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Cision Canada
2 days ago
- Business
- Cision Canada
WESTERN ENERGY SERVICES CORP. RELEASES SECOND QUARTER 2025 FINANCIAL AND OPERATING RESULTS
CALGARY, AB, July 22, 2025 /CNW/ - Western Energy Services Corp. ("Western" or the "Company") (TSX: WRG) announces the release of its second quarter 2025 financial and operating results. Additional information relating to the Company, including the Company's financial statements and management's discussion and analysis ("MD&A") as at June 30, 2025 and for the three and six months ended June 30, 2025 and 2024 will be available on SEDAR+ at Non-International Financial Reporting Standards ("Non-IFRS") measures and ratios, such as Adjusted EBITDA, Adjusted EBITDA as a percentage of revenue, revenue per Operating Day, and revenue per Service Hour, as well as abbreviations and definitions for standard industry terms are defined later in this press release. All amounts are denominated in Canadian dollars (CDN$) unless otherwise identified. Operational and Financial Highlights Three Months Ended June 30, 2025 Financial Highlights: Second quarter revenue of $40.0 million in 2025 was $3.0 million (or 7%) lower than the second quarter of 2024, as higher contract drilling revenue in Canada was more than offset by lower production services revenue. Adjusted EBITDA of $5.9 million in the second quarter of 2025 was $0.6 million (or 11%) higher compared to $5.3 million in the second quarter of 2024. Adjusted EBITDA for the second quarter of 2025 included one-time reorganization costs of $1.0 million, whereas the second quarter of 2024 included $1.8 million of one-time reorganization costs. After normalizing for these one-time reorganization costs in both periods, Adjusted EBITDA in the second quarter of 2025 would have totalled $6.9 million, compared to $7.1 million in 2024, a decrease of $0.2 million due to lower production services activity in Canada. The Company incurred a net loss of $4.6 million in the second quarter of 2025 ($0.14 net loss per basic common share) as compared to a net loss of $5.1 million in the second quarter of 2024 ($0.15 net loss per basic common share) as higher Adjusted EBITDA and decreases in finance costs, were offset partially by higher depreciation expense and a decrease in income tax recovery. Second quarter additions to property and equipment of $6.0 million in 2025 compared to $5.6 million in the second quarter of 2024, consisting of $1.2 million of expansion capital related to rig upgrades and $4.8 million of maintenance capital. During the second quarter of 2025, the Company made a voluntary principal repayment of $5.0 million on its Second Lien Facility (as defined within this press release). Operational Highlights: In Canada, Operating Days of 764 in the second quarter of 2025 were 108 days (or 16%) higher compared to 656 days in the second quarter of 2024. Drilling rig utilization in Canada was 25% in the second quarter of 2025, compared to 21% in the same period of the prior year, mainly due to more upgraded rigs working through spring break up in 2025, as well as improved customer retention in 2025 resulting from targeted marketing efforts. Revenue per Operating Day in Canada averaged $32,709 in the second quarter of 2025, which was 3% higher than the same period of the prior year. In the United States ("US"), drilling rig utilization averaged 17% in the second quarter of 2025, which was lower than the second quarter of 2024, due to continued low industry activity in the US as well as a change in focus to North Dakota from Texas. Revenue per Operating Day in the US for the second quarter of 2025 averaged US$32,506, an 8% increase compared to US$30,016 in the same period of the prior year. The improvement in pricing reflects a more favorable rig mix following the Company's strategic decision to focus its US operations more in North Dakota. In Canada, service rig utilization was 19% in the second quarter of 2025, compared to 33% in the same period of the prior year, as Service Hours decreased by 43% to 7,693 hours from 13,444 hours in the same period of the prior year, mainly due to changes in customer programs. Revenue per Service Hour averaged $1,025 in the second quarter of 2025 and was 1% higher than the second quarter of 2024. Six Months Ended June 30, 2025 Financial Highlights: Revenue for the six months ended June 30, 2025 of $109.0 million was $4.0 million (or 4%) higher than the same period in 2024, as higher contract drilling revenue in Canada was offset partially by lower production services revenue. Adjusted EBITDA for the six months ended June 30, 2025 of $19.9 million was $0.6 million (or 3%) lower compared to $20.5 million in the same period of 2024, mainly due to one-time reorganization costs of $3.6 million. Included in Adjusted EBITDA for the six months ended June 30, 2024, was $1.8 million of one-time reorganization costs. After normalizing for one-time reorganization costs in both periods, Adjusted EBITDA in the first half of 2025 would have totalled $23.5 million, compared to $22.3 million in 2024, an increase of $1.2 million due to higher drilling revenue in Canada, which was offset partially by lower production services activity in Canada and lower drilling activity in the US. The Company incurred a net loss of $2.2 million in the first half of 2025 ($0.06 net loss per basic common share) as compared to a net loss of $3.7 million in the first half of 2024 ($0.11 net loss per basic common share) as decreases in depreciation expense, stock based compensation expense, and finance costs were offset by lower Adjusted EBITDA and income tax recovery. For the six months ended June 30, 2025, additions to property and equipment of $10.9 million compared to $7.5 million in the same period of the prior year, consisting of $1.9 million of expansion capital related to rig upgrades and $9.0 million of maintenance capital. Operational Highlights: In Canada, Operating Days of 2,077 for the six months ended June 30, 2025 were 468 days (or 29%) higher compared to 1,609 days in the same period of the prior year. Drilling rig utilization in Canada was 34% in the first half of 2025, compared to 26% in the same period of the prior year, mainly due to more upgraded rigs working through spring break up in 2025 than in 2024, as well as improved customer retention year over year due to targeted marketing efforts. Revenue per Operating Day in Canada averaged $33,288 for the six months ended June 30, 2025, which was consistent with the same period of the prior year. In the US, drilling rig utilization averaged 22% for the six months ended June 30, 2025, which was lower than 25% in the same period in the prior year, due to continued low industry activity in the US and a change in focus to North Dakota from Texas. Revenue per Operating Day in the US for the six months ended June 30, 2025 averaged US$29,759 a 4% decrease compared to US$30,967 in the same period of the prior year, mainly due to changes in rig mix. In Canada, service rig utilization was 27% in the six months ended June 30, 2025, compared to 38% in the same period of the prior year, as Service Hours decreased by 31% to 22,108 hours from 31,843 hours in the same period of the prior year, mainly due to changes in customer programs. Revenue per Service Hour averaged $1,052 in the first half of 2025 and was 1% higher than the same period in the prior year. On January 27, 2025, the Company announced that it extended the maturity date of its second lien secured term loan with Alberta Investment Management Corporation (the "Second Lien Facility") from May 18, 2026 to May 18, 2027. Selected Financial Information (stated in thousands, except share and per share amounts) Three months ended June 30 Six months ended June 30 Financial Highlights 2025 2024 Change 2025 2024 Change Revenue 40,005 43,033 (7 %) 109,015 105,015 4 % Adjusted EBITDA (1) 5,853 5,259 11 % 19,929 20,478 (3 %) Adjusted EBITDA as a percentage of revenue (1) 15 % 12 % 25 % 18 % 20 % (10 %) Cash flow from operating activities 19,804 19,260 3 % 22,482 27,062 (17 %) Additions to property and equipment 5,954 5,635 6 % 10,933 7,537 45 % Net loss (4,585) (5,136) 11 % (2,199) (3,681) 40 % – basic and diluted net loss per share (0.14) (0.15) 7 % (0.06) (0.11) 45 % Weighted average number of shares – basic and diluted 33,843,022 33,843,015 - 33,843,022 33,843,015 - Outstanding common shares as at period end 33,843,022 33,843,015 - 33,843,022 33,843,015 - (1) See "Non-IFRS Measures and Ratios" included in this press release. Three months ended June 30 Six months ended June 30 Operating Highlights (2) 2025 2024 Change 2025 2024 Change Contract Drilling Canadian Operations: Operating Days 764 656 16 % 2,077 1,609 29 % Revenue per Operating Day (3) 32,709 31,765 3 % 33,288 33,226 - Drilling rig utilization 25 % 21 % 19 % 34 % 26 % 31 % CAOEC industry Operating Days (4) 10,407 10,725 (3 %) 28,647 28,363 1 % United States Operations: Operating Days 110 153 (28 %) 277 317 (13 %) Revenue per Operating Day (US$) (3) 32,506 30,016 8 % 29,759 30,967 (4 %) Drilling rig utilization 17 % 24 % (29 %) 22 % 25 % (12 %) Production Services Service Hours 7,693 13,444 (43 %) 22,108 31,843 (31 %) Revenue per Service Hour (3) 1,025 1,016 1 % 1,052 1,040 1 % Service rig utilization 19 % 33 % (42 %) 27 % 38 % (29 %) (2) See "Defined Terms" included in this press release. (3) See "Non-IFRS Measures and Ratios" included in this press release. (4) Source: The Canadian Association of Energy Contractors ("CAOEC") monthly Contractor Summary, calculated on a spud to rig release basis. Financial Position at (stated in thousands) June 30, 2025 December 31, 2024 June 30, 2024 Working capital (1) 12,637 9,911 22,203 Total assets 407,791 430,981 443,354 Long-term debt – non current portion 89,057 91,657 106,912 (1) See "Defined Terms" included in this press release. Business Overview Western is an energy services company that provides contract drilling services in Canada and in the US and production services in Canada through its various divisions, its subsidiary, and its first nations relationships. Contract Drilling Western markets a fleet of 41 drilling rigs