TORONTO, Nov. 24, 2020 (GLOBE NEWSWIRE) -- The Flowr Corporation (TSX.V: FLWR; OTC: FLWPF) (“Flowr” or the “Company”) herein announces its financial and operational results for the third quarter ended September 30, 2020. Key financial and operating highlights in the third quarter of 2020: * The Company generated gross revenue of approximately $3.5 million in the third quarter, a 64% increase as compared to the same period in 2019 and a 15% increase sequentially from the second quarter in 2020. * Net revenue in the third quarter 2020 was $2.8 million, a 110% increase as compared to the same period in 2019 and up 22% sequentially from the second quarter in 2020. * During the quarter, the Company sold 552 kilograms of dried flower, an increase of 144% as compared to the same period in 2019 and up 31% sequentially from the second quarter 2020. In addition, 370 kilograms of sales were of the Company’s flagship strain BC Pink Kush in the third quarter as compared to 345 kilograms of BC Pink Kush sales in the second quarter of 2020. * Flowr’s BC Pink Kush was the 2, 1 & 1 selling dried flower SKU in dollar terms sold by the OCS to retailers for the trailing 30, 60 and 90 days, respectively, for the period ended September 30, 2020. * Flowr’s BC Pink Kush has not been irradiated in 22 months, which the Company believes is a testament to its ability to bring quality product to market. * The average Flowr branded price per gram in the third quarter was $6.54 which the Company believes reflects its positioning in the premium segment. Overall average price per gram in the third quarter was $5.25, due to trim and biomass agreements entered into during the quarter. * In Canada, the Company achieved significant positive gross margin before impairment of inventory and fair value adjustments of biological assets. * SG&A of $3.6 million in the third quarter of 2020 was 19% lower than in the second quarter of 2020 as the Company continued to see benefits of its global restructuring program announced in March 2020. * A recent consumer research report by the Brightfield Group highlighted Flowr as the 7 ranked Brand by Awareness in Canada and had Flowr ranked 1 or 2 in a variety of Loyalty, Brand Promotion and Satisfaction scores among the top 10 purchased brands in Canada. The Company expects to build on this achievement as it continues to invest in sales and marketing.  Refer to the “Non-GAAP Financial Measures” section below for reconciliation to the IFRS equivalent. Subsequent financial and operational highlights post end of the third quarter: * On October 19, 2020, the Company announced the strategic acquisition (the “Acquisition”) of Terrace Global Inc. (TSX.V: TRCE) (“Terrace Global”), a multi-country operator (MCO) led by experienced cannabis entrepreneurs focused on the development and acquisition of international cannabis assets. On a pro-forma basis, at the time of the announcement of the Acquisition, the combined company had in excess of $31 million in cash and marketable securities on its balance sheet. * Terrace Global was created by a group of pioneers in the cannabis sector who have prior successes in international cannabis markets and include the founders of MedReleaf Corp., ICC Labs Inc. and Bedrocan Cannabis Corp. Both Flowr and Terrace Global have sector leading insider ownership and supportive lead investors groups. * Terrace Global and Flowr jointly operated the Company’s outdoor cultivation site in Aljustrel, Portugal which is believed to be the largest medical cannabis site in the European Union and one of the largest in the world. A video of the Aljustrel project is available on the Company’s website at flowrcorp.com. Throughout October, the Company finished harvesting the majority of the 1 million square feet of cultivation space planted at its outdoor site in Aljustrel, Portugal. The Company’s preliminary findings from its outdoor medical cannabis cultivation site, operated in partnership with Terrace Global, suggested a harvest of approximately 3,000 kgs of high THC (17-21% in premium cultivars) biomass. * On October 10th & 26th, pursuant to the to the Equity Line and Profit Share Agreement with Terrace Global, the Company closed on a fifth and sixth tranche of funding in an aggregate amount of $2.5 million. * On October 6, 2020, the Company completed the development of the Flowr-Hawthorne R&D Center’s (the “R&D Center”) first floor, in accordance with terms of the R&D Agreement, as amended. The Company believes that the 50,000 square foot R&D Center will be North America’s first dedicated cannabis R&D facility focused on cultivation techniques and systems including growth media, nutrient formulations, irrigation and lighting systems, plant genetics and integrated growing systems. * On September 30, 2020, the Company entered into an amendment to the R&D Agreement with Hawthorne, whereby Hawthorne agreed to lend up to $1.3 million in additional funding to Flowr. To date, approximately $1.1 million has been funded. * Given recent COVID-19 related protection measures taken in Ontario, the delay in entering the Quebec market, the delay of new cultivar launches & the pending Terrace transaction expected to close by year end, the Company has decided against providing more specific guidance at this time. Under normal operating conditions, the Company would expect to be cash flow positive in the first half of 2021. MANAGEMENT COMMENTARY “We continue to make inroads in proving out our business model in the Canadian recreational market. While competition is intensifying, we believe there is a clear consumer demand driven market for premium products in the Canadian marketplace. Our pending merger with Terrace Global will