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Recently completed the acquisition of Gage Growth Corp ("Gage"), a leading high-quality premium cannabis brand and operator in Michigan
Pennsylvania facility producing highest quality product to date, recapturing top three market share 2
New Jersey retail and wholesale fully prepared for adult-use launch, pending regulatory approval
Completed GAAP Conversion and became a US Filer with the SEC
TORONTO , March 16, 2022 /CNW/ - TerrAscend Corp. ("TerrAscend" or the "Company") (CSE: TER) ( OTCQX: TRSSF), a leading North American cannabis operator, today reported its financial results for the fourth quarter and full year periods ending December 31, 2021 . All amounts are expressed in U.S. dollars unless indicated otherwise and are prepared under U.S. Generally Accepted Accounting principles (GAAP).
Fourth Quarter 2021 Financial Highlights
- Net Sales were $49.2 million as compared to $49.1 million in Q3 2021 and $49.6 million in Q4 2020.
- Gross Profit Margin was 42.3% as compared to 43.8% in Q3 2021 and 55.8% in Q4 2020.
- Adjusted Gross Profit Margin 1 was 49.8% as compared to 46.2% in Q3 2021 and 60.5% in Q4 2020.
- Adjusted EBITDA 1 was $11.9 million as compared to $9.0 million in Q3 2021 and $19.3 million in Q4 2020. Adjusted EBITDA under IFRS, excluding lease expense, was $12.8 million as compared to $10.5 million in Q3 2021.
- Adjusted EBITDA Margin 1 was 24.2% as compared to 18.3% in Q3 2021 and 38.9% in Q4 2020.
- Cash and cash equivalents , totaled $79.6 million as of December 31, 2021 .
Full Year 2021 Financial Highlights
- Net Sales were $210.4 million , an increase of 42% year-over-year.
- Gross Profit Margin was 53.3% compared to 54.8% in 2020.
- Adjusted Gross Profit Margin 1 was 56.1% compared to 57.2% in 2020.
- Adjusted EBITDA 1 of $65.6 million compared to $41.7 million in 2020, an increase of 57% year-over-year. Adjusted EBITDA under IFRS, excluding lease expense, was $70.1 million as compared to $45.5 million in 2020.
- Adjusted EBITDA Margin 1 of 31.2% compared to 28.2% in 2020, an expansion of 300 basis points.
Jason Wild , Executive Chairman of TerrAscend, commented, "The strategic decisions we made in Pennsylvania have resulted in the highest quality product we have ever sold in this market. Additionally, the actions undertaken in New Jersey have our team prepared for adult use, where we have one of the largest cultivation footprints in the state, along with three ideal dispensary locations. Furthermore, I am thrilled that we have recently completed our acquisition of Gage, which provides us with a leadership position in yet another multi-billion market and the ability to launch this brand beyond Michigan . I'm proud of the hard work by the team in 2021, which has us well positioned for the explosive growth we expect in 2022 and beyond."
Financial Summary of Q4 2021, Full Year 2021 and Comparative Periods
(in millions of U.S. dollars)
| | Q4 2020 | Q3 2021 | Q4 2021 | | 2020 | 2021 |
| Revenue, net | 49.6 | 49.1 | 49.2 | | 147.8 | 210.4 |
| QoQ increase | 30.2% | -16.4% | 0.2% | | | |
| YoY increase | 69.9% | 28.9% | -0.8% | | 131.7% | 42.4% |
| Gross profit | 27.7 | 21.5 | 20.8 | | 81.0 | 112.1 |
| Adjusted Gross profit 1 | 30.0 | 22.7 | 24.5 | | 84.5 | 118.0 |
| Adjusted gross margin % | 60.5% | 46.2% | 49.8% | | 57.2% | 56.1% |
| Share-based compensation expense | 4.7 | 5.2 | 1.5 | | 10.1 | 14.9 |
| General & Administrative expense (excluding share based comp) | 12.5 | 16.1 | 17.0 | | 55.5 | 66.0 |
| % of revenue, net | 25.2% | 32.8% | 34.6% | | 37.6% | 31.4% |
| Adjusted EBITDA 1 | 19.3 | 9.0 | 11.9 | | 41.7 | 65.6 |
| Adjusted EBITDA % of revenue, net | 38.9% | 18.3% | 24.2% | | 28.2% | 31.2% |
| Net income / (loss) | (94.0) | 55.8 | (5.9) | | (142.3) | 6.1 |
| Cash Flow from Operations | (26.9) | (17.9) | (3.8) | | (37.0) | (31.8) |
Fourth Quarter 2021 Business and Operational Highlights
- Pennsylvania facility producing highest quality product to date; recapturing top 3 market share for the month of December 2021 . 2
- New Jersey wholesale and retail fully prepared for adult-use, pending regulatory approval.
