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SCHWAZZE ANNOUNCES FOURTH QUARTER & FULL YEAR 2021 RESULTS
DENVER , March 31, 2022 /PRNewswire/ -- (OTCQX: SHWZ) (NEO: SHWZ) or the , today announced financial results for the fourth quarter ("Q4-2021") and for the year ended ("Y-E") December 31, 2021 ("Y-E 2021").
Since April 2020 , Schwazze has acquired or announced the planned acquisition of 33 cannabis dispensaries as well as seven cultivation facilities and two manufacturing assets in Colorado and New Mexico .
stated Justin Dye , CEO of Schwazze.
Total revenue was $108.4 million for the year ended March 31, 2021 , compared to $24.0 million during the same period in 2020 and represents an increase of approximately 352%. Retail sales were $73.7 million for 2021 from $3.9 million dollars the previous year representing a 1,811% increase driven primarily by acquisitions of dispensaries in Colorado. Wholesale operations revenue increased to $34.4 million from $18.6 million compared to the previous year representing an 85% increase, primarily driven by acquisition of cultivation facilities and increase in sales of distillate products to the market. Other sales were $0.3 million from $1.5 million the previous year, primarily driven by the pivoting away consulting sales.
Total cost of goods and services for the year totaled $59.1 million compared to $17.2 million during the same period in 2020, representing an increase of 243%, due to increased sales of products and growth through acquisition.
Gross profit increased to $49.4 million for the year compared to $6.8 million during the same period in 2020. Gross profit margin rose as a percentage of revenue from 28.2% to 45.5%, continued to be driven by the strength of the Star Buds acquisition, our consolidated purchasing approach, and the implementation of our retail playbook.
The Average basket size for 2021 was $59.70 up 9.5%, compared to 2020 . Recorded customer visits totaled 1,375,589 up 3.8%, compared to 2020 .
Total operating expenses were $38.9 million for the year compared to $29.7 million during the same period in 2020. The higher expenses are attributed to increased selling, general and administrative expenses, salaries, benefits, and related employment costs.
Net income attributed to common shareholders for the year was $7.2 million or $0.17 basic earnings per share, compared to a net loss of ($19.4) million or ($0.47) basic earnings per share for the same period last year.
Adjusted EBITDA for the year was $32.2 million representing 29.7% of revenue., compared to a loss of ($7.6) million for the same period last year. This is derived from Operating Income and adjusting one-time expenses, merger and acquisition and capital raising costs, non-cash related compensation costs, and depreciation and amortization. See the financial table for Adjusted EBITDA below adjustment for details.
For the year ended 2021, the Company generated a positive operating cash flow of $57.3 million compared to a loss of ($9.8) million for the same period with $106.4 million in cash and cash equivalents for the year ended 2021.
Nancy Huber , CFO for Schwazze commented,
The Company is providing guidance for a fourth-quarter 2022 ("Q4 2022") annualized run rate, which excludes transactions that are announced but not closed. Q4 2022 revenue annualized run rate is projected to be approximately $220 Million - $260 Million , and the projected Q4 2022 adjusted EBITDA annualized run rate is projected to be from $70 million to $82 million .
NOTES:
Investors and stakeholders may participate in the conference call by dialing 416 764 8650 or by dialing North American toll free 888-664-6383 or by listening to the webcast from the Company's website at https://ir.schwazze.com. The webcast will be available on the Company's website and on replay until April 7, 2022 and accessed by dialing 888-390-0541 / 040354#.
Following their prepared remarks, Chief Executive Officer, Justin Dye and Chief Financial Officer, Nancy Huber will answer investor questions. Investors may submit questions in advance or during the conference call through the weblink: https://produceredition.webcasts.com/starthere.jsp?ei=1531076&tp_key=128c98ab58 This weblink has been posted to the Company's website and will be archived on the website. All Company SEC filings can also be accessed on the Company website at https://ir.schwazze.com/sec-filings
Schwazze (OTCQX: SHWZ) is building a premier vertically integrated regional cannabis company with assets in Colorado and New Mexico and will continue to take its operating system to other states where it can develop a differentiated regional leadership position. Schwazze is the parent company of a portfolio of leading cannabis businesses and brands spanning seed to sale. The Company is committed to unlocking the full potential of the cannabis plant to improve the human condition. Schwazze is anchored by a high- performance culture that combines customer-centric thinking and data science to test, measure, and drive decisions and outcomes. The Company's leadership team has deep expertise in retailing, wholesaling, and building consumer brands at Fortune 500 companies as well as in the cannabis sector. Schwazze is passionate about making a difference in our communities, promoting diversity and inclusion, and doing our part to incorporate climate-conscious best practices. Medicine Man Technologies, Inc. was Schwazze's former operating trade name. The corporate entity continues to be named Medicine Man Technologies, Inc. Schwazze derives its name from the pruning technique of a cannabis plant to enhance plant structure and promote healthy growth.
This press release contains "forward-looking statements." Such statements may be preceded by the words "plan," "will," "may," "continue," "predicts," or similar words. Forward-looking statements include the guidance provided regarding the Company's Q4 2022 performance and annual capital spending. Forward-looking statements are not guarantees of future events or performance, are based on certain assumptions, and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company's control and cannot be predicted or quantified. Consequently, actual events and results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, risks and uncertainties associated with (i) our inability to manufacture our products and product candidates on a commercial scale on our own or in collaboration with third parties; (ii) difficulties in obtaining financing on commercially reasonable terms; (iii) changes in the size and nature of our competition; (iv) loss of one or more key executives or scientists; (v) difficulties in securing regulatory approval to market our products and product candidates; (vi) our ability to successfully execute our growth strategy in Colorado and outside the state, (vii) our ability to identify and consummate future acquisitions that meet our criteria, (viii) our ability to successfully integrate acquired businesses and realize synergies therefrom, (ix) the ongoing COVID-19 pandemic, (x) the timing and extent of governmental stimulus programs, (xi) the uncertainty in the application of federal, state and local laws to our business, and any changes in such laws, and (xii) our ability to achieve the target metrics, including our annualized revenue and EBIDTA run rates set out in our Q4 2022 guidance. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company's filings with the Securities and Exchange Commission (SEC), including the Company's Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. Investors and security holders are urged to read these documents free of charge on the SEC's website at http://www.sec.gov. The Company assumes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise except as required by law.
Investors, Joanne Jobin , Investor Relations, Joanne.jobin@schwazze.com, 647 964 0292; Daniel Pabon, General Counsel, dan@schwazze.com, 303-371-0387 x1031; Media, Julie Suntrup , Schwazze, Vice President | Marketing & Merchandising, julie.suntrup@schwazze.com, 303 371 0387