Following the release of its Q4 & Full-Year 2020 earnings last week, Red White & Bloom (CSE: RWB) (OTCQX: RWBYF) announced today the release of its first-quarter 2021 financial results. To access the Q1 2021 financial statements and MD&A, head over to the company’s SEDAR page here.
Commenting on the company’s Q1 earnings, RWB Chairman & CEO Brad Rogers stated:
“This was another great quarter for the Company as we continued to see strong traction for our brands. We are building on that momentum and working towards finalizing our revised asset purchase of our Michigan investee to bring their revenue, as well as adjusted sales into IFRS revenue format before the end of this current quarter. Once complete, and the expansion of our Florida operations come on stream, we can finally report in our quarterly results the strength of what we have built and accomplished thus far.”
RWB posted Q1 2021 adjusted sales of $32.7 million, up 14.5% over last quarter’s $28.6 million. The increase was reduced by the strengthening Canadian dollar and would have been about $1 million higher using a constant dollar comparison.
Q1 2021 revenue was $11.8 million compared to $15.7 million in Q4 2020. The decrease is primarily a result of the manner in which the company recognizes revenue under IFRS in the state of Michigan for its Platinum Vape (PV) branded product sales and a decrease of approximately $1 million due to the strengthening Canadian dollar over Q4 2020.
RWB utilizes a 3rd party licensee in Michigan; further to the licensing agreement, the revenue the Company can recognize is product sales less inventory purchases and direct expenses. As a result, the Company’s revenue in Michigan is always understated by inventory purchases made and direct expenses incurred during the period. In the first quarter of 2021, product sales in just Michigan increased by 18% from the prior quarter, and the Company significantly increased inventory purchases to secure sufficient inventory which reduced revenue as per the licensing agreement. This timing difference in revenue will continue until the Company becomes fully licensed in Michigan. Once the Company is licensed in Michigan, the Company will be able to recognize full product sales as revenue under IFRS. As such, investors are provided adjusted sales1 for additional insight into the results of the Company’s performance.
RWB Earnings Call & Webcast
Red White & Bloom management held its earnings conference call and audio webcast today at 4:30 pm EST. RWB provided investors with an overview of the company’s 2020 and Q1 2021 operating results as well as its outlook for 2021. The call finished off with a Q&A period. Investors interested in listening to a replay of the call can do so via the link below.
- Audio Transcript (Link coming soon)
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Red White & Bloom is a paid client of The Cannabis Investor. The Cannabis Investor holds a position in RWB.
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