- Closed on the purchase of a 156,000 square foot facility in Hagerstown, MD for expansion of cultivation and processing, which is expected to be operational during the third quarter of 2022.
- Completed US GAAP conversion and became a US filer under SEC.
Subsequent Events
- Closed on the acquisition of Gage Growth Corp.
- Appointed Ziad Ghanem as President and Chief Operating Officer.
- Appointed Jared Anderson , SVP Finance & Strategy; Charishma Kothari , SVP Marketing and Charles Oster , SVP Sales.
- Appointed Kara DioGuardi to the Board of Directors.
- Became first major MSO to expand its ecommerce platform via proprietary Apothecarium mobile app, available in the Apple App store, with express pick-up and delivery where permitted.
| 1. Adjusted EBITDA and the respective margin and Adjusted Gross Profit and the respective margin are non-GAAP measures. Please see discussion and reconciliation of non-GAAP measures at the end of this press release. |
| |
| 2. According to Headset Data for the period December 1, 2021 through December 26, 2021. |
Full Year and Fourth Quarter 2021 Financial Results
Net sales for the full year 2021 totaled $210.4 million as compared to $147.8 million for 2020, an increase of 42% primarily driven by the Company's first complete year in the New Jersey medical market and retail growth in Pennsylvania , reflecting the acquisition of KCR in May of 2021, as well as a full year of operations at the three existing Apothecarium dispensaries. Total revenue also benefitted from the late 2020 expansion of State Flower cultivation in California and entry into Maryland through the acquisition of HMS Health in May of 2021.
Net sales for the fourth quarter of 2021 were $49.2 million as compared to $49.1 million for the third quarter of 2021 and $49.6 million for the fourth quarter of 2020.
Gross margin for the full year 2021 was 53.3% as compared to 54.8% for the full year 2020. Adjusted gross margin, a non-GAAP financial measure, for the full year 2021 was 56.1% compared with 57.2% in 2020 driven by second half under-absorption related to the reset of the Company's Pennsylvania cultivation facility.
Gross margin for the fourth quarter of 2021 was 42.3% as compared to 43.8% in the third quarter of 2021 related to one-time non-cash write-downs of inventory in Canada and a step up in fair value of inventory related to the acquisition of HMS Health. Adjusted gross margin for the fourth quarter of 2021, excluding these one-time items, was 49.8% as compared to 46.2% for the third quarter of 2021, a 360 basis point improvement quarter-over-quarter.
General & Administrative expenses (G&A) for the full year 2021, excluding stock-based compensation, improved to 31.4% of revenue versus 37.6% of revenue in 2020. G&A excluding stock-based compensation was $66.0 million in 2021, up from $55.5 million in 2020 driven by increased personnel expenses to support the growth of the business and legal expenses primarily related to acquisitions and settlements. Additionally, lease expense, now part of G&A under US GAAP across all periods, rather than previously being reported as finance expense under IFRS, totaled $4.5 million for 2021 and $3.8 million for 2020, representing approximately 2% of revenue.
G&A, excluding stock-based compensation, for the fourth quarter of 2021 totaled $17.0 million as compared to $16.1 million for the third quarter of 2021 with the increase primarily related to an increase in professional fees for US filer and GAAP conversion work.
Full year 2021 adjusted EBITDA was $65.6 million , or $70.1 million excluding lease expense under IFRS, versus $41.7 million , or $45.5 million excluding lease expense under IFRS in 2020, representing 57% growth year over year. 2021 adjusted EBITDA margin was 31.2% versus 28.2% in 2020, a 300 basis point improvement year over year. This improvement was driven by the ramp up of New Jersey operations, the acquisition of HMS in Maryland , and profitability improvements year over year in both California and Canada .
Fourth quarter 2021 adjusted EBITDA was $11.9 million , representing a 24.2% adjusted EBITDA margin, as compared to $9.0 million and an 18.3% margin in the third quarter of 2021. This sequential improvement in adjusted EBITDA was primarily driven by growth in New Jersey and improvement in Pennsylvania . Adjusted EBITDA, excluding lease expense under IFRS, was $12.8 million in the fourth quarter of 2021 as compared to $10.5 million in the third quarter of 2021.