specifically suited for drilling complex horizontal wells across Canada and the US. Western is currently the fourth-largest drilling contractor in Canada, based on the CAOEC registered drilling rigs [1]. Western's marketed and owned contract drilling rig fleets are comprised of the following: (1) See "Contract Drilling Rig Classifications" included in this press release. (2) Source: CAOEC Contractor Summary as at July 22, 2025. Production Services Production services provides well servicing and oilfield equipment rentals in Canada. Western operates 62 well servicing rigs and is the second-largest well servicing company in Canada based on CAOEC registered well servicing rigs [2]. Western's well servicing rig fleet is comprised of the following: Business Environment Crude oil and natural gas prices impact the cash flow of Western's customers, which in turn impacts the demand for Western's services. The following table summarizes average crude oil and natural gas prices, as well as average foreign exchange rates, for the three and six months ended June 30, 2025 and 2024: (1) See "Abbreviations" included in this press release. (2) Source: Sproule June 30, 2025, Price Forecast, Historical Prices. West Texas Intermediate ("WTI") on average decreased by 21% and 14% for the three and six months ended June 30, 2025 respectively, compared to the same periods in the prior year. In 2025, crude oil prices were impacted by market volatility as a result of tariffs implemented by the US government, counter-tariffs in response by several countries, lower global demand and the continued conflict in the Middle East and Eastern Europe. 1 Source: CAOEC Drilling Contractor Summary as at July 22, 2025. 2 Source: CAOEC Well Servicing Fleet List as at July 22, 2025. Pricing on Western Canadian Select crude oil declined by 18% and 6% for the three and six months ended June 30, 2025 respectively, compared to the same periods of the prior year. Natural gas prices in Canada were higher in the three and six months ended June 30, 2025, compared to the same periods in the prior year with the 30-day spot AECO price increasing by 48% and 15% respectively. The US dollar to the Canadian dollar foreign exchange rate for the three and six months ended June 30, 2025 strengthened by 1% and 4% respectively, compared to the same periods in the prior year. Lower WTI prices in the first half of 2025 contributed to weaker industry drilling activity in the US. As reported by Baker Hughes Company [3], the number of active drilling rigs in the US decreased by approximately 5% to 554 rigs as at June 30, 2025 as compared to 581 rigs at June 30, 2024 and averaged 579 rigs during the six months ended June 30, 2025, compared to 613 rigs in the same period of the prior year. In Canada there were 157 active rigs in the Western Canadian Sedimentary Basin ("WCSB") at June 30, 2025, compared to 182 active rigs as at June 30, 2024, representing a decrease of approximately 14%; the CAOEC [4] reported that for drilling in Canada, the total number of Operating Days in the WCSB for the three months ended June 30, 2025, were 3% lower than the same period in the prior year, whereas the total number of Operating Days in the WSCB for the six months ended June 30, 2025 were 1% higher than the same period of the prior year. Outlook In 2025, commodity prices faced downward pressure due to trade tensions resulting from newly imposed US tariffs on imports and retaliatory measures from several countries. These actions contributed to a broader global trade conflict, heightening uncertainty in the global economy. Ongoing geopolitical conflict in Eastern Europe and the Middle East, combined with persistently weak global demand for crude oil, further impacted market sentiment. These macroeconomic factors are expected to impact commodity prices through the remainder of 2025. Additionally, in Canada, the outcome of the 2025 federal election may lead to shifts in energy policy, potentially affecting the approval of future energy infrastructure projects. This contributes to additional uncertainty for the Canadian energy services industry. The precise duration and extent of the adverse impacts of the current macroeconomic environment on Western's customers and operations remains uncertain at this time. Despite these headwinds, recent infrastructure developments present opportunities for the energy services industry. The Trans Mountain pipeline expansion commenced operations on May 1, 2024, providing critical takeaway capacity. Additionally, the Coastal GasLink pipeline delivered its first shipment of liquefied natural gas on June 30, 2025, and the LNG Canada project has begun operations in British Columbia. These projects are expected to support increased activity in Western Canada's energy sector. Western is also cautiously optimistic that the current trade environment may prompt renewed focus among Canadian provinces on strengthening domestic energy independence, which may help accelerate additional project approvals. To navigate this complex environment, Western has implemented several strategic initiatives in 2025, including a reorganization of senior leadership to enhance operational efficiency and support long-term growth. As part of this process, the decision was made to focus on US operations exclusively in North Dakota and redeploy assets previously operating in Texas. The Company remains focused on managing fixed costs, preserving balance sheet strength, deleveraging the business, and maintaining flexibility to respond to market conditions. With these initiatives in place, Western believes it is well-positioned to benefit from improving service demand and pricing momentum. Western's upgraded rig fleet positions the Company to remain competitive in a tightening market. The total rig fleet in the WCSB has decreased from 385 drilling rigs at June 30, 2024 to 372 drilling rigs as of July 22, 2025, representing a decrease of 13 drilling rigs, or 3%, which reduces the supply of drilling rigs for such projects. Currently, 11 of Western's drilling rigs and 8 of Western's well servicing rigs are operating. As disclosed previously, Western's board of directors has approved a capital budget for 2025 of $20 million, comprised of $2 million of expansion capital and $18 million of maintenance capital. The 2025 budget includes approximately $3 million of committed expenditures from 2024 that will carry forward into 2025. Western will continue to manage its costs in a disciplined manner and make required adjustments to its capital program as customer demand changes. In the near term, the primary challenges facing the energy services industry include commodity price volatility, the impact of industry consolidation on Western's exploration and production customers and potential customers, and constrained customer drilling activity, as exploration and production companies continue to prioritize shareholder returns through share repurchases, increased dividends, and debt reduction rather than production growth. Should commodity prices stabilize over a sustained period, and as customers further strengthen their balance sheets, an increase in drilling activity may follow. Over the medium term, Western believes its rig fleet is well positioned to benefit from increased drilling and production activity associated with the completion of the LNG Canada project and the Trans Mountain pipeline expansion. In addition, increased focus on domestic energy security and economic independence may support further development activity across the sector. 3 Source: Baker Hughes Company, 2025 Rig Count monthly press releases. 4 Source: CAOEC, monthly Contractor Summary. Non-IFRS Measures and Ratios Western uses certain financial measures in this press release which do not have any standardized meaning as prescribed by International Financial Reporting Standards ("Non-IFRS"). These measures and ratios, which are derived from information reported in the condensed consolidated financial statements, may not be comparable to similar measures presented by other reporting issuers. These measures and ratios have been described and presented in this press release to provide shareholders and potential investors with additional information regarding the Company. The Non-IFRS measures and ratios used in this press release are identified and defined as follows: Adjusted EBITDA and Adjusted EBITDA as a Percentage of Revenue Adjusted earnings before interest and finance costs, taxes, depreciation and amortization, other non-cash items and one-time gains and losses ("Adjusted EBITDA") is a useful Non-IFRS financial measure as it is used by management and other stakeholders, including current and potential investors, to analyze the Company's principal business activities prior to consideration of how Western's activities are financed and the impact of foreign exchange, income taxes and depreciation. Adjusted EBITDA provides an indication of the results generated by the Company's principal operating segments, which assists management in monitoring current and forecasting future operations, as certain non-core items such as interest and finance costs, taxes, depreciation and amortization, and other non-cash items and one-time gains and losses are removed. The closest IFRS measure would be net income (loss) for consolidated results. Adjusted EBITDA as a percentage of revenue is a Non-IFRS financial ratio which is calculated by dividing Adjusted EBITDA by revenue for the relevant period. Adjusted EBITDA as a percentage of revenue is a useful financial measure as it is used by management and other stakeholders, including current and potential investors, to analyze the profitability of the Company's principal operating segments. The following table provides a reconciliation of net loss, as disclosed in the condensed consolidated statements of operations and comprehensive loss, to Adjusted EBITDA: Three months ended June 30 Six months ended June 30 (stated in thousands) 2025 2024 2025 2024 Net loss (4,585) (5,136) (2,199) (3,681) Income tax expense (1,008) (1,621) (566) (1,093) Loss before income taxes (5,593) (6,757) (2,765) (4,774) Add (deduct): Depreciation 10,348 10,075 20,391 