2022 Second Quarter Financial Highlights
- Q2 2022 revenue increased 12% to
$224 million compared to the second quarter 2021. - Q2 2022 gross profit was
$98 million or 44% of revenue, compared to$69 million or 35% of revenue in the second quarter 2021. - Q2 2022 SG&A was
$100 million or 45% of revenue, compared to$70 million or 35% of revenue in the second quarter 2021. - Q2 2022 net loss was
$(10) million , compared to a loss of$(30) million in the second quarter 2021. - Q2 2022 EBITDA on an unadjusted basis was
$48 million or 22% of revenue, and Adjusted EBITDA1 was$76 million or 34% of revenue. - Cash flow from operations for the six months ended
June 30, 2022 was$44 million .
2022 Second Quarter Operational Highlights
- On
April 21, 2022 ,Verano welcomedNew Jersey GovernorPhil Murphy at ZenLeaf Elizabeth to celebrate the commencement of adult use sales in the state, and also launched adult use sales at the Company’s Zen Leaf Lawrence Township dispensary. - Exceeded 100-dispensary milestone by expanding the Company’s retail footprint with new store openings that include:
- five new MÜV dispensaries located in
Marco Island ,Hobe Sound , FortMyers Beach , Ocala, andWinter Haven , FL. - two new Zen Leaf locations in
Westover, WV andWynnewood, PA.
- five new MÜV dispensaries located in
- Announced exclusive partnership with The Weldon Project’s Mission Green to advance cannabis clemency and advocacy initiatives.
- Relocated Zen Leaf dispensaries in
Canton, OH andPhoenix, AZ to optimize store locations and amenities. - Launched mobile applications and exclusive rewards programs for Verano’s flagship Zen Leaf and MÜV dispensaries.
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1 Adjusted EBITDA is a non-GAAP financial measure. It is derived from EBITDA, another non-GAAP financial measure, both of which are defined in this news release in the section below titled “Non-GAAP Financial Measures.” The most comparable
Subsequent Operational Highlights
- Surpassed 50-dispensary retail footprint milestone for MÜV in
Florida , bringing the total state footprint to 55. - Opened new Zen Leaf dispensary in
Wheeling, WV ; relocated ZenLeaf Jessup toElkridge inMaryland to optimized location and retail space; maximizedNew Jersey footprint with the commencement of adult use sales at ZenLeaf Neptune on theJersey Shore . - Launched
Verano signature flower branded products in four new core markets –Arizona ,Florida ,Massachusetts andPennsylvania ;Verano signature flower branded products are now distributed to more than 500 dispensaries across nine states, including more than 100 of the Company’s retail locations. - Announced the upcoming launch of Savvy in
September 2022 , a new brand featuring larger-format cannabis products that caters to more value-oriented patients and consumers, across seven core markets. - Active operations span 13 states, comprised of 109 dispensaries and 13 cultivation and processing facilities with more than 1 million square feet of cultivation capacity.
Management Commentary
“I am very proud of our performance this quarter alongside the strategic investments we made to ensure our high operational standards touch every part of our business,” said
Balance Sheet and Liquidity
As of
The Company’s total Class A subordinate voting shares outstanding, including Class B proportionate voting shares on an as-converted to Class A subordinate voting share basis, was 330,818,664 as of
Non-GAAP Financial Measures
The Company calculates EBIT as net earnings from operations before interest expense and tax expenses, EBITDA as net earnings from operations before interest expense, tax expense, depreciation, and amortization and Adjusted EBITDA as EBITDA as adjusted for one-time expenses related to other expenses, employee stock compensation, gain from investment in associates, acquisition, transaction and other non-operating costs and acquisition adjustments and other income (expense), net. The calculations of the non-GAAP financial measures used in this news release and the reconciliations to the most comparable
Management believes that this non-GAAP financial information is useful as a supplement to comparable
Conference Call and Webcast
A conference call and audio webcast with analysts and investors will be held on
- Investors and participants can register in advance for the call by visiting: https://conferencingportals.com/event/QNkIOmXU
- After registering, instructions will be shared on how to join the call for those who wish to dial in.
