Harvest Health & Recreation Inc. Reports Second Quarter 2021 Financial Results

  • Second quarter revenue was $102.5 million , up 84% from the second quarter 2020 and 15% sequentially
  • Second quarter net loss before non-controlling interest was $19.2 million , compared to $23.0 million in the first quarter 2021
  • Adjusted EBITDA was $28.0 million in the second quarter, compared to $26.9 million in the first quarter 2021
  • 2021 revenue target of at least $400 million maintained

Harvest Health & Recreation Inc. ("Harvest" or the "Company") ( CSE: HARV OTCQX: HRVSF ), a vertically integrated cannabis company and multi-state operator in the U.S., today reported its financial and operating results for the second quarter 2021. All financial information is provided in U.S. dollars unless otherwise indicated.

Second Quarter 2021 Financial Results

  • Total revenue in the second quarter was $102.5 million , an increase of 84% from $55.7 million in the second quarter of 2020, and up 15% compared to $88.8 million in the first quarter of 2021.
  • Gross profit in the second quarter was $52.3 million , compared to $23.4 million in the second quarter of 2020, and $47.9 million in the first quarter of 2021.
  • Gross profit margin in the second quarter was 51.0%, compared to 42.1% in the second quarter of 2020 and 53.9% in the first quarter of 2021.
  • Net loss before non-controlling interest was $19.2 million for the second quarter, compared to $23.0 million in the first quarter of 2021.
  • Adjusted EBITDA in the second quarter was $28.0 million , compared to $26.9 million in the first quarter of 2021.

Please see the supplemental information regarding the use of Non-GAAP Financial Measures, and a reconciliation of Non-GAAP Financial Measures.

Second Quarter 2021 Business Highlights

  • On May 10, 2021 , Trulieve announced its planned acquisition of Harvest. Each Harvest shareholder is expected to receive 0.1170 shares of Trulieve for each Harvest share, representing total consideration of approximately $2.1 billion and a 34% premium to the May 7, 2021 closing price of the Harvest shares.
  • On May 7, 2021 , Harvest announced that a settlement was reached regarding the grower/processor permittee AGRiMED Industries of PA, LLC.
  • Harvest opened four new medical retail dispensaries in Florida in Lehigh Acres , North Miami Beach , Olympia Heights, and West Palm Beach and one new medical retail dispensary in York , Pennsylvania .
  • As of June 30, 2021 , Harvest owned, operated, or managed 42 retail locations in five states, including 15 open dispensaries in Arizona .

Recent Developments

  • In July, Harvest announced the conversion of the exercise price of select warrants to U.S. dollars and the acceleration of the expiry date of warrants issued in October 2020 .
  • On July 12, 2021 , Harvest filed a definitive proxy statement with the Securities and Exchange Commission and SEDAR for its annual and special shareholder meeting to be held on August 11, 2021 .
  • On July 15, 2021 , Harvest announced the divestiture of cultivation and processing assets in Utah for an immaterial amount of cash.
  • Harvest opened one new medical retail dispensary on July 15 th in South Miami Beach, Florida .
  • Harvest opened one new dispensary serving medical patients and adult use customers on August 6 th in Mesa, Arizona .
  • As of August 10, 2021 , Harvest owned, operated, or managed 44 retail locations in five states, including 16 open dispensaries in Arizona .

Outlook
Harvest is maintaining its full year 2021 revenue target of at least $400 million . Reported gross margins are expected to be at or above 50% and will likely continue to fluctuate from quarter to quarter.

Management Commentary
"Our second quarter results demonstrate continued momentum as Harvest builds scale and expands in its core markets" said Chief Executive Officer Steve White . "We are focused on our key operational and financial priorities in 2021 as we work toward closing the pending acquisition by Trulieve."

Conference Call & Webcast
Harvest Health and Recreation Inc. will host a conference call and audio webcast with Chief Executive Officer Steve White , Tuesday August 10, 2021 at 5:00 PM Eastern Time .

Registration for this event is required. Please use this link to register:
https://www.directeventreg.com/registration/event/5996545

Following registration, an email confirmation will be sent including dial in details and unique conference call codes. Registration will remain open during the call however we recommend advance registration to access the event.

Second quarter results will be available at:
https://investor.harvesthoc.com/financials/default.aspx

The live conference call webcast and replay will be available at:
https://investor.harvesthoc.com/financials/default.aspx

HARVEST HEALTH & RECREATION INC.

Consolidated Balance Sheets

(Amounts expressed in thousands of United States dollars, except share data)



June 30,

2021


December 31,

2020

ASSETS






Current assets:






Cash and cash equivalents

$

71,064


$

78,055

Restricted cash


3,000



4,542

Accounts receivable, net


8,788



5,051

Notes receivable, current portion


9,593



21,556

Related party notes receivable, current portion


10,276



10,052

Inventory, net


44,608



36,862

Other current assets


8,125



5,280

Total current assets


155,454



161,398

Notes receivable, net of current portion


10,516



18,211

Property, plant and equipment, net


179,182



176,827

Right-of-use assets for operating leases, net


113,395



60,843

Related party right-of-use assets for operating leases, net


5,541



5,621

Intangible assets, net


272,083



272,118

Corporate investments


40,924



19,091

Acquisition deposits


50



50

Goodwill


115,541



116,041

Assets held for sale


3,689



6,585

Other assets


19,672



19,850

TOTAL ASSETS

$

916,047


$

856,635

LIABILITIES AND STOCKHOLDERS' EQUITY






LIABILITIES






Current liabilities:






