• Total revenue of $12.2 million demonstrates the Company’s solid momentum year over year and ongoing growth in the rapidly expanding bulk sales market.
• Entourage made a strong impact with new product launches across Alberta, Ontario, and British Columbia, including Color Cannabis’ expanded flower offerings.
• Dime Bag continued its strong performance in Ontario, achieving a sequential increase in sales and hitting a distribution milestone of over 90% coverage.
• Entourage continues to yield positive outcomes from its restructuring initiatives, with SG&A showing a year-over-year decline.
• Management will host a conference call on August 27, 2024, at 10 a.m. Eastern Time.

TORONTO, Aug. 27, 2024 (GLOBE NEWSWIRE) — Entourage Health Corp. (TSX-V: ENTG) (OTCQX: ETRGF) (FSE:4WE) “Entourage” or the “Company,” a Canadian producer and distributor of award-winning cannabis products, today announced its financial results for the three months and six months ending June 30, 2024. The Company reported a total revenue of $12.2 million (net revenue of $9.3 million, before excise duties and discounts). The Company will host a conference call to discuss its financial and business highlights on Tuesday, August 27, 2024, at 10 a.m. Eastern Time.

“Overall, our year-to-date performance aligns with our expectations and prior achievements. As we move into Q3 and beyond, we are optimistic about the opportunities ahead,” said George Scorsis, CEO and Chair. “This quarter, we focused on the launch of new products and offerings under all our Entourage Brands. The expansion of Dime Bag resulted in significant traction, achieving over 90% distribution in Ontario. We remain dedicated to bringing variety to our consumers and are confident that these efforts will drive improved financial results as we progress through the year.”

Summary of Results

For the Quarter-Ended			June 30, 2024		June 30, 2023
			($000’s)		($000’s)
Total revenue			12,218		13,365
*Net revenue (less Excise Tax)			9,263		10,174
Gross profit before changes in fair value			720		2,151
Gross margin % before changes in fair value			8%		21%
Loss and comprehensive loss			(10,325)		(9,572)
EBITDA**			(3,238)		(3,513)
As at			June 30, 2024		December 31, 2023
			($000’s)		($000’s)
Cash and cash equivalents			2,694		11,254
Inventory			11,157		10,010
Working capital			(163,248)		(146,909)

*Net revenue defined as revenue (i.e., gross revenue less discounts and customer incentives but inclusive of freight) less excise taxes
** EBITDA is not a recognized measurement under International Financial Reporting Standards (IFRS), and this data may not be comparable to data presented by other companies. Management defines EBITDA as adjusted to exclude interest, tax, depreciation, stock compensation, fair value changes and other non-cash items, and non-recurring items. This data is furnished to provide additional information and does not have any standardized meaning prescribed by IFRS. The Company uses this non-IFRS measure to provide shareholders and others with supplemental measures of its operating performance. The Company also believes that securities analysts, investors, and other interested parties frequently use this non-IFRS measure in evaluating companies, many of which present similar metrics when reporting their results. As other companies may calculate EBITDA differently than the Company, this metric may not be comparable to similarly titled measures reported by other companies. We caution readers that EBITDA should not be substituted for determining net loss as an indicator of operating results or as a substitute for cash flows from operating and investing activities. See the Company management’s discussion and analysis for the three and six months ended June 30, 2024 (the “Q2 2024 MD&A”), for a detailed reconciliation of adjusted EBITDA to net income/(loss). The Company’s financial statements for the three and six months ended June 30, 2024, and the Q2 2024 MD&A are available on SEDAR+ at www.sedarplus.ca.

“We have achieved stability despite a challenging environment, highlighting the resilience of our business model and the strength of our long-term strategy,” said Vaani Maharaj, CFO. “Although Q2 presented its share of market fluctuations, our steady performance over the past six months demonstrates our commitment to overcoming these obstacles. As we move forward, our focus on execution and capital efficiency will be key to driving future growth and success.”

