TerrAscend Corp. (“TerrAscend” or the “Company”) (TSX: TSND)
(OTCQX: TSNDF), a leading North American cannabis operator, today
reported its financial results for the second quarter ended June
30, 2023. All amounts are expressed in U.S. dollars and are
prepared under U.S. Generally Accepted Accounting Principles
(GAAP), unless indicated otherwise.
The following financial measures are reported as
results from continuing operations due to the shutdown of the
licensed producer business in Canada, which is reported as
discontinued operations for all of 2022. All historical periods
have been restated accordingly.
Second Quarter 2023 Financial
Highlights
- Net Revenue was
$72.1 million, an increase of 3.9% sequentially and 12.7%
year-over-year.
- Gross Profit
Margin was 50.2%, compared to 48.8% in Q1 2023 and 37.5%
in Q2 2022.
- GAAP Net loss from
continuing operations was $12.9 million, compared to $19.2
million in Q1 2023 and net income of $16.9 million in Q2 2022.
- EBITDA from continuing
operations1 was $6.5 million, compared to $6.1 million in
Q1 2023 and $38.4 million in Q2 2022.
- Adjusted EBITDA from
continuing operations1 was $12.8 million, compared to
$12.2 million in Q1 2023 and $8.8 million in Q2 2022.
- Adjusted EBITDA
Margin from continuing
operations1 was 17.8%, compared to 17.6% in Q1 2023 and
13.8% in Q2 2022.
- Net cash provided by (used
in) operating activities - continuing operations was $1.8
million compared to $10.5 million in Q1 2023 and ($14.9) million in
Q2 2022.
- Cash and Cash Equivalents,
including restricted cash, totaled $34.5 million as of
June 30, 2023, of which $2.5 million was long term restricted, as
compared to $33.5 million as of March 31, 2023.
Second Quarter 2023 Business and Operational
Highlights
- Announced three dispensary acquisitions in Maryland to reach
the four store limit in the state
- Closed on the acquisitions of Blue Ridge Wellness and Peninsula
Alternative Health dispensaries in Maryland
- Closed Private Placements for total aggregate proceeds of $21.0
million
- Closed on a $25.0 million commercial loan with Stearns Bank
carrying an interest rate of prime plus 2.25%, equivalent to 10.5%,
with proceeds used to pay down higher interest debt
- Paid down $37.0 million of senior secured term loan in
Pennsylvania
- Completed sale of Mississauga facility for $14.3 million
- Launched Legend brand in Michigan
- Introduced Wana infused gummies in New Jersey and Maryland
- Opened fifth Cookies dispensary in Michigan
- Expanded Cookies partnership into Maryland
- Completed a re-organization of the Company in order to list on
the TSX
Subsequent Events
- Reached four dispensary limit in Maryland with the closing of
the Herbiculture acquisition
- Commenced trading on the TSX under the symbol ‘TSND’ and
announced symbol change on OTC markets to ‘TSNDF’
“We are pleased to deliver results in the second
quarter that exceeded our internal forecasts. We have made
substantial progress over the last several months across virtually
all facets of our business. We have significantly improved our
margins, transformed our balance sheet, materially lowered our
interest expense, delivered positive operating cashflow, acquired
four dispensaries in Maryland and successfully listed on the TSX,
all while driving sector leading revenue growth of 26% in the first
half of 2023,” stated Jason Wild, Executive Chairman of TerrAscend.
“These achievements give us confidence in the remainder of the
year, as evidenced by our full year revenue and Adjusted EBITDA
guidance. We expect to deliver significant growth in revenue and
profitability as we realize the benefits of our now vertically
integrated operations in Maryland as well as continued strong
execution in our other geographies.”
Financial Summary Q2 2023 and Comparative
Periods All figures are restated for the Canadian business
recorded as discontinued operations.