20,598 Stock based compensation (238) (161) (1,169) 276 Finance costs 2,286 2,494 4,639 5,150 Other items (950) (392) (1,167) (772) Adjusted EBITDA 5,853 5,259 19,929 20,478 Revenue per Operating Day This Non-IFRS measure is calculated as drilling revenue for both Canada and the US respectively, divided by Operating Days in Canada and the US respectively. This calculation represents the average day rate by country, charged to Western's customers. Revenue per Service Hour This Non-IFRS measure is calculated as well servicing revenue divided by Service Hours. This calculation represents the average hourly rate charged to Western's customers. Defined Terms Drilling rig utilization: Calculated based on Operating Days divided by total available days. Operating Days: Defined as contract drilling days, calculated on a spud to rig release basis. Service Hours: Defined as well servicing hours completed. Service rig utilization: Calculated as total Service Hours divided by 217 hours per month per rig multiplied by the average rig count for the period as defined by the CAOEC industry standard. Working capital: Calculated as current assets less current liabilities as disclosed in the Company's consolidated financial statements. Contract Drilling Rig Classifications Cardium class rig: Defined as any contract drilling rig which has a total hookload less than or equal to 399,999 lbs (or 177,999 daN). Montney class rig: Defined as any contract drilling rig which has a total hookload between 400,000 lbs (or 178,000 daN) and 499,999 lbs (or 221,999 daN). Duvernay class rig: Defined as any contract drilling rig which has a total hookload equal to or greater than 500,000 lbs (or 222,000 daN). Abbreviations Barrel ("bbl"); Canadian Association of Energy Contractors ("CAOEC"); DecaNewton ("daN"); International Financial Reporting Standards ("IFRS"); Pounds ("lbs"); Thousand cubic feet ("mcf"); Western Canadian Sedimentary Basin ("WCSB"); and West Texas Intermediate ("WTI"). Forward-Looking Statements and Information This press release contains certain forward-looking statements and forward-looking information (collectively, "forward-looking information") within the meaning of applicable Canadian securities laws, as well as other information based on Western's current expectations, estimates, projections and assumptions based on information available as of the date hereof. All information and statements contained herein that are not clearly historical in nature constitute forward-looking information, and words and phrases such as "may", "will", "should", "could", "expect", "intend", "anticipate", "believe", "estimate", "plan", "predict", "potential", "continue", or the negative of these terms or other comparable terminology are generally intended to identify forward-looking information. Such information represents the Company's internal projections, estimates or beliefs concerning, among other things, an outlook on the estimated amounts and timing of additions to property and equipment, anticipated future debt levels and revenues or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. This forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information. In particular, forward-looking information in this press release includes, but is not limited to, statements relating to: the business of Western; industry, market and economic conditions and any anticipated effects on Western and its customers; commodity pricing; the future demand for the Company's services and equipment; the effect of inflation and commodity prices on energy service activity; expectations with respect to customer spending; the impact of Western's upgraded drilling rigs; the potential continued impact of the current conflicts in Eastern Europe and the Middle East on and other macroeconomic factors on commodity prices; the Company's capital budget for 2025, including the allocation of such budget; Western's plans for managing its capital program; the energy service industry and global economic activity; expectations of increased industry activity with respect to the Trans Mountain pipeline project, the Coastal GasLink pipeline project and the LNG Canada project; the impact of the US tariffs on the approach of Canadian governments towards approval of Canadian energy projects and a focus on domestic energy independence; potential changes in Canadian government policies resulting from the outcome of the 2025 federal election; the Company's ability to benefit from improving service demand and pricing momentum; the Company's ability to continue to focus on deleveraging the business; expectations surrounding the level of investment in Canada and its impact on the Company; challenges facing the energy service industry; the Company's focus on debt reduction; expectations with respect to increased drilling activity; and the Company's ability to maintain a competitive advantage, including the factors and practices anticipated to produce and sustain such advantage. The material assumptions that could cause results or events to differ from current expectations reflected in the forward-looking information in this press release include, but are not limited to: demand levels and pricing for oilfield services; demand for crude oil and natural gas and the price and volatility of crude oil and natural gas; pressures on commodity pricing; the impact of inflation; the continued business relationships between the Company and its significant customers; crude oil transport, pipeline and LNG export facility approval and development; that all required regulatory and environmental approvals can be obtained on the necessary terms and in a timely manner, as required by the Company; liquidity and the Company's ability to finance its operations; the effectiveness of the Company's cost structure and capital budget; the effects of seasonal and weather conditions on operations and facilities; the competitive environment to which the various business segments are, or may be, exposed in all aspects of their business and the Company's competitive position therein; the ability of the Company's various business segments to access equipment; global economic conditions and the accuracy of the Company's market outlook expectations for 2025 and in the future; the impact, direct and indirect, of epidemics, pandemics, other public health crisis and geopolitical events, including the conflicts in Eastern Europe and the Middle East and the import tariffs implemented by the US administration on Western's business, customers, business partners, employees, supply chain, other stakeholders and the overall economy; changes in laws, regulations or policies; currency exchange fluctuations; the ability of the Company to attract and retain skilled labour and qualified management; the ability to retain and attract significant customers; the ability to maintain a satisfactory safety record; that any required commercial agreements can be reached; that there are no unforeseen events preventing the performance of contracts and general business, economic and market conditions. Although Western believes that the expectations and assumptions on which such forward-looking information is based on are reasonable, undue reliance should not be placed on the forward-looking information as Western cannot give any assurance that such will prove to be correct. By its nature, forward-looking information is subject to inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, volatility in market prices for crude oil and natural gas and the effect of this volatility on the demand for oilfield services generally; reduced exploration and development activities by customers and the effect of such reduced activities on Western's services and products; political, industry, market, economic, and environmental conditions in Canada, the US and globally; supply and demand for oilfield services relating to contract drilling, well servicing and oilfield rental equipment services; the proximity, capacity and accessibility of crude oil and natural gas pipelines and processing facilities; liabilities and risks inherent in oil and natural gas operations, including environmental liabilities and risks; changes to laws, regulations and policies; the ongoing geopolitical events in Eastern Europe and the Middle East and the duration and impact thereof; fluctuations in foreign exchange, inflation or interest rates; failure of counterparties to perform or comply with their obligations under contracts; regional competition and the increase in new or upgraded rigs; the Company's ability to attract and retain skilled labour; Western's ability to obtain debt or equity financing and to fund capital operating and other expenditures and obligations; the potential need to issue additional debt or equity and the potential resulting dilution of shareholders; uncertainties in weather and temperature affecting the duration of the service periods and the activities that can be completed; the Company's ability to comply with the covenants under its debt facilities, including the Second Lien Facility, and the restrictions on its operations and activities if it is not compliant with such covenants; Western's ability to protect itself from "cyber-attacks" which could compromise its information systems and critical infrastructure; disruptions to global supply chains; and other general industry, economic, market and business conditions. Readers are cautioned that the foregoing list of risks, uncertainties and assumptions are not exhaustive. Additional information on these and other risk factors that could affect Western's operations and financial results are discussed under the headings " Risk Factors" in Western's annual information form for the year ended December 31, 2024, which is available under the Company's SEDAR+ profile at The forward-looking statements and information contained in this press release are made as of the date hereof and Western does not undertake any obligation to update publicly or revise any forward-looking statements and information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws. Any forward-looking statements contained herein are expressly qualified by this cautionary statement.
