Highlights include:
- Q1 saw our continued growth California cannabis distribution business, generating revenue up 68% quarter-on-quarter
- Q1 revenue in the North American accessories industry increased 11% quarter over quarter
- Q1 saw a quarterly decrease in operating expenses by 21% or $2.3 milliondriven by cost reductions in our North American accessories business of 44% or $3.8 millionoffset by the 57% increase in costs or $1.5 million regarding the expansion California cannabis distribution business
TORONTO, November 29, 2022 /PRNewswire/ – Humble & Fume Inc. (CSE: HMBL) (OTCQX: HUMBF) (“Humble” or the “Company”), a leading North American distributor of cannabis and cannabis accessories backed by a customer-centric sales team and robust fulfillment infrastructure, reported today the financial and operational results of the first fiscal quarter 2023 (“Q1 2023”) for the three months ended September 30, 2022.
Joel ToguriCEO of Humble, commented:
“Our focus continues to be on optimizing growth opportunities while proactively scaling the business. We are very pleased with our efforts to expand our portfolio of cannabis brands and expand the scope and scale of our retail relationships.”
The California The cannabis distribution business’s revenue rose 68% quarter-on-quarter. Restructuring initiatives completed last fiscal year have a positive impact on bottom line and profit, with North American accessories operating expenses decreasing quarter-over-quarter by $3.8 million or 44%.
Inventory levels in the North American accessories business continue to decline, selling old/slow moving items. Year by year the inventory decreased by $6.5 millionwith the previous year having a balance of $17.8 million vs current balance of $11.2 million. Quarterly inventories fell 10% or $1.3 million.
Mr. Toguri continued:California continues to be a dynamic market that offers continued growth opportunities to help great brands like Cookies expand across the state.”
Cookies, the leader Californialifestyle and cannabis brand has been successfully integrated with revenue since October. Operating costs in the first quarter were incurred ahead of revenue, with additional staff, vehicles and other one-time costs added to ensure a successful integration and to have the infrastructure in place to start selling. October 1, 2022.
The California The cannabis distribution business continues to grow, with revenue rising quarter after quarter.
- This quarter, our retail customer base grew from 81 to 290; this represents an increase of 258%.
- The number of deliveries saw a similar increase, rising from 128 in the previous quarter to 602, representing an increase of 370%.
“Our continued focus on profitable growth includes right-sizing our organization to ensure we have the most efficient and effective team in place to serve the needs of our brand and our retail partners,” said Mr. Toguri.
Restructuring and cost-saving initiatives taken last year are starting to show in the P&L, with total operating expenses falling year-on-year by $1.5 million & down $3.8 million quarterly on the accessories business in North America. Salary and wages saw the most significant reduction, with savings of 20.7% compared to last year and a quarterly reduction of 14.6%
About Humble & Fume, Inc.
Humble & Smoke, Inc. is a leading North American distributor of cannabis and cannabis accessories backed by a customer-centric sales team and strong fulfillment infrastructure. As the only fully integrated cannabis distribution solution, Humble bridges the gap between retailers, licensed cannabis producers, multi-state operators and cannabis consumers to maximize sales penetration and increase financial performance. With over 20 years of experience operating in North America, Humble has cultivated extensive relationships with suppliers and customers, distributing premium cannabis supplies and consumer devices.
NON-IFRS FINANCIAL MEASURES
EBITDA and Adjusted EBITDA are financial measures that are not defined in IFRS. We define EBITDA as net income (loss) or “earnings”, before interest, income taxes, depreciation and amortization. We define Adjusted EBITDA as EBITDA before: (and) adjustments to the fair value of biological assets and adjustments to the fair value on the sale of inventories; (ii) stock-based compensation expense; (iii) RTO listing expense; and (N) losses from the depreciation of the goodwill. We believe Adjusted EBITDA is a useful measure to evaluate the Company’s performance because it provides more meaningful operating results by excluding the effects of expenses that do not reflect the operating performance of our business and other one-time or non-recurring expenses, and also provides additional insights and perspectives when when analyzing the underlying operational performance of the business. These additional non-IFRS financial measures should not be considered superior to, a substitute for, or an alternative to, and should only be considered in conjunction with, IFRS the financial measures presented here.
FORWARD-LOOKING INFORMATION AND STATEMENTS
This press release contains “forward-looking information” within the meaning of applicable securities laws regarding the proposed listing on CSE, the focus of the Company’s business and the intentions of those subject to early warning requirements. Any such forward-looking statements may be identified by words such as “expects”, “anticipates”, “intends”, “contemplates”, “believes”, “projects”, “plans” and similar expressions. Readers are cautioned not to place undue reliance on forward-looking statements. Statements about, among others, Humble & Fume Inc.’S strategic plans, including future growth opportunities and strategies in United States are all forward-looking information. These statements should not be read as guarantees of future performance or results. Such statements involve known and unknown risks, uncertainties and other factors that could cause actual results, performance or achievements to differ materially from those implied by such statements. Although such statements are based on management’s reasonable assumptions, there can be no assurance that such forward-looking statements will occur as described herein. The Company undertakes no obligation to update or revise forward-looking information to reflect new events or circumstances or actual results, except as required by applicable law. Readers are encouraged to refer to the Company’s disclosure available thereon SEDAR profile (at www.sedar.com) for information regarding risks and other factors that may affect the Company’s business objectives and strategic plans.
SOURCE Humble & Fume Inc.