(in millions
of U.S. Dollars) |
|
Q2
2023 |
|
Q1
2023 |
|
Q2
2022 |
Revenue, net |
|
72.1 |
|
|
69.4 |
|
|
64.0 |
|
Quarter-over-Quarter increase |
|
3.9 |
% |
|
0.6 |
% |
|
31.7 |
% |
Year-over-Year increase |
|
12.7 |
% |
|
42.8 |
% |
|
21.9 |
% |
|
|
|
|
|
|
|
Gross
profit |
|
36.2 |
|
|
33.9 |
|
|
24.0 |
|
Gross profit
margin |
|
50.2 |
% |
|
48.8 |
% |
|
37.5 |
% |
|
|
|
|
|
|
|
General
& Administrative expense |
|
30.5 |
|
|
27.7 |
|
|
32.9 |
|
Share-based
compensation expense (included in G&A expense above) |
|
2.0 |
|
|
1.7 |
|
|
4.5 |
|
G&A as a
% of revenue, net |
|
42.3 |
% |
|
39.9 |
% |
|
51.4 |
% |
|
|
|
|
|
|
|
Net (loss)
income from continuing operations |
|
(12.9 |
) |
|
(19.2 |
) |
|
16.9 |
|
|
|
|
|
|
|
|
EBITDA from
continuing operations1 |
|
6.5 |
|
|
6.1 |
|
|
38.4 |
|
Adjusted
EBITDA from continuing operations1 |
|
12.8 |
|
|
12.2 |
|
|
8.8 |
|
Adjusted
EBITDA Margin from continuing operations |
|
17.8 |
% |
|
17.6 |
% |
|
13.8 |
% |
|
|
|
|
|
|
|
Net Cash provided by (used in) operations- continuing
operations |
1.8 |
|
|
10.5 |
|
|
(14.9 |
) |
|
|
|
|
|
|
|
|
|
Second Quarter 2023 Financial
Results Net revenue for the second quarter of 2023
was $72.1 million as compared to $69.4 million in the first quarter
of 2023 and $64.0 million in the second quarter of 2022,
representing 3.9% growth sequentially and 12.7% growth
year-over-year. The sequential growth was driven primarily by a
full quarter of the Allegany dispensary acquisition in Maryland and
same store sales growth in Michigan.
Gross margin for the second quarter of 2023 was
50.2% as compared to 48.8% in the first quarter of 2023 and 35.5%
in the second quarter of 2022. The 140-basis point improvement in
gross margin from the first quarter to the second quarter of 2023
follows a 420-basis point sequential improvement in the first
quarter of 2023. These improvements were driven by increased
yields, optimization of mix and better utilization of capacity in
New Jersey, Michigan and Maryland.
General & Administrative (G&A) expenses
for the second quarter of 2023 were $30.5 million as compared to
$27.7 million in the first quarter of 2023 and $32.9 million in the
second quarter of 2022. G&A expenses for the second quarter of
2023 included $2.5 million of one-time items including M&A
costs related to the acquisitions in Maryland, capital raising
transaction costs, legal settlement fees, and TSX listing related
costs.
Net loss from continuing operations in the
second quarter of 2023 was $12.9 million compared to $19.2 million
in the first quarter of 2023 and a net income of $16.9 million in
the second quarter of 2022.
Adjusted EBITDA from continuing operations for
the second quarter of 2023, a non-GAAP measure, was $12.8 million,
representing a 17.8% margin, compared to $12.2 million and a 17.6%
margin in the first quarter of 2023 and $8.8 million and a 13.8%
margin in the second quarter of 2022.
Balance Sheet and Cash FlowCash
and cash equivalents, including restricted cash, were $34.5 million
as of June 30, 2023, compared to $33.5 million as of March 31,
2023. Net cash provided by continuing operations was $1.8 million
for the second quarter of 2023, representing the fourth consecutive
quarter of positive cashflow from operations. No cash income tax
payments were made during the quarter. Capital expenditure spending
was $2.2 million in the second quarter of 2023, primarily relating
to store openings in Michigan. Free cashflow, a non-GAAP financial
measure, was ($0.4) million for the quarter.