Cision Canada
3 days ago
- Business
- Cision Canada
MTL Cannabis Reports Q4 and Record Full Year 2025 Financial Results Driven by $105.2M of Revenue, $21.7M of EBITDA, and $18.2M of Cash Flows from Operations
PICKERING, ON, July 21, 2025 /CNW/ - MTL Cannabis Corp. (CSE: MTLC) (OTCQX: MTLNF) ("MTL" or the "Company") is pleased to report it has filed the annual financial statements for the year ending March 31, 2025. Complete details may be found at Income Statement: Revenue of $105,239,109, an increase of $22,175,221, or 27%, compared to $83,063,888 in the prior year. Gross margin before fair value adjustments of 55%, an increase of 9%, compared to 46% in the prior year. Operating Income of $16,051,858, an increase of $11,439,188, or 248%, compared to $4,612,670 in the prior year. Net Income and Comprehensive Income of $6,826,256, an increase of $4,376,733, or 179%, compared to $2,449,523 in the prior year. EBITDA (1) of $21,722,218, an increase of $12,495,154, or 135%, compared to $9,227,064 in the prior year. Adjusted EBITDA (1) of $20,266,508, an increase of $7,622,341, or 60%, compared to $12,644,167 in the prior year. (1) See "Non-IFRS financial measures" section for reconciliation of EBITDA and Adjusted EBITDA. Statement of Cash Flows: Net cash inflows from operating activities of $18,230,108, an increase of $4,499,228, or 32%, compared to $13,780,880 in the prior year. Net cash used in investing activities of ($5,484,584), an increase of ($3,273,646), compared to ($2,210,938) in the prior year. Net cash used in financing activities of ($8,416,701), a decrease of $2,238,657, compared to ($10,655,358) in the prior year. Overall net cash increased to $5,680,958, an increase of $4,328,823, or 320%, compared to $1,352,135 at the beginning of the fiscal year. Additionally, the company was able to demonstrate retained earnings of $5,705,091, an increase of $6,319,256, or 1029%, compared to an accumulated deficit of ($614,165) in the prior year. Management Commentary: "We've entered a new era at MTL as we move from building the foundation to achieving record-breaking results," said Michael Perron, CEO of MTL. "This achievement reflects the dedication of our people, the strength of our disciplined operating model, and our team's ability to execute at a high level. We have built a strong and scalable platform, and at the core of it all is an unwavering commitment to delivering the highest quality products and services to our patients and customers. I am deeply grateful to the entire MTL team for making that possible." Richard Clement, Chair of the board of directors, commented "I am extremely proud of our team for their focus, determination, and the incredible efforts to help build the company to what it is today. We look forward to continuing to deliver strong results for our customers, patients, and shareholders." Non-IFRS financial measures In addition to results reported in accordance with IFRS, the Company uses certain non-IFRS financial measures as supplemental indicators of its financial and operating performance. These non-IFRS financial measures include Adjusted EBITDA. The Company believes these supplementary financial measures reflect the Company's ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in its business. The Company defines EBITDA as earnings before interest, taxes, depreciation and amortization. The Company defines Adjusted EBITDA as income (loss) from continuing operations, as reported, adjusted for depreciation and amortization, financing costs, gains and losses on sale of marketable securities, interest and accretion, share-based payments, change in fair value of biological assets realized through inventory sold, and unrealized gains and losses on changes in fair value of biological assets. The Company uses EBITDA as a measure of the cash generating capacity of its business. The Company uses Adjusted EBITDA to assist with comparatives to other companies by eliminating variability resulting from differences in capital structures, management decisions related to resource allocation, and the impact of fair value adjustments on biological assets and inventory, which may be volatile on a period-to-period basis. EBITDA and Adjusted EBITDA should not be considered alternatives to net income (loss), cash flow from operating activities or other measures of financial performance defined under IFRS. EBITDA and Adjusted EBITDA are intended to provide a proxy for the Company's operating cash flow and are widely used by industry analysts and investors to compare the Company to its competitors and derive expectations of the future financial performance of the Company. The Company's method of calculating EBITDA and Adjusted EBITDA may differ from other companies and, accordingly, they may not be comparable to similar measures used by other companies. The table below provide a reconciliation of Net Income as reported under IFRS in the annual financial statements to EBITDA and Adjusted EBITDA for each of the twelve-month periods ended March 31, 2025 and 2024. About MTL Cannabis Corp. MTL Cannabis Corp. is the parent company of Montréal Medical Cannabis Inc. ("MTL Cannabis"), a licensed producer operating from a 57,000 sq. ft. licensed indoor grow facility in Pointe Claire, Québec; Abba Medix Corp., a licensed producer in Pickering, Ontario that operates a leading medical cannabis marketplace; IsoCanMed Inc., a licensed producer in Louiseville, Québec growing best-in-class indoor cannabis, in its 64,000 sq. ft. production facility; and Canada House Clinics Inc., operating clinics across Canada that work directly with primary care teams to provide specialized cannabinoid therapy services to patients suffering from simple and complex medical conditions. As a flower-first company built for the modern street, MTL Cannabis uses proprietary hydroponic growing methodologies supported by handcrafted techniques to produce products that are truly craft for the masses. MTL Cannabis focuses on craft quality cannabis products, including lines of dried flower, pre-rolls and hash marketed under the "MTL Cannabis", "Low Key by MTL" and "R'belle" brands for the Canadian market through nine distribution arrangements with various provincial cannabis distributors. MTL Cannabis has also developed several export channels for bulk and unbranded GACP quality cannabis. It is MTL's goal for Abba Medix Corp. to become the leading distributor of medical cannabis in Canada and for Canada House Clinics to be the leading Canadian provider of medical cannabis clinic services. For further information, please visit or the Company's public filings at Cautionary Statement Regarding Forward-Looking Information. This press release contains forward- looking statements, including statements that relate to, among other things, the Company's clinic, production and technology businesses, its future plans, the Company's markets, objectives, goals, strategies, intentions, beliefs, expectations and estimates, and can generally be identified by the use of words such as "may", "will", "could", "should", "would", "likely", "possible", "expect", "intend", "estimate", "anticipate", "believe", "plan", "objective" and "continue" (or the negative thereof) and words and expressions of similar import. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed on such statements. Certain material factors or assumptions are applied in making forward-looking statements, and actual results may differ materially from those expressed or implied in such statements. Material assumptions used to develop forward-looking information in this news release include, the regulations related to cannabis use under the Cannabis Act (Canada); Company liquidity and capital resources, including the availability of additional capital resources to fund its activities and repay its outstanding indebtedness; level of competition; the ability to adapt products and services to the changing market; the ability to attract and retain key executives; the ability to execute strategic plans; continued integration of business unit, expansion activities at all our operating locations; and the leveraging of cash flow from operations to accelerate growth and further improve the Company's balance sheet. Additional information about material factors that could cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward-looking statements may be found in the Company's Listing Statement dated August 14, 2023 and its most recent annual and interim Management's Discussion and Analysis under "Risk and Uncertainties" as well as in other public disclosure documents filed with Canadian securities regulatory authorities. The Company does not undertake any obligation to update publicly or to revise any of the forward-looking statements contained in this document, whether as a result of new information, future events or otherwise, except as required by law.
Cision Canada
26-06-2025
- Business
- Cision Canada
INTEGRA PROVIDES 2025 GUIDANCE; FOCUSED ON CONSISTENT OPERATIONS AND CAPITAL INVESTMENT AT FLORIDA CANYON AND SIGNIFICANT ADVANCEMENT OF DEVELOPMENT PROJECTS
VANCOUVER, BC, June 26, 2025 /CNW/ - Integra Resources Corp. ("Integra" or the "Company") (TSXV: ITR) (NYSE American: ITRG) is pleased to provide 2025 guidance which contains an outlook for production, operating costs, sustaining and growth capital, and development spending across the Company's portfolio. (All amounts in United States ("U.S.") dollars unless otherwise stated) 2025 Guidance Summary Unit abbreviations: oz = troy ounce, $/oz sold = U.S. dollars per gold ounce sold, $m = million of U.S. dollars 1. Non-IFRS measure. Refer to the "Non-IFRS Measures" section of this news release. 2. Excludes stock-based compensation (non-cash item). George Salamis, President, CEO and Director of Integra commented: "When Integra acquired the Florida Canyon Mine in late 2024, the primary goal was to secure a consistent and reliable source of cash flow that would allow the Company to advance its flagship development stage projects, DeLamar and Nevada North, and remove the need for annual equity financing. Florida Canyon has successfully delivered on this objective. In the current gold price environment Florida Canyon is generating greater than expected cash flow, which has significantly improved the Company's financial position and ability to execute its strategy. As anticipated, Florida Canyon will see significant re-investment during the remaining quarters of 2025 and into 2026, across several ongoing initiatives to support a profitable mining operation for many years to come. The next 18 months represent a capital-intensive phase of the long-term continuous improvement plan for Florida Canyon. Major investments are underway in key areas including a heap leach pad expansion, increased capitalized waste stripping, a revitalized mobile equipment fleet, process optimization, and enhanced mine planning. The goal is to sustain and grow Florida Canyon, extend its mine life, and address historical underinvestment. Integra is laying the foundation for a more efficient, longer-lived operation with an improved cost profile in the years ahead. The Company's ongoing work at Florida Canyon will be incorporated into a new NI 43-101 technical report, expected to be published in the first half of 2026, in which Integra aims to highlight the improvements which can be made to this cornerstone asset. Florida Canyon's ability to generate cash flow has allowed the Company to expedite and bolster initiatives at the DeLamar Project relating to the ongoing feasibility study and permitting efforts – with the expected commencement of federal mine permitting in the second half of 2025. The Company's enhanced financial strength has also allowed for an increased budget for the Nevada North Project to complete crucial test work to support future economic studies and permitting efforts. Integra is well positioned to deliver on its goals of profitability and project advancement while progressing its long-term vision of building a U.S. focused intermediate gold producer." 