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Tuesday, 02/28/2023 6:47:46 PM

Tuesday, February 28, 2023 6:47:46 PM

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Press Release: Green Thumb Industries Reports Fourth Quarter and Full Year 2022 Results
4:02 pm ET February 28, 2023 (Dow Jones) Print
Green Thumb Industries Reports Fourth Quarter and Full Year 2022 Results

CHICAGO and VANCOUVER, British Columbia, Feb. 28, 2023 (GLOBE NEWSWIRE) -- Green Thumb Industries Inc. ("Green Thumb," or the "Company") (CSE: GTII) (OTCQX: GTBIF), a leading national cannabis consumer packaged goods company and owner of RISE Dispensaries, today reported its financial results for the fourth quarter and full year ended December 31, 2022. Financial results are reported in accordance with U.S. generally accepted accounting principles ("GAAP") and all currency is in U.S. dollars.

Highlights for the fourth quarter ended December 31, 2022:

-- Revenue of $259 million increased 6% year-over-year and decreased 1%
sequentially.

-- Cash flow from operations of $70 million.

-- Cash at quarter end totaled $178 million.

-- GAAP net loss of ($51 million) or ($0.22) per basic and diluted share.

-- Adjusted net income of $12 million or adjusted basic and diluted earnings
per share of $0.05, excluding non-cash impairment charges.

-- Adjusted Operating EBITDA of $81 million or 31% of revenue.
Highlights for the year ended December 31, 2022:

-- Revenue of $1 billion increased 14% over the prior year.

-- Cash flow from operations of $159 million.

-- GAAP net income of $12 million or $0.05 per basic and diluted share.

-- Adjusted net income of $75 million or adjusted basic and diluted earnings
per share of $0.32, excluding non-cash impairment charges recognized in
the fourth quarter.

-- Adjusted Operating EBITDA of $311 million or 31% of revenue.

-- Strong balance sheet and disciplined capital allocation to support
continued future growth.
See definitions and reconciliation of non-GAAP measures elsewhere in this release.

Management Commentary

"In 2022, Green Thumb reached $1 billion in annual revenue while delivering over $300 million in Adjusted Operating EBITDA. Our team continued to execute on our mission by building authentic brands that resonate with consumers. As a federally illegal business with limited access to capital, we remain focused on our cash position, while consistently paying interest and taxes on time. The lack of progress regarding cannabis regulation from our elected officials in Congress is mind-numbing. The crippling tax burden continues to hurt new operators by greatly reducing their prospects for a profitable and sustainable cannabis business," said Green Thumb Founder, Chairman and Chief Executive Officer Ben Kovler.

"While there is notable price compression in the market right now, units sold continues to climb, up 28% year-over-year according to BDSA, indicating that demand for cannabis products remains strong. I am confident that Green Thumb has the right team, the right brands, and the right operational setup to navigate the middle innings of this industry and beyond. Equally important, Green Thumb had $178 million in cash at year end, which is a $31 million increase over last quarter, and we delivered $159 million in cash flow from operations for the year. This financial strength provides for both optionality and durability going forward."

Fourth Quarter and Full Year 2022 Financial Overview

Total revenue for the fourth quarter 2022 was $259.3 million, up 6.4% from $243.6 million for the fourth quarter 2021. For the full year 2022, total revenue increased 13.9% to $1.0 billion. Revenue growth in the fourth quarter was primarily driven by the legalization of adult-use sales in New Jersey, which began on April 21, 2022, as well as revenue generated from acquisitions made throughout 2021.

Overall retail revenue increased 14.2% versus the fourth quarter of 2021 and 24.1% for the full year 2022. Fourth quarter 2022 comparable sales (stores open at least 12 months) increased 3.4% versus prior year on a base of 65 stores. Consumer Packaged Goods gross revenue increased 1.7% versus the fourth quarter of 2021 and 6.0% for the full year 2022.

Gross profit for the fourth quarter 2022 was $124.0 million or 47.8% of revenue compared to $128.6 million or 52.8% of revenue for the fourth quarter 2021. For the full year, gross margin was $504.0 million or 49.5% of revenue versus $491.9 million or 55.1% in 2021. The decline in gross margin percentage was primarily driven by price compression.

Total selling, general and administrative expenses for the fourth quarter were $80.0 million or 30.9% of revenue, compared to $74.3 million or 30.5% of revenue for the fourth quarter 2021. Total selling, general and administrative expenses for the full year 2022 were $294.4 million or 28.9% of revenue, an increase from $277.1 million or 31.0% of revenue in the prior year. During the fourth quarter 2022, the Company also recorded a non-cash impairment charge of $88.5 million related to its Nevada business. This consisted of two charges: a $57.4 million goodwill impairment charge and a $31.1 million write off of the Essence tradename intangible.

Total other expense was $14.1 million for the fourth quarter 2022, primarily reflecting interest expense associated with the Company's senior secured notes, as well as various fair value adjustments associated with the Company's existing investment portfolio. Total other expense for the full year was $12.6 million.

Net loss attributable to the Company for the fourth quarter 2022 was ($51.2 million) or ($0.22) per basic and diluted share, compared to net income of $22.8 million, or $0.10 per basic and diluted share in the prior year. Net income for the full year 2022 was $12.0 million or $0.05 per basic and diluted share. Excluding the non-cash impairment charges of $88.5 million, adjusted net income for the fourth quarter and full year 2022 was $12 million and $75 million, or adjusted basic and diluted earnings per share of $0.05 and $0.32, respectively.

EBITDA for the fourth quarter 2022 was ($19.6 million) or (7.5%) of revenue compared to $75.6 million or 31.0% of revenue for the fourth quarter 2021. EBITDA for the full year 2022 was $217.7 million, or 21.4% of revenue. Adjusted Operating EBITDA for the fourth quarter 2022, which excluded non-cash stock-based compensation, other non-operating costs, and impairment charges, was $81.2 million or 31.3% of revenue as compared to $76.0 million or 31.2% of revenue for the fourth quarter 2021. Adjusted Operating EBITDA for the full year was $311.5 million or 30.6% of revenue, compared to $307.8 million or 34.5% of revenue last year.
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