Operating income for the full year 2021 totaled $23.5 million as compared to $9.6 million in full year 2020, representing an increase of 145% year over year. The increase was primarily driven by the scale up of the New Jersey business and the acquisitions of HMS in Maryland and KCR in PA.
Fourth quarter 2021 operating income was $0.3 million as compared to a loss of $1.8 million for the third quarter of 2021. The improvement quarter over quarter was due to gross margin expansion and lower share based compensation expense.
Net income for the full year 2021 totaled $6.1 million , mainly related to a non-cash $58 million gain on fair value of warrant liability compared with a net loss of $142 million in the prior year, which was impacted by a non-cash $110 million loss on fair value of warrant liability.
Net loss in the fourth quarter was $5.9 million , mainly related to a one-time loss of $3.3 million in lease termination fees, $6.9 million of finance and other expenses, $6.9 million of accrued income taxes, and $2.0 million of transaction costs mostly related to the Gage acquisition. These expenses were partially offset by a $14.4 million non-cash gain on fair value of warrant liability.
Balance Sheet and Cash Flow
Cash and cash equivalents were $79.6 million as of December 31, 2021 , compared to $102.6 million as of September 30, 2021 and $59.2 million as of December 31, 2020 , providing ample capacity to fund planned organic and inorganic growth initiatives. During the quarter, the Company made the final payment of $25 million related to the partial buyout of its New Jersey partnership, taking ownership up to 87.5%, from 75%.
Cash used in operations was $3.8 million for the three months ended December 31, 2021 , mainly driven by an increase in inventory related to the anticipated start of adult use sales in New Jersey . For the full year, cash used in operations was $32 million related to a $24 million working capital increase, mainly related to preparation for New Jersey adult use, and a contingent consideration payment of $11 million .
Capital expenditures were $11.8 million in the fourth quarter of 2021 primarily related to capacity expansions at the Pennsylvania and Maryland facilities, and completion of the third New Jersey dispensary located in Lodi. For the full year 2021 capital expenditures were $38.5 million , of which approximately half was utilized for expansion in Pennsylvania with the remainder related to the buildout of New Jersey and the acquisition of the 156,000 square foot facility in Hagerstown, Maryland .
As of March 15, 2022 there were 318.2 million basic shares outstanding including 251.8 million common shares, 14.0 million preferred shares as converted, and 52.4 million exchangeable shares, including both Canopy and Gage exchangeable shares.
Conference Call
TerrAscend will host a conference call today, March 16, 2022 , to discuss these results. Jason Wild , Executive Chairman; Ziad Ghanem , President and Chief Operating Officer and Keith Stauffer , Chief Financial Officer will host the call starting at 5:00 p.m. Eastern time . A question-and-answer session will follow management's presentation.
| CONFERENCE CALL DETAILS | |
| | |
| DATE: | Wednesday, March 16, 2022 |
| TIME: | 5:00 p.m. Eastern Time |
| WEBCAST: | |
| DIAL-IN NUMBER: | 1-888-664-6392 |
| CONFERENCE ID: | 36277662 |
| REPLAY:
| (416) 764-8677 or (888) 390-0541 Replay Code: 277662 |
Financial results and analyses are available on the Company's website ( www.terrascend.com ) and SEDAR ( www.sedar.com ).
The Canadian Securities Exchange ("CSE") has neither approved nor disapproved the contents of this news release. Neither the CSE nor its Market Regulator (as that term is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this release.
Definition and Reconciliation of Non-GAAP Measures
In addition to reporting the financial results in accordance with GAAP, the Company reports certain financial results that differ from what is reported under GAAP. Non-GAAP measures used by management do not have any standardized meaning prescribed by GAAP and may not be comparable to similar measures presented by other companies. The Company believes that certain investors and analysts use these measures to measure a company's ability to meet other payment obligations or as a common measurement to value companies in the cannabis industry, and the Company calculates Adjusted Gross Profit as Gross Profit adjusted for certain material non-cash items and Adjusted EBITDA as EBITDA adjusted for certain material non-cash items and certain other adjustments management believes are not reflective of the ongoing operations and performance. Such information is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The Company believes this definition is a useful measure to assess the performance of the Company as it provides more meaningful operating results by excluding the effects of expenses that are not reflective of the Company's underlying business performance and other one-time or non-recurring expenses.
