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Nov. 17, 2020, 4:01 p.m. EST

Curaleaf Reports Record Third Quarter 2020 Financial and Operational Results

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WAKEFIELD, Mass., Nov. 17, 2020 (Canada NewsWire via COMTEX) -- Record Third Quarter Pro Forma Revenue((1)(2))of $215.3 Million

Record Third Quarter Managed Revenue((1))of $193.2 Million, up 164% and in Line with Company Guidance

Record Year-to-Date Managed Revenue((1)) of $419.6 Million

Record Third Quarter Adjusted EBITDA((1)) of $42.3 Million as Operations Across 23 States Continue to Scale

WAKEFIELD, Mass., Nov. 17, 2020 /CNW/ -- Curaleaf Holdings, Inc. /zigman2/quotes/203485866/delayed CA:CURA -2.51% (otcqx:CURLF) ("Curaleaf" or the "Company"), a leading U.S. provider of consumer products in cannabis, today reported its financial and operating results for the third quarter ended September 30, 2020. All financial information is provided in U.S. dollars unless otherwise indicated.







        
        
        
                      Q3 2020 Financial Highlights (Unaudited)
        
        
        
        
        
        
                      ($ thousands, except per share amounts)
        
              Q3 2020
        
              Q2 2020   % qoq    Q3 2019
              % yoy
                                                                                                    Change                Change
        
            ---
        
        
               Managed Revenue(1)                                           $193,220      $121,402      59%    $73,192        164%
        
        
        
               Total Revenue                                                $182,408      $117,480      55%    $61,820        195%
        
        
        
               Gross profit before impact of biological assets               $91,775       $60,636      51%    $34,741        164%
        
        
        
               Gross profit on cannabis sales(1)                             $89,669       $42,735     110%    $23,602        280%
        
        
        
               Gross margin on cannabis sales(1)                                 50%          43%                47%
        
        
        
               Adjusted EBITDA(1)                                            $42,295       $27,994      51%    $10,439        305%
        
        
        
               Net income (loss) attributable to Curaleaf Holdings Inc.     ($9,343)     ($2,029)           ($6,835)
        
        
        
               Net income (loss) per share - basic and diluted               ($0.01)      ($0.00)             (0.01)
        
        
        
        
        








        
        
        
        
                      (1)              See "Non-IFRS Financial and
                                          Performance Measures" below for more
                                          information regarding Curaleaf's use
                                          of Non-IFRS financial measures and
                                          other reconciliations.
        
        
        
                      (2)              Pro Forma Revenue includes the
                                          revenue from GR Companies, Inc.
                                          ("Grassroots") as if it occurred on
                                          July 1, 2020.
        
        
        


Third Quarter Highlights







        
            --  Record managed revenue of $193.2 million, which grew 164%
                year-over-year and 59% sequentially
            --  Record total revenue of $182.4 million, which grew 195%
                year-over-year and 55% sequentially
            --  Record Adjusted EBITDA of $42.3 million, which grew more than
                four times 2019 levels and 51% sequentially
            --  Closed acquisition of Grassroots creating the world's largest
                cannabis Company, as measured by revenue
            --  Completed acquisition of Curaleaf NJ, Inc. and Maine Organic
                Therapy assets that were previously managed
            --  Closed private placement of approximately $24.5 million in net
                proceeds
            --  Raised approximately $41.0 million in net proceeds related to
                sale-leaseback transactions
        
        
        


Post Third Quarter Highlights







        
            --  Select launched into 3 new states, including Ohio, Illinois,
                Pennsylvania, now available in 16 states
            --  Opened 2 new dispensaries in Florida with 33 now open in state
            --  Completed Acquisition of Alternative Therapies Group in
                Massachusetts the last managed entity to be consolidated
            --  Voters in two key Curaleaf states approved cannabis for
                adult-use: New Jersey and Arizona
            --  Announced the divestiture of $31.5 million of assets in
                Maryland, supporting the optimization of Curaleaf's vertically
                integrated presence in the state
        
        
        


Joseph Lusardi, Chief Executive Officer of Curaleaf stated, "Curaleaf's record third quarter results were complemented by the successful completion of our acquisition of Grassroots, which expanded our presence into 6 new states, including high-growth markets such as Illinois and Pennsylvania. As we head into 2021, Curaleaf remains incredibly well-positioned following the transformative legalization of adult-use cannabis in Arizona and New Jersey, and consequently the potential of future adult-use in New York, Pennsylvania and Connecticut. Each of these markets present an enormous opportunity for us, as the only MSO with a leading presence in every one of these states. Looking forward, we expect our growth will be driven by organic initiatives, increased capacity and dispensaries in key states and the roll out of adult use in Arizona and New Jersey."

