Heritage Cannabis Gross Revenues Up 200% in Q2 2022
Heritage Cannabis Holdings Corp. (OTCQX: HERTF), just announced its financial results for Q2 2022 as at and for the three- and six-month periods ended April 30, 2022 (“Q2 2022”). All figures are in Canadian dollars unless otherwise noted.
“We are excited to release these financials which show us reaching cash-flow positive territory ahead of schedule. The Heritage team continues to deliver on product innovation, distribution, and new revenue channels which has been a driving force to allow us to reach our targets – a major achievement during the recent choppy markets – and we remain focused on building a strong platform that can both generate top-line growth without sacrificing strong business fundamentals,” said David Schwede, CEO of Heritage.
“We have signalled our drive to success over the past year, and with our continued solid execution of our business strategy we have crossed an important milestone ahead of our committed timeframe. Our total gross revenue for the first half of this year is up over 210% from the same time a year ago – a strong signal of what is ahead for Heritage and our innovative, in-demand products.”
Heritage Cannabis Selected Financial Highlights
Selected financial highlights for the three- and six-month periods ended April 30, 2022 include the following:
Q2 2022 Financial Highlights
The Company reported gross revenue of $10,452,313 for the three months ended April 30, 2022, an increase of $5,847,515 compared to gross revenue of $4,604,798 for the three months ended April 30, 2021, representing an increase of 127%. The growth was driven by a continued increase in the Company’s vape and concentrate offerings as well as the launch of the flower vertical. The increase from the prior year is a direct result of increasing our listings from 70 to over 300 in the current period as well as growing distribution from a few provinces to coast to coast nationally.
For the six-month period ended April 30, 2022, the Company recorded gross revenue of $20,048,454 an increase of $13,616,383 compared to gross revenue of $6,432,071 for the six months ended April 30, 2021, representing an increase of over 212%.
The increase in gross revenue was the result of the Company being fully transitioned to branded provincial sales and as a result of an increase in sales across all of its product verticals. Provincial listings increased dramatically over the latest six-month period and the prior period included a period before the Premium 5 acquisition. Cost of sales for the three months ended April 30, 2022 was $4,306,378, an increase of $2,222,465, compared to $2,083,913 for the three months ended April 30, 2021. Cost of sales increased as a result of increased sales but decreased on a percentage of sales basis as a result of improved biomass purchasing and improved operational efficiencies. Cost of sales for the six months ended April 30, 2022 was $8,962,828, an increase of $5,868,554, compared to $3,094,274 for the six months ended April 30, 2021.
Cost of sales increased as a function of the increased sales results previously discussed. For the three months ended April 30, 2022, the Company recorded a comprehensive loss of $500,614 or nil per share compared to a comprehensive loss of $5,151,011 or $0.01 loss per share for the three months ended April 30, 2021. The improvement over the prior period was due to gross margin gains and the cost management in general and administrative expenses combined with a $410,000 unrealized decrease in loss on contingent payables. For the six months ended April 30, 2022, the Company recorded a comprehensive income of $5,756,599 or $0.01 income per share compared to a comprehensive loss of $8,362,093 or $0.01 loss per share for the six months ended April 30, 2021.
The decrease in loss was primarily attributable to a non-cash accounting policy-related gain of $8,571,429 due to the change in fair market value between the share price used for the Premium 5 first milestone payment and the current share price at the time of award combined with the improvements in the operating business noted above.
Heritage Cannabis Gross Revenues Up 200% in Q2 2022
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