The table below reconciles Gross Profit and Adjusted Gross Profit for the years ended December 31, 2021 , December 31, 2020 and December 31, 2019 .
(in millions of U.S. Dollars)
| | For the years ended | ||||
| Summary of Adjusted Gross Profit | December 31, 2021 | | December 31, 2020 | | December 31, 2019 |
| Gross profit | 112,104 | | 81,020 | | 2,558 |
| Add (deduct) the impact of: | | | | | |
| Non-cash write downs of inventory | 2,417 | | 3,668 | | 6,956 |
| Relief of fair value of inventory upon acquisition | 3,465 | | (230) | | 2,677 |
| Adjusted gross profit | 117,986 | | 84,458 | | 12,191 |
The table below reconciles Gross Profit and Adjusted Gross Profit for the three months ended December 31, 2021 , September 30, 2021 and December 31, 2020 .
(in millions of U.S. Dollars)
| | For the Three Month Period Ended | ||||
| Summary of Adjusted Gross Profit | December 31, 2021 | | September 31, 2021 | | December 31, 2021 |
| Gross profit | 20,830 | | 21,497 | | 27,735 |
| Add (deduct) the impact of: | | | | | |
| Non-cash write downs of inventory | 1,968 | | — | | 2,250 |
| Relief of fair value of inventory upon acquisition | 1,735 | | 1,163 | | — |
| Adjusted gross profit | 24,533 | | 22,660 | | 29,985 |
The table below reconciles net income (loss) to EBITDA and Adjusted EBITDA for the years ended December 31, 2021 , December 31, 2020 and December 31, 2019 .
(in millions of U.S. Dollars)
| | | For the years ended | ||||
| Summary of EBITDA and Adjusted EBITDA | | December 31, | | December 31, | | December 31, |
| Net income (loss) | $ | 6,135 | $ | (142,256) | $ | (163,147) |
| Add (deduct) the impact of: | | | | | | |
| Provision for income taxes | | 28,314 | | 10,769 | | 1,769 |
| Interest accretion | | 24,662 | | 8,416 | | 3,694 |
| Amortization and depreciation | | 15,390 | | 10,433 | | 4,444 |
| EBITDA | | 74,501 | $ | (112,638) | $ | (153,240) |
| Add (deduct) the impact of: | | | | | | |
| Non-cash write downs of inventory | | 2,417 | $ | 3,668 | $ | 6,956 |
| Relief of fair value of inventory upon acquisition | | 3,465 | | (230) | | 2,677 |
| Share-based compensation | | 14,941 | | 10,475 | | 7,661 |
| Impairment of goodwill and intangible assets | | 8,640 | | 766 | | 49,111 |
| Impairment of property and equipment | | 470 | | 823 | | 1,746 |
| Loss on lease termination | | 3,278 | | — | | — |
| Revaluation of contingent consideration | | 3,584 | | 18,709 | | 46,857 |
| Restructuring costs and executive severance | | 931 | | 1,023 | | 121 |
| Legal settlements | | 2,121 | | — | | — |
| Fees for services related to NJ licenses | | — | | 7,500 | | — |
| Other one-time items | | 6,070 | | 1,070 | | 8,323 |
| (Gain) loss on fair value of warrants and purchase option derivative asset | | (57,904) | | 110,518 | | — |
| Indemnification asset release | | 4,504 | | — | | — |
| Unrealized and realized (gain) loss on investments and notes receivable | | (6,192) | | (186) | | 4,394 |
| Unrealized foreign exchange loss | | 4,810 | | 178 | | 313 |
| Adjusted EBITDA | $ | 65,636 | $ | 41,676 | $ | (25,081) |
The table below reconciles net income (loss) to EBITDA and Adjusted EBITDA for the three months ended December 31, 2021 , September 30, 2021 and December 31, 2020 .