put us in a stronger financial position and better equip us to execute on our strategic objectives as we enter 2021 and beyond. We are very excited to welcome the Terrace team to the Flowr family and continue to work towards closing the transaction by the end of 2020,” said Vinay Tolia, Flowr’s Chief Executive Officer.THIRD QUARTER 2020 RESULTSThe following table summarizes the Company’s key financial and operational results:In thousands of Canadian dollars, (except per share and grams metrics) Three months ended September 30Nine months ended September 30 2020 2019 2020 2019 Grams Harvested – K1*1,305,311 446,854 3,140,979 1,186,570 Grams Sold552,409 226,807 1,094,187 777,626 Average Net Realized Price per Gram5.25 8.03 5.68 7.23 Gross Revenue3,403 2,069 7,375 6,642 Net revenue **2,823 1,344 5,913 5,154 Gross profit (loss) before fair value adjustments(2,660)46 (5,326)230 Selling, General and Administrative expense3,563 6,085 14,000 15,054 Share-based compensation1,022 3,442 2,624 9,036 Net income/(loss)**(10,174)(14,688)(28,105)(9,675) Basic & diluted earnings/(loss) per share(0.06)(0.12)(0.19)(0.09) Cash used in investing activities(4,247)(20,318)(14,283)(47,158) Cash from financing activities2,794 43,976 27,251 62,373 * Excludes trim ** Net of excise tax, sales returns and price concessions. * Net revenue of $2.8 million was the Company’s highest revenue quarter since initial industry wide product sell-in in Q4 2018. The following table summarizes the Company’s financial results for the three months and nine months ended September 30, 2020:In thousands of CAD dollars Three months ended September 30Nine months ended September 30 2020 2019 2020 2019 Net income/(loss)(10,427)(14,688)(30,113)(9,675) Depreciation and amortization1,812 793 4,583 1,926 Unrealized (gains) losses on fair value adjustments of biological assets2,733 (3,597)6,578 (5,300) Fair value adjustments on inventory sold(196)269 (907)438 Share-based compensation1,106 3,442 2,834 9,036 Restructuring costs— — 726 — Transaction and listing costs— 1,086 — 1,086 Unrealized (gain) loss on fair value of investments held in shares106 — 103 148 Unrealized loss on valuation of warrant investment— 63 39 434 Loss (gain) on acquisition of investment in Holigen— 7,098 — (11,652) Finance costs1,384 212 2,885 478 Interest expense— (2)(15)(72) Adjusted EBITDA(3,482)(5,324)(13,287)(13,153) Adjusted EBITDA (Non-IFRS Measure)Adjusted EBITDA is defined as net loss, plus (minus) income taxes (recovery), plus (minus) interest income (expense), net, plus depreciation and amortization, plus share-based compensation, plus (minus) non-cash fair value adjustments on biological assets and inventory sold, plus listing expense costs, plus (minus) loss (gain) on investments. Management believes this measure provides useful information as it is a commonly used measure in the capital markets and as it is a close proxy for repeatable cash used by operations.For a full discussion of Flowr’s operational and financial results for the three and nine months ended September 30, 2020, please refer to the Company’s third quarter 2020 Management’s Discussion & Analysis and Consolidated Financial Statements, which have been filed on SEDAR.CONFERENCE CALL AND WEBCASTThe Company will host a conference call and webcast to review these results today at 5:30 p.m. Eastern Time.Conference call and live webcast details are as follows:Webcast: flowrcorp.com/investors/events-and-presentations Online registration: http://www.directeventreg.com/registration/event/7384863Conference call and webcast replay details are as follows:Toll Free: 1-800-585-8367 Toll/International: 1-416-621-4642 Passcode: 7384863 Webcast Replay: flowrcorp.com/investors/events-and-presentations/ The telephone replay of the conference call will be available through midnight on January 12, 2021.About The Flowr CorporationThe Flowr Corporation is a Toronto-headquartered cannabis company with operations in Canada, Europe, and Australia. Its Canadian operating campus, located in Kelowna, BC, includes a purpose-built, GMP-designed indoor cultivation facility; an outdoor and greenhouse cultivation site; and a state-of-the-art R&D facility that is awaiting licensing from Health Canada. From this campus, Flowr produces recreational and medicinal products. Internationally, Flowr intends to service the global medical cannabis market through its subsidiary Holigen, which has a license for cannabis cultivation in Portugal and operates GMP licensed facilities in both Portugal and Australia.Flowr aims to support improving outcomes through responsible cannabis use and, as an established expert in cannabis cultivation, strives to be the brand of choice for consumers and patients seeking the highest-quality craftsmanship and product consistency across a portfolio of differentiated cannabis products. For more information, please visit flowrcorp.com or follow Flowr on Twitter: @FlowrCanada and LinkedIn: The Flowr Corporation.On behalf of The Flowr Corporation: Vinay Tolia CEO and DirectorCONTACT INFORMATION: INVESTORS & MEDIA: Thierry Elmaleh Head of Capital Markets (877) 356-9726 ext. 1528 email@example.comCautionary Note Regarding Non-GAAP MeasuresThis press release refers to certain financial performance measures that are not defined by and do not have a standardized meaning under IFRS (termed “Non-GAAP measures”). These Non-GAAP measures are defined in Management’s Discussion and Analysis of Financial Condition and Results of Operations for the three and nine months ended September 30, 2020 under “Non-IFRS Measures”. Non-GAAP measures are used by management to assess the financial and operational performance of the Company. The Company believes