Flower One Holdings Inc. (CSE: FONE) (OTCQX: FLOOF) released its financial and operating results for the first quarter ending March 31, 2021, with revenue rising 53% to $13.9 million over last year’s $8.8 million. This topped the previous guidance from Flower One of $13.5 million and was a big jump sequentially over the fourth quarter’s $9.7 million. Flower One reported an income from operations of $3.8 million and a net loss of $10.6 million. The company said the net loss resulted from $9.5 million of finance expenses, fair value losses on derivatives, losses on note modifications, and foreign exchange losses.
“In the first quarter of 2021 we reported the best performance in the history of the Company, as the impact of the restructuring and operational improvements began to show results,” said Kellen O’Keefe, Flower One’s President & Interim CEO. “With the new board of directors and management in place, we have taken the first steps towards positioning Flower One for long-term success. We are focused on the financial discipline and operational excellence required to meet or exceed projections and achieve cash flow positivity. We believe we are closer than ever to meeting these objectives, as we continue to capitalize on the return of tourism in Nevada. Over the past several months, we have improved the quality of cannabis that comes out of our facility, which has enabled us to generate a significantly higher average price per pound. Our commitment to quality has been very well received by the market, allowing us to gain nearly 25% share of the wholesale market and become the largest producer of cannabis in Nevada.”
Balance Sheet Improvements
Beginning in January, Flower One underwent a complete restructuring transaction of its debt, which was completed in the second quarter of 2021. The successful debt restructuring, net proceeds from the convertible debenture financing and improved operating results enabled it to significantly improve its liquidity position by the quarter-end. General and administrative expenses for the quarter totaled $7.4 million (which included approximately $1.5 million of one-time/non-recurring expenses associated with the corporate restructure) vs. $6.2 million during the first quarter of 2020 and $8.2 million during the fourth quarter of 2020. This improvement resulted from the new management’s focus on cost rationalization, offset partially by higher cannabis taxes related to higher sales.
“Due to the corporate restructure-related debt reductions and uses of proceeds from the January and March financings to reduce payables and other obligations, the Company’s liquidity position improved significantly. Given performance to date in Q2 and the April restructure of our Canadian Debentures, we expect further improvements as we continue to scale up and reduce costs,” noted Richard Groberg, Flower One’s Interim CFO.
Second Quarter Guidance
Flower One gave its second-quarter 2021 preliminary unaudited revenue guidance of $16-$18 million. Groberg said, “Given that new management didn’t assume full control until the end of January 2021, these results did not reflect the full impact of the new management’s strategies in terms of product allocation, pricing, product yield, cost of cultivation, harvesting, and production. Looking ahead, we will continue to automate production at our facilities, where possible, which will enhance our ability to produce more at a lower all-in cost per gram. While first-quarter 2021 was a record quarter, we expect our financial performance to continue to improve and for growth to accelerate throughout the remainder of the year, as reflected in our preliminary second-quarter 2021 guidance.”
The post Flower One Reports Solid First Quarter, Guides Higher For Second appeared first on Green Market Report.