Canadian Marijuana Company Rubicon Organics Reports Flat Revenue, Adjusted EBITDA Loss, Provides Positive Outlook

Rubicon Organics Inc. ROMJ ROMJF reported its financial results Wednesday for the first quarter ended March 31, 2024, with revenue of CA$8.9 million ($6.5 million), a 1% increase from CA$8.8 million in the prior year period.

"We anticipated a challenging Q1 due to typical seasonality and the overhang of weak consumer sentiment from 2023," stated CEO Margaret Brodie. "I expect to recover from this temporary dip from our streak of positive Adjusted EBITDA in Q2. In Q1, a changing product mix reduced our gross margin, but this spring we’ve shifted focus to higher-margin products, expecting improved results in Q2 and beyond. Our Q1 working capital investment for product launches is expected to come to fruition delivering further net revenue growth starting in Q2. Additionally, our first-half results are influenced by the ongoing one-time ERP implementation.

"Rubicon Organics holds the #1 premium position in Canada and is poised for growth with the launch of our full spectrum extract vapes line tapping into the highest growth segment in Canada. With a focus on quality, we are confident that our vape launch will not only drive revenue growth but also solidify our position as a leader in the Canadian cannabis market."

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Q1 2024 and Subsequent Highlights:

• Gross profit was CA$2.4 million, which compares to CA$3.17 million in the first quarter of last year.
• Adjusted EBITDAwas a loss of CA$423,212 compared to a gain of CA$168,665 in the same period of 2023.
• Cash used by operating activities was CA$900,000 compared to cash provided by operating activities of CA$200,000 in Q1 2023.
• As of March, 31 the company had CA$8.12 million in cash and cash equivalents, compared to CA$9.8 million on Dec. 31.

2024 Outlook

Rubicon Organics anticipates year-over-year growth in net revenue, supported by modest increases in its cost base, excluding the impact of the ERP implementation occurring mostly in the first half, thereby enhancing it operating leverage.

The company projects most of the growth to come from it branded products that are produced using external capacity. It also expects to see price compression across all categories in Canadian cannabis industry, but projects to deliver continued operating positive cash flow in the year ahead and plan to refinance its debt to a longer-term mortgage facility in the second half of 2024.

Price Action

Rubicon Organic shares traded 0.14% higher at 40 cents per share during Thursday's per-market session.

See Also: Cannabis Producer, Rubicon Organics, Reports Seventh Consecutive Quarter Of Positive Cash Flow & EBITDA

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