Accounts payable

$

7,988


$

10,755

Other current liabilities


30,434



28,896

Contingent consideration, current portion


10,398



17,985

Income tax payable


10,642



17,504

Operating lease liability, current portion


1,910



2,906

Related party operating lease liability, current portion


150



135

Notes payable, current portion


134,394



20,910

Total current liabilities


195,916



99,091

Notes payable, net of current portion


144,248



244,066

Warrant liability


3,438



20,908

Operating lease liability, net of current portion


112,731



58,637

Related party operating lease liability, net of current portion


5,518



5,595

Deferred tax liability


53,082



53,082

Total liabilities associated with assets held for sale


28



718

Other long-term liabilities


11



63

TOTAL LIABILITIES


514,972



482,160

STOCKHOLDERS' EQUITY






Capital stock


736,901



667,248

Accumulated deficit


(336,234)



(293,607)

Stockholders' equity attributed to Harvest Health & Recreation Inc.


400,667



373,641

Non-controlling interest


408



834

TOTAL STOCKHOLDERS' EQUITY


401,075



374,475

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

916,047


$

856,635

HARVEST HEALTH & RECREATION INC.

Consolidated Statements of Operations

(Amounts expressed in thousands of United States dollars, except share and per share data)



For the three months ended June 30,


2021


2020

Revenue, net of discounts

$

102,463


$

55,661

Cost of goods sold


(50,201)



(32,246)

Gross profit


52,262



23,415

Expenses






General and administrative


33,126



26,940

General and administrative, related party operating lease expense


201



200

Sales and marketing


1,224



1,248

Share-based compensation


3,741



3,276

Depreciation and amortization


2,641



725

Total expenses


40,933



32,389

Operating income (loss)


11,329



(8,974)

Other (expense) income






Loss on sale of assets


(21)



(2,783)

Other income


269



1,205

Fair value of liability adjustment


(8,353)



(1,497)

Fair value of contingent consideration


(4,500)



Foreign currency gain


17



30

Interest expense


(9,182)



(9,169)

Contract asset impairment




(2,420)

Loss before taxes and non-controlling interest


(10,441)



(23,608)

Income taxes


(6,834)



(1,132)

Net loss from continuing operations before non-controlling interest


(17,275)



(24,740)

Net loss from discontinued operations, net of tax


(1,954)



(905)

Net loss before non-controlling interest


(19,229)



(25,645)

Net income attributed to non-controlling interest


(276)



(1,929)

Net loss attributed to Harvest Health & Recreation Inc.

$

(19,505)


$

(27,574)

Net loss per share – basic and diluted

$

(0.04)


$

(0.07)

Attributable to Harvest Health and Recreation Inc.

$

(0.05)


$

(0.07)

Attributable to discontinued operations, net of tax

$

(0.00)


$

(0.00)

Weighted-average shares outstanding - basic and diluted


413,103,779



364,580,737

Use of Non-GAAP Financial Measures
This press release includes certain non-GAAP financial measures as defined by the SEC. Reconciliations of these non-GAAP financial measures to the most directly comparable financial measure calculated and presented in accordance with GAAP are included below. This information should be considered as supplemental in nature and not as a substitute for, or superior to, any measure of performance prepared in accordance with GAAP. Our management uses adjusted EBITDA to evaluate our operating performance and trends and make planning decisions. Our management believes adjusted EBITDA helps identify underlying trends in our business that could otherwise be masked by the effect of the items that we exclude. Accordingly, we believe that adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects, and allowing for greater transparency with respect to key financial metrics used by our management in its financial and operational decision-making.

Reconciliation of Non-GAAP Financial Measures
The table below reconciles Net loss to Adjusted EBITDA for the periods indicated.


For the three months ended June 30,

(Amounts expressed in thousands of United States dollars)

2021


2020

Net loss (GAAP) before non-controlling interest

$

(19,229)


$

(25,645)

Add (deduct) impact of:






Net interest and other financing costs (1)


9,184



9,390

Income tax


6,834



1,132

Amortization and depreciation (2)


3,532



1,803

Loss on sale of assets


21



2,783

Fair value of liability adjustment


8,353



1,497

Fair value of contingent consideration


4,500



Other income


(269)



(1,205)

Foreign currency gain


(17)



(30)

Share-based compensation expense


3,741



3,276

Contract asset impairment




2,420

Discontinued operations, net of tax


1,954



905

Other expansion expenses (pre-open)


3,371



2,323

Transaction & other special charges


6,047



956

Adjusted EBITDA (non-GAAP)

$

28,022


$

(395)


(1) Includes less than $0.1 million and $0.2 million of interest reported in cost of sales for the three months ended June 30, 2021 and 2020, respectively

(2) Includes $1.1 million and $0.9 million of depreciation reported in cost of sales for the three months ended June 30, 2021 and 2020, respectively

