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
PHOENIX, Aug. 10, 2021 /PRNewswire/ — 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 15th in South Miami Beach, Florida.
- Harvest opened one new dispensary serving medical patients and adult use customers on August 6th 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.
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: http://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
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.
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
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