Revenue Highlights

		Q2 2024		Q2 2023		Change YOY
		($000’s)		($000’s)		%
Net Revenue by Channel
Medical		4,141		4,163		(1%)
Adult use		4,104		5,786		(29%)
Bulk		1,018		225		351%
Total Net Revenue		9,263		10,174		(9%)

Financial Highlights

• Entourage realized total revenues of $12.2 million and $28.6 million for the three and six months ended June 30, 2024. Despite a slight decrease of approximately 9% in the most recent quarter, the overall six-month performance remains consistent with the previous period, reflecting stable operational performance and sustained revenue generation over the six-month period.
• For the three and six months ended June 30, 2024, the Company reported gross profit before changes in fair value of $0.7 million, 8% of net revenue and $6.5 million, 30% of net revenue, respectively. This compares to $2.1 million, 21% of net revenue and $5.1 million, 23% of net revenue for the same periods in the prior year.
• For the three months ended June 30, 2024, cost of goods sold (COGS) increased by 6% to $8.5 million from $8.0 million in the prior year. For the six months ended June 30, 2024, COGS decreased by 8% to $15.4 million from $16.8 million, mainly due to a reduction in provisions and write-downs, reflecting better inventory management.
• During the three and six months ended June 30, 2024, EBITDA increased by $274,701 or 8% to $3.2 million and $11.7 million or 159% to $4.3 million, compared to the same periods in 2023.

Corporate Highlights During and After the Second Quarter of 2024

• The Company announced in August that it was in breach of certain financial covenants and other obligations under each of its Senior Credit Agreement and Subordinated Credit agreements with an affiliate of the LiUNA Pension Fund of Central and Eastern Canada (“LPF”). The Company is working collaboratively with LPF to agree on amended debt terms. As a positive step forward, the Company received a renewed forbearance letter dated August 2, 2024, waiving the Company’s breaches until October 8, 2024, subject to the satisfaction or waiver of certain conditions.

Operational and Commercial Highlights

• Increased Production Capacity: Entourage increased production to over 2.0 million monthly pre-rolls.
• Product Launches in Alberta: During the second quarter, the Company introduced six new products under Entourage Brands, including expanding 7g flower and launching two new Color 10-pack SKUs: Sour Grapefruit Haze and Pedro’s Prima.
• Ontario Launches: Entourage Brands rolled out three new products in Ontario, highlighted by the launch of the latest Color Cannabis cultivar, Pedro’s Prima, a descendant of the popular Pedro’s Sweet Sativa. Additionally, Saturday introduced the Sour Blueberry-infused XL blunt.
• Expansions in British Columbia: In B.C., the Company launched four new SKUs, including the expansion of Color Cannabis live resin pre-rolls and two new 10-packs: Sour Grapefruit Haze and Phantom Sunset, now available in over 50% of B.C.’s retail outlets.
• Dime Bag Growth in Ontario: Dime Bag continued its strong performance in Ontario, achieving quarter-over-quarter sales growth and reaching a distribution milestone of over 90% coverage.
• Starseed Medicinal: The successful launch of two new dried flower products, Lemon Octane and Pineapple God, gained significant traction, becoming popular choices among the medical patient population.

Company Outlook

Entourage has demonstrated early successes that set a strong, positive path for the remainder of 2024. The Company’s strategic initiatives, including the launch of innovative products, the introduction of large-format offerings, and the expansion of Saturday’s portfolio, are paving the way for growth. The favourable market response to Dime Bag, with its notable distribution milestone, highlights the potential to grow market share in the pre-roll segment.

The Company is strategically focusing on expanding our distribution channels across Canada, launching targeted products satisfying diverse consumer preferences, and forming strategic partnerships to scale operations and meet demand. By leveraging data-driven market insights, the Company is well-positioned for sustainable growth and profitability. Entourage’s focus on innovation, quality, and operational excellence aims to strengthen the Company’s position within the industry.

Conference Call Details

A conference call will be hosted by Mr. Scorsis and Ms. Maharaj, with management available for questions following opening remarks:

Date: Tuesday, August 27, 2024
Time: 10 a.m. Eastern Time
Toll-Free Number: 1-800-267-6316
Conference ID: ETRGFQ2

Webcast: https://events.q4inc.com/attendee/382521020

Company Update

The Company announced today that, in accordance with the provisions of its omnibus equity incentive compensation plan (the “Omnibus Plan“), the Company has authorized the issuance of an aggregate of 1,200,000 deferred share units (“DSUs”) to certain members of its Board of Directors as compensation for services provided in the second quarter of 2024. The DSUs will vest on June 30, 2025, and are granted in lieu of a portion of cash compensation for services rendered during the quarter.