(in millions of U.S. Dollars)
| | For the Three Month Period Ended | ||||
| Summary of EBITDA and Adjusted EBITDA | December 31, 2021 | | September 31, 2021 | | December 31, 2021 |
| Net (loss) income | (5,927) | | 55,834 | | (93,982) |
| Add (deduct) the impact of: | | | | | |
| Provision for income taxes | 6,942 | | 4,999 | | 2,791 |
| Interest accretion | 6,528 | | 6,351 | | 2,810 |
| Amortization and depreciation | 4,140 | | 4,200 | | 3,160 |
| EBITDA | 11,683 | | 71,384 | | (85,221) |
| Add (deduct) the impact of: | | | | | |
| Non-cash write downs of inventory | 1,968 | | - | | 2,250 |
| Relief of fair value of inventory upon acquisition | 1,735 | | 1,163 | | - |
| Share-based compensation | 1,548 | | 5,178 | | 4,657 |
| Impairment of goodwill and intangible assets | - | | - | | 32 |
| Impairment of property and equipment | 470 | | - | | 823 |
| Loss on lease termination | 3,278 | | - | | - |
| Revaluation of contingent consideration | 932 | | (338) | | 4,042 |
| Restructuring costs and executive severance | 14 | | 450 | | 74 |
| Other one-time items | 3,583 | | 1,365 | | 8 |
| (Gain) loss on fair value of warrants and purchase option derivative asset | (14,189) | | (69,016) | | 92,685 |
| Indemnification asset release | 613 | | 95 | | - |
| Unrealized and realized (gain) loss on investments and notes receivable | - | | - | | (126) |
| Unrealized and realized foreign exchange loss | 228 | | (1,256) | | 67 |
| Adjusted EBITDA | 11,863 | | 9,025 | | 19,291 |
About TerrAscend
TerrAscend is a leading North American cannabis operator with vertically integrated operations in Pennsylvania, New Jersey, Michigan and California, licensed cultivation and processing operations in Maryland and licensed production in Canada. TerrAscend operates The Apothecarium and Gage dispensary retail locations as well as scaled cultivation, processing, and manufacturing facilities in its core markets. TerrAscend's cultivation and manufacturing practices yield consistent, high-quality cannabis, providing industry-leading product selection to both the medical and legal adult-use markets. The Company owns several synergistic businesses and brands, including Gage Cannabis, The Apothecarium, Ilera Healthcare, Kind Tree, Prism, State Flower, Valhalla Confections, and Arise Bioscience Inc. For more information, visit www.terrascend.com .
Forward Looking Information
This news release contains "forward-looking information" within the meaning of applicable securities laws. Forward-looking information contained in this press release 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, and include statements with respect to future revenue and profits. Forward-looking information is not a guarantee of future performance and is based upon a number of estimates and assumptions of management in light of management's experience and perception of trends, current conditions and expected developments, as well as other factors relevant in the circumstances, including assumptions in respect of current and future market conditions, the current and future regulatory environment, and the availability of licenses, approvals and permits.
Although the Company believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because the Company can give no assurance that they will prove to be correct. Actual results and developments may differ materially from those contemplated by these statements. Forward-looking information is subject to a variety of risks and uncertainties that could cause actual events or results to differ materially from those projected in the forward-looking information. Such risks and uncertainties include, but are not limited to, current and future market conditions; risks related to federal, state, provincial, territorial, local and foreign government laws, rules and regulations, including federal and state laws in the United States relating to cannabis operations in the United States ; and the risk factors set out in the Company's most recently filed MD&A, filed with the Canadian securities regulators and available under the Company's profile on SEDAR at www.sedar.com .
The statements in this press release are made as of the date of this release. The Company disclaims any intent or obligation to update any forward-looking information, whether, as a result of new information, future events, or results or otherwise, other than as required by applicable securities laws.