that these Non-GAAP measures, in addition to conventional measures prepared in accordance with IFRS, enable investors to evaluate the Company’s operating results, underlying performance and prospects in a similar manner to the Company’s management. As there are no standardized methods of calculating these Non-GAAP measures, the Company’s approaches may differ from those used by others, and accordingly, the use of these measures may not be directly comparable. Accordingly, these Non-GAAP measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.Notice regarding future-oriented financial information: To the extent any forward-looking information in this press release constitutes future-oriented financial information or financial outlooks within the meaning of securities laws, such information is being provided to demonstrate the potential financial performance of the Company and readers are cautioned that this information may not be appropriate for any other purpose and that they should not place undue reliance on such future-oriented financial information and financial outlooks. Future-oriented financial information and financial outlooks, as with forward-looking information generally, are, without limitation, based on the assumptions and subject to the risks set out below under “Notice regarding forward-looking information”.Forward-Looking InformationThis press release contains “forward-looking information” within the meaning of Canadian Securities laws, which may include but is not limited to: the Company’s belief that Aljustrel is the largest outdoor THC cultivation project in Europe and one of the largest in the world; the harvest from Aljustrel yielding approximately 3,000 kgs of high THC (17-21% in premium cultivars) biomass; the Company’s belief that the R&D Center will be North America’s first dedicated cannabis R&D facility focused on cultivation techniques and systems including growth media, nutrient formulations, irrigation and lighting systems, plant genetics and integrated growing systems; the anticipated funding from Hawthorne under the amended R&D Agreement; the Company’s expectation that it will build on its achievements as it continues to invest in sales and marketing; the Company continuing to invest in sales and marketing; the anticipated timeline for completion of the Acquisition; the expected benefits of the Acquisition, including the Company’s expectation that the Acquisition will put it in a stronger financial position and better equip it to execute on its strategic objectives as it enters 2021 and beyond; the Company’s anticipated timeline for becoming cash flow positive; there being strong consumer demand for premium dried flower products; Flowr servicing the global medical cannabis market and operating GMP facilities in Portugal and Australia; Flowr supporting improving outcomes through responsible cannabis use and striving to be the brand of choice for consumers and patients seeking highest-quality craftmanship and product consistency; and Flowr’s business, production and products and Flowr’s plans to provide premium quality cannabis to adult use recreational and medical markets.Often, but not always, forward-looking information can be identified by the use of words such as “plans”, “is expected”, “expects”, “scheduled”, “intends”, “contemplates”, “anticipates”, “believes”, “proposes” or variations (including negative and grammatical variations) of such words and phrases, or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Such information and statements are based on the current expectations of Flowr’s management and are based on assumptions and subject to risks and uncertainties. Although Flowr’s management believes that the assumptions underlying such information and statements are reasonable, they may prove to be incorrect. The forward-looking events and circumstances discussed in this press release may not occur by certain specified dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting Flowr, including risks relating to: Aljustrel not being the largest outdoor THC cultivation project in Europe and one of the largest in the world to date; the harvest from Aljustrel not yielding approximately 3,000 kgs of high THC (17-21% in premium cultivars) biomass; the R&D Center not being North America’s first dedicated cannabis R&D facility focused on cultivation techniques and systems including growth media, nutrient formulations, irrigation and lighting systems, plant genetics and integrated growing systems; the funding received from Hawthorne under the amended R&D Agreement being less than anticipated; the Company’s being unable to build on its achievements as it continues to invest in sales and marketing; the Company being unable to continue to invest in sales and marketing; the Acquisition not being completed within the anticipated timeline, or at all; the Company not realizing the expected benefits of the Acquisition, including the Company’s expectation that the Acquisition will put it in a stronger financial position and better equip it to execute on its strategic objectives as it enters 2021 and beyond; there not being strong consumer demand for premium dried flower products; the Company being unable to achieve a substantial increase in production and sales through the remainder of the year; the net revenues for Q4 being less than anticipated, which could put further pressure on the trading price of the Company’s securities; the Company being unable to become cash flow positive in the anticipated timeline, and thus requiring the Company to obtain additional liquidity and/or file for creditor protection; the Company failing to realize sales out of Holigen, and thus having limited growth