Delivers Record Revenue of
Management Commentary
“I am tremendously proud of the strong results we delivered in the third quarter, highlighted by raising and tightening our free cash flow guidance range and generating record revenue, and the recent strategic elevation of our capital markets strategy by uplisting to Cboe Canada,” said
Archos continued: “While we never run our business based on legislative assumptions, we are encouraged by the multi-faceted federal reform efforts surrounding cannabis, and although we remain confident in our ability to continue growing our business in the current environment, we will continue to position ourselves to capitalize on growth opportunities should any federal reforms materialize. I am grateful to our
Third Quarter 2023 Financial Highlights
For the Three Months Ended, | |||||
($ in thousands) | |||||
Revenues, net of Discounts | $ 240,088 | $ 234,115 | $ 227,588 | ||
Gross Profit | 133,220 | 115,191 | 122,994 | ||
Income from Operations | 40,288 | 30,430 | 37,075 | ||
Net Loss Attributable to | (17,842) | (13,061) | (42,993) | ||
Adjusted EBITDA2 | 89,349 | 71,512 | 82,124 |
- Revenue of
$240 million increased 5% year-over-year and increased 3% versus the prior quarter.- Introducing state-level revenue to be reported on a recurring basis.
- Gross profit of
$133 million or 55% of revenue. - SG&A expense of
$86 million or 36% of revenue. - Net loss of
$(18) million . - Adjusted EBITDA2 of
$89 million or 37% of revenue. - Net cash provided by operating activities of
$37 million . - Capital expenditures of
$10 million . - Free cash flow1 of
$27 million .
Third Quarter 2023 Financial Overview
Revenue for the third quarter 2023 was
Gross profit for the third quarter 2023 was
SG&A expense for the third quarter 2023 was
Net loss for the third quarter 2023 was
Adjusted EBITDA2 for the third quarter 2023 was
Net cash provided by operating activities for the nine months ended
Capital expenditures for the nine months ended
Free cash flow1 for the nine months ended
2023 Guidance
- The Company raises its free cash flow1 guidance for the year to
$72-76 million , up from$65-75 million , and lowers its capital expenditures guidance to$30-37 million , down from$35-50 million .
Third Quarter 2023 and Subsequent Operational Highlights
- Welcomed cannabis customers at the Company's four
Maryland Zen Leaf retail locations to commemorate the state's historic launch of adult use sales onJuly 1 . - Appointed
John Tipton andCharles Mueller to the Company's Board of Directors. - Expanded the Company's retail footprint across key markets by opening the following new stores:
- MÜV dispensary locations in
Apopka ,Fort Pierce andSatellite Beach, Florida , raising the Company's totalFlorida retail footprint to 72 storefronts statewide; - and Zen Leaf social equity joint venture dispensaries in
Norwich andNewington , raising the Company'sConnecticut retail footprint to four locations.
- MÜV dispensary locations in
- Commenced trading on Cboe Canada, elevating the Company's capital markets strategy and presence on a senior exchange with a global platform that spans 26 markets.
- Introduced Savvy Threads, a non-plant-touching e-commerce extension of the Company's Savvy brand featuring limited-edition, artist-driven streetwear available for sale and delivery to all 50 states.
- Relaunched national philanthropic donation campaigns benefiting the
Lynn Sage Breast Cancer Foundation and The Weldon Project's Mission Green. - Leading coalition of industry stakeholders as a plaintiff challenging the legality of the federal government's intervention in legal intrastate cannabis commerce under the Commerce Clause and Controlled Substances Act.
- Current operations span 13 states, comprised of 135 dispensaries and 14 production facilities with more than one million square feet of cultivation capacity.
Balance Sheet and Liquidity
As of
The Company’s total Class A subordinate voting shares outstanding was 343,529,456 as of
Conference Call and Webcast
A conference call and webcast with analysts and investors is scheduled for
- Investors and participants can register in advance for the call by visiting: https://conferencingportals.com/event/sxTSCKLn
- After registering, instructions will be shared on how to join the call for those who wish to dial in.
- On
November 8, 2023 , the live webcast can be accessed via the following link: https://events.q4inc.com/attendee/254800729 - 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.
