Grown Rogue Reports Third Quarter 2022 Results, Positive Free Cash Flow and Net Income

Grown Rogue Reports Third Quarter 2022 Results, Positive Free Cash Flow and Net Income  

  • Revenue of $4.25M compared to $3.03M in Q3 2021, an increase of 40%, with adjusted EBITDA1 margin of 27.5% compared to 25.5% in Q3 2021 

  • Operating cash flow, before changes in working capital, of $0.91M or 21.5% of revenue 

  • Fifth consecutive quarter of positive net income and operating cash flow 

Medford, Oregon, September 30, 2022 – Grown Rogue International Inc. (“Grown Rogue” or the “Company”) (CSE: GRIN) (OTC: GRUSF), a craft cannabis company operating in Oregon and Michigan, reports its fiscal third quarter 2022 results for the three months ended July 31, 2022. All financial information is provided in U.S. dollars unless otherwise indicated. 

Third Quarter 2022 Financial Summary 

  • Tenth consecutive quarter of positive aEBITDA1 and fourth consecutive quarter above $1M 

  • Total liabilities decreased $1.44M from Q2 2022 and working capital increased $0.39M 

  • Constructed the 13th and 14th growing rooms in Michigan with first harvests expected in Q4 2022  

  • #1 flower brand in Oregon for the fifth consecutive quarter, and fastest growing flower brand for the fifth time in the last twelve months, according to LeafLink’s MarketScape data  

  • Exchanged $0.16M in legacy investment assets for forgiveness of $0.70M in debt 

“At Grown Rogue, we are laser-focused on our mission of delivering affordable, craft-quality cannabis to an increasing number of cannabis consumers,” said Obie Strickler, CEO of Grown Rogue. “To further that mission, we focus on increasing our efficiencies while ensuring customers experience quality expressions of leading genetics, and our operational results continue to reflect the success of that focus. This scale and operating leverage has resulted in the leading position in the Oregon flower market and a top 10 position in Michigan. I am particularly pleased with our 40% year over year revenue growth and 51% year over year adjusted EBITDA growth, despite continued market headwinds,” continued Mr. Strickler. “We are now focused on continuing to delight customers in Oregon and Michigan while evaluating opportunities to enter new markets while remaining disciplined in our capital allocation. I look forward to bringing Grown Rogue to new markets and consumers and will be updating shareholders on these efforts in the future.” 

Highlights by State 

Oregon Operations  

  • Revenue of $2.40M compared to $1.28M in Q3 2021, an increase of 88% 

  • Gross profit, before fair value adjustments, of $0.93M and gross margin of 38.5% 

  • Segmented aEBITDA1 of $0.57M and aEBITDA1 margin of 23.8% 

  • Segmented net income, before fair value adjustments, of $0.29M and margin of 12.0% 

  • Indoor production of whole flower increased to 900 pounds per month compared to 800 pounds of whole flower per month in Q2 2022 

Michigan Operations (Through Golden Harvests, LLC) 

  • Revenue of $1.85M compared to $1.75M in Q3 2021, an increase of 6% 

  • Gross margin, before fair value adjustments, of 59.5% 

  • Segmented aEBITDA1 of $0.84M and aEBITDA1 margin of 45.2% 

  • Segmented net income, before fair value adjustments, of $0.47M and margin of 25.2% 

  • Indoor production of whole flower increased to 750 pounds per month compared to 550 pounds of whole flower per month in Q2 2022 

About Grown Rogue  

Grown Rogue International (CSE: GRIN | OTC: GRUSF) is a vertically integrated, multi-state Cannabis family of brands on a mission to inspire consumers to “enhance experiences” through cannabis. We have combined an expert management team, award winning grow team, state of the art indoor and outdoor manufacturing facilities, and consumer insight-based product categorization, to create innovative products thoughtfully curated from “seed to experience.”  The Grown Rogue family of products include sungrown and indoor premium flower, along with nitro sealed indoor and sungrown pre-rolls and jars. 

NOTES: 

1.  

The Company’s “aEBITDA,” or “Adjusted EBITDA,” is a non-IFRS measure used by management that does not have any prescribed meaning by IFRS and that may not be comparable to similar measures presented by other companies. The Company defines “EBITDA” as the Company’s net income or loss for a period, as reported, before interest, taxes, depreciation and amortization, and is further adjusted to remove transaction costs, stock-based compensation expense, accretion expense, gain (loss) on derecognition of derivative liabilities, the effects of fair-value accounting for biological assets and inventory, as well as other non-cash items and items not representative of operational performance as reported in net income (loss). Adjusted EBITDA is defined as EBITDA adjusted for the impact of various significant or unusual transactions. The Company believes that this is a useful metric to evaluate its operating performance.  

2.  

The Company has provided unaudited pro-forma revenue information, which assumes that closed and pending mergers and acquisitions in 2021 are included in the Company’s financial results as of the beginning of the quarterly and annual periods in 2021 for the Company and target companies.  

 

NON-IFRS FINANCIAL MEASURES 

EBITDA and aEBITDA are non-IFRS measures and do not have standardized definitions under IFRS. The Company has also provided unaudited pro-forma financial information, which assumes that closed and pending mergers and acquisitions in 2021 are included in the Company’s financial results as of the beginning of the quarterly and annual periods in 2021. The Company has provided the non-IFRS financial measures, which are not calculated or presented in accordance with IFRS, as supplemental information and in addition to the financial measures that are calculated and presented in accordance with IFRS. These supplemental non-IFRS financial measures are presented because management has evaluated the financial results both including and excluding the adjusted items and believe that the supplemental non-IFRS financial measures presented provide additional perspective and insights when analyzing the core operating performance of the business. These supplemental non-IFRS financial measures should not be considered superior to, as a substitute for or as an alternative to, and should only be considered in conjunction with, the IFRS financial measures presented herein. Accordingly, the following information provides reconciliations of the supplemental non-IFRS financial measures, presented herein to the most directly comparable financial measures calculated and presented in accordance with IFRS. 

Jake Iotte