Forward-looking Statements
This press release contains "forward-looking statements," within the meaning of United States and Canadian securities laws. Such statements reflect current estimates, expectations and projections about future events and involve risks and uncertainties relating to future events and Harvest's performance, and actual events may differ materially from these forward looking statements, which may be identified by the use of words such as, "may", "would", "could", "will", "likely", "expect", "anticipate", "believe, "intend", "plan", "forecast", "project", "estimate", "outlook" and other similar expressions. These forward looking statements include, without limitation, including statements regarding Trulieve Cannabis Corp.'s ("Trulieve") and Harvest's strategic business combination and the expected terms, timing and closing of the combination, estimates of pro-forma financial information of the combined company, Trulieve's and Harvest's expected financial performance for fiscal 2021, the combined operations and prospects of Trulieve and Harvest, the current and projected market and growth opportunities for the combined company and value for shareholders; current and anticipated shareholder demands and litigation in connection with the proposed transaction; our expectations for 2021 financial performance and targeted revenue and gross margin; prospects for revenue growth and profitability in our core markets and in the U.S. cannabis industry generally; our continued growth in retail dispensary openings, same store sales growth, recreational sales in Arizona , and expanded cultivation and manufacturing operations; the development of federal and state cannabis regulatory framework in the United States applicable to multi-state operators, including a delay in, or a failure to, federally decriminalize cannabis in the United States , as well as such frameworks in Harvest's core markets; adverse changes in the application or enforcement of current laws, including those related to taxation; adverse changes in the public perception of cannabis; the effects of the weather, natural disasters, and health pandemics, including recent renewed resurgence of the novel coronavirus (COVID-19) on customer demand, Harvest's supply chain as well as its consolidated results of operation, financial position and cash flows; the ability of Harvest to develop Harvest's brand and meet its growth, revenue and profitability projections and objectives; its ability to generate sufficient cash flow to repay debt obligations and to fund operating expenses and future investment; the ability of Harvest to complete planned acquisitions that are accretive to its revenue; the ability of Harvest to obtain and/or maintain licenses to operate in the jurisdictions in which it operates or in which it expects or plans to operate; changes in general economic, business and political conditions, including changes in the financial markets, and, in particular, the ability of Harvest to raise debt and equity capital in the amounts and at the costs that it expects; the ability to locate and acquire suitable companies, properties or assets necessary to execute on Harvest's business plans; the ability of Harvest to execute planned store openings and secure cannabis supply at appropriate amounts and cost; fluctuations in the prevailing prices for cannabis and cannabis products in the markets that Harvest operates in and sources supply; its ability to resolve existing and future litigation and arbitrations on acceptable terms; and increasing costs of compliance with extensive government regulation. These risks, uncertainties and assumptions could adversely affect the outcome and financial effects of the plans and events described herein. In addition, even if the outcome and financial effects of the plans and events described herein are consistent with the forward-looking statements contained in this document, those results or developments may not be indicative of results or developments in subsequent periods.

Forward-looking statements involve significant risks, assumptions, uncertainties and other factors that may cause actual future results or anticipated events to differ materially from those expressed or implied in any forward-looking statements. Please see the heading "Risk Factors" in Harvest's Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission and in Harvest's Annual Information Circular, which was filed on SEDAR, both of which were filed on March 30, 2021 , and in our Form 10-Q for the quarter ended March 31, 2021 , which was filed with the SEC and SEDAR on May 13, 2021 , and in all subsequent filings that Harvest makes with the Securities and Exchange Commission and SEDAR, for a discussion of the material risk factors that could cause actual results to differ materially from the forward-looking information. Harvest does not undertake to update any forward-looking statements that are included herein, except in accordance with applicable securities laws.

About Harvest Health & Recreation Inc.
Headquartered in Tempe, Arizona , Harvest Health & Recreation Inc. is a vertically integrated cannabis company and multi-state operator. Since 2011, Harvest has been committed to expanding its retail and wholesale presence throughout the U.S., acquiring, manufacturing, and selling cannabis products for patients and consumers in addition to providing services to retail dispensaries. Through organic license wins, service agreements, and targeted acquisitions, Harvest has assembled an operational footprint spanning multiple states in the U.S. Harvest's mission is to improve lives through the goodness of cannabis. We hope you'll join us on our journey:   https://harvesthoc.com  

Facebook: @HarvestHOC
Instagram: @HarvestHOC
Twitter: @HarvestHOC

Cision View original content: https://www.prnewswire.com/news-releases/harvest-health--recreation-inc-reports-second-quarter-2021-financial-results-301352511.html

SOURCE Harvest Health & Recreation Inc.

Cision View original content: https://www.newswire.ca/en/releases/archive/August2021/10/c4620.html

News Provided by Canada Newswire via QuoteMedia

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Trulieve Reports Third Quarter 2024 Results Ahead of Florida Adult-Use Vote

  • Third quarter revenue of $284 million , up 3% year over year, in line with guidance
  • Gross margin of 61%, compared to 52% during the third quarter of 2023
  • Year to date cash flow from operations of $241 million and free cash flow of $162 million *
  • Florida adult-use campaign support of $48 million during the third quarter

Trulieve Cannabis Corp . (CSE: TRUL ) (OTCQX: TCNNF ) ("Trulieve" or "the Company"), a leading and top-performing cannabis company in the U.S., today announced its results for the quarter ended September 30, 2024. Results are reported in U.S. dollars and in accordance with U.S. Generally Accepted Accounting Principles unless otherwise indicated. Numbers may not sum perfectly due to rounding.

Trulieve logo (PRNewsfoto/Trulieve Cannabis Corp.)

Q3   2024 Financial and Operational Highlights*

  • Revenue of $284 million increased 3% year over year, with 95% of revenue from retail sales.
  • Achieved gross margin of 61%, with GAAP gross profit of $173 million .
  • Reported net loss attributable to common shareholders of $60 million . Adjusted net loss of $12 million * excludes $48 million in campaign support and other non-recurring charges, asset impairments, disposals and discontinued operations.
  • Achieved adjusted EBITDA of $96 million *, or 34% of revenue, up 24% year over year.
  • Generated cash flow from operations of $30 million and free cash flow of $(7) million *, both of which were impacted by $48 million in campaign support.
  • Cash and short term investments at quarter end totaled $319 million .
  • Launched adult use sales at three Ohio locations: Beavercreek, Columbus , and Westerville .
  • Rolled out #YesOn3 product line to support Smart and Safe Florida adult-use campaign.
  • Entered partnership with Professional Pickleball Association and Major League Pickleball to sponsor events in Arizona , Florida , and Georgia .
  • Opened 15 new dispensaries in Florida and Pennsylvania .
  • Ended the quarter with 30% of retail locations outside of the state of Florida .

*See "Non-GAAP Financial Measures" below for additional information and a reconciliation to GAAP for all Non-GAAP metrics.

Recent Developments

  • Opened five new retail locations in Bonita Springs , Hallandale , Lake Placid , Orlando , and St. Augustine, Florida .
  • Currently operate 220 retail dispensaries and over four million square feet of cultivation and processing capacity in the United States .

Management Commentary

"As voters in Florida cast their ballots across the state today, there is an opportunity to make history by approving cannabis legalization for personal use," said Kim Rivers , Trulieve CEO. "With 156 stores in Florida , scaled production capacity, and sufficient capital to support further investment, if approved, Trulieve is best positioned to fully prepare for the launch of recreational sales next Spring."

Financial Highlights*

Results of Operations

For the Three Months Ended

For the Nine Months Ended

(Figures in millions except per
share data)

September
30, 2024

September
30, 2023

% Better /
(Worse)

June 30,
2024

% Better /
(Worse)

September
30, 2024

September
30, 2023

% Better /
(Worse)

Revenue

$

284

$

275

3 %

$

303

(6 %)

$

885

$

842

5 %

Gross profit

$

173

$

143

21 %

$

182

(5 %)

$

529

$

435

22 %

Gross margin %


61 %


52 %



60 %



60 %


52 %


Operating expenses

$

173

$

120

(44 %)

$

132

(31 %)

$

432

$

686

37 %

Operating expenses %


61 %


43 %



43 %



49 %


81 %


Net loss**

$

(60)

$

(25)

(137 %)

$

(12)

NMF

$

(95)

$

(493)

81 %

Net loss continuing
operations

$

(60)

$

(23)

(163 %)

$

(11)

NMF

$

(94)

$

(399)

76 %

Adjusted net (loss) income

$

(12)

$

(15)

19 %

$

0

NMF

$

(22)

$

(47)

53 %

Basic and diluted shares
outstanding


190


189



190



190


189


EPS continuing operations

$

(0.32)

$

(0.12)

(168 %)

$

(0.04)

NMF

$

(0.52)

$

(2.09)

75 %

Adjusted EPS

$

(0.06)

$

(0.08)

20 %

$

0.00

NMF

$

(0.12)

$

(0.25)

54 %

Adjusted EBITDA

$

96

$

78

24 %

$

107

(10 %)

$

309

$

235

32 %

Adjusted EBITDA Margin %


34 %


28 %



35 %



35 %


28 %



NMF - No Meaningful Figure

*See "Non-GAAP Financial Measures" below for additional information and a reconciliation to GAAP for all Non-GAAP metrics.

**Net loss attributable to common shareholders which excludes non-controlling interest.

Conference Call

The Company will host a conference call and live audio webcast on November 5, 2024, at 8:30 A.M. Eastern time , to discuss its third quarter 2024 financial results. Interested parties can join the conference call by dialing in as directed below. Please dial in 15 minutes prior to the call.

North American toll free: 1-844-824-3830


Passcode: 3735709




International: 1-412-542-4136


Passcode: 3735709

A live audio webcast of the conference call will be available at:
Trulieve Cannabis Corp Q3 2024 Earnings

A powerpoint presentation and archived replay of the webcast will be available at:
https: //investors.trulieve.com/events

The Company's Form 10-Q for the quarter ended September 30, 2024, will be available on the SEC's website or at https://investors.trulieve.com/quarterly-results . The Company's Management Discussion and Analysis for the period and the accompanying financial statements and notes will be available under the Company's profile on https://www.sedarplus.ca/landingpage/ and on its website at https://investors.trulieve.com/quarterly-results . This news release is not in any way a substitute for reading those financial statements, including the notes to the financial statements.

Trulieve Cannabis Corp.

Condensed Consolidated Balance Sheets (Unaudited)

(in millions, except for share data)



September 30,  
2024


December 31,  
2023

ASSETS




Current Assets:




Cash and cash equivalents

$                237.7


$                201.4

Short-term investments

80.2


Restricted cash

0.9


6.6

Accounts receivable, net

9.0


6.7

Inventories

220.9


213.1

Income tax receivable

5.8


Prepaid expenses

19.2


17.6

Other current assets

26.6


23.7

Notes receivable - current portion, net

1.8


6.2

Assets associated with discontinued operations

0.9


2.0

Total current assets

603.0


477.3

Property and equipment, net

701.6


676.4

Right of use assets - operating, net

116.1


95.9

Right of use assets - finance, net

65.6


58.5

Intangible assets, net

873.3


917.2

Goodwill

483.9


483.9

Notes receivable, net

5.8


7.4

Other assets

23.0


10.4

Long-term assets associated with discontinued operations

2.0


2.0

TOTAL ASSETS

$            2,874.2


$             2,729.1

LIABILITIES




Current Liabilities:




Accounts payable and accrued liabilities

$                  96.1


$                  83.2

Deferred revenue

6.7


1.3

Notes payable - current portion

3.3


3.8

Operating lease liabilities - current portion

11.6


10.1

Finance lease liabilities - current portion

9.1


7.6

Construction finance liabilities - current portion

1.8


1.5

Contingencies

4.6


4.4

Liabilities associated with discontinued operations

3.5


3.0

Total current liabilities

136.7


114.8

Long-Term Liabilities:




Private placement notes, net

364.4


363.2

Notes payable, net

112.8


115.9

Operating lease liabilities

113.4


92.2

Finance lease liabilities

68.4


61.7

Construction finance liabilities

135.9


136.7

Deferred tax liabilities

204.2


207.0

Uncertain tax position liabilities

384.1


180.4

Other long-term liabilities

6.5


7.1

Long-term liabilities associated with discontinued operations

39.4


41.6

TOTAL LIABILITIES

$            1,565.8


$             1,320.4

MEZZANINE EQUITY




Redeemable non-controlling interest

$                    7.1


$                      —

SHAREHOLDERS' EQUITY




Common stock, no par value; unlimited shares authorized. 189,154,228 and
186,235,818 shares issued and outstanding as of September 30,
2024 and December 31, 2023, respectively.

$                      —


$                      —

Additional paid-in-capital

2,048.0


2,055.1

Accumulated deficit

(736.0)


(640.6)

Non-controlling interest

(10.7)


(5.9)

TOTAL SHAREHOLDERS' EQUITY

1,301.3


1,408.6

TOTAL LIABILITIES, MEZZANINE EQUITY, AND SHAREHOLDERS' EQUITY

$            2,874.2


$             2,729.1

Trulieve Cannabis Corp.

Condensed Consolidated Statements of Operations (Unaudited)

(in millions, except for share data)



Three Months Ended  
September 30,


Nine Months Ended  
September 30,


2024


2023


2024


2023

Revenue

$       284.3


$       275.2


$       885.3


$       842.2

Cost of goods sold

111.0


132.3


356.6


407.4

Gross profit

173.3


142.9


528.7


434.8

Expenses:








Sales and marketing

66.7


59.4


191.0


181.2

General and administrative

81.9


34.5


161.5


108.7

Depreciation and amortization

28.3


27.0


84.2


82.6

Impairment and disposal of long-lived assets, net of (recoveries)

(4.3)


(1.2)


(4.4)


5.5

Impairment of goodwill




307.6

Total expenses

172.7


119.6


432.3


685.6

Income (loss) from operations

0.6


23.3


96.5


(250.8)

Other income (expense):








Interest expense, net

(17.5)


(20.8)


(47.6)


(60.9)

Interest income

4.2


1.9


11.5


4.3

Gain on debt extinguishment


8.2



8.2

Other (expense) income, net

(0.2)


1.1


(4.8)


5.9

Total other expense, net

(13.5)


(9.6)


(40.9)


(42.6)

(Loss) income before provision for income taxes

(12.8)


13.7


55.6


(293.4)

Provision for income taxes

47.4


36.6


150.0


105.9

Net loss from continuing operations

(60.2)


(22.9)


(94.4)


(399.3)

Net loss from discontinued operations, net of tax benefit
(provision) of zero, zero, zero, and $(0.6), respectively

(1.6)


(2.9)


(4.6)


(99.1)

Net loss

(61.9)


(25.8)


(99.0)


(498.3)

Less: net loss attributable to non-controlling interest
from continuing operations

(1.4)


(0.5)


(2.8)


(3.8)

Less: net loss attributable to redeemable non-controlling interest
from continuing operations

(0.3)



(0.9)


Less: net loss attributable to non-controlling interest from
discontinued operations




(1.2)

Net loss attributable to common shareholders

$        (60.2)


$        (25.4)


$        (95.3)


$     (493.4)









Earnings Per Share (see numerator reconciliation below)








Net loss per share - Continuing operations:








Basic and diluted

$        (0.32)


$        (0.12)


$        (0.52)


$        (2.09)

Net loss per share - Discontinued operations:








Basic and diluted

$        (0.01)


$        (0.02)


$        (0.02)


$        (0.52)

Weighted average number of common shares used in computing net
loss per share:








Basic and diluted

190.2


188.9


190.0


189.0









EPS Numerator Reconciliation








Net loss attributable to common shareholders (from above)

$        (60.2)


$        (25.4)


$        (95.3)


$     (493.4)

Net loss from discontinued operations, net of tax, attributable to
common shareholders