Consolidated Balance Sheets
(Amounts expressed in thousands of United States dollars, except for per share amounts)
| | At | | At | ||
| | December 31, | | December 31, | ||
| Assets | | | | | |
| Current Assets | | | | | |
| Cash and cash equivalents | $ | 79,642 | | $ | 59,226 |
| Accounts receivable, net | | 14,920 | | | 10,856 |
| Share subscriptions receivable | | 105 | | | — |
| Inventory | | 42,323 | | | 20,561 |
| Prepaid expenses and other current assets | | 6,231 | | | 4,903 |
| | | 143,221 | | | 95,546 |
| Non-Current Assets | | | | | |
| Property and equipment, net | | 140,762 | | | 110,245 |
| Operating lease right of use assets | | 29,561 | | | 23,229 |
| Intangible assets, net | | 168,984 | | | 110,710 |
| Goodwill | | 90,326 | | | 72,796 |
| Indemnification asset | | 3,969 | | | 11,500 |
| Investment in associate | | — | | | 1,379 |
| Other non-current assets | | 5,111 | | | 1,839 |
| | | 438,713 | | | 331,698 |
| Total Assets | $ | 581,934 | | $ | 427,244 |
| | | | | | |
| Liabilities and Shareholders' Equity | | | | | |
| Current Liabilities | | | | | |
| Accounts payable and accrued liabilities | $ | 30,340 | | $ | 27,382 |
| Deferred revenue | | 1,071 | | | 638 |
| Loans payable, current | | 8,837 | | | 5,734 |
| Contingent consideration payable, current | | 9,982 | | | 30,966 |
| Lease liability, current | | 1,193 | | | 1,025 |
| Corporate income tax payable | | 18,939 | | | 27,739 |
| | | 70,362 | | | 93,484 |
| Non-Current Liabilities | | | | | |
| Loans payable, non-current | | 176,306 | | | 171,172 |
| Contingent consideration payable, non-current | | 2,553 | | | 6,590 |
| Lease liability, non-current | | 30,754 | | | 23,836 |
| Warrant liability | | 54,986 | | | 132,257 |
| Convertible debentures | | — | | | 5,284 |
| Deferred income tax liability | | 14,269 | | | 7,937 |
| Other non-current liabilities | | 3,750 | | | |
| | | 282,618 | | | 347,076 |
| Total Liabilities | | 352,980 | | | 440,560 |
| Commitments and Contingencies | | | | | |
| Shareholders' Equity (Deficit) | | | | | |
| Share Capital | | | | | |
| Series A, convertible preferred stock, no par value, unlimited shares authorized; and 13,708 and 14,258 shares outstanding as of December 31, 2021 and December 31, 2020, respectively | | — | | | — |
| Series B, convertible preferred stock, no par value, unlimited shares authorized; and 610 and 710 shares outstanding as of December 31, 2021 and December 31, 2020, respectively | | — | | | — |
| Series C, convertible preferred stock, no par value, unlimited shares authorized; and 36 and nil shares outstanding as of December 31, 2021 and December 31, 2020, respectively | | — | | | — |
| Series D, convertible preferred stock, no par value, unlimited shares authorized; and nil and nil shares outstanding as of December 31, 2021 and December 31, 2020, respectively | | — | | | — |
| Proportionate voting shares, no par value, unlimited shares authorized; and nil and 76,307 shares outstanding as of December 31, 2021 and December 31, 2020, respectively | | — | | | — |
| Exchangeable shares, no par value, unlimited shares authorized; and 38,890,571 and 38,890,571 shares outstanding as of December 31, 2021 and December 31, 2020, respectively | | — | | | — |
| Common stock, no par value, unlimited shares authorized; 190,930,800 and 79,526,785 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | | — | | | — |
| Additional paid in capital | | 535,418 | | | 305,138 |
| Accumulated other comprehensive income (loss) | | 2,823 | | | (3,662) |
| Accumulated deficit | | (314,654) | | | (318,594) |
| Non-controlling interest | | 5,367 | | | 3,802 |
| Total Shareholders' Equity (Deficit) | | 228,954 | | | (13,316) |
| Total Liabilities and Shareholders' Equity (Deficit) | $ | 581,934 | | $ | 427,244 |
Consolidated Statements of Operations and Comprehensive Income (Loss)
(Amounts expressed in thousands of United States dollars, except for per share amounts)
| | For the years ended | ||||||||
| | December 31, | | | December 31, | | December 31, | |||
| Revenue | $ | 222,067 | | | $ | 157,906 | | $ | 66,164 |
| Excise and cultivation taxes | | (11,648) | | | | (10,073) | | | (2,351) |
