- First Quarter 2022 Revenue Increased 48.5% to $61.9 million as Compared to the First Quarter of 2021
- Established Fourth Vertically Integrated State-Level Operation in Nevada with the Completion of the Acquisition of The Apothecarium(2) dispensary in Las Vegas
BOCA RATON, Fla., May 25, 2022 (GLOBE NEWSWIRE) — Jushi Holdings Inc. (“Jushi” or the “Company”) (CSE: JUSH) (OTCQX: JUSHF), a vertically integrated, multi-state cannabis operator, is pleased to announce its financial results for the first quarter 2022 (“Q1 2022”) ended March 31, 2022. All financial information is provided in U.S. dollars unless otherwise indicated.
First Quarter 2022 Highlights
- Total revenue of $61.9 million, an increase of 48.5% year-over-year
- Adjusted gross profit(1) of $25.5 million, an increase of 33.1% year-over-year
- Net loss of $14.3 million
- Adjusted EBITDA(1) of $1.1 million, or 1.7% of revenue
- Cash and cash equivalents were $76.2 million as of the quarter end
First Quarter 2022 Operational Highlights
- Completed the acquisition of The Apothecarium(2) in Las Vegas, Nevada (“Apothecarium Nevada”), an operating adult-use and medical retail dispensary
- Debuted a series of cannabis brands and product launches in Massachusetts, beginning with the launch of flower brands The Bank and Sèchè
- Closed a non-brokered private placement (the “Offering”), for total proceeds of approximately $13.7 million
- Placed on The Globe and Mail’s Third-Annual Women Lead Here benchmark of executive gender diversity
- Announced that Jim Cacioppo, Chief Executive Officer, Chairman, and Founder, purchased 66,800 Class B Subordinate Voting Shares of the Company in the open market for an approximate amount of $220,000
Recent Developments
- Awarded a provisional medical marijuana dispensary license in Ohio, establishing the Company’s fifth vertically integrated state-level operation
- Expanded the Company’s vertically integrated footprint in Nevada with the completion of the NuLeaf, Inc. (“NuLeaf”) acquisition, adding a 27,000 sq. ft. cultivation facility, 13,000 sq. ft. processing facility, and three adult-use and medical retail dispensaries in the state
- Launched the Company’s first line of solventless cannabis extracts in the Pennsylvania market under its award-winning The Lab brand, comprised of high-quality live rosin vapes and concentrates
- Opened the 32nd retail location nationwide and 3rd BEYOND / HELLO™ dispensary in California
- Closed on the purchase of land adjacent to the Company’s Toledo Ohio grow facility which will allow Jushi to significantly expand its cultivation footprint at the Ohio grow facility, subject to regulatory approvals
Management Commentary
Despite the seasonal weakness in the first quarter and a series of challenges including the loss of store hours due to Omicron, snowstorms, and the Pennsylvania distillate cartridges recall, I am pleased with our first quarter performance and the progress we have made in positioning our business for the long term.
Jim Cacioppo, Chief Executive Officer, Chairman, and Founder of Jushi
We remain focused on investing in our businesses, including building out our store base, significantly expanding our cultivation and processing facilities in both Pennsylvania and Virginia, scaling our wholesale channel in Massachusetts, Pennsylvania, and Virginia, and integrating our two recently acquired businesses in Nevada.
He added, “At the same time, we have taken decisive steps to manage our costs across all operating units and are encouraged by the initial results. I am confident that our investments into the business and the cost savings measures we have recently implemented position us to achieve accelerated growth and profitability through the balance of the year.”
Jim Cacioppo concluded, “I am very encouraged by what we have accomplished to date and remain confident that we are creating one of the most robust and exciting platforms to capitalize on the growth in the U.S. cannabis industry. I am incredibly proud of our people and their contributions and look forward to scaling our operations in 2022 and beyond.”
(1) See “Reconciliation of Non-IFRS Financial Measures” at the end of this press release for more information regarding the Company’s use of non-IFRS financial measures.
(2) The Apothecarium is used under license with an affiliate of TerrAscend Corp.
Financial Results for the First Quarter 2022
The following is a tabular summary and commentary of revenue, gross profit, adjusted gross profit, net income (loss), and net income (loss) per share for the three-month periods ended March 31, 2022, December 31, 2021, and March 31, 2021.
