Humble & Fume Archives - Green Market Report

StaffMay 26, 2022
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Humble & Fume Inc. (CSE: HMBL) (OTCQX: HUMBF) reported its third-quarter fiscal 2022 financial results for the fiscal third-quarter ending March 31, 2022. Revenue fell to $16 million in the quarter versus last year’s revenue of $18 million for the same time period. Humble & Fume said that the revenue decreased as a result of management’s focus on selling higher-margin products and moving away from lower-margin sales channels.

The net losses decreased to $2.5 million from last year’s $5.8 million. The decrease in net losses was primarily driven by the decrease in accretion expense on the convertible debentures issued in May 2019 and exercised on June 14, 2021, resulting in the conversion of the debt to share capital.

Joel Toguri, Chief Executive Officer of Humble, said, “We are laser-focused on cost-cutting, optimizing the business, improving on our end-to-end customer experience, and aggressively pursuing expansion opportunities in the US. Our commitment to right-sizing the business has resulted in faster turnaround times, improved accuracy in our fulfillment, and a meaningful reduction in our inventory. We have made significant improvements to our cost base while stabilizing revenue and improving gross margins.”

The operating loss for the quarter decreased to ($2) million from ($3) million compared to the same period in the prior year. The decrease in operating loss was driven primarily by increased gross margin.

Toguri added, “Our expansion into cannabis distribution in the US is ahead of schedule. In Q3, the build-out of our cannabis operations in California resulted in the on-boarding of multiple partners, including California’s preeminent flower brand Canndescent and industry-leading brands such as Leune, Proof, Highsman, and Humboldt Farms. We are very proud to be associated with these brands who share our vision for the future growth of the cannabis industry. They have chosen us as partners because we are dedicated to helping them grow their businesses, and we are committed to moving with pace.”

The company said that expansion into cannabis distribution in California is ahead of schedule and operational, with multiple tier-one brand partners onboarded in the first three months with an anticipated annualized revenue contribution of $25-35 million which is slated to start in Q4 (April – June 2022).


StaffNovember 26, 2021
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After the markets closed on the Wednesday before Thanksgiving, Humble & Fume Inc. (CSE: HMBL)  reported its first-quarter fiscal 2022 financials for the three months ended September 30, 2021 with revenue falling to $18.1 million versus $19.4 million for the same time period in 2021. The company blamed the drop in revenue on a decline in sales as management in the U.S. continued to focus on selling high-margin products with competitive pricing and discounting tactics. Humble said that the Canadian operations saw revenue climb to $8.6 million, a 27% increase year-over-year as a result of the expansion of sales agency partnerships, along with higher margin sales from its core accessories business.

Humble delivered a net loss of $1.7 million, or $0.02 per diluted share, compared to a net loss of $4 million, or $0.07 per share, for last year’s first quarter. The company attributed the improvement in net losses year-over-year to the settlement of the convertible debenture on June 14, 2021, resulting in nil accretion and fair value adjustment.

“As the legal cannabis market in North America continues to mature, Humble remains agile and focused on providing a leading solution for brands to scale quickly and retailers to focus on their customers,” said CEO Joel Toguri. “We are encouraged by the strong revenue growth we saw this quarter from our Canadian operations, which was driven by our expanding cannabis brands partnerships and higher margin sales from our accessory portfolio. We have made huge strides towards our expansion into cannabis distribution in the United States. Last week’s announcement of Johnson Brothers investment, through Green Acre, is transformative for the legal cannabis distribution market in North America. Together with our acquisition of Cabo Connection, Humble is executing upon our business strategy and readying for its launch in California.”

Closing Florida

On November 24, the company said it would close its Florida warehouse facility on November 30. Humble said it has made the decision to focus resources on the  Texas and Nevada warehouse locations, which are able to adapt and scale with the growing business.