_________________________
1 Free cash flow is a non-
2 Adjusted EBITDA is a non-
Non-
The Company calculates EBIT as net income (loss) before interest expense and income tax expense, EBITDA as net income (loss) before interest expense, income tax expense, depreciation, and amortization, adjusted EBITDA as net income (loss) plus net interest expense, income tax expense, depreciation and amortization, and also excludes certain one-time items, and free cash flow as net cash provided by operating activities less capital expenditures. The calculations of the non-
Management believes that this non-
About
Contacts:
Investors
VP, Investor Relations
julianna.paterra@verano.com
Media
VP, Communications
steve.mazeika@verano.com
312-348-4430
Forward Looking Statements
This press release contains “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, strategies, 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”, “projects,” “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 annual report on Form 10-K for the year ended
Financial Information Tables
The following tables include the reconciliations of the non-
Highlights from Unaudited Interim Condensed Consolidated Statements of Operations
($ in Thousands)
For the Three Months Ended, | ||||||||||||
2023 | 2023 | 2022 | ||||||||||
Revenues, net of Discounts | $ | 240,088 | $ | 234,115 | $ | 227,588 | ||||||
Cost of Goods Sold, net | 106,868 | 118,924 | 104,594 | |||||||||
Gross Profit | 133,220 | 115,191 | 122,994 | |||||||||
Gross Profit % | 55 | % | 49 | % | 54 | % | ||||||
Operating Expenses | ||||||||||||
Selling, General and Administrative | 86,316 | 84,660 | 85,710 | |||||||||
Loss on Impairment - Investment in Associates | 6,571 | — | — | |||||||||
Total Operating Expenses | 92,887 | 84,660 | 85,710 | |||||||||
Loss from Investments in Associates | (45 | ) | (101 | ) | (209 | ) | ||||||
Income from Operations | 40,288 | 30,430 | 37,075 | |||||||||
Other Income (Expense): | ||||||||||||
Gain (Loss) on Disposal of Property, Plant and Equipment | (234 | ) | (388 | ) | 1,443 | |||||||
Gain on Deconsolidation | — | — | 75 | |||||||||
Gain on Previously Held Equity Interest | — | — | 175 | |||||||||
Interest Expense, net | (15,166 | ) | (14,013 | ) | (11,785 | ) | ||||||
Other Income (Expense), net | 2,145 | (1,411 | ) | (595 | ) | |||||||
Total Other Income (Expense), Net | (13,255 | ) | (15,812 | ) | (10,687 | ) | ||||||
Income Before Provision for Income Taxes and Non-Controlling Interest | 27,033 | 14,618 | 26,388 | |||||||||
Provision for Income Tax Expense | (44,797 | ) | (27,679 | ) | (69,381 | ) | ||||||
Net Income Attributable To Non-Controlling Interest | 78 | — | — | |||||||||
Net Loss Attributable to | (17,842 | ) | (13,061 | ) | (42,993 | ) |
Highlights from Condensed Consolidated Balance Sheets
($ in Thousands)
2023 | 2022 | |||||||
(Unaudited) | ||||||||
Cash and Cash Equivalents | $ | 129,921 | $ | 84,851 | ||||
Other Current Assets | 225,083 | 233,424 | ||||||
Property and Equipment, Net | 512,589 | 525,905 | ||||||
Intangible Assets, Net | 1,114,088 | 1,180,766 | ||||||
269,222 | 269,088 | |||||||
Other Long-Term Assets | 104,200 | 102,021 | ||||||
Total Assets | $ | 2,355,103 | $ | 2,396,055 | ||||
Total Current Liabilities | $ | 352,300 | $ | 386,645 | ||||
Total Long-Term Liabilities | 689,318 | 667,860 | ||||||
Total Shareholders' Equity | 1,313,407 | 1,341,550 | ||||||
Non-Controlling Interest | 78 | — | ||||||
Total Liabilities and Shareholders' Equity | $ | 2,355,103 | $ | 2,396,055 |
Segmented Revenue By State
For the Three Months Ended, | For the Nine Months Ended, | |||||||
Net Retail Sales by State | ||||||||
($ in thousands) | (Unaudited) | (Unaudited) | ||||||
$ | 53,685 | $ | 162,265 | |||||
30,914 | 93,741 | |||||||
30,408 | 100,539 | |||||||
17,012 | 51,435 | |||||||
13,329 | 42,423 | |||||||
Maryland | 10,578 | 17,719 | ||||||
7,530 | 20,811 | |||||||
