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Lifeist reports third quarter 2023 financial results

(Globe Newswire) Toronto — Lifeist Wellness Inc., a health-tech company that leverages advancements in science and technology to build breakthrough companies that transform human wellness, today reported its financial results for the three months ended August 31, 2023 compared to the same period last year. All financial figures are in Canadian dollars unless otherwise indicated.

Third quarter

• Net revenue of $4.8 million in Q3 2023 compared to $6.8 million in Q3 2022.
• The strategic focus on high margin activities and operational efficiency continues to pay off with gross margins improving to 30% in Q3 2023 compared to 20 per cent in Q3 2022.
• Gross profit before inventory adjustment increased slightly to $1.4 million.
• Operating costs and professional fees drop 21.4 per cent to $3.1 million in Q3 2023 compared to $3.8 million in Q3 2022.

“Our steadfast commitment to transforming Lifeist into a diversified wellness company with high-margin business units remains on track. Our third-quarter performance, while presenting unique challenges, underscores our unwavering dedication to continuous improvement and efficiency. We have shifted our primary focus to gross profit enhancement, rather than simply revenue growth, and together with cost efficiency measures in Q3 2023, such actions yielded promising results. With this strategic shift in focus, we will be better positioned to weather industry fluctuations, foster profitability, and deliver sustainable growth. We look forward to communicating our progress within our business units as we continue to navigate the challenging path forward.” — Meni Morim, CEO, Lifeist

Financial summary

Net revenue was $4.8 million in Q3 2023 compared to $6.8 million in Q3 2022 due to supply chain challenges impacting CannMart’s cannabis revenue in Q3 2023, as compared to Q3 2022.

Gross profit before inventory adjustment increased 2.9 per cent to $1.4 million in Q3 2023 versus the same period last year, with margins expanding to 30 per cent in Q3 2023 from 20 per cent in Q2 2023. The increase in margins in Q3 2023 as compared to Q3 2022 reflects the success of the Company’s strategic focus on individual segments, geographies, and products, as well as a continuous effort to improve production efficiencies across all segments.

Adjusted EBITDA loss increased to $2.1 million in Q3 2023 compared to $1.2 million in Q3 2022 and net loss from continuing operations was $2.4 million, or ($0.005) per diluted share, in Q3 2023 compared to a loss of $1.9 million, or ($0.005) per share, in Q3 2022. The increase in both adjusted EBITDA loss and net loss was due largely to a significant one-time gain recorded in Q3 2022 relating to the termination of a distribution agreement. Excluding this one-time gain adjusted EBITDA and net loss improved year over year.

Balance sheet and cash flow

Cash and cash equivalents were $1.4 million at August 31, 2023, compared to $3.8 million at November 30, 2022.

Inventories were $5.6 million at August 31, 2023 compared to $4.5 million at November 30, 2022.

The working capital position was $3.7 million at August 31, 2023.

Net cash used by operations was $1.5 million in Q3 2023 compared to $3.2 million in Q3 2022, due in part to lower revenue from CannMart and reductions in overall operating costs.

Additional information

The Company’s complete financial statements and management’s discussion & analysis for Q3 2023 are available on Lifeist’s website and SEDAR+