Sales Increase 960% to $6.7 Million with 27% Reduction in Operating Expenses
BOCA RATON, FL, Aug. 17, 2020 — Stem Holdings, Inc. (“Stem” or the “Company”) (OTCQX: STMH CSE: STEM), a leading vertically-integrated cannabis and hemp branded products company with state-of-the-art cultivation, processing, extraction, retail, and distribution operations throughout the United States, announced today its financial results for the third quarter ended June 30, 2020.
Third quarter financial highlights:
- For the third quarter ended June 30, 2020 revenues increased 960% vs. same period prior year, attributed to organic growth, the integration of Oregon-based businesses, new product innovation, and a new dispensary in California acquired in March 2020.
- Recorded the Company’s first positive adjusted EBITDA for the quarter ended June 30, 2020 of $.3 million from operations.
- Gross margin for the quarter ended June 30, 2020 of $1.77 million vs. $.36 million same period prior year.
- Operating expenses for the quarter ended June 30, 2020 were reduced by 27% reflecting achievement of planned acquisition synergies and productivity initiatives throughout the Company.
- Net loss per share of 1-cent vs. loss of 10-cents in the prior period reflecting a 77% improvement in net loss attributable to Stem Holding’s operations for the quarter ended June 30, 2020.
The Company continues to execute its four-point plan as announced in its shareholder update in July 2020. “We are extremely pleased with our performance in the quarter, particularly as we navigated our operations and cash flow in a challenging COVID-19 environment,” stated Adam Berk, Chief Executive Officer of Stem. “Our team continues to execute our plan for expanded cultivation and yield of world-class products, disruptive innovation in accretive-margin segments, and expansion of our distribution footprint in key markets,” Berk commented. “We continue to focus on cash management through stringent inventory control and cash conversion as we diligently manage our receivable and payable activities. Last, our marketing initiatives continue to drive new consumer trial and brand loyalty as we focus on superior quality while achieving synergies in production and SG&A without compromise,” he concluded.
About Stem Holdings, Inc.
Stem Holdings, Inc. (OTCQX: STMH CSE: STEM) is a leading cannabis and hemp branded products company in the U.S. with proprietary capabilities in sustainable cultivation, processing, extraction, and R&D, as well as retail and distribution operations aligned with state-by-state regulations. Stem’s award-winning brands are the foundation of the Company’s expansion into current and new segments and markets, with exceptional and disruptive brands and products that benefit well-being. Stem’s expertise and scale will drive growth domestically and internationally, building value for shareholders.
Cautionary Note Regarding Forward-Looking Information
This press release contains statements which constitute “forward-looking information” within the meaning of applicable securities laws, including statements regarding the plans, intentions, beliefs and current expectations of the management of Stem with respect to future business activities. Forward-looking information is often identified by the words “may”, “would”, “could”, “should”, “will”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect” or similar expressions and include information regarding: (i) the ability of the Company to successfully achieve its business objectives, (ii) plans for expansion of Stem, (iii) expectations for other economic, business, and/or competitive factors, and (iv) anticipated growth.
Investors are cautioned that forward-looking information is not based on historical facts but instead reflect the management of Stem’s expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Although Stem believes that the expectations reflected in such forward-looking information are reasonable, such information involves risks and uncertainties, and undue reliance should not be placed on such information, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of the Company. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking information are the following: changes in general economic, business and political conditions, including changes in the financial markets; the ability of the Company to raise debt and equity capital in the amounts and at the costs that it expects; adverse changes in the public perception of cannabis; decreases in the prevailing prices for cannabis and cannabis products in the markets that the Company operates in; adverse changes in applicable laws; or adverse changes in the application or enforcement of current laws, including those related to taxation; the inability to locate and acquire suitable companies, properties and assets necessary to execute on the Company’s business plans; and increasing costs of compliance with extensive government regulation. This forward-looking information may be affected by risks and uncertainties in the business of Stem and market conditions.
Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although Stem has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. Stem does not intend, and does not assume any obligation, to update this forward-looking information except as otherwise required by applicable law.
No securities regulatory authority has in any way passed upon the merits of the proposed transactions described in this news release or has approved or disapproved of the contents of this news release.