7,362 | 22,060 | |||||||
5,849 | 19,284 | |||||||
3,160 | 9,643 | |||||||
1,611 | 4,152 | |||||||
Other | 4,269 | 12,235 | ||||||
Total Net Retail Sales | $ | 185,707 | $ | 556,307 |
For the Three Months Ended, | For the Nine Months Ended, | |||||||||||||||
Wholesale Sales by State | ||||||||||||||||
Gross | Net1 | Gross | Net1 | |||||||||||||
($ in thousands) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||
$ | 26,267 | $ | 16,254 | $ | 75,878 | $ | 35,778 | |||||||||
20,353 | 12,149 | 59,977 | 34,832 | |||||||||||||
14,235 | 10,771 | 40,380 | 31,668 | |||||||||||||
Maryland | 9,320 | 6,042 | 19,829 | 13,973 | ||||||||||||
7,890 | 4,239 | 21,693 | 12,123 | |||||||||||||
7,034 | 1,898 | 18,905 | 7,313 | |||||||||||||
2,555 | 769 | 7,435 | 2,118 | |||||||||||||
1,669 | 825 | 5,959 | 2,779 | |||||||||||||
1,570 | 644 | 5,327 | 2,440 | |||||||||||||
1,486 | 780 | 3,863 | 1,912 | |||||||||||||
Other | 10 | 10 | 20 | 20 | ||||||||||||
Total Wholesale Sales | $ | 92,389 | $ | 54,381 | $ | 259,266 | $ | 144,956 |
1Net of intercompany eliminations
Free Cash Flow Guidance Reconciliation (Non-
Full-Year 2023 Guidance | ||||||||
Low | High | |||||||
($ in thousands) | (Unaudited) | (Unaudited) | ||||||
Net Cash Provided by Operating Activities | $ | 102,000 | $ | 113,000 | ||||
Purchase of property, plant, and equipment | (30,000 | ) | (37,000 | ) | ||||
Free Cash Flow | $ | 72,000 | $ | 76,000 |
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow (Non-
Nine Months Ended | ||||||||
2023 | 2022 | |||||||
($ in thousands) | (Unaudited) | (Unaudited) | ||||||
Net Cash Provided by Operating Activities | $ | 77,361 | $ | 65,311 | ||||
Purchase of property, plant, and equipment | (26,503 | ) | (109,720 | ) | ||||
Free Cash Flow | $ | 50,858 | $ | (44,409 | ) |
Three Months Ended | ||||
2023 | ||||
($ in thousands) | (Unaudited) | |||
Net Cash Provided by Operating Activities | $ | 36,621 | ||
Purchase of property, plant, and equipment | (9,962 | ) | ||
Free Cash Flow | $ | 26,659 |
Reconciliation of Net Loss to EBITDA (Non-
For the Three Months Ended, | For the Nine Months Ended, | |||||||||||||||
($ in thousands) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||
Net Loss Attributable to | $ | (17,842 | ) | $ | (42,993 | ) | $ | (40,140 | ) | $ | (53,054 | ) | ||||
Interest Expense, Net | 15,166 | 11,785 | 45,084 | 34,082 | ||||||||||||
Income Tax Expense | 44,797 | 69,381 | 100,796 | 105,998 | ||||||||||||
Depreciation and Amortization - COGS | 18,384 | 20,727 | 55,434 | 59,540 | ||||||||||||
Depreciation and Amortization - SG&A | 16,882 | 15,592 | 50,125 | 46,690 | ||||||||||||
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) | $ | 77,387 | $ | 74,492 | $ | 211,299 | $ | 193,256 |
Reconciliation of Net Loss to EBIT (Non-
For the Three Months Ended, | ||||||||||||
2023 | 2023 | 2022 | ||||||||||
($ in thousands) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||
Net Loss Attributable to | $ | (17,842 | ) | $ | (13,061 | ) | $ | (42,993 | ) | |||
Interest Expense, Net | 15,166 | 14,013 | 11,785 | |||||||||
Income Tax Expense | 44,797 | 27,679 | 69,381 | |||||||||
Earnings Before Interest, Taxes (EBIT) | $ | 42,121 | $ | 28,631 | $ | 38,173 | ||||||
COGS Add-backs: | ||||||||||||
Depreciation and Amortization - COGS | 18,384 | 18,529 | 20,727 | |||||||||
Acquisition, Transaction and Other Non-operating Costs | — | — | 111 | |||||||||
Employee Stock Compensation | 625 | 488 | 1,745 | |||||||||
SG&A Add-backs: | ||||||||||||
Depreciation and Amortization - SG&A | 16,882 | 16,708 | 15,592 | |||||||||
Acquisition, Transaction and Other Non-operating Costs | 617 | 472 | (1,791 | ) | ||||||||
Employee Stock Compensation | 4,062 | 3,260 | 8,075 | |||||||||
Acquisition Adjustments and Other Income (Expense), net | $ | 6,658 | $ | 3,424 | $ | (508 | ) | |||||
Adjusted EBITDA | $ | 89,349 | $ | 71,512 | $ | 82,124 |
Source:
2023 GlobeNewswire, Inc., source