Coho Collective Kitchens Inc. Reports Q3 2023 Financial Results
Revenue of $724,000, up 56% YOY
Gross Profit of $639,000, up 59% YOY
Average Revenue per Member of $1,601, up 6% YOY
Operating Expenses Reduced by 17% compared to Q2 2023
Vancouver, British Columbia- February 28, 2023 - Coho Collective Kitchens Inc. (TSXV: COHO) ("Coho" or the "Company"), a commercial real estate and food technology company that provides private and shared kitchen and food production space to a variety of businesses, is pleased to announce that it has filed its unaudited Q3 financial results for the three and nine months ended December 31, 2022, the highlights of which are included in this news release. The unaudited Condensed Consolidated Interim Financial Statements and Management Discussion and Analysis (“MD&A”) for the three and nine months ended December 31, 2022, can be viewed by visiting the Company's website at www.cohocommissary.com or its profile on SEDAR at www.sedar.com.
Q3 Financial Highlights
Revenue of $723,703, a 56% increase vs. revenue of $463,711 in Q3 of the prior year. The year-over-year increase was driven by higher rental and retail sales.
Gross profit of $638,696, a 59% increase vs. gross profit of $401,784 in Q3 of the prior year. The year-over-year increase was driven by higher revenue and complemented by a higher gross margin.
Average Revenue per Member of $1,601, a 6% increase vs. Average Revenue per Member of $1,515 in Q3 of the prior year.
Operating expenses of $1,949,553, a 17% decrease vs. operating expenses of $2,346,191 in Q2 of the current year, reflecting the Company’s ongoing cost reduction efforts.
"Coho Collective Kitchens Inc. has nearly tripled the number of its open locations since its IPO in June 2022, currently operating eight locations throughout British Columbia. As these businesses stabilize over the coming months, revenue is expected to continue to grow. Coho's two largest projects to date are currently in development and progressing well. We remain committed to delivering phenomenal customer service and managing costs as we expand," said Andrew Barnes, Co-Founder and Chief Executive Officer of Coho Collective Kitchens Inc.
Operating Highlights for the Quarter
During the quarter ended December 31, 2022, the Company began generating revenues from its previously announced Sunshine Coast and Victoria Hudson locations.
During the quarter ended December 31, 2022, the Company announced the openings of its seventh facility (White Rock) and eighth facility (Pandora). The Company is pleased to announce that it has executed membership agreements at both locations, with revenues to commence in Q4 of the current year.
Subsequent to Quarter End:
On January 3, 2023, the Company announced that shareholders holding an aggregate of 56,609,764 common shares of Coho (the “Shares”) voluntarily executed an extension to a lock-up agreement (the “Lock-Up”) for their Shares. 56,609,764 Shares are subject to the restrictions imposed by the Lock-Up until December 9, 2023 (the “Lock-up Period”). Subject to limited exceptions, the Lock-Up stipulates that, during the Lock-Up Period, these shareholders will not, directly or indirectly, sell or agree to sell, or announce any intention to sell or agree to sell, any Shares or securities exchangeable or exercisable for Shares.
On January 5, 2023, the Company announced the unveiling of a bold new brand identity. The new brand identity, which includes a new logo, brand messaging, and visual identity, will enhance the Company’s competitive advantage and position it for success in the future.
On February 6, 2023, the Company announced the appointment of Yuri Fulmer, O.B.C., to its Board of Directors. Mr. Fulmer is a seasoned entrepreneur, an award-winning businessperson and a proud philanthropist. With over 25 years of experience in the restaurant industry, Mr. Fulmer has grown his first A&W franchise into dozens more. Mr. Fulmer's company, Fulmer & Company, was listed twice on the Profit 100 as one of the country's largest and fastest growing private companies. As Chairman of Fulmer & Company, he works to enable small and mid-cap businesses to reach their next level of growth, while striving to provide an ethical support network for entrepreneurs and their companies.
Certain information provided in this news release is extracted from the financial statements and MD&A of the Company for the three and nine months ended December 31, 2022, and should be read in conjunction with them. It is only in the context of the fulsome information and disclosures contained in the financial statements and MD&A that an investor can properly analyze this information. The financial statements and MD&A have been published on the Company’s profile on SEDAR.
Announcement Regarding Advisory Board
Coho is excited to announce the appointment of its second member to its newly appointed Advisory Board. The Advisory Board has been formed to provide ongoing strategic guidance and support to the Company. The first two members of the Advisory Board include:
Tara Finnegan: As previously announced on December 1, 2022, Ms. Finnegan stepped down from serving on Coho’s Board of Directors and joined Coho’s newly appointed Advisory Board. Ms. Finnegan will serve as a valuable complement to Coho’s existing Board of Directors to advise and guide Coho to secure high-value commercial contracts for Coho.
Bryan Wevers: As the founder of several successful private enterprises, Mr. Wevers brings over 30 years of construction and real estate development experience to Coho’s Advisory Board. Having established the Wevers Family Scholarship Fund, Mr. Wevers is also an avid philanthropist whose values and focus on building communities align with Coho’s overall mission and objectives.
Coho is a growth stage, community-driven, commercial real estate and food technology company that provides private and shared kitchen and production space to food companies from start-ups to restaurant groups seeking turnkey solutions and business services. Each of the Company’s customers, called “Members”, are revenue generating companies that have signed a membership agreement with Coho for an agreed upon term. The concept falls in line with a rapidly growing trend in the food-delivery industry creating a market for delivery-only and/or virtual restaurant concepts. For more information about how Coho is growing and innovating in the commissary space, visit https://www.cohocommissary.com.
Andrew Barnes, Chief Executive Officer
Non-IFRS Financial Measures
This news release makes reference to certain non-IFRS measures and ratios, hereafter, referred to as "non-IFRS measures". These measures, such as "Average Revenue per Member", are not recognized measures under IFRS, and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of the results of operations from management's perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of the financial information reported under IFRS. Coho's management uses these non-IFRS measures to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts, and to determine components of management compensation. As required by Canadian securities laws, Coho defines and reconciles these non-IFRS measures below:
Average Revenue per Member
"Average Revenue per Member" is defined as the mean amount billed across all locations divided by the amount of active member companies.
"Average Revenue per Member" is determined by monthly reconciliation of member payments across facilities.
"Average Revenue per Member" is frequently used to measure the unit value of members to Coho's space, and their ability to further monetize members by offering value add services and adjusting prices based on market conditions.
This press release may contain forward-looking information within the meaning of applicable securities legislation, which reflect management's current expectations regarding future events, including Coho’s ability to open additional locations on schedule, Coho’s ability to complete additional locations within budget, and the expectation that additional locations will generate revenue in the future. Forward‐looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the Company’s control, which could cause actual results and events to differ materially from those that are disclosed in or implied by such forward‐looking information. Such risks and uncertainties include, but are not limited to, the ability of the Company to execute on its strategy and the factors discussed under “Risk Factors” in the annual financial statements and MD&A of the Company. Coho disclaims any obligation to update these forward-looking statements.
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.