| Revenue, net | | 210,419 | | | | 147,833 | | | 63,813 |
| | | | | | | | | | |
| Cost of sales | | 98,315 | | | | 66,813 | | | 61,255 |
| | | | | | | | | | |
| Gross profit | | 112,104 | | | | 81,020 | | | 2,558 |
| | | | | | | | | | |
| Operating expenses: | | | | | | | | | |
| General and administrative | | 80,973 | | | | 65,534 | | | 45,898 |
| Amortization and depreciation | | 7,656 | | | | 5,562 | | | 3,067 |
| Research and development | | - | | | | 317 | | | 582 |
| Total operating expenses | | 88,629 | | | | 71,413 | | | 49,547 |
| | | | | | | | | | |
| Income (loss) from operations | | 23,475 | | | | 9,607 | | | (46,989) |
| Other (income) expense | | | | | | | | | |
| Revaluation of contingent consideration | | 3,584 | | | | 18,709 | | | 46,857 |
| (Gain) loss on fair value of warrants and purchase option derivative asset | | (57,904) | | | | 110,518 | | | — |
| Finance and other expenses | | 29,229 | | | | 8,193 | | | 3,524 |
| Transaction and restructuring costs | | 3,111 | | | | 2,093 | | | 8,444 |
| Impairment of goodwill | | 5,007 | | | | — | | | 45,802 |
| Impairment of intangible assets | | 3,633 | | | | 766 | | | 3,309 |
| Impairment of property and equipment | | 470 | | | | 823 | | | 1,746 |
| Loss on lease termination | | 3,278 | | | | — | | | — |
| Unrealized foreign exchange loss | | 4,810 | | | | 178 | | | 313 |
| Unrealized and realized (gain) loss on investments and notes receivable | | (6,192) | | | | (186) | | | 4,394 |
| Income (loss) before provision for income taxes | | 34,449 | | | | (131,487) | | | (161,378) |
| Provision for income taxes | | 28,314 | | | | 10,769 | | | 1,769 |
| Net income (loss) | $ | 6,135 | | | $ | (142,256) | | $ | (163,147) |
| | | | | | | | | | |
| Foreign currency translation | | (6,485) | | | | 2,875 | | | (2,088) |
| Comprehensive income (loss) | $ | 12,620 | | | $ | (145,131) | | $ | (161,059) |
| | | | | | | | | | |
| Net income (loss) attributable to: | | | | | | | | | |
| Common and proportionate Shareholders of the Company | $ | 3,111 | | | $ | (139,204) | | $ | (160,668) |
| Non-controlling interests | $ | 3,024 | | | $ | (3,052) | | $ | (2,479) |
| | | | | | | | | | |
| Comprehensive income (loss) attributable to: | | | | | | | | | |
| Common and proportionate Shareholders of the Company | $ | 9,596 | | | $ | (142,079) | | $ | (158,580) |
| Non-controlling interests | $ | 3,024 | | | $ | (3,052) | | $ | (2,479) |
| | | | | | | | | | |
| Net income (loss) per share, basic and diluted | | | | | | | | | |
| Net income (loss) per share – basic | $ | 0.02 | | | $ | (0.93) | | $ | (1.61) |
| Weighted average number of outstanding common and proportionate voting shares | | 181,056,654 | | | | 149,740,210 | | | 99,592,007 |
| Net income (loss) per share - diluted | $ | 0.01 | | | $ | (0.93) | | $ | (1.61) |
| Weighted average number of outstanding common and proportionate voting shares, assuming dilution | | 208,708,664 | | | | 149,740,210 | | | 99,592,007 |
Consolidated Statements of Cash Flows
(Amounts expressed in thousands of United States dollars, except for per share amounts)
| | For the years ended | |||||||
| | December 31, 2021 | | December 31, 2020 | | December 31, 2019 | |||
| Operating activities | | | | | | |||
| Net income (loss) | $ | 6,135 | | $ | (142,256) | | $ | (163,147) |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities | | | | | | |||
| Non-cash write downs of inventory | 3,052 | | 7,167 | | 10,805 | |||
| Accretion expense | 4,363 | | 5,500 | | 973 | |||
| Depreciation of property and equipment and amortization of intangible assets | 15,390 | | 10,433 | | 4,444 | |||
| Amortization of operating right-of-use assets | 1,247 | | 4,239 | | 1,086 | |||
| Share-based compensation | 14,941 | | 10,475 | | 7,661 | |||
| Deferred income tax expense | (1,808) | | (11,970) | | (1,234) | |||
| (Gain) loss on fair value of warrants and purchase option derivative | (57,904) | | 110,518 | | — | |||
| Revaluation of contingent consideration | 3,584 | | 18,709 | | 46,857 | |||
| Impairment of goodwill and intangible assets | 8,640 | | 766 | | 49,111 | |||
| Impairment of property and equipment | 470 | | 823 | | 1,746 | |||
| Loss on lease termination | 3,278 | | — | | — | |||