2025 Production, Cost, and Growth Outlook – Florida Canyon Mine Gold production from the Florida Canyon Mine ("Florida Canyon" or the "Mine") is expected to be 70,000 to 75,000 ounces in 2025. The Company is planning to mine approximately 13.5 million tonnes of ore and 11.2 million tonnes of waste for a total of 24.7 million tonnes, resulting in a strip ratio of 0.83. The increased strip ratio in 2025 is a result of catching up on stripping postponed by previous owners, as well as additional stripping required to access new areas for mining. Cash costs at Florida Canyon are expected to range from $1,800 to $1,900 per ounce of gold sold, including royalties. Integra has numerous ongoing optimization studies at Florida Canyon focused on identifying areas for increased efficiency and cost reduction. Sustaining capital expenditures of $48.0 million to $53.0 million are focused on capitalized waste stripping, mobile fleet rebuild and replacement financing, heap leach pad expansion, and other sustaining items. Sustaining capital expenditure is weighted more heavily toward the third quarter of 2025, with work beginning for the heap leach pad expansion and fleet refurbishment. Approximately 45% of the annual sustaining capital is expected to be deployed in the third quarter of the year, which will result in an elevated mine-site all-in sustaining cost during this period. Mine site all-in sustaining costs at Florida Canyon are expected to range from $2,450 to $2,550 per ounce of gold sold, which reflects the capital-intensive period at Florida Canyon expected in 2025 and 2026. The increase to the mine-site all-in sustaining cost guidance range in 2025 versus actual first quarter costs is primarily a result of timing of sustaining capital expenditures. Growth capital between $8.0 million and $10.0 million at Florida Canyon will be deployed on expansion projects and various studies including drill testing oxide targets, mobile equipment financing to grow the fleet, engineering studies on potential steepening of pit wall slopes, and the possibility of increasing run-of-mine gold mineralized material to the heap leach pad. At Florida Canyon approximately $1.5 million has been allocated to support the 2025 growth drilling program, consisting of ~10,000 meters of reverse circulation drilling focused on near-mine targets designed to support oxide mineral reserve and resource growth and mine life extension. Drilling commenced in early May and is expected to conclude in the third quarter of 2025, with initial assay results expected to be released during the summer months of 2025. The drill program is expected to support a mineral resource and reserve update and a revised life-of-mine plan in 2026. 2025 Development Outlook – The DeLamar Project and the Nevada North Project Integra remains committed to advancing its flagship development-stage heap leach projects: the past producing DeLamar Project ("DeLamar") located in southwestern Idaho and the Nevada North Project ("Nevada North") located in western Nevada. The total expected project development spending in 2025 is $14.5 million to $15.5 million. At DeLamar, efforts in 2025 will be focused on the completion of the feasibility study and permit advancement. A total of $12.0 million to $12.5 million has been allocated to advancing DeLamar in 2025. Approximately 15% of the anticipated budget at DeLamar is allocated to advanced engineering studies that will support the upcoming feasibility study, which is expected to be delivered later in 2025. Approximately 40% of the budget for DeLamar will directly support permitting activities. In March 2025, Integra submitted the Mine Plan of Operations ("MPO") for DeLamar to the United States Bureau of Land Management ("BLM"). The submission of the updated MPO to the BLM initiates the pathway for the issuance of a Notice of Intent ("NOI"), which is a formal announcement of the BLM's intent to prepare an Environmental Impact Statement ("EIS") to evaluate the potential environmental effects of the proposed action in accordance with the National Environmental Policy Act ("NEPA"). Nevada North consists of two mineral exploration deposits, the Wildcat Deposit ("Wildcat") and the Mountain View Deposit ("Mountain View"). At Nevada North, the Company has allocated approximately $2.5 million to $3.0 million to execute several initiatives focused on continued project advancement and de-risking. The Company anticipates completing a metallurgical test work program at Wildcat and commencing a geochemical sampling program designed to assess future development criteria for mineralized oxide material and waste rock in the second half of 2025. Metallurgical and geochemical testing is being completed to support future economic studies and permitting efforts at Nevada North. These initiatives contribute to Integra's long-term growth strategy which involves the de-risking and permitting of its key development stage heap leach projects to build a leading U.S. focused intermediate gold producer. About Integra Resources Integra is a growing precious metals producer in the Great Basin of the Western United States. Integra is focused on demonstrating profitability and operational excellence at its principal operating asset, the Florida Canyon Mine, located in Nevada. In addition, Integra is committed to advancing its flagship development-stage heap leach projects: the past producing DeLamar Project located in southwestern Idaho and the Nevada North Project located in western Nevada. Integra creates sustainable value for shareholders, stakeholders, and local communities through successful mining operations, efficient project development, disciplined capital allocation, and strategic M&A, while upholding the highest industry standards for environmental, social, and governance practices. ON BEHALF OF THE BOARD OF DIRECTORS George Salamis President, CEO and Director Qualified Person The scientific and technical information contained in this news release has been reviewed and approved by Gregory Robinson (P.E., SME Registered Member), Integra's General Manager of the Florida Canyon Mine. Mr. Robinson is a "qualified person" as defined in National Instrument 43-101 – Standards of Disclosure for Mineral Projects ("NI 43-101"). Non-IFRS Measures The Company has included certain performance measures in this news release which are not specified, defined, or determined under generally accepted accounting principles (in the Company's case, International Financial Reporting Standards ("IFRS")). These are common performance measures in the gold mining industry, but because they do not have any mandated standardized definitions, they may not be comparable to similar measures presented by other issuers. Accordingly, the Company uses such measures to provide additional information, and you should not consider them in isolation or as a substitute for measures of performance prepared in accordance with generally accepted accounting principles. In this section, all currency figures in tables are in thousands, except per-share and per-ounce amounts. Forward Looking Statements Certain information set forth in this news release contains "forward–looking statements" and "forward–looking information" within the meaning of applicable Canadian securities legislation and in applicable United States securities law (referred to herein as forward–looking statements). Except for statements of historical fact, certain information contained herein constitutes forward–looking statements which includes, but is not limited to, statements with respect to: the Company's 2025 guidance, including production, AISC, expenditures and expenses; plans and expectations for Florida Canyon; expansion and life-of-mine extension plans at Florida Canyon; the timing, content, and purpose of an updated NI 43-101 technical report for Florida Canyon; anticipated assay results and mineral resources and reserves updates for Florida Canyon; feasibility study completion and permitting timelines for the DeLamar Project; test work and permitting plans for the Nevada North Project. Forward-looking statements are often identified by the use of words such as "may", "will", "could", "would", "anticipate", 'believe", "expect", "intend", "potential", "estimate", "budget", "scheduled", "plans", "planned", "forecasts", "goals" and similar expressions. Forward-looking statements are based on a number of factors and assumptions made by management and considered reasonable at the time such statement was made. Forward–looking statements necessarily involve known and unknown risks and uncertainties, which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or result expressed or implied by such forward–looking statements, including but not limited to those risk factors disclosed in Integra's Annual Information Form dated March 26, 2025 for the fiscal year ended December 31, 2024, which is available on the SEDAR+ issuer profile for the Company at and available as Exhibit 99.1 to Integra's Form 40-F, which is available on the EDGAR profile for the Company at Investors are cautioned not to put undue reliance on forward-looking statements. The forward-looking statements contained herein are made as of the date of this news release and, accordingly, are subject to change after such date. The Company disclaims any intent or obligation to update publicly or otherwise revise any forward-looking statements or the foregoing list of assumptions or factors, whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws. Investors are urged to read the Company's filings with Canadian securities regulatory agencies, which can be viewed online under the Company's profile on SEDAR+ at Cautionary Note for U.S. Investors Concerning Mineral Resources and Reserves NI 43-101 is a rule of the Canadian Securities Administrators which establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. Technical disclosure contained in this news release has been prepared in accordance with NI 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum Classification System. These standards differ from the requirements of the U.S. Securities and Exchange Commission ("SEC") and resource information contained in this news release may not be comparable to similar information disclosed by domestic United States companies subject to the SEC's reporting and disclosure requirements. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. SOURCE Integra Resources Corp.
