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CHICAGO and VANCOUVER, British Columbia, Aug. 28, 2019 (GLOBE NEWSWIRE) -- Green Thumb Industries Inc. (“GTI” or the “Company”) (CSE: GTII) (OTCQX: GTBIF), a leading national cannabis consumer packaged goods company and owner of Rise™ and Essence retail stores, today reported its financial results for the second quarter ended June 30, 2019. All currency is in U.S. dollars, unless noted otherwise.
“We are pleased to report another solid quarter of positive yet disciplined momentum with record revenue and positive adjusted operating EBITDA as our strategic plan delivers on operating efficiencies from scale. Continued execution of key priorities such as the closing of Integral Associates, accelerated store openings, and expanded distribution of our brand portfolio sets us up well for the future,” said GTI Founder and Chief Executive Officer Ben Kovler.
“We are deep in the chapter of maximizing the levers in our business to drive long-term operational performance that delivers value for our shareholders and the communities in which we operate,” Kovler continued. “We are focused on optimizing our wholesale and retail businesses, integrating our acquisitions, and further strengthening compliance across the organization. We are pleased to see many of these efforts already bearing fruit as we head into the second half of 2019 and I want to thank our team for all of their hard work.”
Consumer Packaged Goods Business Develo
Retail Business Development
Leadership and Corporate Governance Update
Capital Markets and Financing Activities
On May 23rd, GTI closed a $105.5 million senior secured non-brokered private placement debt financing through the issuance of senior secured notes (the “Notes”). The financing will be used for general working capital purposes, strategic growth initiatives, and to retire the Company’s existing debt. The Notes have a maturity date of May 22, 2022, and will bear interest at 12% per annum, payable quarterly, with an option, at the discretion of the Company, to extend an additional 12 months. The Company also has the ability to raise an additional approximately $45 million under the terms of this note six months from the initial date of close.
Second Quarter 2019 Financial Overview
Total revenue for the second quarter of 2019 was $44.7 million, up 228% from $13.6 million for the second quarter of 2018 and up 60% from $27.9 million for the first quarter of 2019. Revenue growth was driven by the distribution expansion of GTI’s branded product portfolio to third-party retailers, the addition of Integral Associates in Nevada, and increased store traffic to GTI’s 25 open and operating retail stores, particularly in Illinois and Pennsylvania.
In the second quarter, GTI generated revenue from ten of its twelve markets: Nevada, Illinois, Pennsylvania, Massachusetts, Florida, Maryland, Connecticut, California, Ohio and Colorado. The Company also made capital investments related to the build out of new markets in New York and New Jersey, in preparation for revenue generation over the next six months.
Gross profit before biological asset adjustment for the second quarter was $23.2 million or 52%, as compared to $6.3 million or 46% for the same period last year. Gross margin improvement was driven primarily by increased operating efficiencies. Gross profit after net gains on biological asset transformation for the second quarter was $22.6 million or 50% as compared to $6.9 million or 50% for the same period last year.
Total operating expenses for the second quarter were $32.5 million, as compared to $12.1 million for the same period last year and $26.1 million last quarter. Total operating expenses include general and administrative (“G&A”) expenses, which totaled $24.9 million for the quarter. G&A expenses include increased headcount related expenses as the Company continues to scale the business, non-recurring acquisition related expenses of $1.4 million, and non-cash expenses related to stock-based compensation of $6.3 million for the quarter.
Total other expenses were $12.3 million for the second quarter as compared to total other income of $34.5 million for the same period last year. The decrease primarily reflects a decrease in value from a variable note receivable in other income (expense) and debt-related interest expenses.
Net loss attributable to GTI for the second quarter was $22.2 million. EBITDA1 was a loss of $9.4 million for the second quarter of 2019. Excluding fair value adjustments, non-cash stock compensation expenses, and transaction closing costs, GTI generated Adjusted Operating EBITDA1 of $5.0 million for the second quarter of 2019, an improvement from a loss of approximately $0.4 million in the prior quarter.
Balance Sheet and Liquidity
As of June 30, 2019, total Company assets were $1.1 billion, including cash and cash equivalents of $135.8 million and long-term liabilities of $153.4 million. The Company had $96.3 million total debt.
Total shares on a fully converted basis were 200,495,458 at June 30, 2019. Total fully diluted shares were 208,323,751 including options, warrants and restricted stock units (RSUs).
Additional information relating to the Company’s second quarter 2019 results is available on SEDAR at www.sedar.com in the Company’s Interim Financial Statements and Management Discussion & Analysis (“MD&A”).
GTI refers to certain non-IFRS financial measures such as Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), and adjusted operating EBITDA earnings defined as earnings before interest, taxes, depreciation, amortization, less certain non-cash equity compensation expense, including one-time transaction fees and all other non-cash items. These measures do not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other issuers.
Conference Call and Webcast
GTI will host a conference call on Wednesday, August 28, 2019 at 5:00 pm ET to discuss its financial results for the second quarter ended June 30, 2019. The conference call may be accessed by dialing 877-273-8145 (Toll-Free) or 647-689-5400 (International) with conference ID: 2278778. A live audio webcast of the call will also be available on the Investor Relations section of GTI’s website at https://www.gtigrows.com/investors and will be archived for replay.