and revenue generation generally and outside of Canada; the Company failing to produce, or having crop failures of, its new product offerings, given the limited amount of experience growing such strains; the Company’s view that customers demand high THC products and are willing to pay a premium for such products not materializing, which could materially adversely affect the Company’s business, operations and financial results; sales trends and demand for the Company’s BC Pink Kush strain not being robust; the Company’s foundational thesis that growing high quality cannabis at scale is difficult and only a few companies are both focused and able to do so not materializing, thus impacting the Company’s strategy and ultimately its financial results; EU-GMP certification failing to open the medicinal cannabis opportunity for the Company in global markets; Flowr’s inability to scale its business in 2020, which could materially adversely impact its financial condition and result in breach of its debt arrangements; the Company being unable to complete its objectives and/or those objectives not positioning the Company for long term success; the Company being unable to execute its near and long-term goals; new genetics not driving further operational improvements and/or enhancing the Company’s product mix; the Canadian industry not being in short supply of premium dry flower; the Company’s expectations for the first harvest from Portugal not being realized; the Company not being well positioned to distribute EU-GMP compliant product into underserviced markets; the Company being unable to address consumer demand with new genetics; the Company being unable to prioritize data acquisition to ensure production planning is driven by consumer insights and that its portfolio of finished products will address consumer preference; Flowr being unable to advance its plan for its Kelowna Campus to be a single hub for all aspects of cultivation, processing and packaging to service the Canadian cannabis market; Kelowna 1 being unable to produce high caliber dried flower; the Company being unable to double its operating capacity at Kelowna 1; Flowr being unable to deliver finished products from new genetics into the marketplace in 2020; new genetics not delivering higher yields and/or not supporting the rollout of an expanded line of high THC products; Kelowna 1 being unable to reach the anticipated production run-rate at the end of 2020; the Company not realizing premium pricing relative to the broader adult-use market; any inaccuracies in the estimated total capex for Kelowna 1; Flowr Forest’s production per annum being less than anticipated; the Company being unable to launch concentrate products; the inability to complete construction of facilities in Portugal in a timely fashion or at all; the inability to realize revenue from the Company’s European operations within the anticipated timeframe or at all; the Company being unable to establish sales and distribution channels in Europe and Australia to deliver medicinal cannabis to underserviced markets; any failure to realize expectations with respect to the anticipated timing for harvests, propagation, completion of construction and installation of extraction infrastructure at the Company’s Sintra facility; the Company being unable to commence GMP packaging and commercial sales in Europe within the anticipated timeframe or at all; the Company being unable to realize expectations for annual production and processing capacity at its Sintra facility; the inability to complete a partial extraction and processing facility at the Company’s Aljustrel facility; the Aljustrel facility being unable to complete a phased ramp up of production; Flowr’s assets in Australia not being a hub for distribution and sales of medicinal cannabis into the Australasian region; Flowr being unable to service the global medical cannabis market and/or operate GMP-designed manufacturing facilities in Portugal and Australia; Flowr being unable to support improving outcomes through responsible cannabis use and/or striving to be the brand of choice for consumers and patients seeking highest-quality craftmanship and product consistency; the construction and development of Holigen’s and the Company’s cultivation and production facilities; general economic and stock market conditions; adverse industry events; loss of markets; future legislative and regulatory developments in Canada and elsewhere; the cannabis industry in Canada generally; the ability of Flowr to implement its business strategies; Flowr’s inability to produce or sell premium quality cannabis; the impacts of the COVID-19 pandemic materially adversely effecting Flowr’s business; the risks and uncertainties detailed from time to time in Flowr’s filings with the Canadian Securities Administrators; and many other factors beyond the control of Flowr.Although Flowr has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. No forward-looking information can be guaranteed. Except as required by applicable securities laws, forward-looking information speaks only as of the date on which they are made and Flowr undertakes no obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise. When considering such forward-looking information, readers should keep in mind the risk factors and other cautionary statements in Flowr’s Annual Information Form dated April 28, 2020 (the “AIF”) and filed with the applicable securities regulatory authorities in Canada. The risk factors and other factors noted in the AIF could cause actual events or results to differ materially from those described in any forward-looking information.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.