During the quarter, the Company completed the
sale of its facility in Canada for $14.3 million, completed private
placements for gross proceeds of $21.5 million, closed on a $25
million loan with Stearns bank at a rate of prime plus 2.25%, paid
down $43 million of higher interest debt on its Ilera term loan,
and made cash consideration payments totaling $4.9 million for two
Maryland acquisitions which closed in the quarter.
As of August 10, 2023, there were 363 million
basic shares outstanding, including 287 million common shares, 13
million preferred shares as converted, and 63 million exchangeable
non-voting shares. Additionally, there are 51 million warrants and
options outstanding at a weighted average price of $4.44.
Outlook for 2023The Company is
reiterating its outlook for Net Revenue and Adjusted EBITDA from
continuing operations1 for 2023 to be at least $305 million and at
least $58 million, respectively, representing year-over-year growth
of 23% in Net Revenue and 49% in Adjusted EBITDA from continuing
operations1.
Conference CallTerrAscend will
host a conference call today, August 10, 2023, to discuss these
results. Jason Wild, Executive Chairman, Ziad Ghanem, Chief
Executive Officer, and Keith Stauffer, Chief Financial Officer,
will host the call starting at 5:00 p.m. Eastern time. A
question-and-answer session will follow management's
presentation.
CONFERENCE CALL DETAILS |
|
|
Date: |
Thursday, August 10, 2023 |
Time: |
5:00 p.m. Eastern Time |
RapidConnect URL: |
https://emportal.ink/44mrcy0 |
Webcast: |
Click Here |
Dial-in Number: |
1-888-664-6392 |
Conference ID: |
98441769 |
Replay: |
416-764-8677 or 1-888-390-0541Available until 12:00 midnight
Eastern Time Thursday, August 24, 2023 Replay Entry Code:
441769# |
Financial results and analyses are available on
the Company’s website (www.terrascend.com) and SEDAR
(www.sedar.com).
About TerrAscendTerrAscend is a
leading TSX-listed cannabis company with interests across
the North American cannabis sector, including vertically integrated
operations in Pennsylvania, New Jersey, Maryland, Michigan and
California through TerrAscend Growth Corp. and retail operations in
Canada through TerrAscend Canada
Inc. (“TerrAscend”). TerrAscend operates The
Apothecarium, Gage and other dispensary retail
locations as well as scaled cultivation, processing, and
manufacturing facilities in its core markets. TerrAscend’s
cultivation and manufacturing practices yield consistent,
high-quality cannabis, providing industry-leading product selection
to both the medical and legal adult-use markets. The Company owns
or licenses several synergistic businesses and brands including
Gage Cannabis, The Apothecarium, Cookies, Lemonnade, Ilera
Healthcare, Kind Tree, Legend, State Flower, Wana, and Valhalla
Confections. For more information
visit www.terrascend.com.
Caution Regarding Cannabis Operations in
the United States Investors should note that there are
significant legal restrictions and regulations that govern the
cannabis industry in the United States. Cannabis remains a Schedule
I drug under the U.S. Controlled Substances Act, making it illegal
under federal law in the United States to, among other things,
cultivate, distribute or possess cannabis in the United States.
Financial transactions involving proceeds generated by, or intended
to promote, cannabis-related business activities in the United
States may form the basis for prosecution under applicable US
federal money laundering legislation.
While the approach to enforcement of such laws
by the federal government in the United States has trended toward
non-enforcement against individuals and businesses that comply with
medical or adult-use cannabis programs in states where such
programs are legal, strict compliance with state laws with respect
to cannabis will neither absolve TerrAscend of liability under U.S.
federal law, nor will it provide a defense to any federal
proceeding which may be brought against TerrAscend. The enforcement
of federal laws in the United States is a significant risk to the
business of TerrAscend and any proceedings brought against
TerrAscend thereunder may adversely affect TerrAscend’s operations
and financial performance.
