Adam Jackson
Entourage Health Corp. (TSX-V: ENTG) (OTCQX: ETRGF) announced Tuesday a 24% sequential increase in revenue for the first quarter of 2023 ending March 31, with a significant contribution from its medical cannabis stream and adult-use pre-roll sales.
The Canadian cannabis producer and distributor’s first-quarter revenue reached $15.1 million, compared to $12.1 million in the fourth quarter of 2022. Despite a reported net loss of $9.5 million, slightly up from the $8.76 million loss in the same period last year, the company remains optimistic. Earnings per share were a loss of three cents.
In a statement, Entourage’s CFO Vaani Maharaj emphasized the company’s strategic focus on generating revenue from its most successful products and maintaining fiscal discipline.
“As we consistently enhance operational efficiencies, optimize costs of sale, and minimize cash burn, we are well-prepared to amplify revenue growth and strengthen our financial stability,” Maharaj added.
Entourage also spotlighted its improved operational efficiencies and lower inventory write-downs as driving forces behind a rise in gross profit, which reached $3 million in the quarter, up $10.5 million from the previous quarter. Gross margins stood at 25% in the first quarter, a significant improvement from -86% in the fourth quarter of 2022 and slightly up from 22% in last year’s first quarter.
In line with Maharaj’s emphasis on cost control, the cost of goods sold was $8.83 million for the first quarter, down nearly $900,000 from Q1 2022. This reflects the company’s ongoing efforts to optimize operations and implement automation initiatives, it said.
Alongside its financial results, Entourage reiterated several corporate and commercial advances during the first quarter.
The company secured an amendment to its credit facility, closed a $15 million tranche with the LiUNA Pension Fund, and sold its Strathroy facility.
In its expansion into the medical cannabis market, Entourage added a new union group to its proprietary program, in partnership with Union Benefits. It also launched CBD chewing gum via Starseed Medicinal.
Commercially, Entourage collaborated with Boston Beer Co. to distribute its cannabis-infused iced tea beverage, TeaPot, in Quebec. The company also expanded its Color and Saturday adult-use product lines.
George Scorsis, CEO and executive chairman of Entourage, echoed Maharaj’s sentiments on the company’s strategic focus, attributing growth to strategic transformation initiatives and cost improvements.
“Our financial results allow us to accomplish our objectives and establish a solid foundation for sustainable growth and long-term success in the cannabis market,” Scorsis said in a statement.
The company’s board of directors also approved a one-time grant of performance shares to certain members of the management team.
