Grown Rogue Reports Fourth Quarter 2021 Results, 30% aEBITDA1 Margin and 24% Sequential Revenue Growth

• Positive Net Income of $0.43M, before fair value adjustments
• Q4 2021 Revenue of $3.76M versus $3.03M in Q3 2021, an increase of 24%
• Q4 2021 aEBITDA¹ margin of 30% ($1.14M), versus 25% ($0.77M) in Q3 2021, an increase of 48% ($0.37M)
• Michigan operations (through Golden Harvests, LLC) report industry leading gross margin of 72% and aEBITDA¹ margin of 52%, before fair value adjustments
• Top performing Oregon brand in both August and October, according to LeafLink 

January 05, 2022 07:45 AM Eastern Standard Time

MEDFORD, Ore.–(BUSINESS WIRE)–Grown Rogue International Inc. (“Grown Rogue” or the “Company”) (CSE: GRIN) (OTC: GRUSF), a multi-state cannabis company with operations and assets in Oregon and Michigan, reports unaudited fourth quarter results. All financial information is provided in U.S. dollars unless otherwise indicated.

Fourth Quarter 2021 Financial Summary

• Eighth consecutive quarter, including pro-forma results, of positive aEBITDA¹
• Revenue of $3.76M compared to $3.03M in the Q3 2021, an increase of 24%
• Gross margin, before fair value adjustments, of 62.4% compared to 59.1% in the third quarter, an increase of >300 basis points
• aEBITDA margin of 30.4% ($1.14M) compared to 25.5% ($0.77M) in Q3 2021, an increase of 48% ($0.37M)
• Operating income, before fair value adjustments, of $0.73M compared to $0.26M in the Q3 2021, an increase of 177%
• Operating margin of 19.5% compared to 8.7% in the third quarter, an increase of >1000 basis points compared to Q3 2021
• Net income, before fair value adjustments, of $0.43M
• Working capital of $2.94M compared to $1.85M in Q3 2021
• Net assets (excluding intangibles and goodwill) of $6.82M compared to $5.55M in Q3 2021
• Subsequent to quarter-end, Grown Rogue closed a private placement for gross proceeds of $1.3M USD including $0.3M from the Company’s chief executive officer, Obie Strickler

“Grown Rogue continues to execute on our growth plan, increasing revenue by 24% and aEBITDA by 48% sequentially. The company gained market share in both Oregon and Michigan as our customers and retail partners value our quality, consistency, and service. Our 24% revenue growth vs market headwinds on the west coast (Oregon sales down 7%) validates the strength in our products and our team” said Obie Strickler, CEO of Grown Rogue. “Even with the significant pricing pressure being experienced across the sector affecting many of our peers, Grown Rogue’s continued industry leading metrics speak to our efficiency and discipline with managing costs. We are excited to enter 2022 where we expect to continue building our low-cost, high-quality flower business and launch some new products into our markets.”

Highlights by State

Oregon Operations

• Revenue of $1.62M compared to $1.28M in the Q3 2021, an increase of 27%
• Indoor revenue of $1.57M compared to $1.06M in Q3 2021, an increase of 48%
• Gross margin, before fair value adjustments, of 49.4% compared to 40.2% in Q3 2021, an increase of >900 basis points
• Segmented aEBITDA¹ margin of 44.7% compared to 7.9% in the third quarter
• Average selling price of indoor whole flower of $858/pound compared to $1,079/pound in Q3 2021, a decrease of 20%
• Indoor production run rate expected to increase from 700 pounds/month in Q4 2021 to 1000 pounds/month in the Q2 2022
• Harvested ~3% of Oregon’s total indoor wet weight with only ~0.3% of producer licenses in the state

Michigan Operations

• Revenue of $2.14M compared to $1.75M in the Q3 2021, an increase of 22%
• Gross margin, before fair value adjustments, of 72.3% compared to 73.0% in Q3 2021
• Segmented aEBITDA ¹ margin of 52.1% compared to 54.8% in the Q3 2021
• Average selling price of indoor whole flower of $1740/pound compared to $2077/pound in Q3 2021, a decrease of 16%
• Indoor production run rate expected to increase from 550 pounds/month in Q4 2021 quarter to 750 pounds/month in Q2 2022
• Improved wholesale position in bulk flower sales in 2021 from 20^th in the Q2 2021 to 16^th in the Q3 2021 to 10^th in Q4 2021, according to LeafLink’s MarketScape data
• Expect state market share to increase in fiscal 2022 as additional cultivation capacity comes online and the Company enters new product categories

The financial information in this release is preliminary and subject to completion of Grown Rogue’s year-end financial reporting processes and audit. Grown Rogue expects to file its fiscal year 2021 in February 2022.