Unrivaled Brands Q1 FY23 Revenue Declines 52.7% YoY, What About Profit?

Unrivaled Brands, Inc. UNRV, a cannabis company with operations throughout California, today reported financial results for its fiscal first quarter ended March 31, 2023, revealing revenue of $8.7 million, a decrease of 52.7% compared to $18.5 million in Q1 FY 2022.

Q1 FY 2023 Financial Highlights

Gross profit was $4.2 million, a decrease of 26.7% compared to $5.7 million in Q1 FY 2022.
Gross margin increased to 48% as compared to 44% during the prior quarter and up from 31% from the quarter ended March 31, 2022.
Net income was $410,000 compared net loss of $8.6 million in Q1 FY 2022.
Adjusted EBITDA from continuing operations was negative $1.15 million compared to positive $1.4 million in the previous quarter.

Q1 FY 2023 Other Highlights

For the quarter ended March 31, 2023, the company had a $3.0 million gain on extinguishment of debt and a $1.5 million gain on settlement of liabilities. The company also had $1.0 million of interest expense and $1.4 million of non-cash expense for income taxes, depreciation, and amortization.
During the fiscal first quarter, the company entered into a binding term sheet to resolve outstanding litigation with People’s California, LLC, subject to final documentation, staying all pending litigation and restructuring debt. As a result, $15.0 million of debt related to the People’s acquisition was reclassified from current liabilities to long-term liabilities as of March 31, 2023.
During the fiscal first quarter, the company entered into a binding settlement term sheet to settle approximately $3.3 million of indebtedness to certain noteholders of the company.
As of March 31, 2023, the company had 153 employees, a reduction from 185 employees a year ago.

Patty Chan, Unrivaled’s interim CFO stated, “Q1 has been a testament to our unwavering commitment to progress. Our team has achieved two consecutive quarters of net income and positive EBITDA, despite the recessionary environment. We have remained steadfast in our pursuit of growth and success, and we are pleased to report that our efforts have paid off. Our continuous progress is a reflection of our team's hard work and dedication, and we are excited to build on this momentum and explore opportunity as we move forward."

Photo by Esteban López on Unsplash

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