Release Date: November 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Entourage Health Corp (ETRGF, Financial) achieved a total revenue of $13.6 million, reflecting an 11% year-over-year increase.
- EBITDA improved by 70% this quarter and 65% year-over-year, indicating effective cost management and operational efficiency.
- SG&A expenses decreased by 32% year-over-year, showcasing significant cost savings.
- The company has expanded its product portfolio with 23 new SKUs, leading to positive market reception and increased retail placements.
- Entourage Health Corp (ETRGF) is strategically positioned to lead Canada's medical cannabis market, with plans to introduce innovative patient-centric products.
Negative Points
- Medical revenue decreased by 7% due to lower patient renewal rates and reduced basket sizes.
- The average selling price per gram decreased by 32% due to market price compression and bulk sales.
- Cost of goods sold increased by 20% due to higher biomass costs, which are expected to continue in the short term.
- The company experienced a cash reduction of $7.6 million compared to December 2023 due to operating losses.
- Entourage Health Corp (ETRGF) is negotiating a resolution to the current forbearance letter with its largest lender, indicating financial challenges.
Q & A Highlights
Q: Can you provide more details on the revenue growth and the factors contributing to it?
A: George Scorsis, CEO: We achieved a total revenue of $13.6 million, reflecting an 11% year-over-year increase. This growth is attributed to our strategic initiatives, particularly our expansion into alternative sales channels, which is part of our diversification strategy. This has contributed to our top line alongside our adult use and medical segments.
Q: How has the company managed to improve EBITA and reduce SG&A expenses?
A: George Scorsis, CEO: EBITA increased by 70% this quarter and 65% year-over-year due to our efforts to manage costs, streamline operations, and enhance margins. SG&A expenses decreased by 32% year-over-year, driven by advancements in preroll automation, optimizing our product mix, and enhancing production processes.
Q: What are the key achievements in product development and market expansion?
A: George Scorsis, CEO: We launched 23 new SKUs across our core brands, including innovative formats like infused prerolls and value-focused offerings under our newly launched Dime Bank brand. The response has been positive, with Dime Bank leading our adult use portfolio growth, delivering $2.5 million in incremental revenue year-over-year and securing 2000 new retail placements.
Q: How is the company addressing the challenges in the medical cannabis market?
A: George Scorsis, CEO: We are strategically positioned to lead Canada's medical cannabis market by introducing innovative patient-centric product formats. We are expanding access across new platforms tailored to veterans and aging populations, focusing on innovation in medical and wellness-oriented products to capitalize on the projected growth of Canada's medical cannabis sector.
Q: What steps is the company taking to ensure financial stability and growth?
A: Bonnie, CFO: We are focusing on cash preservation, operational efficiency, and consumer needs. Our cash burn continues to decrease due to disciplined cost management. We are also working with our largest lender to negotiate a resolution to the current forbearance letter, which expires on January 15, 2025, to simplify our capital structure.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
