CALGARY, AB, July 23, 2020 /CNW/ - YSS Corp.™ (the
"Company" or "YSS") (TSXV: YSS) (WKN: A2PMAX), a
premier Canadian cannabis retailer with operations under the
YSSTM and Sweet TreeTM brands and a trusted
destination to explore and discover cannabis in Canada, is
pleased to announce preliminary Q2 2020 financial results and
provide an operational update.
Q2 2020 Highlights
- Revenue of $4.7 million increased
12% over Q1 2020 and exceeded the Company's Q2 2020 outlook of
$4.6 million.
- Gross margin of $1.4 million was
6% higher than Q1 2020 and exceeded the Company's Q2 2020 outlook
of $1.3 million.
- Store-Level EBITDA1 of $358,000 represents a 131% increase over the
previous quarter.
- General and administrative costs of $671,000 were $149,000 (18%) lower than in Q1 2020.
- By the end of Q2 2020, YSS had successfully increased the
number of EBITDA1 positive stores to 15 compared to 13
at the end of the previous quarter.
Operational Update
Positive growth trends have prevailed through the first half of
2020 and have continued into July. Based on data reported by
Statistics Canada for the first five months of 2020, Canada and Alberta are on-pace to exceed $2.0 billion and $450
million in retail cannabis sales in 2020, respectively,
which would represent an increase from $1.2
billion and $255 million,
respectively, in 2019 annual retail sales.
Concurrent with this growth, YSS has taken steps to improve
operational efficiencies. These steps, combined with increased
same-store sales, have resulted in store-level EBITDA1
margin improvement from 4% in Q1 2020 to 8% in Q2 2020 with the
expectation to exceed 10% in Q3 2020.
YSS remains on target to exit 2020 with positive run-rate
corporate EBITDA1. This goal would be accelerated
if the Company maintains a consistent pace of same-store growth for
the remainder of 2020 and realizes positive contribution from
opening and operating additional stores in 2020. Construction on
the next two YSS stores, located in Waterloo and Edmonton, is expected to commence in the
coming weeks.
With $4.6 million of cash and no
debt at the end of Q1 2020, YSS has ample capital to support
ongoing same-store growth and complete the construction of planned
new stores in Alberta and
Ontario while maintaining the
financial flexibility to pursue strategic acquisition
opportunities.
1 Non-IFRS
measure. Store-Level EBITDA is defined as revenue less cost of
goods sold and operating costs before corporate general &
administrative expenses, and Corporate EBITDA is defined as
Store-Level EBITDA less corporate general & administrative
costs.
|
Concurrent with this press release, the Company has posted an
updated corporate presentation on the investor portal of the YSS
website at:
https://ysscorp.ca/investors.
During the COVID-19 pandemic, YSS and Sweet Tree stores have
remained open, with operations continuing without meaningful
disruption. In the face of COVID-19, YSS' business value of
trust has been prioritized more than ever. The Company cares
deeply about the safety and well-being of its employees, customers,
and partners, and is pleased with the positive outcome of measures
put in place to ensure stores are clean and safe, and with the
success to date of its click and collect program, which minimizes
the in-store time required for customers.
Additional Information
Selected financial and operational information is outlined in
this press release and should be read in conjunction with YSS' the
audited consolidated financial statements for the quarter ended
March 31, 2020 and the related
management's discussion and analysis ("MD&A"), each of
which is filed on SEDAR at www.sedar.com and posted to the
Company's website at www.ysscorp.ca/.
For information on store locations, updates on promotions, store
openings and to access the Company's click and collect service
please visit www.ysscorp.ca, www.sweettreecannabis.com and follow
us on social media.
For additional information regarding YSS Corp. please see the
Company's website at www.ysscorp.ca/investors and filings available
under the Company's profile on SEDAR at www.sedar.com.
About YSS Corp.
With retail operations under the YSSTM and
Sweet TreeTM brands, YSS Corp. is a premium
cannabis retailer and the trusted destination to explore and
discover cannabis in Canada. YSS
operates 17 locations across Alberta and in Saskatchewan under the YSS and Sweet Tree
brands. In addition, YSS maintains a strategic portfolio of
under construction, secured and prospective locations that
represent future organic growth potential for the Company. YSS
management brings proven expertise across capital markets, retail
operations, hospitality, cannabis, financial management and a
strong commitment to deliver shareholder value by leveraging
high-quality opportunities within this exciting new industry. The
YSS retail experience is built on our five fundamental pillars:
convenience, value, selection, team, and above all else, trust.
