C21 Investments Inc. (CSE: CXXI) (OTCQX: CXXIF) announced unaudited results for its third-quarter ending October 31, 2020, with revenue of $9.5 million. Most of the revenues came from Nevada’s retail operations which rose 5% sequentially to $8.9 million. C21 also delivered a net income of $2.3 million for the quarter. The company’s strong results delivered $0.014 earnings per share in the third quarter and an earnings-positive result year-to-date with net income of $475,000.
President and CEO Sonny Newman said, “C21 has achieved a number of record results this quarter as evidenced by our strong earnings. With our recently announced note restructuring and debenture backstop, we have fortified our balance sheet. We are now focused on the next logical step of our growth strategy – the expansion of our Nevada cultivation and production facility. This puts us in an excellent position to extend our retail footprint in the state. We have built a profitable, scalable business and remain focused on expanding our share of the Nevada market where we have a proven track record of success and on delivering results for our shareholders.”
Nevada also reported record same-store sales and has generated a 52% Gross Margin year-to-date. Challenges within the Oregon operations resulted in lower revenue and gross margin being reported this quarter. Adjusted EBITDA was $2.7 million in the quarter (28% EBITDA margin), and adjusted EBITDA year-to-date totaled $6.5 million (24% margin). For the third quarter, SG&A was $1.7 million. On a year-to-date basis, SG&A expenses were $5.2 million (19% of revenue) versus prior year-to-date of $8.4 million (30% of revenue).
Continued strong cash flow from operations delivered $3.1 million in the quarter. Year-to-date, cash flow from operations of $8.7 million was up 175% from last year, also surpassing the prior full-year results of $5.5 million. This enabled C21 to pay down $5.4 million of debt in the nine-month period. The company said in its statement that it has continued to pay down its debt, reducing the principal amount of its notes payable by an additional $1.1 million, bringing the year to date total paid down by cash flow from operations to $6.5 million.
C21 recently announced the planned expansion of its licensed cultivation and production facility in Nevada – a 40,000 square foot buildout to existing operations, including eleven new flowering rooms and two new vegetative rooms. “This 200% of the additional canopy is expected to yield an incremental 7,500 pounds of premium indoor flower and 3,000 pounds of trim/biomass annually. The Company expects the expansion to be funded internally at a cost of approximately $6 million.”