Mike Carlotti, Chief Financial Officer of Curaleaf, added, "Curaleaf, once again, delivered record quarterly results highlighted by record managed revenues, total revenues, and a 51% sequential improvement in Adjusted EBITDA. We anticipate a continued rise in managed revenue and adjusted EBITDA leading to strong sequential growth in the fourth quarter and into 2021. Finally, as of October 8th, we consolidated our final managed entity, Alternative Therapies Group in Massachusetts, and accordingly will report only IFRS total revenue beginning in the first quarter of 2021, thus greatly simplifying our future financial reporting."

Financial Results for the Third Quarter Ended September 30, 2020

Managed Revenue for the third quarter of 2020 was a record $193.2 million, an increase of 164.0% compared to $73.2 million in the third quarter of 2019. Managed Revenue for the third quarter increased 59.2% sequentially.

Total Revenue for the third quarter of 2020 was a record $182.4 million, an increase of 195.1% compared to $61.8 million in the third quarter of 2019. Total Revenue for the third quarter of 2020 increased 55.3% sequentially.

Retail revenue increased by 206.5% to $135.3 million during third the quarter of 2020, compared to $44.2 million in the third quarter of 2019. The increase in retail revenue was primarily due to organic growth and new store openings in in Florida, Massachusetts, Arizona and New York, coupled with the impact of Grassroots, Curaleaf NJ, Arrow, and Maine Organic Therapy acquisitions in 2020, the 2019 acquisitions of two dispensaries in Arizona in the third quarter of 2019 and acquisition of Acres in Nevada in late 2019.

Wholesale revenue increased nearly seven-fold to $45.0 million during the third quarter of 2020, compared to $6.5 million in the third quarter of 2019. Growth in wholesale revenue was due primarily to the addition of Select, Grassroots, New Jersey, Blue Kudu and an increase in California, Maryland and New York as a result of increased cultivation and harvest.

Management fee income decreased by 81.1% to $2.1 million during the third quarter of 2020, compared to $11.1 million in the third quarter of 2019. The decrease in the management fee income was primarily due to the acquisition of Curaleaf NJ, the managed not-for-profit in New Jersey in July 2020, offset by the management fees generated from ATG.

Gross profit before impact of biological assets for the third quarter of 2020 was $91.8 million, compared to $34.7 million for the third quarter of 2019. The increase was primarily due to the continued improvement in the operating capacity and efficiency of the Company's cultivation and processing facilities.

Gross profit on cannabis sales was $89.7 million for the third quarter of 2020, resulting in a 50% margin, compared to $23.6 million in the third quarter of 2019. The increase was primarily due to the continued improvement in the operating capacity and efficiency of the Company's cultivation and processing facilities.

Adjusted EBITDA was a record $42.3 million for the third quarter of 2020, compared to $10.4 million for the third quarter of 2019.

Net loss, attributable to Curaleaf Holdings, Inc., for the third quarter of 2020 was $9.3 million, compared to a net loss of $6.8 million in the third quarter of 2019. The decrease was primarily driven by a $16.3 million increase in depreciation and amortization and a $0.8 million increase in share-based compensation, both of which are non-cash, a $13.5 million increase in income tax expense, a $13.3 million increase in net interest expense and $10.1 million increase in one-time expenses. These were partially offset by a $10.2 million increase in the fair value of biological assets and a $10.3 million increase in other income.

Balance Sheet and Liquidity

/zigman2/quotes/203485866/delayed
CA : Canadian Securities Exchange
$ 20.96
-0.54 -2.51%
Volume: 657,413
March 3, 2021 3:59p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$14.69 billion
Rev. per Employee
N/A
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