The Parent Company Q3 Revenue Drops 28% Sequentially, CEO Says New Products Coming Soon

Author: Joana Scopel | November 14, 2022 09:22pm

The Parent Company (NEO: GRAM.U) (OTCQX:GRAMF) announced its financial results on Monday for the quarter ended September 30, 2022 ("Q3 2022"). “All amounts are expressed in U.S. dollars,” reads a press release.

Q3 2022 Financial

• Q3 2022 Net sales from continuing operations of $19.6 million (excluding bulk wholesale business which is shown as discontinued operations on September 30, 2022)
• Gross profit from continuing operations for Q3 2022 was $6.6 million, or 34% of net sales
• Reported an adjusted Q3 2022 net loss of $31.3 million which excludes $13.4 million of losses associated with discontinued operations, a non-cash tax recovery of $24.5 million, and $127.8 million of non-cash impairments, primarily associated with intangible assets and goodwill.
• Adjusted EBITDA loss from continuing operations for Q3 2022 was $15.9 million. Adjusted EBITDA removes the effects of changes in the fair value of financial instruments, impairment charges, and other non-cash items.
• Unrestricted Cash and cash equivalents totaled $107 million as of September 30, 2022.

"Our refocused strategy is delivering, with gross margin improving to 34% in the third quarter. Our cost-saving initiatives are also generating real impact, with $13.6 million in expected annual expense savings, and our strategic outsourcing of select low-margin and non-core activities, enabling our team to invest our energy in the best opportunities for long-term growth,” said Troy Datcher, CEO and chairman of The Parent Company. “While these choices have had a short-term impact on topline revenue, I am confident these actions have positioned us to become a leader in the California market."
Operational Highlights:

• Completed the acquisition of Calma, the Company's popular West Hollywood location.
• Accelerated cost-saving initiatives by strategically outsourcing the Company's cultivation in addition to optimizing its delivery depot network in advance of the California Department of Cannabis Control's proposed new regulations.
• Entered into exclusive brand licensing and cultivation production agreements in Maryland with Curio Wellness, according to the report.

Subsequent Events: Under the revised symbol "GRAM", the company began trading in Canadian dollars on the NEO stock exchange, on October 7, 2022. 

“In the coming months, we expect to bring several new and exciting products and formats to market, expand our brand portfolio, and further connect with consumers,” Datcher said. “Our significant retail insights have enabled us to identify several current gaps in the marketplace, where we intend to roll out higher-margin products that deliver value to both customers and shareholders. We look forward to a year of excitement and innovation as we take the next step on our path to becoming an industry leader."

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Photo: Courtesy Of PiggyBank On Unsplash

Posted In: GRAMF