C21 Investments Reports Fourth Quarter and Fiscal Year End Financial Results
Q4's Increased Revenue Driven By Same Store Sales Growth Across All Silver State Relief Dispensaries
VANCOUVER, BC, June 23, 2025 /CNW/ - C21 Investments Inc. (CSE:CXXI) (OTCQX:CXXIF) ("C21" or the "Company"), a vertically integrated cannabis company, today announced the filing of its audited financial statements and management discussion and analysis for its fourth quarter and fiscal year ending March 31, 2025, on SEDAR. The Company's financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). All currency is reported in U.S. dollars. The Company recently changed its fiscal reporting period to a March 31st year-end (see news release dated August 1, 2024 for audited two-month stub period). With this change, the comparative period in our audited financial statements will not reflect the same calendar months.
Fourth Quarter Highlights (January 1, 2025 to March 31, 2025):
Revenue of $8.1 million - up 3% from Q3, driven by same store sales growth across all dispensaries; State of Nevada sales were down 6.5% from the sequential comparative period1; Compared to the previously reported Q4 (ended Jan. 31, 2024), revenue grew by 24%
Gross Margin of 45% - relatively flat from Q3
Income from Operations of $0.8 million, down $0.1 million from Q3 due to one-time SG&A costs
Earnings (Loss) Per Share of ($0.01), down from Q3's ($0.00), primarily due to income tax adjustments; Net Income Before Tax of $0.7 million
Adjusted EBITDA2 of $1.7 million - up 8% quarter-over-quarter and up 60% over the previous Q4
Free Cash Flow2 before working capital changes and taxes of $1.6 million, flat from Q3
Purchased and cancelled over 2 million shares (see news release dated February 19, 2025)
Fiscal Year Highlights (April 1, 2024 to March 31, 2025)
Revenue of $30.1 million, up 6.5% over the previously reported fiscal year (ended January 31, 2024)
Gross Margin of 42% - up 230 basis points from the previous year despite one-time costs in Q1 associated with opening the South Reno store
Income from Operations of $1.3 million, driven by an 11% operating margin in the second half of the fiscal year, partially offset by one-time costs in Q1
Earnings (Loss) Per Share of ($0.03), primarily driven by income taxes and one-time costs opening the South Reno dispensary; Net Income Before Tax of $0.4 million
Adjusted EBITDA2 of $4.9 million, up 7% over the prior fiscal year
Free Cash Flow2 before working capital changes and taxes of $4.0 million, up 41% from the prior fiscal year
Customer Transactions increased 38% over the fiscal year, from 126,449 in Q1 to 174,611 in Q4
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1
State of Nevada cannabis sales: https://www.headset.io/markets/nevada
2
Refer to "Non-GAAP Measures" disclosure at the end of this news release for a description and calculation of these measures
Q4 and Fiscal Year End Management and Operational Commentary:
CEO and President, Sonny Newman: "I'm excited to share our strong results this quarter, a typically slow period for the industry, which showcases the hard work we've put into driving continued organic, same-store sales growth. We have seen fourth quarter sales surge by 24% over the previous Q4, fuelled by a 38% increase in customer transactions over the year. Despite the 6.5% sequential decline in Nevada state sales, our Q4 revenue grew 3% quarter-over-quarter. Our South Reno store has now delivered over 100% same-store sales growth from its first full operational month in July 2024 to March 2025. Despite industry-wide price compression, we have witnessed a 26% retail sales increase from Q1 to Q4, which has significantly improved margins. The Company's disciplined approach to growth has allowed us to achieve another year of sustained free cash flow2. Our consistently strong results are a testament to C21's unique model and incredible team. We remain committed to actively pursuing additional accretive opportunities while maintaining our relentless focus on driving shareholder value."
Given the previously reported change in fiscal year end from January 31 to March 31, it is important to note that there is no equivalent time period to this Q4 report in the Company's historical results.
Q4 revenue of $8.1 million was up 3% from Q3, despite the 6.5% decline in Nevada sales over the comparative period1. The increase in retail sales was driven by same store sales growth in each of Silver State's three dispensaries. The South Reno dispensary continues ramping its sales with exceptional performance, with monthly sales of $580,000 in March, up from $273,000 in July, achieving over 100% same store sales growth since its first operational month. For the fiscal year, Revenue was $30.1 million, with 26% retail sales growth reported from Q1 to Q4.