Revenue in Q1 2022 increased 48.5% to $61.9 million as compared to $41.7 million in the first quarter of 2021 (“Q1 2021”), driven by the expansion of our retail footprint from 17 to 29 stores, the acquisition of Nature’s Remedy of Massachusetts, and increased wholesale sales at our Pennsylvania and Virginia grower-processor facilities. On a sequential quarterly basis, revenue declined 6.1% from $65.9 million in the fourth quarter of 2021 (“Q4 2021”). The 6.1% sequential decrease in revenue was driven primarily by a seasonal slowdown in activity, industry headwinds, such as continued inflationary pressures on consumer spending, regulatory delays impacting the expansion and sale of product offerings in select states, and temporary store closures related to the pandemic and snowstorms.
Adjusted gross profit(1) in Q1 2022 was $25.5 million, or 41.3% of revenue, compared to $26.4 million, or 40.0% of revenue, in Q4 2021. The increase in gross margin was primarily driven by margin improvement in Pennsylvania, partially offset by an increase in promotional activity at retail in Illinois and Massachusetts and pricing compression in wholesale as the Company continues to build out its brands across state markets.
Q1 2022 net loss was $14.3 million, or $0.08 per basic share and net loss of $0.08 per diluted share, compared to net income of $5.2 million, or $0.04 per basic share and net loss of $0.15 per diluted share, in Q4 2021. The net loss of $0.08 per diluted share in Q1 2022 was primarily due to the infrastructure and headcount investments that were completed in 2021 that are expected to have a transitional impact on our 2022 results.
Adjusted EBITDA(1) in Q1 2022 was $1.1 million, a decrease of $0.4 million as compared to $1.5 million in Q4 2021 and a decrease of $3 million compared to the $4 million in Q1 2021. The decrease in Adjusted EBITDA(1) on a sequential quarterly basis was driven by lower revenues and gross profit.
Balance Sheet and Liquidity
As of March 31, 2022, the Company had $76.2 million of cash and cash equivalents, including proceeds from the Offering closed in Q1 2022. The Company paid approximately $29 million in capital expenditures during Q1 2022, of which $10 million was paid for capital expenditures accrued at year end 2021. The Company expects to incur approximately $40 to $60 million of new cash capital expenditures for the full year 2022, subject to market conditions and regulatory changes. As of March 31, 2022, the Company had approximately $147 million in principal amount of total debt, excluding leases and property, plant, and equipment financing obligations. As of May 25, 2022, the Company’s Acquisition Facility had $60 million of available capacity, including the $25 million accordion feature. As of May 25, 2022, the Company’s issued and outstanding shares were 194,542,278 and its fully diluted shares outstanding were 281,438,589.
Outlook
Mr. Cacioppo commented, “Looking ahead to the remainder of the year, we expect to open an additional four dispensaries and continue to build-out the grow rooms in our Pennsylvania and Virginia grower-processor facilities, which will increase our margins and substantially grow our wholesale sales in 2022 and beyond.” Mr. Cacioppo added, “We are modestly revising our fourth quarter 2022 annualized revenue to be between $340 to $380 million, and our 2022 annualized Adjusted EBITDA to be between $60 to $80 million on an IFRS basis. The slight reduction in revenue and Adjusted EBITDA guidance was driven by (1) weakening in the macro environment; (2) ongoing regulatory delays; and (3) supply chain issues. We want to be conservative in regard to our projected revenue ramp through the remainder of the year. By the end of 2022, we are targeting 50 retail licenses across seven markets, including 36 operating retail locations and approximately 330,000 sq. ft. of cultivation and processing capacity.”
Mr. Cacioppo concluded, “We are putting in significant work, optimizing our resources, and making important investments where needed, to execute on our strategic initiatives and build out our business for long-term, sustained growth for our shareholders.”
The Company’s MD&A and consolidated financial statements for the first quarter ended March 31, 2022, will be filed in May. The Company’s previous public filings may be found on SEDAR at www.SEDAR.com.
Conference Call and Webcast Information
The Company will host a conference call to discuss its financial results for the first quarter 2022 at 9:00 a.m. ET today, Wednesday, May 25, 2022.
