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High Tide Reports Financial Results for Third Quarter 2019 Featuring a 281% Increase in Revenue over the Same Period of the Previous Year

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CALGARY, Sept. 30, 2019 /CNW/ - High Tide Inc. ("High Tide" or the "Company") (CSE:HITI) (OTCQB:HITIF) (Frankfurt:2LY), an Alberta-based, retail-focused cannabis corporation enhanced by the manufacturing and wholesale distribution of smoking accessories and cannabis lifestyle products, has filed its financial results for the third fiscal quarter of 2019 ending July 31, the highlights of which are included in this news release. The full set of Condensed Interim Consolidated Financial Statements and Management's Discussion and Analysis can be viewed by visiting High Tide's website at www.hightideinc.com, its profile page on SEDAR at www.sedar.com or the Company's CSE profile page at www.thecse.com.

High Tide Inc. (CNW Group/High Tide Inc.)

Third Quarter 2019 Financial Highlights
(In thousands of Canadian dollars)

  • Revenue for the three months ended July 31, 2019 increased by 281%, to $8,288 from $2,175 for the same period in the previous year. Revenue for the nine months ended July 31, 2019 increased by 199%, to $19,885 from $6,651 for the same period in the previous year. The increases are primarily due to the acquisition of Grasscity, the retail cannabis operations of Canna Cabana which began generating revenue on October 27, 2018 as well as sales made to new customers in the Company's Wholesale Segment.
  • Gross margin for the three months ended July 31, 2019 increased by 160%, to $3,060 from $1,177 in the same period in 2018, primarily due to an increase in sales volume. Gross margin for the nine months ended July 31, 2019 increased by 97%, to $7,202 from $3,650 in the same period in 2018 due to the same increase in sale volume.
  • For the nine months ended July 31, 2019, the Company generated a loss of $10,864 (2018 – loss of $687) and had net operating cash outflows of $12,584 (2018 – outflows of $1,824). The loss and cash outflows are primarily driven by start-up costs to incorporate and staff High Tide and Canna Cabana, as well as from an increase in professional fees and rent paid.
  • For the quarter ended July 31, 2019, the total assets of the Company increased by 6% to $50,703 from $47,677 on April 30, 2019.
  • High Tide had a working capital surplus of $13,839 for the three months ending July 31, 2019 (October 31, 2018 - $14,919), mainly due to an increase in liabilities resulting from expanded operations as Canna Cabana began to operate and Grasscity was acquired.

Third Quarter 2019 Corporate Highlights
(In thousands of Canadian dollars – except for number of shares)

  • On May 9, 2019, High Tide opened its 14th and 15th Canna Cabana retail store locations in Fort Saskatchewan, Alberta, and Lacombe, Alberta
  • On May 15, 2019, High Tide received approval from the Depository Trust Company (the "DTC") to make the Company's common shares eligible to be electronically cleared and settled through DTC, making High Tide's shares more accessible to investors in the United States
  • On May 24, 2019, High Tide announced that it had acquired Dreamweavers Cannabis Products Ltd., a retail cannabis store and e-commerce business currently operating in Swift Current, Saskatchewan
  • On May 29, 2019, it was announced that High Tide had partnered with Halo Labs Inc. for the exclusive global distribution of DabTabsTM Home Preparation Kits
  • On June 4, 2019, the Company announced the opening of a Smoker's Corner store in the Royal Chapelle area of Edmonton
  • On June 13, 2019, High Tide announced the receipt of AGCO Authorization to open the Canna Cabana Toronto retail cannabis store on Yonge Street, which opened on June 15, 2019
  • On June 17, 2019, High Tide closed the final tranche of its oversubscribed convertible debenture offering, with gross proceeds raised of $11,560
  • On June 26, 2019, the Company announced that it had upgraded Grasscity to the Magento 2 e-commerce platform
  • On July 3, 2019, a Canna Cabana location began selling cannabis in Grand Prairie with 10 more Alberta stores announced to follow shortly
  • On, July 10, 2019, High Tide announced the opening of Canna Cabana locations in Edmonton and Okotoks
  • On July 18, 2019, the Company announced research analyst coverage by Canaccord Genuity
  • On July 23, 2019, High Tide announced the establishment of a 25,000 square-foot warehouse in Nevada to facilitate the expansion of its Wholesale Segment by reducing lead-times on order fulfilment to High Tide's growing customer base in the United States
  • On July 24, 2019, High Tide announced the voting results from its first Annual General and Special Meeting of Shareholders as a publicly traded company
  • On July 25, 2019, the Company announced the opening of three new Canna Cabana stores selling recreational cannabis in Alberta
  • On July 29, 2019, the Company announced its 9th celebrity licenses secured by Famous Brandz and the renewal of a key existing license
  • On July 31, 2019, High Tide announced the opening of a Canna Cabana in Fort Saskatchewan as its 11th location selling recreational cannabis in Alberta, bringing its total to 15 branded locations across Canada at that time

Subsequent to the end of the third fiscal quarter of 2019, in chronological order, High Tide:

  • On August 8, 2019, High Tide announced the opening of a Canna Cabana in Lloydminster
  • On August 15, 2019, the Company announced the opening of a Canna Cabana in Olds
  • On August 22, 2019, High Tide announced the opening of a Canna Cabana in Bonnyville
  • On August 29, 2019, the Company announced Canna Cabana stores in Calgary, Edmonton and Red Deer
  • On September 4, 2019, High Tide announced the acquisition of the Smoker's Corner franchise on Jasper Avenue in Edmonton for conversion into a Canna Cabana location
  • On September 6, 2019, the Company announced the opening of Canna Cabana stores in Calgary and Vegreville
  • On September 12, 2019, High Tide announced the opening of a Canna Cabana in St. Alberta and that it had secured a location in Banff
  • On September 13, 2019, the Company announced the opening of its first KushBar location, bringing its total to 25 branded retail cannabis stores across Canada

SUMMARY OF KEY FINANCIAL MEASURES

For the nine months ended July 31, 2019


Nine months ended July 31

$ Millions (except where noted)

2019

2018


$

$

Revenue

19.9

6.7

Gross Margin

7.2

3.6

Gross Margin Percentage

36%

55%

Total Expenses

(21.8)

(4.3)

Loss Before Taxes

(14.6)

(0.7)

Net Loss for the Period

(10.9)

(0.7)

Loss Per Share (Basic)

(0.06)

(0.01)

Loss Per Share (Diluted)

(0.06)

(0.01)

 

SUMMARY OF QUARTERLY MEASURES

(C$ in millions,

Q3

Q2

Q1

Q4

Q3

Q2

Q1

Q4

except per share amounts)

2019

2019

2019

2018

2018

2018

2018

2017

Net Revenue

8.3

6.6

5.0

2.1

2.2

1.7

2.7

2.5

Income (Loss) Before OCI

(3.8)

(3.3)

(3.8)

(3.8)

(0.6)

(0.4)

0.3

0.3

Basic EPS

(0.02)

(0.02)

(0.02)

(0.05)

-

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