“We believe that Humble is uniquely positioned to capitalize on actionable opportunities to expand our Canadian cannabis distribution model into the U.S., including dispensaries and partnering exclusively with leading plant touching brands. We plan to export the knowledge and experience from our Canadian operations to strategically enter new U.S. markets with a focused on measured growth,” continued Mr. Toguri.
“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,” concluded Mr. Toguri.
“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 Humble.
Revenue for the fourth quarter fiscal 2021 increased 33.7 percent to $19.4 million, compared to $14.5 million for the fourth quarter fiscal 2020. The increase in revenue was due primarily to strong sales in the U.S. and Canadian accessories wholesale market.
Gross profit for the fourth quarter fiscal 2021 was $3.6 million, resulting in a gross margin of 18 percent, compared to $1.7 million, or a gross margin of 12 percent, for the fourth quarter fiscal 2020. The increase in gross profit was primarily due to increased sales volumes of high margin products in the core Canadian and U.S. distribution operations, increased sales of branded products from Fume Labs, and increased service fees from Humble Cannabis Solutions.
Adjusted EBITDA for the fourth quarter fiscal 2021 was $(2.0) million, compared to $(2.2) million for fourth quarter fiscal 2020. Changes in quarter-over-quarter adjusted EBITDA were driven primarily by one-time adjustments in the fair value of the derivative liability for the convertible debenture and due to fluctuations in the foreign exchange gain/loss for each period.
Net loss for the fourth quarter fiscal 2021 was $88,904, or $0.00 per diluted share, a 99.7 percent decrease compared to a net loss of $4.1 million, or $0.08 per share, for the fourth quarter fiscal 2020. Net losses were primarily driven by growth in overall headcount levels primarily to support increasing 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.
Revenue for fiscal year 2021 was $74.1 million, an increase of 71 percent compared to $43.4 million in fiscal year 2020. The increase in revenue was due primarily 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. Operating loss declined by 14 percent as operating expenses as a percentage of revenue improved year-over-year by 50 percent.
Gross profit for fiscal year 2021 was $13.6 million, resulting in a gross margin of 18 percent, an increase of 143 percent compared to fiscal year 2020. The increase over the prior year was due to a higher volume of sales of the Company’s accessories product offering.
Adjusted EBITDA for the fiscal year 2021 was $(5.5) million, compared to ($8.2) million for fiscal year 2020. Adjusted EBITDA loss narrowed by $2.7 million, driven by higher sales in Canada and the U.S., a decrease in operating losses due to increased margins, increase in share based compensation, and the onetime adjustments in the fair value of the derivative liability for the convertible debenture. Cash and cash equivalents of $9.7 million as of June 30, 2021.
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 fiscal year 2020. The change in net losses year-over-year are driven by higher gross margins and sales in 2021 from our core distribution business, as well as one-time charges related to our RTO transaction and the fair-value adjustment of the derivative liability for the convertible debenture.
Humble & Fume Inc. is a leading North American distributor of cannabis and cannabis accessories, supported by a customer-centric sales team and strong fulfillment infrastructure. As the only fully-integrated cannabis distribution solution, Humble bridges the gap for retailers, licensed cannabis producers, multi-state operators, and cannabis consumers to maximize sales penetration, and increase financial performance. With over 20 years of North American operating experience, Humble has cultivated extensive vendor and customer relationships, distributing premium cannabis consumables and consumption devices. The Company is comprised of four subsidiaries that represents its vertical integration across North America; B.O.B. Headquarters Inc. / Humble+Fume, Windship Trading LLC, Humble+ Cannabis Solutions and Fume Labs Inc.
EBITDA and Adjusted EBITDA are financial measures that are not defined under IFRS. We define EBITDA as net income (loss), or “earnings”, before interest, income taxes, depreciation and amortization. We define Adjusted EBITDA as EBITDA before: (i) fair value adjustments on biological assets and fair value adjustments on sale of inventory; (ii) share-based compensation expense; (iii) RTO listing expense; and (iv) goodwill impairment losses. We believe Adjusted EBITDA is a useful measure to assess the performance of the Company as it provides more meaningful operating results by excluding the effects of expenses that are not reflective of our operating business performance and other one-time or non- recurring expenses, and also provide additional perspective and insights when analyzing the core operating performance of the business. These supplemental non-IFRS financial measures should not be considered superior to, as a substitute for or as an alternative to, and should only be considered in conjunction with, the IFRS financial measures presented herein.
This news release contains "forward-looking information" within the meaning of applicable securities laws relating to the proposed listing on the CSE, the focus of the Company’s business, and intentions of those subject to early warning disclosure requirements. Any such forward-looking statements may be identified by words such as "expects", "anticipates", "intends", "contemplates", "believes", "projects", "plans" and similar expressions. Readers are cautioned not to place undue reliance on forward-looking statements. Statements about, among other things, Humble & Fume Inc.'s strategic plans including future growth opportunities and strategies in the United States are all forward-looking information. These statements should not be read as guarantees of future performance or results. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance, or achievements to be materially different from those implied by such statements. Although such statements are based on management's reasonable assumptions, there can be no assurance that such forward-looking statements will occur as described herein. The Company assumes no responsibility to update or revise forward-looking information to reflect new events or circumstances or actual results unless required by applicable law. Readers are encouraged to refer to the Company’s disclosure available on its SEDAR profile (at www.sedar.com) for information as to the risks and other factors which may effect the Company’s business objectives and strategic plans.