Event: First Quarter 2022 Financial Results Conference Call
Date: Wednesday, May 25, 2022
Time: 9:00 a.m. Eastern Time
Live Call: +1-833-646-0490 (U.S. Toll-Free) or +1-918-922-6617 (International)
Conference ID: 6827238
Webcast: Register
For interested individuals unable to join the conference call, a dial-in replay of the call will be available until June 24, 2022, and can be accessed by dialing +1-855-859-2056 (U.S. Toll-Free) or +1-404-537-3406 (International) and entering replay pin number: 6827238.
Consolidated Financial Statement
The financial information reported in this press release is based on unaudited management prepared financial statements for the three months March 31, 2022. These financial statements have been prepared in accordance with IFRS. This release contains certain preliminary financial results for first quarter 2022, including, but not limited to, Cost of goods sold; Gross profit; Income tax (expense) benefit; Net loss; Inventory, net; Goodwill, net; Deferred taxes, contingent consideration and accrued expenses. The Company expects to file its unaudited consolidated financial statements for the first quarter 2022 ended March 31, 2022, on SEDAR in May. Accordingly, such financial information may be subject to change. All financial information contained in this press release is qualified in its entirety with reference to such financial statements. While the Company does not expect there to be any material changes between the information contained in this press release and the consolidated financial statements it files on SEDAR, to the extent that the financial information contained in this press release is inconsistent with the information contained in the Company’s financial statements, the financial information contained in this press release shall be deemed to be modified or superseded by the Company’s filed financial statements. The making of a modifying or superseding statement shall not be deemed an admission for any purposes that the modified or superseded statement, when made, constituted a misrepresentation for purposes of applicable securities laws. Further, the reader should refer to the additional disclosures in the Company’s unaudited financial statements for the first quarter ended March 31, 2022.
About Jushi Holdings Inc.
We are a vertically integrated cannabis company led by an industry-leading management team. In the United States, Jushi is focused on building a multi-state portfolio of branded cannabis assets through opportunistic acquisitions, distressed workouts, and competitive applications. Jushi strives to maximize shareholder value while delivering high-quality products across all levels of the cannabis ecosystem. For more information, visit jushico.com or our social media channels, Instagram, Facebook, Twitter, and LinkedIn.
JUSHI HOLDINGS INC.
Reconciliation of Non-IFRS Financial Measures
EBITDA, Adjusted EBITDA and Adjusted Gross Profit
In addition to providing financial measurements based on IFRS, the Company provides additional financial metrics that are not prepared in accordance with IFRS. Management uses non-IFRS financial measures, in addition to IFRS financial measures, to understand and compare operating results across accounting periods, for financial and operational decision making, for planning and forecasting purposes and to evaluate the Corporation’s financial performance. These non-IFRS financial measures are EBITDA, Adjusted EBITDA and Adjusted Gross Profit (defined below). Management believes that these non-IFRS financial measures reflect the Company’s ongoing business in a manner that allows for meaningful comparisons and analysis of trends in the business, as they facilitate comparing financial results across accounting periods and to those of peer companies. As there are no standardized methods of calculating these non-IFRS measures, the Company’s methods may differ from those used by others, and accordingly, the use of these measures may not be directly comparable to similar measures used by others, thus limiting their usefulness. Accordingly, these non-IFRS measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.
EBITDA and Adjusted EBITDA are financial measures that are not defined under IFRS. Management defines EBITDA as net income (loss), or “earnings”, before interest, income taxes, depreciation and amortization. Management defines Adjusted EBITDA as EBITDA before: (i) non-cash share-based compensation expense and other one-time charges; (ii) inventory-related adjustments; (iii) fair value changes in derivatives; (iv) other income/expense items (xiii) transaction costs; and (v) start-up costs. The financial measures noted above are metrics that have been adjusted from the IFRS net income (loss) measure in an effort to provide readers with a normalized metric in making comparisons more meaningful across the cannabis industry, as well as to remove non-recurring, irregular and one-time items that may otherwise distort the IFRS net income measure. Other companies in the Corporation’s industry may calculate this measure differently, limiting their usefulness as comparative measures. “Adjusted Gross Profit” represents gross profit, as reported, adjusted to exclude certain inventory-related adjustments and start-up costs (within COGS).