- On
August 16, 2022 , the live webcast can be accessed via the following link: https://events.q4inc.com/attendee/764015566 - The live and archived webcast will be available on the Events and Presentations page of the Company’s investor relations website at investors.verano.com .
About
Contacts:
Investors
Director, Investor Relations
julianna.paterra@verano.com
Media
Director, Communications
steve.mazeika@verano.com
312-348-4430
Forward Looking Statements
This press release may contain “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking statements are not representative of historical facts or information or current condition, but instead represent only the Company’s beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of the Company’s control. Generally, such forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “future”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or may contain statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “will continue”, “will occur” or “will be achieved”. Forward-looking statements involve and are subject to assumptions and known and unknown risks, uncertainties, and other factors which may cause actual events, results, performance, or achievements of the Company to be materially different from future events, results, performance, and achievements expressed or implied by forward-looking statements herein, including, without limitation, the risk factors described in the Company’s registration statement on Form 10, as amended, and quarterly reports on Form 10-Q filed with the
Financial Information Tables
The following tables present the reconciliations of the non-GAAP financial measures to the respective most directly comparable GAAP financial measures for the three and six months ended
Highlights from Unaudited Consolidated Statements of Operations
($ in Thousands except share and per share amounts)
Three Months Ended | Six Months Ended | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Revenue | $ | 223,662 | $ | 199,066 | $ | 425,897 | $ | 319,961 | ||||||||
Cost of Sales | 125,547 | 129,856 | 229,165 | 196,461 | ||||||||||||
Gross Profit | 98,115 | 69,210 | 196,732 | 123,500 | ||||||||||||
Gross Profit % | 43.9 | % | 34.8 | % | 46.2 | % | 38.6 | % | ||||||||
Expenses: | ||||||||||||||||
Selling, General, and Administrative | 100,263 | 70,013 | 189,824 | 112,679 | ||||||||||||
Total Expenses | 100,263 | 70,013 | 189,824 | 112,679 | ||||||||||||
Income (Loss) from Investments in Associates | (144 | ) | 645 | 1,860 | 1,448 | |||||||||||
Income (Loss) from Operations | (2,292 | ) | (158 | ) | 8,768 | 12,269 | ||||||||||
Other Income (Expense): | ||||||||||||||||
Loss on Disposal of Property, Plant and Equipment | (203 | ) | (429 | ) | (1,192 | ) | (429 | ) | ||||||||
Gain (Loss) on Deconsolidation | (73 | ) | — | 9,485 | — | |||||||||||
Gain (Loss) on Previously Held Equity Interest | (171 | ) | — | 13,928 | — | |||||||||||
Interest Expense, net | (11,624 | ) | (5,434 | ) | (22,295 | ) | (7,201 | ) | ||||||||
Other Income (Expense), net | 15,619 | (131 | ) | 18,153 | (997 | ) | ||||||||||
Total Other Income (Expense) | 3,548 | (5,994 | ) | 18,079 | (8,627 | ) | ||||||||||
Net Income (Loss) Before Provision for Income Taxes and Non-Controlling Interest | 1,256 | (6,152 | ) | 26,847 | 3,642 | |||||||||||
Provision For Income Taxes | (11,103 | ) | (23,438 | ) | (36,617 | ) | (39,852 | ) | ||||||||