| Release of indemnification asset | 4,504 | | — | | — | |||
| Forgiveness of loan principal and interest | (1,414) | | — | | — | |||
| Fees for services related to NJ licenses | — | | 7,500 | | — | |||
| Unrealized foreign exchange loss | 4,810 | | 178 | | 313 | |||
| Unrealized and realized (gain) loss on investments and notes receivable | (6,192) | | (186) | | 4,394 | |||
| Changes in operating assets and liabilities | | | | | | |||
| Receivables | (2,967) | | (4,472) | | 199 | |||
| Inventory | (17,375) | | (11,779) | | (6,651) | |||
| Prepaid expense and deposits | (1,445) | | (46) | | (456) | |||
| Other assets | (423) | | (442) | | — | |||
| Accounts payable and accrued liabilities and other payables | 2,162 | | 6,364 | | 1,548 | |||
| Operating lease liability | (705) | | (3,055) | | (1,042) | |||
| Other liability | 3,750 | | — | | — | |||
| Contingent consideration payable | (11,394) | | (56,527) | | — | |||
| Corporate income taxes payable | (6,938) | | 11,358 | | 2,653 | |||
| Deferred revenue | 424 | | (268) | | 899 | |||
| Net cash used in operating activities | (31,815) | | (36,971) | | (39,841) | |||
| Investing activities | | | | | | |||
| Investment in property and equipment | (38,483) | | (44,621) | | (32,834) | |||
| Investment in intangible assets | (387) | | (896) | | (1,306) | |||
| Investment in notes receivable | — | | — | | (10,456) | |||
| Principal payments received on notes receivable | — | | — | | 6,111 | |||
| Principal payments received on lease receivable | 693 | | 124 | | — | |||
| Sale of investments | — | | — | | 2,427 | |||
| Distribution of earnings from associates | 469 | | 153 | | — | |||
| Investment in NJ partnership | (50,000) | | — | | — | |||
| Investment in joint venture | — | | — | | (620) | |||
| Deposits for property and equipment | (1,977) | | — | | — | |||
| Deposits for business acquisition | — | | (1,389) | | — | |||
| Cash portion of consideration paid in acquisitions, net of cash acquired | (42,736) | | — | | (67,540) | |||
| Cash received on acquisitions | — | | 739 | | — | |||
| Net cash used in investing activities | (132,421) | | (45,890) | | (104,218) | |||
| Financing activities | | | | | | |||
| Proceeds from options and warrants exercised | 30,785 | | 7,287 | | 26,894 | |||
| Proceeds from loans payable | 766 | | 201,496 | | 42,843 | |||
| Capital contributions (paid) received by non-controlling interests | (53) | | 393 | | 1,906 | |||
| Loan principal paid | (4,500) | | (53,886) | | — | |||
| Loan origination fee paid | — | | (2,250) | | — | |||
| Payments of contingent consideration | (18,274) | | (90,657) | | — | |||
| Proceeds from convertible debentures, net of issuance costs | — | | — | | 15,336 | |||
| Proceeds from private placement, net of share issuance costs | 173,477 | | 71,023 | | 49,955 | |||
| Net cash provided by financing activities | 182,201 | | 133,406 | | 136,934 | |||
| Net increase (decrease) in cash and cash equivalents during the period | 17,965 | | 50,544 | | (7,125) | |||
| Net effects of foreign exchange | 2,451 | | (480) | | 327 | |||
| Cash and cash equivalents, beginning of period | 59,226 | | 9,162 | | 15,960 | |||
| Cash and cash equivalents, end of period | $ | 79,642 | | $ | 59,226 | | $ | 9,162 |
| Supplemental disclosure with respect to cash flows | | | | | | |||
| Income taxes paid | $ | 37,060 | | $ | 11,204 | | $ | - |
| Interest paid | $ | 21,694 | | $ | 2,192 | | $ | 2,760 |
| Non-cash transactions | | | | | | |||
| Shares issued as consideration for acquisitions | 34,427 | | — | | 56,663 | |||
| Shares issued for compensation of services | — | | 3,750 | | — | |||
| Accrued capital purchases | 450 | | 4,544 | | 7,042 | |||
| Notes receivable settled for business acquisition | — | | 3,032 | | — | |||
| Promissory note issued as consideration for acquisitions | 8,839 | | — | | — | |||
| Conversion of shares into note receivable | — | | — | | 3,163 | |||
| Conversion of note receivable into shares | — | | — | | (2,687) | |||
SOURCE TerrAscend
View original content: https://www.newswire.ca/en/releases/archive/March2022/16/c5145.html
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