1.6


2.9


4.6


97.9

Adjustment of redeemable non-controlling interest to maximum
redemption value

(2.1)



(9.0)


Net loss from continuing operations available to common
shareholders

$        (60.6)


$        (22.5)


$        (99.7)


$     (395.5)

Trulieve Cannabis Corp.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(in millions)



Three Months Ended  
September 30,


Nine Months Ended  
September 30,


2024


2023


2024


2023

Cash flows from operating activities








Net loss

$            (61.9)


$            (25.8)


$            (99.0)


$          (498.3)

Adjustments to reconcile net loss to net cash provided by operating
activities:








Depreciation and amortization

28.3


27.0


84.2


83.6

Depreciation included in cost of goods sold

13.3


14.5


40.1


45.4

Gain on debt extinguishment


(8.2)



(8.2)

Impairment and disposal of long-lived assets, net of (recoveries)

(4.3)


(1.2)


(4.4)


5.5

Impairment of goodwill




307.6

Amortization of operating lease right of use assets

3.0


2.5


8.3


7.8

Share-based compensation

5.5


4.5


15.6


7.4

Allowance for credit losses

0.5


0.5


4.9


0.9

Deferred income taxes

(6.2)


(6.5)


(2.7)


(18.7)

Loss from disposal of discontinued operations


0.6



69.8

Other non-cash changes

(0.3)


1.7


0.9


5.0

Changes in operating assets and liabilities:








Inventories

(13.3)


26.2


(8.3)


66.5

Accounts receivable

(1.5)


(1.2)


(0.7)


(1.9)

Prepaid expenses and other current assets

4.9


4.3


(0.9)


9.3

Other assets

(1.1)


0.3


(6.1)


2.0

Accounts payable and accrued liabilities

4.9


8.9


4.6


4.5

Income tax receivable / payable

0.5


(0.1)


(4.3)


(49.9)

Other liabilities


0.9


0.2


(14.4)

Operating lease liabilities

(1.6)


(2.1)


(6.0)


(6.9)

Deferred revenue

2.3


(2.2)


5.3


(6.0)

Uncertain tax position liabilities

51.0


50.7


203.8


61.8

Other long-term liabilities

1.8


(1.8)


(0.7)


(2.6)

Proceeds received from insurance for operating expenses

4.4



5.9


Net cash provided by operating activities

30.3


93.4


240.8


70.4

Cash flows from investing activities








Purchases of property and equipment

(36.9)


(6.3)


(79.0)


(31.0)

Capitalized interest

(1.2)


0.9


(0.9)


0.1

Purchases of internal use software

(6.8)


(3.4)


(18.3)


(7.7)

Purchases of short-term investments

(80.0)



(80.0)


Cash paid for licenses

(6.5)



(7.0)


(4.0)

Payment for initial direct costs on finance leases

(0.6)



(0.6)


Proceeds from disposal activities

0.3


3.5


1.0


11.7

Proceeds from notes receivable repayments

0.3


0.2


0.9


0.6

Proceeds received from insurance recoveries on property and equipment



0.5


Net cash used in investing activities

(131.5)


(5.0)


(183.4)


(30.3)

Cash flows from financing activities








Payments for taxes related to net share settlement of equity awards

(12.2)



(12.3)


Payments on finance lease obligations

(1.9)


(1.8)


(5.5)


(5.7)

Payments on notes payable

(1.4)


(0.7)


(3.8)


(5.5)

Payments on construction finance liabilities

(0.9)


(0.7)


(2.5)


(1.3)

Payments and costs related to consolidated VIE settlement transaction



(5.1)


Distributions to subsidiary non-controlling interest



(1.1)


(0.1)

Payments on private placement notes


(47.6)



(47.6)

Payments for debt issuance costs


(0.4)



(0.4)

Proceeds from non-controlling interest holders' subscription



3.0


Proceeds from equity exercises



0.2


Net cash used in financing activities

(16.4)


(51.3)


(27.1)


(60.6)

Net (decrease) increase in cash, and cash equivalents

(117.5)


37.2


30.3


(20.5)

Cash, cash equivalents, and restricted cash, beginning of period

356.1


159.9


208.0


213.8

Cash and cash equivalents of discontinued operations, beginning of
period


1.8


0.3


5.7

Less: cash and cash equivalents of discontinued operations, end of period


(0.1)



(0.1)

Cash, cash equivalents, and restricted cash, end of period

$            238.6


$            198.9


$            238.6


$            198.9


The consolidated statements of cash flows include continuing operations and discontinued operations for the periods presented.

Non-GAAP Financial Measures (Unaudited)

In addition to our results determined in accordance with GAAP, we supplement our results with non-GAAP financial measures, including EBITDA, adjusted EBITDA, adjusted EBITDA margin %, adjusted net (loss) income, adjusted net (loss) income per diluted share, and free cash flow. The Company calculates EBITDA as net income (loss) before net interest expense, income tax expense, depreciation and amortization; adjusted EBITDA as net income (loss) before net interest expense, interest income, income tax expense, depreciation and amortization and also excludes certain extraordinary items; adjusted EBITDA margin as adjusted EBITDA as % of revenue, adjusted net (loss) income as net income (loss) less certain extraordinary items; adjusted EPS as adjusted net (loss) income divided by basic and diluted shares outstanding; and free cash flow as cash flow from operations less capital expenditures. Our management uses these non-GAAP financial measures in conjunction with GAAP financial measures to evaluate our operating results and financial performance. We believe these measures are useful to investors as they are widely used measures of performance and can facilitate comparison to other companies. These non-GAAP financial measures are not, and should not be considered as, measures of liquidity. These non-GAAP financial measures have limitations as analytical tools in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP. Because of these limitations, these non-GAAP financial measures should be considered along with GAAP financial performance measures. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures. A reconciliation of the non-GAAP financial measures to such GAAP measures can be found below. These non-GAAP financial measures should be considered supplemental to, and not a substitute for, our reported financial results prepared in accordance with GAAP.