The Company earlier announced on April 24, 2024, that in accordance with the provisions of its Omnibus Plan, an aggregate of 1,600,000 DSUs respectively were issued to the Board of Directors of the Company as compensation for services for the fourth quarter of 2023 and the first quarter of 2024 with vesting dates of December 31, 2024, and March 31, 2025, respectively. The Company wishes to clarify that the sum of 1,331,507 DSUs were issued to certain members of the Board of Directors as compensation for their services for the first quarter of 2024 and not 1,600,000 DSUs. 131,507 DSUs vest on January 30, 2024, and 1,200,000 DSUs vest on March 31, 2025.

About Entourage Health Corp. 
Entourage Health Corp. is the publicly traded parent Company of Entourage Brands Corp., a licence holder producing and distributing cannabis products for the medical and adult-use markets. The Company owns and operates a fully licensed 26,000 sq. ft. Aylmer, ON processing facility. With its Starseed Medicinal medical-centric brand, Entourage has expanded its multi-channelled distribution strategy. Starseed’s industry-first, exclusive partnership with LiUNA, the largest construction union in Canada, along with employers and union groups, complements Entourage’s direct sales to medical patients. Entourage’s elite adult-use product portfolio includes Color Cannabis, Saturday Cannabis – and now Dime Bag and Syndicate – sold across eight provincial distribution agencies. Exclusive Canadian producer and distributor of award-winning U.S.-based wellness brand Mary’s Medicinals, sold in both medical and adult-use channels. In addition, Entourage also entered into an exclusive agreement with Irwin Naturals, a renowned nutraceutical and herbal supplement formulator of branded wellness products sold across North America. 

Follow Entourage and its brands on:

LinkedIn 

Instagram:
Color Cannabis, Saturday Cannabis, Starseed & Syndicate

For additional information or investor or media inquiries:
Catherine Flaman
Senior Director, Communications & Corporate Affairs
416-910-0279
[email protected]

Forward Looking Information

This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation which are based upon Entourage’s current internal expectations, estimates, projections, assumptions and beliefs and views of future events. Forward-looking information can be identified using forward-looking terminology such as “expect”, “likely”, “may”, “will”, “should”, “intend”, “anticipate”, “potential”, “proposed”, “estimate” and other similar words, including negative and grammatical variations thereof, or statements that certain events or conditions “may”, “would” or “will” happen, or by discussions of strategy.

The forward-looking information in this news release is based upon the expectations, estimates, projections, assumptions, and views of future events which management believes to be reasonable in the circumstances. Forward-looking information includes estimates, plans, expectations, opinions, forecasts, projections, targets, guidance, or other statements that are not statements of fact. Forward-looking information necessarily involve known and unknown risks, including, without limitation, risks associated with general economic conditions; adverse industry events; loss of markets; future legislative and regulatory developments; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the cannabis industry in Canada generally; the ability of Entourage to implement its business strategies; competition; crop failure; and other risks.

Any forward-looking information speaks only as of the date on which it is made, and, except as required by law, Entourage does not undertake any obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Entourage to predict all such factors. When considering this forward-looking information, readers should keep in mind the risk factors and other cautionary statements in Entourage’s disclosure documents filed with the applicable Canadian securities’ regulatory authorities on SEDAR+ at www.sedarplus.ca The risk factors and other factors noted in the disclosure documents could cause actual events or results to differ materially from those described in any forward-looking information.

Third Party Information

This press release includes market and industry data that has been obtained from third party sources, including industry publications. The Company believes that the industry data is accurate and that its estimates and assumptions are reasonable, but there is no assurance as to the accuracy or completeness of this data. Third party sources generally state that the information contained therein has been obtained from sources believed to be reliable, but there is no assurance as to the accuracy or completeness of included information. Although the data is believed to be reliable, the Company has not independently verified any of the data from third party sources referred to in this press release or ascertained the underlying economic assumptions relied upon by such sources.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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