About Green Thumb Industries:
Green Thumb Industries (GTI), a national cannabis consumer packaged goods company and retailer, is dedicated to providing dignified access to cannabis while giving back to the communities in which they serve. GTI manufactures and distributes a portfolio of branded cannabis products including Rythm, Dogwalkers, The Feel Collection, incredibles and Beboe, among others. The company also owns and operates rapidly growing national retail cannabis stores called Rise™ and Essence. Headquartered in Chicago, Illinois, GTI has 13 manufacturing facilities, licenses for 95 retail locations and operations across 12 U.S. markets. Established in 2014, GTI employs approximately 1,200 people and serves thousands of patients and customers each year. GTI was named a Best Workplace 2018 by Crain’s Chicago Business. More information is available at GTIgrows.com.
Cautionary Note Regarding Forward-Looking Information
This press release contains statements which may constitute “forward-looking information” within the meaning of applicable securities laws, including statements regarding the plans, intentions, beliefs and current expectations of GTI with respect to future business activities. Forward-looking information is often identified by the words “may,” “would,” “could,” “should,” “will,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “expect,” or similar expressions and include information regarding the future direction and business objectives of GTI. 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 and expectations relating to general economic and market conditions. Any forward‐looking information speaks only as of the date on which it is made, and, except as required by law, GTI does not undertake any obligation to update or revise any forward‐looking information, whether as a result of new information, future events or otherwise. The forward‐looking information in this news release is subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those express or implied. When considering these forward‐looking statements, readers should keep in mind the risk factors and other cautionary statements in GTI’s public filings with the applicable securities regulatory authorities on SEDAR at www.sedar.com, including the risk factors set out in GTI’s annual information form dated July 10, 2018.
The Canadian Securities Exchange does not accept responsibility for the adequacy or accuracy of this release.
|Investor Contact:||Media Contact:|
Chief Strategy Officer
VP, Corporate Communications
Source: Green Thumb Industries
Highlights from Unaudited and Unreviewed Interim Condensed Consolidated Statements of Operations and Comprehensive Loss
|(Amounts Expressed in United States Dollars)|
|Three Months Ended|
|Revenues, net of discounts||$||44,726,777||$||13,624,658|
|Cost of Goods Sold, net||(21,488,647||)||(7,337,040||)|
|Gross Profit before Biological Asset Adjustment||23,238,130||6,287,618|
|Net Effect of Changes in Fair Value of Biological Assets||(684,085||)||584,764|
|General and Administrative||24,932,060||11,251,399|
|Sales and Marketing||1,525,877||354,292|
|Depreciation and Amortization||6,011,800||522,550|
|Loss From Operations||(9,915,692||)||(5,255,859||)|
|Other Income (Expense):|
|Other Income (Expense), net||(6,640,546||)||34,612,194|
|Total Other Income (Expense)||(12,287,706||)||34,523,608|
|Income (Loss) Before Provision for Income Taxes And Non-Controlling Interest||(22,203,398||)||29,267,749|
|Provision For Income Taxes||(177,333||)||4,253,000|
|Net Income (Loss) and Comprehensive Income (Loss) Before Non-Controlling Interest||(22,026,065||)||25,014,749|
|Net Income and Comprehensive Income Attributable To Non-Controlling Interest||216,946||24,621,861|
|Net Income (Loss) and Comprehensive Income (Loss) Attributable To Green Thumb Industries Inc.||$||(22,243,011||)||$||392,888|
|Net Income (Loss) per share - diluted||$||(0.12||)||$||0.00|
|Weighted average number of shares outstanding - diluted||187,830,565||139,471,034|
|Highlights from Unaudited and Unreviewed Interim Condensed Consolidated Statements of Financial Position|
|(Amounts Expressed in United States Dollars)|
|June 30,||December 31,|
|Cash and cash equivalents||$||135,759,426||$||145,986,072|
|Other current assets||53,416,754||28,409,968|
|Property and equipment, net||117,582,922||65,324,080|
|Intangible assets, net||329,869,194||91,565,678|
|Other long-term assets||64,923,391||56,392,427|
|Total current liabilities||$||95,565,527||$||47,619,512|
|Notes payable, net of current portion||96,131,006||5,733,797|
|Other long-term liabilities||57,263,513||14,769,377|
|Total liabilities and equity||$||1,070,333,050||$||417,002,585|
Supplemental Information (Unaudited and Unreviewed) Regarding Non-IFRS Financial Measures
EBITDA and Adjusted Operating EBITDA are non-IFRS measures and do not have standardized definitions under IFRS. The following information provides reconciliations of the supplemental non-IFRS financial measures, presented in this press release to the most directly comparable financial measures calculated and presented in accordance with International Financial Reporting Standards. The Company has provided the non-IFRS financial measures in the press release, which are not calculated or presented in accordance with IFRS, as supplemental information and in addition to the financial measures that are calculated and presented in accordance with IFRS. These supplemental non-IFRS financial measures are presented because management has evaluated the Company’s financial results both including and excluding the adjusted items and believe that the supplemental non-IFRS financial measures presented provide additional perspective and insights when analyzing the core operating performance of the Company’s business. These supplemental non-IFRS financial measures should not be considered superior to, as a substitute for or as an alternative to, and should be considered in conjunction with, the IFRS financial measures presented in the press release.
|(Amounts Expressed in United States Dollars)|
Three Months Ended June,
|Net income (loss) before noncontrolling interest (IFRS)||$||(22,026,065||)||$||25,014,749|
|Depreciation and amortization||7,180,909||639,640|
|Earnings before interest, taxes, depreciation and amortization|
|(EBITDA) (non-IFRS measure)||$||(9,375,329||)||$||29,995,975|
|Share-based compensation, non-cash||6,339,443||1,006,988|
|Acquisition, transaction, and other non-operating costs||1,444,555||-|
|Adjusted Operating EBITDA (non-IFRS measure)||$||5,049,215||$||655,833|