Gross Margin of 45% in the fourth quarter was relatively flat from Q3. For the year, Gross Margin was 42% and improved 230 basis points from the previous fiscal year (ended January 31, 2024). The improvement was driven by increased retail revenues, and greater operational synergies and cost efficiencies associated with integrating the new dispensary, partially offset by one-time costs in Q1 associated with opening the South Reno store.
C21 reported Income from Operations of $0.8 million in the fourth quarter. This continued strong operating margin was driven by the increase in retail sales while slightly offset by one-time costs in the period related to the refiling of income taxes for the previous three years. For the year, Income from Operations was $1.3 million, driven by an 11% operating margin in the second half of the year, and partially offset by one-time costs in Q1 associated with the new dispensary.
The Company reported a Net Loss of $1.6 million in the fourth quarter, or ($0.01) per share. Q4's Net Loss was primarily due to increased Income Tax provisions. The Company generated $0.7 million Net Income Before Tax for Q4. For the year, Net Loss was $4.0 million or ($0.03) per share, impacted by $4.2 million in Income Tax and further by one-time costs in Q1 associated with opening the new dispensary in South Reno. Net Income Before Tax for the year was $0.4 million.
Q4 Adjusted EBITDA2 was $1.7 million, up 8% from Q3. The increase in Adjusted EBITDA was driven by the improved retail sales for the quarter. For the year, Adjusted EBITDA was $4.9 million, up 7% from the previous fiscal year (ended January 31, 2024).
Q4 Free Cash Flow2 before working capital changes was $1.6 million, flat from Q3. For the year, Free Cash Flow2 before working capital changes was $4.0 million, up 41% over the previous fiscal year (ended January 31, 2024).
Cash at the end of Q4 was up $0.1 million from Q3 notwithstanding $0.8 million in Income Tax paid, a $0.3 million debenture principal repayment, and $0.3 million in share repurchases in the quarter. Total Liabilities increased due to the addition of Uncertain Tax Provisions. For the year, Income Tax paid in cash was $1.5 million.
In the fourth quarter, the Company announced the repurchase and cancellation of 2.05 million shares, at an average price of $0.125 per share (see news release dated February 19, 2025). As of June 23, 2025, the Company has 117,862,314 shares outstanding.
Based on legal interpretations and opinions that challenge its tax liability under Section 280E Internal Revenue Code of 1986, the Company has taken the position that it does not owe taxes attributable to the application of this Section of the Code. The Company plans on refiling amended U.S. federal income tax returns for the years ended January 31, 2022, January 31, 2023, January 31, 2024, and the two months ended March 31, 2024. Management exercises significant judgment when assessing the probability of successfully sustaining the Company's tax filing positions, and in determining whether a contingent tax liability should be recorded and, if so, estimating the amount. See disclosure of Risk Factors in the MD&A.
Non-GAAP Measures:
C21 reports its financial results in accordance with GAAP and uses a number of financial measures when assessing its results and measuring overall performance. Some of these financial measures and ratios are not calculated in accordance with GAAP. The Company refers to certain Non-GAAP financial measures such as "Free Cash Flow", "Adjusted EBITDA" and "same store sales". These measures do not have any standardized meanings prescribed by GAAP and may not be comparable to similar measures presented by other issuers. The Company considers these measures to be an important indicator of the financial strength and performance of its business. The Company believes the adjusted results presented provide relevant and useful information for investors because they clarify the Company's actual operating performance, make it easier to compare the Company's results with those of other companies and allow investors to review performance in the same way as the management of the Company. Since these measures are not calculated in accordance with GAAP, they should not be considered in isolation of, or as a substitute for, the Company's reported results as indicators of the Company's performance, and they may not be comparable to similarly named measures from other companies. The tables below provide reconciliations of Non-GAAP financial measures to the most directly comparable GAAP measures.
"Free Cash Flow" is defined as Cash Provided by Operating Activities from Continuing Operations adding back income tax expense and before changes in working capital, minus capital expenditures. Management believes that Free Cash Flow, which measures our ability to generate cash from our continuing business operations, is an important financial measure for use in evaluating the Company's financial performance. Free Cash Flow should be considered in addition to, rather than as a substitute for, consolidated net income as a measure of our performance and net cash provided by operating activities as a measure of our liquidity.
Q4 Free Cash Flow:
