C21 Investments Inc. Files Audited Financial Statements for Fiscal Year 2023, Reports Revenue Decline and Positive Net Income

LOS ANGELES– C21 Investments Inc. announced the filing of its audited financial statements and management discussion and analysis for its fiscal year ended January 31, 2023. The financial statements, prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP). All amounts are reported in U.S. dollars.

Key financial highlights for the audited fiscal year include a revenue of $28.9 million, representing a 12% year-over-year decline. Notably, state of Nevada cannabis sales experienced a 16% decrease compared to the previous year. Despite the decline in revenue, the company reported a net income from continuing operations of $1.4 million, reflecting an increase of $0.4 million from the unaudited results reported in the June 2, 2023 news release. Earnings per share from continuing operations were reported at $0.01.

The gross margin for the fiscal year stood at 46.4%, with an adjusted gross profit margin of 49.0%. Adjusted EBITDA reached $7.4 million, with an EBITDA margin of 26%. The company demonstrated positive cash flow from operations, amounting to $6.0 million, marking the fourth consecutive year of positive quarterly free cash flow.

Significant progress was made in reducing liabilities during the fiscal year, with a reduction of $4.1 million, including the complete retirement of the remaining balance of the senior note as of June 1, 2023.

It is important to note that the unaudited financial results disclosed in the prior news release remain largely unchanged in the audited financial statements. The adjustments primarily relate to net income from continuing operations and net income due to previously disclosed tax provision changes.

The British Columbia Securities Commission (BCSC) issued a cease trade order on June 6, 2023, in connection with the delay in filing the audited consolidated financial statements and other annual filings. However, the company has now completed the annual filings and anticipates the revocation of the cease trade order by June 15, 2023.

“We are pleased to announce the release of our audited year-end financial statements. We appreciate the patience of our shareholders during this delay while our tax provision changes for our previous fiscal year were corrected and restated,” stated Sonny Newman, CEO and President of C21 Investments Inc.

C21 Investments Inc. adheres to GAAP standards and utilizes various financial measures and ratios to assess results and overall performance. Non-GAAP measures, such as “Free Cash Flow,” “Adjusted Gross Profit,” “Adjusted Gross Profit Margin,” and “Adjusted EBITDA,” are employed to provide investors with additional insights into the company’s financial strength and performance. It should be noted that these measures may not be comparable to those used by other issuers. The company believes that adjusted results offer relevant and useful information, enabling investors to assess performance in line with management’s perspective.

Free Cash Flow, defined as Cash Provided by Operating Activities from Continuing Operations minus capital expenses of property and equipment, is considered an important financial measure by management. For the fiscal year ended January 31, 2023, the company generated Free Cash Flow of $5.5 million.

Adjusted Gross Profit and Adjusted Gross Profit Margin, which account for certain material non-cash items, including fair value adjustments and one-time expenses, were reported at $14.2 million and 49.0%, respectively.

Adjusted EBITDA, a commonly used measurement in the financial community, was $7.4 million, reflecting the company’s continuing operations and future prospects.