Reconciliation of Non-GAAP EBITDA and Adjusted EBITDA (Unaudited)
The following table presents a reconciliation of GAAP net loss attributable to common shareholders to non-GAAP EBITDA and Adjusted EBITDA for each of the periods presented:

(Amounts expressed in millions of United States dollars)

Three Months Ended

For the Nine Months Ended

September
30, 2024

September
30, 2023

June 30,
2024

September
30, 2024

September
30, 2023

Net loss attributable to common shareholders

$

(60.2)

$

(25.4)

$

(12.0)

$

(95.3)

$

(493.4)

Add (deduct) impact of:











Interest expense, net

$

17.5

$

20.8

$

15.4

$

47.6

$

60.9

Interest income

$

(4.2)

$

(1.9)

$

(4.0)

$

(11.5)

$

(4.3)

Provision for income taxes

$

47.4

$

36.6

$

47.2

$

150.0

$

105.9

Depreciation and amortization

$

28.3

$

27.0

$

28.1

$

84.2

$

82.6

Depreciation included in cost of goods sold

$

13.3

$

14.6

$

13.3

$

40.1

$

42.7

EBITDA (Non-GAAP)

$

42.1

$

71.8

$

88.0

$

215.0

$

(205.5)

EBITDA Margin (Non-GAAP)


15 %


26 %


29 %


24 %


(24 %)












Impairment of goodwill

$

$

$

$

$

307.6

Impairment and disposal of long-lived assets, net of
(recoveries)

$

(4.3)

$

(1.2)

$

1.2

$

(4.4)

$

5.5

Legislative campaign contributions

$

48.4

$

0.5

$

5.0

$

62.7

$

19.6

Acquisition, transaction, and other non-recurring costs

$

2.6

$

8.5

$

4.3

$

10.6

$

16.1

Share-based compensation

$

5.5

$

4.5

$

5.0

$

15.6

$

7.4

Gain on debt extinguishment

$

$

(8.2)

$

$

$

(8.2)

Other (expense) income, net

$

0.2

$

(1.1)

$

1.8

$

4.8

$

(5.9)

Discontinued operations, net of tax, attributable to
common shareholders

$

1.6

$

2.9

$

1.6

$

4.6

$

97.9

Adjusted EBITDA (Non-GAAP)

$

96.1

$

77.7

$

107.0

$

308.8

$

234.5

Adjusted EBITDA Margin (Non-GAAP)


34 %


28 %


35 %


35 %


28 %

Reconciliation of Non-GAAP Adjusted Net (Loss) Income (Unaudited)
The following table presents a reconciliation of GAAP net loss attributable to common shareholders to non-GAAP adjusted net (loss) income, for each of the periods presented:


For the Three Months Ended

For the Nine Months Ended

(Amounts expressed in millions of United States dollars)

September
30, 2024

September
30, 2023

June 30,
2024

September
30, 2024

September
30, 2023

Net loss attributable to common shareholders

$

(60.2)

$

(25.4)

$

(12.0)

$

(95.3)

$

(493.4)

Net loss from discontinued operations, net of tax,
attributable to common shareholders

$

1.6

$

2.9

$

1.6

$

4.6

$

97.9

Adjustment of redeemable non-controlling interest to
maximum redemption value

$

(2.1)

$

$

1.9

$

(9.0)

$

Net loss from continuing operations available to common
shareholders

$

(60.6)

$

(22.5)

$

(8.5)

$

(99.7)

$

(395.5)

Add (deduct) impact of:


Adjustment of redeemable non-controlling interest to
maximum redemption value

$

2.1

$

$

(1.9)

$

9.0

$

Impairment of goodwill

$

$

$

$

$

307.6

Impairment and disposal of long-lived assets, net of
(recoveries)

$

(4.3)

$

(1.2)

$

1.2

$

(4.4)

$

5.5

Legislative campaign contributions

$

48.4

$

0.5

$

5.0

$

62.7

$

19.6

Acquisition, transaction, and other non-recurring costs

$

2.6

$

8.5

$

4.3

$

10.6

$

16.1

Fair value of derivative liabilities - warrants

$

$

$

$

$

(0.3)

Adjusted net (loss) income (Non-GAAP)

$

(11.9)

$

(14.7)

$

0.2

$

(21.9)

$

(47.0)

Reconciliation of Non-GAAP Adjusted Net (Loss) Income Per Diluted Share (Unaudited)
The following table presents a reconciliation of GAAP net loss attributable to common shareholders per share to non-GAAP adjusted net (loss) income per diluted share, for each of the periods presented:


For the Three Months Ended

For the Nine Months Ended

(Amounts expressed are per share except for shares
which are in millions)

