(1) Non-operating expenses include foreign exchange losses. (2) Unrealized loss from changes in fair value includes changes in the value of the Company's contingent consideration associated with its acquisition of JustCBD. (3) Other acquisition and transaction costs are one-time legal and due-diligence fees related to business combinations.
