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Tuesday, 08/08/2023 4:16:16 PM

Tuesday, August 08, 2023 4:16:16 PM

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Press Release: Green Thumb Industries Reports Second Quarter 2023 Results
4:02 pm ET August 8, 2023 (Dow Jones) Print
Green Thumb Industries Reports Second Quarter 2023 Results

CHICAGO and VANCOUVER, British Columbia, Aug. 08, 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 second quarter ended June 30, 2023. 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 second quarter and six months ended June 30, 2023:

-- Second quarter revenue of $252 million increased 2% sequentially; first
half 2023 revenue increased 1% to $501 million year-over-year.

-- GAAP net income of $13 million or $0.05 per basic and diluted share.

-- Adjusted EBITDA was $76 million or 30% of revenue.

-- Six months cash flow from operations of $93 million, net of $52 million
of tax payments.

-- Cash at quarter end totaled $149 million.

-- Six RISE retail stores were opened: two in Pennsylvania; two in Virginia
and one each in Minnesota and Nevada.
Additionally, immediately after quarter end, on July 1, adult-use cannabis sales commenced at the Company's four RISE retail stores in Maryland.

See definitions and reconciliation of non-GAAP measures elsewhere in this release.

Management Commentary

"In the second quarter, we delivered solid results of $252 million in revenue, up slightly from the first quarter, and GAAP net income of $13 million or $0.05 per basic and diluted share. Adjusted EBITDA was $76 million or 30% of revenue. Importantly, cash flow from operations was $18 million after paying $52 million of taxes this quarter. For the first six months of 2023, the Company had Adjusted EBITDA of $152 million and cash flow from operations of $93 million. Finally, we ended the second quarter with a strong balance sheet and $149 million in cash. As we move into the second half of the year, we are pleased with our overall position and our team's ability to execute on our long-term strategy," said Green Thumb Founder, Chairman and Chief Executive Officer Ben Kovler.

Green Thumb President Anthony Georgiadis added, "While the cannabis industry continues to face challenges, at Green Thumb, we have been able to navigate a path to profitability and strong operating cash flow. Generating cash and carefully managing it has been core to our DNA since our founding. In addition, over the last 12 months we have made approximately $240 million in capital investments to position the Company for continued strong performance across our diversified portfolio of states."

Second Quarter 2023 Financial Overview

Total revenue for the second quarter 2023 was $252.4 million, down 1.0% from the prior year period. The decline in revenue was primarily driven by price compression. This was partially offset by continued growth in existing markets such as New Jersey, Virginia and Connecticut, as well as revenue generated from new stores opened in the current period.

Overall retail revenue decreased 2.4% versus the second quarter of 2022. Second quarter 2023 comparable sales (stores open at least 12 months) decreased 3.3% versus the prior year on a base of 76 stores. Consumer Packaged Goods gross revenue increased 12.8% versus the second quarter of 2022.

Gross profit for the second quarter 2023 was $125.3 million or 49.6% of revenue compared to $125.8 million or 49.5% of revenue year-over-year. The Company was able to offset price compression headwinds through operational efficiencies as well as an increase in Consumer Packaged Goods sales through Green Thumb-owned retail stores.

Total selling, general and administrative expenses for the second quarter were $84.2 million or 33.4% of revenue, compared to $63.5 million or 25.0% of revenue for the second quarter 2022. The increase in total expenses was primarily due to a one-time acquisition-related non-cash fair value credit in the prior year period. In addition, Green Thumb incurred increased expenses associated with opening new stores, as well as the preparation for the recent launch of adult-use cannabis sales in Maryland.

Net income attributable to the Company for the second quarter 2023 was $13.4 million or $0.05 per basic and diluted share, compared to a net income of $24.4 million, or income of $0.11 per basic and $0.10 per diluted share in the prior year period.

In the second quarter 2023, EBITDA was $65.3 million or 25.9% of revenue versus $86.5 million or 34.0% of revenue for the comparable period. Adjusted EBITDA, which excluded non-cash stock-based compensation of $7.4 million and other non-operating adjustments of $3.1 million, was $75.8 million or 30.0% of revenue as compared to $78.7 million or 31.0% of revenue for the second quarter 2022.

For additional information on these non-GAAP financial measures, see below under "Non-GAAP Financial Information."

Balance Sheet and Liquidity

As of June 30, 2023, current assets were $341.3 million, including cash and cash equivalents of $149.0 million. Total debt outstanding was $289.9 million.

Total basic and diluted weighted average shares outstanding for the three months ended June 30, 2023, were 238.0 million shares and 238.4 million shares, respectively.

Business Developments

During the second quarter, the Company opened six retail stores:

-- RISE Dispensary New Hope, Minnesota; profits from the first day of sales
were donated to Balanced Veterans Network.

-- RISE Dispensary Grove City, Pennsylvania; profits from the first day of
sales were donated to Grove City Community Food Pantry.

-- RISE Dispensary Bristol, Virginia; profits from the first day of sales
were donated to Virginia NORML.

-- RISE Dispensary Las Vegas on Nellis; profits from the grand opening were
donated to Opportunity Village.

-- RISE Dispensary Philadelphia, Pennsylvania; profits from the grand
opening were donated to Philadelphia Lawyers for Social Equity (PLSE).

-- RISE Dispensary Danville, Virginia; profits from the grand opening were
donated to Virginia NORML.
Subsequent to quarter end, on August 2, 2023, Green Thumb opened its 84(th) retail store nationwide in Las Vegas on Craig Road. Profits from the grand opening were donated to Opportunity Village. On July 1, 2023, Green Thumb commenced adult-use sales at its four Maryland retail stores in Hagerstown, Joppa, Silver Spring and Bethesda. Each store donated a portion of profits from the first day of adult-use sales to a local nonprofit organization, including Mission of Love Charities, Explore MD Cannabis and I Support The Girls.

Green Thumb in the Community

In partnership with 40 Tons, an African American and woman-owned social impact organization committed to restorative justice and equitable access to career opportunities, Good Green, a cannabis flower brand owned by Green Thumb, presented the sixth 40 Tons Level Up Career Conference & Business Expo in Chicago. The conference was an innovative employment resource that promotes social justice and brings together employers who encourage equitable hiring practices with diverse job seekers.

Non-GAAP Financial Information

This press release includes certain non-GAAP financial measures as defined by the U.S. Securities and Exchange Commission. Reconciliations of these non-GAAP financial measures to the most directly comparable financial measure calculated and presented in accordance with GAAP are included in the financial schedules attached to this press release. 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.
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