Fire & Flower FY22 Gross Margin Declines To 26.4%, What About Adjusted EBITDA?

Fire & Flower Holdings Corp. FFLWF FAF released its financial results for the 9-week period of the fourth quarter and the 48-week fiscal year ended December 31, 2022 due to the company's revised fiscal year end.

Q4 2022 Financial Highlights

• Revenue was CA$30.5 million ($22.3 million) for the 9-week Q4 2022, a decrease of 28% compared to CA$42.7 million for the 13-week Q4 2021.

• Gross profit of CA$7.4 million (24.3% of revenue) for the 9-week fourth quarter of 2022, compared to CA$13.7 million (32.1% of revenue) in Q4 2021.

• Adjusted EBITDA was negative CA$3.8 million for the 9-week Q4 2022, compared to negative CA$2.4 million in Q4 2021.

• Net loss was CA$29.9 million for the 9-week Q4 2022, including restructuring and impairment charges of CA$45.7 million and CA$21.5 million million for the respective periods, compared to a loss of CA$19.4 million in Q4 2021.

• Cash balance of CA$12.4 million.

FY 2022 Financial Highlights

• Consolidated revenue of CA$156.0 million for the 48-week fiscal year 2022, a decrease of 11% compared to CA$175.5 million for the 52-week FY 2021.

• Consolidated gross profit of CA$41.1 million (26.4% of revenue) for the 48-week fiscal year 2022, compared to gross profit of CA$62.1 million (35.4% of revenue) in FY 2021.

• Adjusted EBITDA of negative CA$15.0 million for the 48-week fiscal year 2022, compared to positive CA$5.1 million in FY 2021.

• Net loss of CA$89.5 Million for the 48-week fiscal year 2022, compared to a loss of CA$63.6 million in FY 2021.

"2022 was a turnaround year for Fire & Flower, represented by three consecutive quarters of same store sales and gross margin growth. We look to 2023 as a transformative year where we anticipate achieving positive adjusted EBITDA during the first half of the fiscal year through a disciplined approach to our core retail business, driving top line revenue, gross profit dollars and reducing our overhead expenses. We are delivering higher gross margin percentages with increased retail foot traffic, consumer price credibility and using our advanced Hifyre data capabilities to ensure that we have the most in-demand products for our customers," stated Stéphane Trudel, CEO of Fire & Flower.

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