Net Income Attributable To Non-Controlling Interest | — | 98 | 291 | 1,364 | ||||||||||||
Net Loss Attributable to | (9,847 | ) | (29,688 | ) | (10,061 | ) | (37,574 | ) | ||||||||
Net Loss per share - basic | (0.03 | ) | (0.10 | ) | (0.03 | ) | (0.14 | ) | ||||||||
Net Loss per share - diluted | (0.03 | ) | (0.10 | ) | (0.03 | ) | (0.14 | ) | ||||||||
Weighted average number of shares outstanding - basic | 328,519,193 | 300,715,671 | 327,402,503 | 265,842,657 | ||||||||||||
Weighted average number of shares outstanding - diluted | 328,519,193 | 300,715,671 | 327,402,503 | 265,842,657 |
Highlights from Condensed Consolidated Balance Sheets
($ in Thousands)
2022 | 2021 | |||||||
(Unaudited) | (As Restated) | |||||||
Cash and Cash Equivalents | $ | 92,833 | $ | 99,118 | ||||
Other Current Assets | 195,123 | 177,926 | ||||||
Property and Equipment, Net | 515,698 | 452,232 | ||||||
Intangible Assets, Net | 1,343,371 | 1,379,913 | ||||||
376,637 | 368,130 | |||||||
Other Long-Term Assets | 81,308 | 71,336 | ||||||
Total Assets | $ | 2,604,970 | $ | 2,548,655 | ||||
Total Current Liabilities | $ | 586,777 | $ | 470,516 | ||||
Total Long-Term Liabilities | 469,468 | 596,333 | ||||||
Total Shareholders' Equity | 1,548,725 | 1,480,530 | ||||||
Non-controlling Interest | — | 1,276 | ||||||
Total Liabilities and Shareholders' Equity | $ | 2,604,970 | $ | 2,548,655 |
Unaudited Reconciliation of Net Loss to EBITDA (Non-GAAP)
($ in thousands) | Three Months Ended | Six Months Ended | ||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Net Loss Attributable to | $ | (9,847 | ) | $ | (29,688 | ) | $ | (10,061 | ) | $ | (37,574 | ) | ||||
Interest Expense, net | 11,624 | 5,434 | 22,295 | 7,201 | ||||||||||||
Income Tax Expense | 11,103 | 23,438 | 36,617 | 39,852 | ||||||||||||
Depreciation and Amortization - COGS | 19,089 | 13,963 | 38,814 | 22,282 | ||||||||||||
Depreciation and Amortization - SG&A | 16,388 | 10,311 | 31,097 | 13,775 | ||||||||||||
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) | 48,357 | 23,458 | 118,762 | 45,536 |
Unaudited Reconciliation of Net Loss to EBIT (Non-GAAP) and Adjusted EBITDA (Non-GAAP)
($ in thousands) | Three Months Ended | Six Months Ended | ||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Net Loss Attributable to | $ | (9,847 | ) | $ | (29,688 | ) | $ | (10,061 | ) | $ | (37,574 | ) | ||||
Interest Expense, Net | 11,624 | 5,434 | 22,295 | 7,201 | ||||||||||||
Income Tax Expense | 11,103 | 23,438 | 36,617 | 39,852 | ||||||||||||
Earnings Before Interest and Taxes (EBIT) | $ | 12,880 | $ | (816 | ) | $ | 48,851 | $ | 9,479 | |||||||
COGS Add-backs: | ||||||||||||||||
Depreciation and Amortization | 19,089 | 13,963 | 38,814 | 22,282 | ||||||||||||
Acquisition, Transaction and Other Non-operating Costs | 15,385 | 35,167 | 19,998 | 53,804 | ||||||||||||
Employee Stock Compensation | 2,976 | — | 4,027 | — | ||||||||||||
SG&A Add-backs: | ||||||||||||||||
Depreciation and Amortization | 16,388 | 10,311 | 31,097 | 13,775 | ||||||||||||
Acquisition, Transaction and Other Non-operating Costs | 10,720 | 10,038 | 22,972 | 23,316 | ||||||||||||
Employee Stock Compensation | 10,515 | 12,580 | 20,377 | 18,333 | ||||||||||||
Acquisition Adjustments and Other Income (Expense), net | (12,428 | ) | (635 | ) | (23,397 | ) | 421 | |||||||||
Adjusted EBITDA | $ | 75,526 | $ | 80,608 | $ | 162,738 | $ | 141,409 |
Source:
2022 GlobeNewswire, Inc., source