TRUBAR (SBBC) Q2 2024 earnings summary

Executive summary

• Leadership strengthened with the addition of Erica Groussman, St. John Walshe, and other industry veterans to the board, and the CEO assuming a permanent, full-time role.

• Completed major restructuring by closing or divesting non-core assets, focusing on three core brand groups with TRUBAR as the flagship.

• Significant reduction in overhead and realignment of resources to support TRUBAR's growth.

• Net revenue for six months ended June 30, 2024, was CAD 21 million (up 3% year-over-year); Adjusted EBITDA reached CAD 1 million.

• TRUBAR expanded into 16 U.S. states, over 7 new retail chains, 1,000+ GNC locations, and a national Costco rollout.

Financial highlights

• Q2 2024 revenue was CAD 7 million, down year-over-year due to declines in non-core brands, while TRUBAR Q2 revenue rose 5% to CAD 6.4 million.

• Q2 gross margin improved to 47% (up from 21% year-over-year), driven by lower COGS and TRUBAR performance.

• Net loss of CAD 7.1 million in Q2, with CAD 6.3-6.5 million attributed to fair value charges on warrants and derivatives.

• Adjusted EBITDA positive at CAD 0.3 million for Q2, a CAD 0.7 million improvement year-over-year.

• Six-month revenue reached CAD 21 million, up from CAD 20.3 million year-over-year; six-month gross margin at 35%, up 4 percentage points year-over-year.

Outlook and guidance

• Confident in achieving 2024 revenue guidance of CAD 45-50 million, with Q3 and Q4 expected to ramp up due to expanded distribution.

• Focus remains on expanding TRUBAR sales in the U.S., Canada, and internationally, supported by new credit facilities and working capital improvements.

• Distribution points and store count are ahead of original plans, supporting strong second-half growth.

• Strategic initiatives aim to support continued brand portfolio expansion and operational scaling.