Cision Canada
20-06-2025
- Business
- Cision Canada
SIMPLY SOLVENTLESS ANNOUNCES Q1 2025 FINANCIAL RESULTS INCLUDING RECORD ANNUALIZED GROSS REVENUE OF $49.6 MILLION ($0.459/SHARE) AND ANNUALIZED ADJUSTED EBITDA OF $12.8 MILLION ($0.120/SHARE)
/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES./ CALGARY, AB, June 20, 2025 /CNW/ - Simply Solventless Concentrates Ltd. (TSXV: HASH) (" SSC") is pleased to announce its Q1 2025 financial and operating results including record quarterly gross revenue of $12.4 million, EBITDA of $9.5 million, net and comprehensive income of $8.4 million, and adjusted EBITDA of $3.2 million. These results represent annualized gross revenue of $49.6 million ($0.459/share) and annualized adjusted EBITDA of $12.8 million ($0.120/share). The information set out in this press release should be read in conjunction with SSC's condensed interim consolidated financial statements as at and for the three months ended March 31, 2025 and the related management's discussion and analysis, which are available for review on SSC's SEDAR+ profile at Jeff Swainson, President and CEO of SSC, stated: "Q1 2025 was a strong quarter for SSC with the closing of the Humble acquisition, which vertically integrated our operations into cultivation, the closing of an over subscribed $6.0 million convertible debenture offering, achieving record gross revenue and adjusted EBITDA, the expansion of our asset base from $10.9 million in Q1 2024 to $57.8 million in Q1 2025, and subsequent to quarter end, significantly improving our balance sheet with the repayment of $3.4 million, the discharge of $0.5 million, and the deferral of $3.25 million of debt. Our steadfast focus for 2025 is to leverage our portfolio of assets to maximize profitability, cash flow from operations, and balance sheet strength, while achieving a lower cost of capital." Q1 2025 Financial Highlights: INCOME STATEMENT FIGURES Q1 2025 Q1 2025 ANNUALIZED Q1 2024 Q1 2024 ANNUALIZED % INCREASE Gross Revenue $12.4M $49.6M $3.1M $12.4M 298 % Gross Revenue/Share $0.115 $0.459 $0.064 $0.258 78 % Net Revenue $9.9M $39.6M $2.3M $9.2M 330 % Net Revenue/Share $0.091 $0.365 $0.047 $0.190 93 % Gross Margin $4.8M $19.2M $1.1M $4.4M 331 % Gross Margin/Share $0.044 $0.178 $0.023 $0.092 94 % EBITDA (1) $9.5M Not Annualized (2) $0.6M $2.4M 1,451 % EBITDA/Share $0.087 Not Annualized (2) $0.012 $0.050 595 % Adjusted EBITDA (1) $3.2M $12.8M $0.6M $2.4M 417 % Adjusted EBITDA/Share $0.030 $0.120 $0.012 $0.050 131 % Net Income $8.4 Not Annualized (2) $0.5M $2.0M 1,573 % Net Income/Share $0.078 Not Annualized (2) $0.010 $0.041 650 % Normalized Net Income (NNI) (1) $1.6 $6.4M $0.5M $2.0M 500 % NNI/Share $0.014 $0.057 $0.010 $0.041 38 % Cash from Operations Prior to Changes in Working Capital $2.0M $8.0M $0.6M $2.4M 233 % Gross Margin % 48.7 % 48.7 % 48.6 % 48.6 % 0 % (1) Non-IFRS financial measure. See discussion in the Non-IFRS Financial Measures advisories section of this press release below. (2) Not annualized as $7.7 million bargain purchase gain is non-recurring and skews figures. The results above include the consolidated operations of SSC and its wholly owned subsidiaries Massive Hash Factory Ltd., CannMart Inc. (acquired on September 12, 2024), ANC (acquired on October 18, 2024, effective October 1, 2024), and Humble (acquired on February 28, 2025, adding 1 month of operating results). SSC is continuing to capture synergies in respect of these acquisitions to further reduce costs. Continued Rationalization and Cost Savings During late Q1 2025, SSC continued to restructure operations to capture acquisition synergies. This restructuring reduced headcount by approximately 58 during March 2025, reducing annualized payroll costs by approximately $2,500,000. These amounts exclude headcount reductions made prior to closing the Humble acquisition. SSC has identified further restructuring opportunities with an estimated cost savings of between $500,000-$1,000,000 per year. Q1 2025 Operational Highlights $6.0 million Convertible Debenture Financing: On February 13, 2025, SSC completed a $6.0 million financing through the issuance of 6,000 debenture units (" Debenture Units") pursuant to an offering (the " Offering") at a price of $1,000 per Debenture Unit. Each Debenture Unit is comprised of one $1,000 principal value secured convertible debenture of SSC (" Debentures") and 1,000 common share purchase warrants of SSC (the " Warrants"). The Debentures are convertible into SSC common shares (" Common Shares") at $1.00 per Common Share at the option of the holder and at any time during the term of the Debentures. Interest accrues on the Debentures at 11% per annum, which interest is payable quarterly in cash by SSC. The Debentures mature on the date which is 48 months from the closing date, are secured by all present and after acquired property of SSC and its subsidiaries, and are subordinated to the Notes (defined below). A total of 6,000,000 Warrants were issued pursuant to the Offering. Each Warrant is exercisable for one Common Share at a price of $1.20 per Common Share for a period of four years from the closing date. The Debentures, Warrants and underlying Common Shares were subject to a hold period of four months and one day from the closing date. 350 Debenture Units (for gross proceeds of $350,000) were issued to Note holders for partial settlement of the Note balance outstanding. Acquisition of Humble: On February 28, 2025, SSC acquired all the issued and outstanding shares of Delta 9 Bio-Tech (now Humble) for cash consideration of $3,000,000 (" Acquisition"). In connection with the Acquisition, SSC entered into a lease agreement on closing in respect of the Facility (defined below) with an arms-length party for a 10-year term with renewal options. Humble operates a 98,000 square foot GACP certified cannabis cultivation facility in Winnipeg, Manitoba (the " Facility"), with an annual cultivation capacity of approximately 8,000-9,000kg of dried cannabis flower and trim. Humble services the recreational dried flower markets in Ontario, Alberta, Manitoba, Saskatchewan, British Columbia, and the Maritimes, and the business-to-business wholesale market in Canada and internationally. Key anticipated benefits and synergies are as follows: Low Cultivation Costs: Upon capture of synergies and optimization, it is expected that the all-in cash cost to cultivate will be approximately $0.70 per gram, among the lowest for indoor cannabis in Canada. No Liabilities: As Humble was acquired through CCAA proceedings, SSC assumed no liabilities upon closing of the Acquisition. Tax Pools: Humble has approximately $60 million of accrued non-capital loss tax pools which may be usable to SSC. Should these tax pools be utilized, they are expected to reduce future tax payments by up to $12 million at an effective tax rate of 20%. International Exposure: The Facility is GACP certified, allowing for the export of dried flower to international markets, which currently attracts higher selling prices. Complimentary Products: The Acquisition allows SSC to participate in the dried flower product category, which is the largest cannabis product category in Canada with a market share of approximately 40% (according to Headset data). Supply Chain: In the opinion of SSC, the supply demand dynamic is balancing in the Canadian wholesale cannabis marketplace, making it more difficult to procure the inputs that SSC requires. The Acquisition secured a supply of high-quality flower and trim for use in SSC's prerolls and in the manufacturing of concentrates and hash. Prerolling: Humble sells regular and infused prerolls in numerous markets. SSC's subsidiary ANC Inc. brings this manufacturing in-house, maximizing efficiency. Vapes: Humble sells vape cartridges in numerous markets. This manufacturing has come in-house at SSC's Massive Hash Factory facility, reducing production costs. Inventory Velocity: Humble sells several products that SSC manufactures, including hash, which helps maximize inventory turnover. Facility Cost Savings: SSC will be able to rationalize the activities performed at its various facilities, reducing fixed operating costs by approximately $750,000 annually once rationalized. Cost Synergies: Administration, including but not limited to public company costs, accounting, IT, governance, and HR are shared, reducing costs significantly. Blended Excise Rate: Humble pays lower excise rates as a cultivator, which lowers SSC's overall corporate blended excise tax rate. Repayment of $3.4 Million of ANC Promissory Notes & Deferral of Remainder: Subsequent to Q1 2025, $3.4 of the maximum remaining $7.15 million combined ANC Promissory Note and Reserve Earnout Promissory Note (collectively, the " Notes") were repaid through the issuance of 6,875,000 common shares of SSC at $0.50 per common share (subject to TSXV approval). $0.5 million of the Notes were discharged, $1.0 million of the Notes are now payable on June 3, 2026, and $2.2 million (" Payments Balance") of the Notes are payable with average weekly payments of $21,370.19 over two years. Should SSC repay the $2.2 million Payments Balance by July 31, 2025, the remaining principal balance owing at that time will be reduced by $367,500. Should SSC repay this balance by December 31, 2025, the remaining principal balance owing at that time will be reduced by $245,000. The equity issued is subject to a hold period of four months and one day from the date of issuance. This transaction significantly de-levered SSC's balance sheet. About Simply Solventless Concentrates Ltd. SSC is a public company incorporated under the Business Corporations Act (Alberta). SSC's mission is to provide pure, potent, terpene-rich ready to consume cannabis products to discerning cannabis consumers. For more information regarding SSC, please see Notice on Forward Looking Information This press release contains forward-looking statements and forward-looking information (collectively, "forward-looking statements") within the meaning of applicable securities laws. Any statements that are contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "will", "estimates", "believes", "intends", "expects", "projected", "approximately" and similar expressions which are intended to identify forward-looking statements. More particularly and without limitation, this press release contains forward looking statements concerning continued organic revenue growth, the continued synergies expected from integrating CannMart Inc., ANC, and Humble into SSC's operations, capitalizing on SSC's business plan and SSC's expected growth, results of operations and performance. SSC cautions that all forward-looking statements are inherently uncertain, and that actual performance may be affected by a number of material factors, assumptions and expectations, many of which are beyond the control of SSC, including expectations and assumptions concerning SSC, the timing and market acceptance of products, competition in SSC's markets, SSC's reliance on customers, fluctuations in interest rates, SSC's ability to maintain good relations with its customers, employees and other stakeholders, changes in law or regulations, SSC's ability to protect its intellectual property, as well as other risks and uncertainties, including those described in SSC's filings available on SEDAR+ at The reader is cautioned that assumptions used in the preparation of any forward-looking statements may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted as a result of numerous known and unknown risks, uncertainties and other factors, many of which are beyond the control of SSC. The reader is cautioned not to place undue reliance on any forward-looking statements. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement. The forward-looking statements contained in this press release are made as of the date of this press release, and SSC does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by securities law. This press release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about cost saving and rationalization and restructuring (payroll and other), gross revenue, adjusted EBITDA and NNI of SSC, which are subject to the same assumptions, risk factors, limitations and qualifications as set forth in the above paragraphs. FOFI contained in this document was approved by management as of the date of this document and was provided for the purpose of providing further information about SSC's future business operations. SSC and its management believe that FOFI has been prepared on a reasonable basis, reflecting management's best estimates and judgments, and represent, to the best of management's knowledge and opinion, SSC's expected course of action. However, because this information is highly subjective, it should not be relied on as necessarily indicative of future results. SSC disclaims any intention or obligation to update or revise any FOFI contained in this document, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. Readers are cautioned that the FOFI contained in this document should not be used for purposes other than for which it is disclosed herein. Differences in the timing of capital expenditures or revenues and variances in production estimates can have a significant impact on the key performance measures included in SSC's guidance. SSC's actual results may differ materially from these estimates. Non-IFRS Financial Measures This press release includes references to "working capital", "current ratio", "inventory turnover", "EBITDA", "adjusted EBITDA" and "normalized net income", which are not defined under International Financial Reporting Standards (IFRS). The intent of these non-IFRS measures is to provide additional useful information to investors and analysts. These non-IFRS measures do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other entities. As such, these non-IFRS measures should not be considered in isolation or used as a substitute for measures of performance prepared in accordance with IFRS. Working capital is an indicative measure of SSC's ability to service its short-term financial obligations with short-term assets. Management believes this measure provides useful information about SSC's current short-term liquidity. Refer to "Liquidity and Capital Resources" for a detailed calculation of this measure in SSC's Q1 2025 MD&A. Current ratio is calculated by dividing current assets by current liabilities and is meant to indicate whether a company is capable of servicing its current liabilities. Inventory turnover is calculated by dividing cost of goods sold by inventory, and is meant to indicate how efficient a company is at turning inventory into cash. EBITDA is calculated as income before interest and finance costs, taxes, depreciation and amortization expenses. EBITDA is considered as a useful measure by management of SSC to understand the profitability of SSC excluding the effects of capital structure, taxation and depreciation, but may not be appropriate for other purposes. EBITDA is considered a useful measure by management to understand profitability excluding the effects of capital structure, taxation and depreciation, but may not be appropriate for other purposes. Adjusted EBITDA is not defined under IFRS and therefore should not be considered an alternative to, or more meaningful than net income (loss) and comprehensive income (loss). Adjusted EBITDA is calculated as net income before interest and finance costs, taxes, depreciation and amortization expenses, share based compensation, gain settlement or disposal or bargain purchase gains, non-recurring restructuring costs and acquisition costs, foreign exchange gains and losses and government rebates, and other gains or costs that are expected to be non-recurring. Adjusted EBITDA is considered a useful measure by management to understand profitability excluding the effects of capital structure, taxation and depreciation, and non-recurring items, but may not be appropriate for other purposes. NNI is considered as a useful measure by management of SSC to understand the profitability of SSC excluding the effects of certain non-operating items. NNI is calculated as net income less gain settlement or disposal or bargain purchase gains, non-recurring restructuring costs and acquisition costs, foreign exchange gains and losses and government rebates, income tax recovery, and other gains or costs that are expected to be non-recurring. See the " Operations" section in SSC's management's discussion & analysis for Q1 2025 and the year ended December 31 2024, available on SEDAR+ at for a quantitative reconciliation of net income to adjusted EBITDA for such period, which information is incorporated by reference in this press release. Shown below is a reconciliation of EBITDA, adjusted EBITDA and NNI for Q1, 2025. Reconciliation of Non-GAAP Measures EBITDA and Adjusted EBITDA For the Three Months Ended March 31, 2025 March 31, 2024 Net and comprehensive income $ 8,408,008 $ 502,536 Non-operating items: Depreciation and amortization 587,091 13,234 Finance costs 558,221 51,832 Income tax recovery (97,214) - EBITDA 9,456,106 567,602 Non-operating items: Restructuring costs 551,175 - Acquisition costs 372,316 - Foreign exchange loss 15,175 - Government rebates 28,786 - Bargain purchase acquisition price (7,725,913) - Share compensation expense 552,237 43,969 Adjusted EBITDA $ 3,249,882 $ 611,571 Normalized Net Income For the Three Months Ended March 31, 2025 March 31, 2024 Net and comprehensive income $ 8,408,008 $ 502,536 Non-operating items: Restructuring costs 551,175 - Acquisition costs 372,316 - Foreign exchange loss 15,175 - Government rebates 28,786 - Bargain purchase acquisition price (7,725,913) - Income tax recovery (97,214) 43,969 Normalized net income $ 1,552,333 $ 546,505 This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. SOURCE Simply Solventless Concentrates Ltd.
Business Wire
13-06-2025
- Business
- Business Wire
Roots Reports Strong First Quarter Fiscal 2025 Results
TORONTO--(BUSINESS WIRE)-- Roots ('Roots' or the 'Company') (TSX: ROOT), a premium outdoor-lifestyle brand, announced today financial results for its first quarter ended May 3, 2025 ('Q1 2025'). All financial results are reported in Canadian dollars unless otherwise stated. Certain metrics, including those expressed on an adjusted basis, are non-IFRS measures. See 'Non-IFRS Measures and Industry Metrics' below. "Our first-quarter results, marking the third consecutive quarter of year-over-year growth in sales, gross margin, and adjusted EBITDA, speaks to the growing resonance of the Roots brand and the discipline with which we are executing our strategic priorities,' said Meghan Roach, President and Chief Executive Officer. 'From elevated marketing to improved product availability and AI-operational enhancements, we drove meaningful gains across key performance metrics. As we begin 2025, I am proud of how our team continues to innovate and deliver value, while navigating consumer preferences and the evolving retail landscape." Sales were $40.0 million, a 6.7% increase compared to $37.5 million in Q1 2024. DTC sales were $34.6 million, a 10.2% increase compared to $31.4 million in Q1 2024 DTC comparable sales growth was 14.1% Gross margin was 61.5%, up 250bps compared to 59.0% in Q1 2024 DTC gross margin of 62.9%, up 80bps compared to 62.1% in Q1 2024 Net loss totaled ($7.9) million, improving from ($8.9) million in Q1 2024 Excluding the impacts from cash settled instruments under our share-based compensation plan, net loss would have been ($7.4) million, improving 16.5% compared to ($8.9) million in Q1 2024 Adjusted EBITDA amounted to ($7.1) million, a 10.7% improvement from ($8.0) million in Q1 2024 Excluding the impacts from cash settled instruments under our share-based compensation plan, Adjusted EBITDA would have been ($6.6) million, improving 16.8% compared to ($8.0) million in Q1 2024 Net debt reduced 6.7% year-over-year to $29.6 million Repurchased 115,300 shares for $0.3 million under the normal course issue bid that launched in Q1 2025 1 Basis points ('bps'). 2 Adjusted EBITDA is a non-IFRS measure that adjusts for the impact of certain items that are non-recurring or unusual in nature to remove difficulty in comparing underlying financial performance between periods. See 'Non-IFRS Measures and Industry Metrics'. 3 Free cash flow is a supplementary financial measure that reflects cash flow generated from ongoing operations, calculated as our cash from operating activities less cash used in investing activities and the payment of principal on lease liabilities net of lease incentives. See 'Non-IFRS Measures and Industry Metrics'. 4 Net debt is a supplementary financial measure that reflects our liquidity, refer to the 'Reconciliation of long-term debt to net debt and leverage ratio' table for the calculation. See 'Non-IFRS Measures and Industry Metrics'. Expand 'Our first quarter results reflect our ongoing commitment to balance top-line growth with cost discipline to improve long-term profitability and operating leverage,' said Leon Wu, Chief Financial Officer. 