This news release may include forward-looking statements
including opinions, assumptions, estimates, the Company's
assessment of future plans and operations, and, more
particularly, statements concerning: YSS' retail cannabis business
strategy, including organic growth and strategic activities; the
Company's operations; COVID-19, the Company's actions taken
in response thereto and the effect thereof and the impact of
COVID-19 on the Company's business, financial condition and results
of operations; the Company being positioned with the
financial flexibility to support ongoing same-store growth,
construct and open new stores and execute on strategic merger and
acquisition opportunities; the Company's objective to exit
2020 with positive run-rate corporate EBITDA and the factors
contributing thereto; the Company's planned construction and
opening of new stores in Alberta
and Ontario, timing thereof and
impact thereon on the Company's 2020 objectives; the future
performance of the operating retail cannabis stores; and
expectations regarding annualized 2020 retail cannabis sales in
Canada and Alberta.
When used in this document, the words "will," "anticipate,"
"believe," "estimate," "expect," "intent," "may," "project,"
"should," and similar expressions are intended to be among the
statements that identify forward-looking statements.
The forward-looking statements are founded on the basis of
expectations and assumptions made by the Company. Forward-looking
statements are subject to a wide range of risks and uncertainties
and, although the Company believes that the expectations
represented by such forward-looking statements are reasonable,
there can be no assurance that such expectations will be realized.
Any number of important factors could cause actual results to
differ materially from those in the forward-looking statements
including, but not limited to: risks relating to the COVID-19
pandemic, governmental responses thereto, measures taken by the
Company in response thereto and the impact thereof on the global
economy, capital markets, the cannabis retail industry and the
Company; the success of the Company's operations; ability to
execute its business strategy and future plans of operations; risks
relating to acquisitions; third party credit risks; accuracy and
reliability of data analytics relied on by the Company; ability to
obtain, amend or renew necessary licences, permits and
authorizations for the Company's operations in a timely and
cost-efficient manner; ability to obtain and maintain liability
insurance on acceptable terms; development of new stores including
construction delays; increased competition; ability to locate and
secure acceptable store sites and maintain retail leases on
acceptable terms; ability to obtain quality and diversified
cannabis products and cannabis accessories; ability to attract and
retain key personnel and customers; dependence on key personnel;
labour costs, shortages and labour relations; supply interruption
or delays; dependence on suppliers; intellectual property and
cybersecurity risks; risks related to product recalls, product
liability and health and safety; unfavourable publicity and
consumer perception with respect to cannabis, cannabis products and
cannabis accessories; industry conditions and events; the size of
the recreational cannabis market; changing customer habits; the
state of the economy including general economic conditions in
Canada, the U.S. and globally; the
unpredictability and volatility of the price of the common shares;
restrictions on potential growth; availability of sufficient
financial resources to fund the Company's capital expenditures;
changes in tax rates and government mark-ups; the state of domestic
capital markets; the ability to obtain financing on satisfactory
terms; changes in general market conditions; and other factors more
fully described from time to time in the reports and filings made
by the Company with securities regulatory authorities. Please refer
to the Company's management's discussion and analysis for the year
ended December 31, 2019 and the
Company's annual information form for the year ended December 31, 2019 for additional risk factors
relating to the Company, which can be accessed under the Company's
profile on www.sedar.com.
Except as required by applicable laws, the Company does not
undertake any obligation to publicly update or revise any
forward-looking statements.
This news release contains future-oriented financial
information and financial outlook information (collectively,
"FOFI") about the Company's revenue, gross margin and EBITDA, 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 YSS' future business operations.
YSS 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.
Store-level EBITDA (Earnings Before Interest Tax Depreciation
Amortization) is not a measure recognized by IFRS and does not have
a standardized meaning prescribed by International Financial
Reporting Standards ("IFRS"). Investors are cautioned that this
measure should not be relied on as an indicator of the Company's
financial performance, of its cash flows from operating, investing
and financing activities or be relied on as a measure of its
liquidity and cash flows. The Company's method of calculating the
aforementioned non-IFRS financial measure, may differ from the
methods used by other issuers. Therefore, this measure may not be
comparable to similar measures presented by other issuers. Please
refer to the MD&A for additional information relating to
non-IFRS measures.
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 news release.
SOURCE YSS Corp.