September
30, 2024

September
30, 2023

June 30,
2024

September
30, 2024

September
30, 2023

Net loss attributable to common shareholders

$

(0.32)

$

(0.13)

$

(0.06)

$

(0.50)

$

(2.61)

Net loss from discontinued operations, net of tax,
attributable to common shareholders

$

0.01

$

0.02

$

0.01

$

0.02

$

0.52

Adjustment of redeemable non-controlling interest to
maximum redemption value

$

(0.01)

$

$

0.01

$

(0.05)

$

Net loss from continuing operations available to common
shareholders

$

(0.32)

$

(0.12)

$

(0.04)

$

(0.52)

$

(2.09)

Add (deduct) impact of:


Adjustment of redeemable non-controlling interest to
maximum redemption value

$

0.01

$

$

(0.01)

$

0.05

$

Impairment of goodwill

$

$

$

$

$

1.63

Impairment and disposal of long-lived assets, net of
(recoveries)

$

(0.02)

$

(0.01)

$

0.01

$

(0.02)

$

0.03

Legislative campaign contributions

$

0.25

$

0.00

$

0.03

$

0.33

$

0.10

Acquisition, transaction, and other non-recurring costs

$

0.01

$

0.05

$

0.02

$

0.06

$

0.09

Fair value of derivative liabilities - warrants

$

$

$

$

$

0.00

Adjusted net (loss) income (Non-GAAP)

$

(0.06)

$

(0.08)

$

0.00

$

(0.12)

$

(0.25)

Basic and diluted shares outstanding


190.2


188.9


190.3


190.0


189.0

Reconciliation of Non-GAAP Free Cash Flow (Unaudited)
The following table presents a reconciliation of GAAP cash flow from operating activities to non-GAAP free cash flow, for each of the periods presented:


For the Three Months Ended

For the Nine Months Ended

(Amounts expressed in millions of United States dollars)

September
30, 2024

September
30, 2023

June 30,
2024

September
30, 2024

September
30, 2023

Cash flow from operating activities

$

30.3

$

93.4

$

71.3

$

240.8

$

70.4

Payments for property and equipment

$

(36.9)

$

(6.3)

$

(26.5)

$

(79.0)

$

(31.0)

Free cash flow (Non-GAAP)

$

(6.6)

$

87.2

$

44.8

$

161.8

$

39.4

Forward-Looking Statements

This news release includes forward-looking information and statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to the Company's expectations or forecasts of business, operations, financial performance, cash flows, prospects, and other plans, intentions, expectations, estimates, and beliefs and include statements regarding the potential approval of cannabis legalization for personal use in Florida , the Company's growth opportunities and the Company's positioning for the future. Words such as "expects", "continue", "will", "anticipates" and "intends" or similar expressions are intended to identify forward-looking statements. These forward-looking statements are based on the Company's current projections and expectations about future events and financial trends that management believes might affect its financial condition, results of operations, business strategy and financial needs, and on certain assumptions and analysis made by the Company in light of the experience and perception of historical trends, current conditions and expected future developments and other factors management believes are appropriate. Forward-looking information and 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 information and statements herein, including, without limitation, the risks discussed under the heading "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2023 and in our periodic reports subsequently filed with the United Sates Securities and Exchange Commission and in the Company's filings on https://www.sedarplus.ca/landingpage/ . Although the Company believes that any forward-looking information and statements herein are reasonable, in light of the use of assumptions and the significant risks and uncertainties inherent in such information and statements, there can be no assurance that any such forward-looking information and statements will prove to be accurate, and accordingly readers are advised to rely on their own evaluation of such risks and uncertainties and should not place undue reliance upon such forward-looking information and statements. Any forward-looking information and statements herein are made as of the date hereof and, except as required by applicable laws, the Company assumes no obligation and disclaims any intention to update or revise any forward-looking information and statements herein or to update the reasons that actual events or results could or do differ from those projected in any forward looking information and statements herein, whether as a result of new information, future events or results, or otherwise.

About Trulieve

Trulieve is an industry leading, vertically integrated cannabis company and multi-state operator in the U.S., with leading market positions in Arizona , Florida , and Pennsylvania . Trulieve is poised for accelerated growth and expansion, building scale in retail and distribution in new and existing markets through its hub strategy. By providing innovative, high-quality products across its brand portfolio, Trulieve delivers optimal customer experiences and increases access to cannabis, helping patients and customers to live without limits. Trulieve is listed on the CSE under the symbol TRUL and trades on the OTCQX market under the symbol TCNNF. For more information, please visit Trulieve.com .

Facebook: @Trulieve
Instagram: @Trulieve_
X: @Trulieve

Investor Contact
Christine Hersey , Vice President of Investor Relations
+1 (424) 202-0210
Christine.Hersey@Trulieve.com

Media Contact
Phil Buck , APR, Corporate Communications Manager
+1 (406) 370-6226
Philip.Buck@Trulieve.com

Cision View original content to download multimedia: https://www.prnewswire.com/news-releases/trulieve-reports-third-quarter-2024-results-ahead-of-florida-adult-use-vote-302296068.html

SOURCE Trulieve Cannabis Corp.

Cision View original content to download multimedia: http://www.newswire.ca/en/releases/archive/November2024/05/c9112.html

News Provided by Canada Newswire via QuoteMedia

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