C21 Investments Inc. (CSE: CXXI) (OTCQX: CXXIF) reported revenue of $28.9 million for the fiscal year ended Jan. 31, a 12% slump from the previous year.
The filings show net income from continuing operations of $1 million, or $0.01 per share. C21 reported adjusted EBITDA of $7.4 million, marking a 26% EBITDA margin, and $6 million of cash flow from operations, highlighting its fourth consecutive year of positive quarterly free cash flow.
Total liabilities were reduced by $3.8 million.
Despite a drop in sales in Nevada by 16% over the comparative period, C21 has maintained progress in the state. The company has reported a sequential revenue decrease of 2% in fourth-quarter revenue, bringing it to $7 million, while Nevada overall saw a 3% drop in sales over the same period.
According to CEO Sonny Newman, the company’s approach and commitment to free cash flow generation have allowed it to drive shareholder value through new initiatives, such as the new loyalty program aimed at maintaining customer activity amid the downward pressure on retail margins.
However, the company has not been immune to the market’s changing dynamics. Product demand declined due to consumers’ shifting discretionary habits post-pandemic, leading to a decrease in annual gross margin to 46.4%, versus the previous year’s 57%. The company said it responded by shutting down cultivation rooms on a rotating basis during the last quarter, which resulted in lower flower yields.
It also said it continued to see a rise in wholesale sales in the first quarter of 2023, including the company’s branded Phantom Farms flower.
The company has 120,047,814 issued and outstanding common shares, with no changes since the year’s end.