Unrivaled Brands, Inc. (OTCQX:UNRV) reported its financial results for the quarter and fiscal year ended December 31, 2021.
“Our strategy throughout 2021 was focused on building scale. As a result, we were able to leverage numerous sector opportunities, successfully positioning Unrivaled as a dominant West Coast MSO,” Tiffany Davis, CEO of Unrivaled Brands stated.
“While the board and I are pleased that these efforts resulted in 2021 fiscal year revenue growth of approximately 674%, market conditions continue to shift and it’s important we pivot to capitalize on these changes. As a result, I will be shifting our focus from acquisitions to integration to ensure more profitable and sustainable growth over the long term.”
Financial Update
- Gross profit for the year ended December 31, 2021 was approximately $11.97 million, compared to a gross profit of approximately, $2.64 million for the year ended December 31, 2020, an increase of $9.32 million. Our gross margin for the year ended December 31, 2021 was 25.1% compared with the gross margin of 42.9% for the year ended December 31, 2020. The year-over-year margin decrease was due to the inclusion of the lower margin distribution operation into the portfolio in 2021. In 2020, the operation was exclusively retail.
- Selling, general and administrative expenses for the year ended December 31, 2021 were approximately $48.26 million, compared to approximately $19.32 million for the year ended December 31, 2020, an increase of $30.12 million. In general, the increase was due to costs associated with the acquisitions brought on-board in 2021 that resulted in a significantly larger company.
- The Company reported revenue of $47.7 million for full-year 2021 compared to $6.2 million for full 2020. In the fourth quarter of 2021, we reported revenue of $22.7 million compared to $2.5 million for fourth quarter 2020. These numbers exclude revenue from NuLeaf as it was "held for sale" so the $12.9 million in revenue for that operation in 2021 was excluded. The inclusion of NuLeaf would have resulted in approximately $60.6 million revenue for 2021.
- The Company’s previously communicated $70 million revenue target for 2021 revenue included NuLeaf and was presented as "combined" or "pro forma" with total UMBRLA revenue for the year. Because the merger with UMBRLA occurred on July 1, 2021, the Company’s reported financial results only include approximately a half year of UMBRLA revenue.
“Our plans over the coming weeks and months include further refining both our strategy and structure. This includes additions to our leadership team, establishing synergies across our portfolio companies, and creating operational efficiencies through shared services. We believe these moves will effectively right-size the business, improve margins, and ensure our acquisitions are accretive to strengthen our overall balance sheet,” Davis added.
“We continue to work diligently to strengthen our collective future. We are incredibly grateful to our team members who remain hard at work, fully focused on our day-to-day business and delivering on our commitments to customers, partners and shareholders. Relatedly, and as anticipated, we successfully closed the sale of NuLeaf last week resulting in the receipt of $6.5 million.”
