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SCHWAZZE ANNOUNCES FIRST QUARTER 2023 FINANCIAL RESULTS
DENVER , May 10, 2023 /PRNewswire/ -- operating as (OTCQX: SHWZ) (NEO: SHWZ) or the , today announced financial results for the first quarter ("Q1 2023").
During the first quarter of 2023, Schwazze continued its expansion plans into Colorado and New Mexico . In Colorado , the Company entered into definitive agreements to acquire two Smokey's retail dispensaries in Fort Collins and Garden City, as well as Standing Akimbo, the largest medical dispensary in Colorado . In New Mexico, the Company entered into a definitive agreement to acquire 14 retail dispensaries, one manufacturing and one cultivation facility from Everest. These acquisitions continue to deepen Company's foothold in Colorado and New Mexico with a total dispensary count to-date of 60, as well as three manufacturing facilities and six operating cultivation facilities.
stated Justin Dye , CEO of Schwazze.
said Nirup Krishnamurthy , President of Schwazze.
Consolidated First Quarter revenues of $40 million dollars increased $8.2 million dollars or 26% compared to $31.8 million dollars for the same quarter last year. Quarter over quarter revenues remain flat as is seasonally typical for the industry.
Income from operations was $5.6 million dollars and improved $10.4 million dollars over the ($4.8) million dollar loss from operations in the first quarter of 2022. Adjusted EBITDA for Q1 2023 was $14.5 million dollars or 36.3% of revenue compared to $7.9 million dollars or 24.7% of revenue for the same period last year. We ended the quarter with $35 million in cash.
Total cost of goods and services was $17.0 million dollars compared to $20.8 million for the same period last year, representing a $3.8 million dollar decrease or 18.6%. This was primarily due to overall cost improvements due to vertical integration in New Mexico .
As a result, gross profit increased to $23.0 million dollars or 58% of total revenue compared to $10.9 million dollars or 34% for the same quarter last year with quarter over quarter improvement as compared to $23 million or 57% of total revenue in Q4 2022.
Total Operating Expenses totaled $17.4 million dollars for Q1 2023 as compared to $15.7 million for Q1 2022, representing an increase of $1.7 million dollars driven by payroll tax refunds offset by intangible asset amortization related to non-cash purchase price accounting adjustments from 2022 acquisitions reflected in selling, general and administrative expenses.
Other income for Q1 2023 was $758 thousand dollars , compared to other expense of $20.7 million dollars for the same quarter last year. The year-over-year change in other income/expense was driven by the accounting revaluation of the derivative liability related to the convertible note.
As a result, Schwazze generated Net Income of $1.7 million dollars compared to a Net Loss of ($26.8) million dollars for Q1 2023.
Forrest Hoffmaster , CFO for Schwazze commented,
Investors and stakeholders may participate in the conference call by dialing 416-764-8650 or by dialing North American toll free 1-888-664-6383 or listen 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 May 17, 2023 , and may be accessed by dialing 1-416-764-8677 or North American toll free 1-888-390-0541 / 592815 #.
Following their prepared remarks, Company management will answer investor questions. Investors may submit questions in advance or during the conference call itself through the weblink: https://app.webinar.net/x0q6rpnP84n. 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) (NEO: 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, deriving its name from the pruning technique of a cannabis plant to enhance plant structure and promote healthy growth.
Since April 2020 , Schwazze has acquired, opened, or announced the planned acquisition of 60 cannabis retail dispensaries (bannered as Star Buds, Emerald Fields, R. Greenleaf, Standing Akimbo, and Everest) as well as six operating cultivation facilities and three manufacturing plants across Colorado and New Mexico . In May 2021 , Schwazze announced its Biosciences division, and in August 2021 , it commenced home delivery services in Colorado .
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 its 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.
This press release contains "forward-looking statements." Such statements may be preceded by the words "may," "will," "could," "would," "should," "expect," "intends," "plans," "strategy," "prospects," "anticipate," "believe," "approximately," "estimate," "predict," "project," "potential," "continue," "ongoing," or the negative of these terms or other words of similar meaning in connection with a discussion of future events or future operating or financial performance, although the absence of these words does not necessarily mean that a statement is not forward-looking. 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) regulatory limitations on our products and services and the uncertainty in the application of federal, state, and local laws to our business, and any changes in such laws; (ii) our ability to manufacture our products and product candidates on a commercial scale on our own or in collaboration with third parties; (iii) our ability to identify, consummate, and integrate anticipated acquisitions; (iv) general industry and economic conditions; (v) our ability to access adequate capital upon terms and conditions that are acceptable to us; (vi) our ability to pay interest and principal on outstanding debt when due; (vii) volatility in credit and market conditions; (viii) the loss of one or more key executives or other key employees; and (ix) other risks and uncertainties related to the cannabis market and our business strategy. 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.
CONTACT: Investors, Joanne Jobin , ICR, Investor Relations, Joanne.jobin@schwazze.com, 647.964.0292; Legal, Christine Jones , Schwazze, Chief Legal Officer, Christine.Jones@schwazze.com, 303.809.2697; Media, Julie Suntrup, Schwazze, Vice President, Corporate Marketing & Brands, julie.suntrup@schwazze.com, 303.371.0387
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