'With a strong balance sheet, we are well-positioned to opportunistically respond to shifting market conditions while sustaining our current momentum.' FIRST QUARTER OVERVIEW Total sales were $40.0 million in Q1 2025, representing an increase of 6.7% from $37.5 million in the first quarter of fiscal 2024 ('Q1 2024'). DTC sales (corporate retail store and eCommerce sales) were $34.6 million, a 10.2% increase from $31.4 million in Q1 2024. DTC momentum carried into Q1, with comparable sales growth of 14.1%, driven by double-digit growth across both channels. This was led by conversion improvements through improved product curation, customer experience improvements, and better in-stock position. P&O sales (wholesale Roots branded products, licensing to select manufacturing partners and the sale of certain custom products) amounted to $5.4 million in Q1 2025 as compared to $6.1 million in Q1 2024. The decline in P&O sales is from lower wholesale sales as our international operating partner continues to optimize their inventory levels. This decline was partially offset by double digit growth from the remaining lines of business in the segment, including China Tmall eCommerce sales. Gross profit reached $24.6 million in Q1 2025 compared to $22.1 million in Q1 2024, representing a year-over-year increase of 11.2%. Gross margin was 61.5% in Q1 2025 compared to 59.0% in Q1 2024. DTC gross margin was 62.9% in Q1 2025, up 80 basis points from 62.1% in Q1 2024. The increase in DTC gross margin was driven by 270 bps of product margin expansion from improved costing and lower discount sales. This was partially offset by the unfavorable foreign exchange impact on U.S. dollar purchases and increased freight premiums. SG&A expenses totaled $33.3 million in Q1 2025 compared to $32.0 million in Q1 2024, representing a year-over-year increase of 4.1%. The increase was partially driven by $0.5 million of unfavourable revaluation of cash-settled instruments under our share-based compensation plan. Excluding this item, SG&A expenses increased 2.6%, primarily reflecting higher investments in marketing, with sales-driven variable costs largely offset by savings from store fleet optimization initiatives. Net loss totaled ($7.9) million, or ($0.20) per share, in Q1 2025, improving from a net loss of ($8.9) million, or ($0.22) per share, in Q1 2024. Adjusted EBITDA amounted to ($7.1) million in Q1 2025, improving from to ($8.0) million in Q1 2024. FINANCIAL POSITION Inventory was $40.5 million at the end of Q1 2025, as compared to $35.4 million at the end of Q1 2024, representing an increase of $5.1 million or 14.5%. The year-over-year increase in inventory was driven by an increase in certain core collections on-hand, addressing the shortages in these areas in Q1 2024, and higher in-transit inventory to support the upcoming season. Free cash flow was ($21.8) million in Q1 2025, as compared to ($14.6) million in Q1 2024. The change in free cash outflows was driven by increased inventory purchases and the timing of certain monthly occupancy cost payments. As at May 3, 2025, Roots had net debt of $29.6 million, improved from $31.7 million a year earlier. The Company's leverage ratio, defined as total net debt to trailing 12-months Adjusted EBITDA, was 1.3x as at Q1 2025. As at May 3, 2025, Roots had $40.6 million outstanding under its credit facilities and total liquidity of $65.9 million, including cash and borrowing capacity available under its revolving credit facility. NORMAL COURSE ISSUER BID Under its Normal Course Issuer Bid ('NCIB') program, Roots repurchased 115,300 common shares of the Company ('Shares') for a total consideration of $0.3 million in Q1 2025. The NCIB allows the Company to repurchase for cancellation up to 1,347,118 Shares during the 12-month period ending April 10, 2026. At the end of Q1 2025, 115,300 Shares had been purchased under the current NCIB program. On May 22, 2025, the Company amended its Credit Agreement to extend the current maturity date of September 6, 2026 to September 6, 2027. In addition, the amendment reduced the $60 million Revolver Credit Facility, which includes a swing loan of $10 million, down to $45 million, and increased the maximum annual excess cash flow sweep, as defined in the Credit Agreement, from $5 million to $7.5 million. The costs incurred by the Company associated with the amendment will be recorded as debt financing costs within long-term debt and will be recognized in interest expense over the remaining term of the loan. CONFERENCE CALL AND WEBCAST INFORMATION Roots will hold a conference call to review its first quarter 2025 results on June 13, 2025 at 8:00 a.m. ET. All interested parties can join the call by dialing 1-226-828-7575 or 1-833-950-0062 and using conference ID: 239625. Please dial in 15 minutes prior to the call to secure a line. The conference call will be archived for replay until June 20, 2025, at midnight, and can be accessed by dialing 1-226-828-7578 or 1-833-950-0062 and entering the replay passcode: 507584. A live audio webcast of the conference call will be available on the Events and Presentations section of the Company's investor website at or by following the link here. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast. An archived replay of the webcast will be available on the Company's website for one year. NON-IFRS MEASURES AND INDUSTRY METRICS This press release makes reference to certain non-IFRS measures including certain metrics specific to the industry in which we operate. These measures are not recognized measures under International Financial Reporting Standards as issued by the International Accounting Standards Board ('IFRS'), do not have a standardized meaning prescribed by IFRS and, therefore, may not be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management's perspective. Accordingly, these measures are not intended to represent, and should not be considered as alternatives to net loss or other performance measures derived in accordance with IFRS as measures of operating performance or operating cash flows or as a measure of liquidity. In addition to our results determined in accordance with IFRS, we use non-IFRS measures including 'EBITDA', 'Adjusted EBITDA', 'Net Debt'; and non-IFRS ratio: 'leverage ratio'. This press release also makes reference to 'gross margin', 'DTC gross margin', and 'comparable sales', which are commonly used metrics in our industry but that may be calculated differently compared to other companies. Gross margin, DTC gross margin and comparable sales are considered supplementary financial measures under applicable securities laws. We believe these non-IFRS measures and industry metrics provide useful information to both management and investors in measuring our financial performance and condition and highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. For further information regarding these non-IFRS measures, please refer to 'Cautionary Note-Regarding Non-IFRS Measures and Industry Metrics' in our management's discussion and analysis for Q1 2025, which is incorporated by reference herein and is available on SEDAR+ at or the Company's Investor Relations website at _______________ Notes: (a) The impact of IFRS 16 in Q1 2025 and Q1 2024 was: (i) a decrease to selling, general, and admin (' SG&A ') expenses of $1,262 and $1,097, respectively, which comprised the impact of depreciation, and lease modifications on the right-of-use (' ROU ') assets, net of the exclusion of rent payments from SG&A expenses, (ii) a decrease in interest expense of $1,292 and $1,291, respectively, arising from interest expense recorded on the lease liabilities in the period, and (iii) a deferred tax impact of $(8) and $(52), respectively, based on tax attributes on the ROU assets and lease liabilities balances recorded. (b) As a result of the Acquisition, the Company recognized an intangible asset for lease arrangements in the amount of $6,310, which when excluding the impacts of IFRS 16, is amortized over the life of the leases and included in SG&A expenses. (c) Represents non-cash share-based compensation expense in respect of our Legacy Equity Incentive Plan, Legacy Employee Option Plan, and Omnibus Equity Incentive Plan. (d) Represents expenses incurred in respect of the Company's efforts to recruit for vacancies in key management positions and severance costs associated with employee separations relating to such positions. (e) Represents non-recurring legal costs that are outside the scope of normal operations. (f) Adjusted EBITDA excludes the impact of IFRS 16. If the impact of IFRS 16 was included for Q1 2025 and Q1 2024, Adjusted EBITDA would have been $(1,723) and $(2,364), respectively. Expand Reconciliation of long-term debt to net debt and leverage ratio: __________ Notes: (1) Total long-term debt of $35,490 at May 3, 2025, is net of $684 unamortized long-term debt financing costs. As at May 4, 2024, total long-term debt of $44,119 is net of $1,079 unamortized long-term debt financing costs. As at February 1, 2025, total long-term debt of $41,370 is net of $810 unamortized long-term debt financing costs. Expand ABOUT ROOTS Established in 1973, Roots is a global lifestyle brand. Starting from a small cabin in northern Canada, Roots has become a global brand with over 100 corporate retail stores in Canada, two stores in the United States, and an eCommerce platform, We have more than 100 partner-operated stores in Asia, and we also operate a dedicated Roots-branded storefront on in China. We design, market, and sell a broad selection of products in different departments, including women's, men's, children's, and gender-free apparel, leather goods, footwear, and accessories. Our products are built with uncompromising comfort, quality, and style that allows you to feel At Home With Nature TM. We offer products designed to meet life's everyday adventures and provide you with the versatility to live your life to the fullest. We also wholesale through business-to-business channels and license the brand to a select group of licensees selling products to major retailers. Roots Corporation is a Canadian corporation doing business as 'Roots'. FORWARD-LOOKING INFORMATION Certain information in this press release contains forward-looking information. This information is based on management's reasonable assumptions and beliefs in light of the information currently available to us and is made as of the date of this press release. Actual results and the timing of events may differ materially from those anticipated in the forward-looking information as a result of various factors. Information regarding our expectations of future results, performance, achievements, prospects or opportunities or the markets in which we operate is forward-looking information. Statements containing forward-looking information are not facts but instead represent management's expectations, estimates and projections regarding future events or circumstances. Many factors could cause our actual results, level of activity, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking statements. See 'Forward-Looking Information' and 'Risk Factors' in the Company's current Annual Information Form for a discussion of the uncertainties, risks and assumptions associated with these statements. Readers are urged to consider the uncertainties, risks and assumptions carefully in evaluating the forward-looking information and are cautioned not to place undue reliance on such information. We have no intention and undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities law.