Mr. Toguri added, “This past quarter was transitional for us following our public listing on the Canadian Securities Exchange. While we saw an increase in Canadian revenue, the U.S. operations saw a decrease as a result of our decision to focus the business on healthier margin sales, reducing the mix of high volume, low margin products. Aligned with our strategy to expand into cannabis distribution in the U.S., we implemented a new operating structure in October, which included headcount reductions. Our new structure reprioritizes our customers, identified redundancies and redirects resources to this opportunity. As part of these changes, in October we began the closure of our Florida warehouse, which will result in cost structure savings while consolidating shipping from our two remaining warehouses and improving customer experience. We are aggressively focused on becoming the leading cannabis distributor in North America, which we believe will ultimately deliver revenue growth and profitability.”

 


Debra BorchardtOctober 7, 2021
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After the market closed on Tuesday, Humble & Fume Inc.(CSE: HMBL) reported its financial results for the fiscal 2021 fourth quarter and year ending June 30, 2021. For the quarter, Humble delivered revenue of $19.4 million an increase of 33% from last year’s $14.5 million. The company attributed the increase in revenue to strong sales in the U.S. and Canadian accessories wholesale market. Humble’s accessory lines include some of the highest-rated products like Puffco, Storz & Bickel and Ryot.

The company reported that the net loss for the quarter was $88,904, or $0.00 per diluted share, a 99.7% decrease from last year’s net loss of $4.1 million, or $0.08 per share. The company said that the net losses were primarily driven by growth in overall headcount levels primarily to support increased U.S. and Canada sales, higher sales and marketing expense to support brand partnerships and the launch of FUME, and higher freight costs included in the company’s cost of goods sold selling expenses, and higher share-based compensation expense compared to the year-ago period.

“Humble bridges the gap between cannabis brands, accessory producers and the growing retail market in North America to drive increased sales and maximize financial performance for our partners. Throughout fiscal 2021, we significantly increased our new retailer accounts, which helped drive record fiscal year revenue of $74 million. Revenue increased 71% while gross margin increased by 143% year-over-year. We achieved this strong organic growth and margin enhancement while continuing to identify new opportunities to grow profitably,” said Joel Toguri, Chief Executive Officer of Humble. Togiru was recently named the company’s CEO  and was the former Chief Revenue Officer at The Supreme Cannabis Company Inc.

Full Year Results

Humble reported that the revenue for fiscal year 2021 was $74.1 million, an increase of 71% from last year’s $43.4 million. The company attributed the increase in revenue to stronger sales in the U.S. and Canadian markets for the company’s accessories line, an increase in sales from Fume Labs, and increased service fees for Humble Cannabis Solutions. The operating loss declined by 14% as operating expenses as a percentage of revenue improved year-over-year by 50%. The net loss for the fiscal year 2021 was $13.0 million, or $0.20 per diluted share, compared to $15.7 million, or $0.26 per share, for the fiscal year 2020. The change in net losses year-over-year were driven by higher gross margins and sales in 2021 from the company’s core distribution business, as well as one-time charges related to its RTO transaction and the fair value adjustment of the derivative liability for the convertible debenture.

Mr. Toguri added, “As we look ahead to the next few quarters, we are focused on rationalization of the business further to drive profitable growth. In addition to maintaining our rapid growth, we are laser-focused on further improving margins and cash flow by managing expenses, finding efficiencies and streamlining our product procurement and inventory management systems. We believe that we have the vision and capital resources to continue executing during our rapid growth phase and as we move to generate sustainable profit and positive cash flow to deliver long-term shareholder value.”

“Fiscal 2021 resulted in significant milestones for Humble, most notably the successful closing of our go-public transaction, commencing trading on the CSE, and the introduction of new leadership, with Joel Toguri as Chief Executive Officer. As a proven leader, with strong experience in the cannabis industry, the Board is extremely pleased to have Joel at the helm as we streamline operations and continue to focus on retail distribution and sales growth over the coming year,” said Shawn Dym, Executive Chairman of the Board of Humbl


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