High Tide (HITI) - 2025 Q1 - Quarterly Report

Financial Statements Consolidated Statements of Financial Position As of January 31, 2025, High Tide's total assets were $235.7 million, a decrease from $246.2 million on October 31, 2024, primarily due to a reduction in cash and cash equivalents. Total liabilities also decreased to $90.6 million from $100.7 million, largely driven by the repayment of notes payable. Consequently, total shareholders' equity remained relatively stable at $145.1 million Statement of Financial Position Highlights (in thousands of CAD) | Financial Position | Jan 31, 2025 ($) | Oct 31, 2024 ($) | | :--- | :--- | :--- | | Total Current Assets | 73,732 | 85,789 | | Cash and cash equivalents | 33,341 | 47,267 | | Total Non-Current Assets | 161,931 | 160,419 | | Intangible assets and goodwill | 92,467 | 92,816 | | Total Assets | 235,663 | 246,208 | | Total Current Liabilities | 45,828 | 61,480 | | Current portion of notes payable | 724 | 13,974 | | Total Non-Current Liabilities | 44,735 | 39,216 | | Total Liabilities | 90,563 | 100,696 | | Total Shareholders' Equity | 145,100 | 145,512 | Consolidated Statements of Loss and Comprehensive Loss For the three months ended January 31, 2025, the company's revenue increased by 11.2% year-over-year to $142.5 million. However, gross profit slightly decreased to $35.4 million from $36.0 million. A rise in operating expenses led to a significant drop in income from operations to $67 thousand from $2.8 million in the prior year. The company reported a net loss of $2.7 million, a substantial increase from the $5 thousand net loss in the same period last year Income Statement Summary (in thousands of CAD) | Metric | Q1 2025 ($) | Q1 2024 ($) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 142,461 | 128,068 | +11.2% | | Gross Profit | 35,440 | 35,994 | -1.5% | | Income from Operations | 67 | 2,792 | -97.6% | | Net Loss | (2,689) | (5) | N/A | | Basic and Diluted EPS | (0.03) | — | N/A | Consolidated Statements of Changes in Equity Total shareholders' equity experienced a slight decrease from $145.5 million at October 31, 2024, to $145.1 million at January 31, 2025. The decrease was primarily driven by the net loss for the period of $2.8 million (attributable to owners), which was largely offset by share-based compensation of $1.2 million and positive cumulative translation adjustments Changes in Equity (in thousands of CAD) | Description | Amount ($) | | :--- | :--- | | Balance, October 31, 2024 | 145,512 | | Net loss for the period | (2,689) | | Share-based compensation | 1,175 | | Issuance of shares through ATM (net) | 5 | | Options and Warrants exercised | 216 | | Cumulative translation adjustment | 881 | | Balance, January 31, 2025 | 145,100 | Consolidated Statements of Cash Flows In Q1 2025, the company experienced a net cash decrease of $13.9 million. While operations generated $0.7 million in cash, this was significantly lower than the $6.9 million generated in Q1 2024. Cash used in investing activities was $2.7 million for asset purchases. Financing activities resulted in a net cash outflow of $12.0 million, primarily due to the repayment of $13.4 million in notes payable, partially offset by proceeds from new secured debentures Cash Flow Summary (in thousands of CAD) | Activity | Q1 2025 ($) | Q1 2024 ($) | | :--- | :--- | :--- | | Net cash provided by operating activities | 682 | 6,873 | | Net cash used in investing activities | (2,741) | (2,076) | | Net cash used in financing activities | (11,992) | (6,196) | | Net (decrease) in cash | (13,926) | (1,436) | | Cash, beginning of period | 47,267 | 30,121 | | Cash, end of period | 33,341 | 28,685 | - A significant financing outflow was the repayment of notes payable amounting to $13.4 million, while the company raised $4.4 million from secured debentures[10] Notes to the Financial Statements General Information and Accounting Policies High Tide Inc. is a retail-focused cannabis company with operations in Canada, the US, and Europe. These unaudited condensed interim consolidated financial statements were prepared in accordance with IAS 34 and are consistent with the accounting policies of the most recent annual statements. The company adopted amendments to IFRS 16 and IAS 1, which did not have a material impact - The company is a retail-focused cannabis entity with brick-and-mortar stores and global e-commerce assets, listed on Nasdaq, TSXV, and FSE[11] - The financial statements have been prepared in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting[13] - The company's subsidiaries operate with functional currencies including the Canadian dollar, U.S. dollar, Euro, and British Pound Sterling[16][19] Revenue and Segment Performance Total revenue for Q1 2025 reached $142.5 million, an 11.2% increase from $128.1 million in Q1 2024. The growth was driven by the Bricks and Mortar segment, which saw revenue climb to $135.7 million. Conversely, the E-commerce segment's revenue fell to $6.7 million from $12.4 million. Geographically, Canadian revenue grew substantially, while US revenue declined. The Bricks and Mortar segment generated $2.3 million in operating income, whereas the E-commerce segment posted a $2.2 million operating loss Revenue by Segment and Geography (Q1 2025 vs Q1 2024, in thousands of CAD) | Category | Q1 2025 ($) | Q1 2024 ($) | Change (%) | | :--- | :--- | :--- | :--- | | Segment | | | | | Bricks and Mortar | 135,714 | 115,701 | +17.3% | | E-commerce | 6,747 | 12,367 | -45.4% | | Geography | | | | | Canada | 135,714 | 115,701 | +17.3% | | USA | 6,458 | 11,815 | -45.3% | | International | 289 | 552 | -47.6% | | Total Revenue | 142,461 | 128,068 | +11.2% | Income from Operations by Segment (Q1 2025, in thousands of CAD) | Segment | Income (Loss) from Operations ($) | | :--- | :--- | | Bricks and Mortar | 2,290 | | E-commerce | (2,223) | | Total | 67 | Asset Analysis The company's asset base is dominated by non-current assets, particularly intangible assets and goodwill ($92.5 million). Property and equipment increased slightly to $28.2 million due to additions. Inventory levels rose to $30.4 million from $29.3 million at the end of the previous fiscal year. No impairment indicators were identified for intangible assets during the quarter - The net book value of Property and Equipment increased to $28.2 million as of Jan 31, 2025, from $27.5 million at Oct 31, 2024, with additions of $2.6 million during the quarter[29] - Intangible assets and goodwill stood at $92.5 million. The company evaluated for impairment indicators during the quarter and determined none were present[31] - Total inventory increased to $30.4 million as of Jan 31, 2025, up from $29.3 million at Oct 31, 2024[33] Liabilities and Equity Analysis Total liabilities decreased, primarily due to a significant reduction in notes payable from $14.0 million to $0.8 million after a $13.0 million loan was paid in full. The company increased its long-term debt by issuing an additional $5.0 million in secured debentures. Share capital saw a minor increase from equity financing through the ATM program and exercises of options and warrants - Notes payable decreased dramatically to $0.8 million from $14.0 million, as a $13.0 million loan to OCN was paid in full on December 31, 2024[36] - The company issued an additional $5.0 million of secured debentures at a 10% discount on November 30, 2024, increasing the total face value to $15.0 million[40] - The company raised $52 thousand through its at-the-market (ATM) equity program during the quarter[44] Financial Instruments and Risk Management The company manages financial risks including credit, liquidity, interest rate, and foreign currency risk. Liquidity risk is managed through operational cash flow and financing. A maturity analysis shows contractual cash outflows of $37.1 million due in 2025. The company is exposed to interest rate risk on its variable-rate borrowings and foreign currency risk on its net monetary assets denominated in USD, EUR, and GBP Maturity of Financial Liabilities (Undiscounted, in thousands of CAD) | Period | Amount ($) | | :--- | :--- | | 2025 | 37,084 | | 2026-2027 | 24,786 | | 2028-2029 | 27,969 | | 2030 and beyond | 17,771 | | Total | 107,610 | - Approximately 56% of the company's borrowings are at a fixed interest rate. A +/- 1.0% change in variable rates would impact annual interest payments by approximately +/- $120 thousand[67] - The company has net monetary assets exposed to foreign currency fluctuations, primarily in GBP and EUR, and net monetary liabilities in USD[68] Other Key Disclosures The company engages in related party transactions, including a lease for office and warehouse space from a company controlled by the President & CEO. Capital management objectives focus on profitable growth, shareholder returns, and financial flexibility. Subsequent to the quarter's end, the company announced it has paused the acquisition of Purecan GmbH, which was intended to facilitate its entry into the German market - The company leases office and warehouse space from Grover Properties Inc., a company related to the President & CEO, with annual lease payments of $386 thousand[72] - The company's capital management strategy aims to maintain a flexible capital structure to fund growth and meet obligations through cash flow and financing[77] - Subsequent to the quarter end, on February 25, 2025, the company paused its acquisition of Purecan GmbH to explore alternative arrangements for its German market expansion[82]