Notice Regarding Forward-Looking
Information This press release contains “forward-looking
information” within the meaning of applicable securities laws.
Forward-looking information contained in this press release may be
identified by the use of words such as, “may”, “would”, “could”,
“will”, “likely”, “expect”, “anticipate”, “believe”, “intend”,
“plan”, “forecast”, “project”, “estimate”, “outlook” and other
similar expressions. Forward-looking information is not a guarantee
of future performance and is based upon a number of estimates and
assumptions of management in light of management’s experience and
perception of trends, current conditions and expected developments,
as well as other factors relevant in the circumstances, including
assumptions in respect of current and future market conditions, the
current and future regulatory environment, and the availability of
licenses, approvals and permits. Examples of forward-looking
information contained in this press release include statements
regarding the impacts of the listing on the TSX Listing; and
expectations for other economic, business, and/or competitive
factors.
Although the Company believes that the
expectations and assumptions on which such forward-looking
information is based are reasonable, undue reliance should not be
placed on the forward-looking information because the Company can
give no assurance that they will prove to be correct. Actual
results and developments may differ materially from those
contemplated by these statements. Forward-looking information is
subject to a variety of risks and uncertainties that could cause
actual events or results to differ materially from those projected
in the forward-looking information. Such risks and uncertainties
include, but are not limited to, current and future market
conditions; risks related to federal, state, provincial,
territorial, local and foreign government laws, rules and
regulations, including federal and state laws in the United States
relating to cannabis operations in the United States; and the risk
factors set out in the Company’s most recently filed MD&A,
filed with the Canadian securities regulators and available under
the Company’s profile on SEDAR at www.sedar.com and in the section
titled “Risk Factors” in the Company’s Annual Report on Form 10-K
for the year ended December 31, 2022 filed with the Securities and
Exchange Commission (the “SEC”) on March 16, 2023, the Company’s
Annual Report on Form 10-K/A for the year ended December 31, 2022
filed with the SEC on May 4, 2023 and its subsequently filed
quarterly reports on Form 10-Q.
The statements in this press release are made as
of the date of this press release. TerrAscend disclaims any intent
or obligation to update any forward-looking information, whether as
a result of new information, future events or results or otherwise,
other than as required by applicable securities laws.
No stock exchange, securities commission or
other regulatory authority has approved or disapproved the
information contained herein.
Definition and Reconciliation of
Non-GAAP MeasuresIn addition to reporting the financial
results in accordance with GAAP, the Company reports certain
financial results that differ from what is reported under GAAP.
Non-GAAP measures used by management do not have any standardized
meaning prescribed by GAAP and may not be comparable to similar
measures presented by other companies. The Company believes that
certain investors and analysts use these measures to measure a
company’s ability to meet other payment obligations or as a common
measurement to value companies in the cannabis industry, and the
Company calculates Adjusted Gross Profit and Adjusted Gross Profit
Margin as Gross Profit and gross profit margin adjusted for certain
material non-cash items including the one-time relief of fair value
of inventory on acquisition, non-cash write downs of inventory,
sales returns and write downs of inventory as a result of a vape
recall in Pennsylvania, and other one-time adjustments to gross
profit that management does not believe are reflective of ongoing
operations. We calculate Adjusted EBITDA from continuing operations
and Adjusted EBITDA Margin from continuing operations as EBITDA
from continuing operations adjusted for certain material non-cash
items such as inventory write downs outside of the normal course of
operations, share based compensation expense, impairment charges
taken on goodwill, intangible assets and property and equipment,
the gain or loss recognized on the revaluation of our contingent
consideration liabilities, one-time write off of accounts
receivable related to one customer that was deemed uncollectible,
loan modification fees related to the modification of debt, the
gain recognized on the extinguishment of debt, the gain or loss
recognized on the remeasurement of the fair value of the U.S
denominated preferred share warrants, one time fees incurred in
connection with our acquisitions and certain other adjustments
management believes are not reflective of the ongoing operations
and performance. Such information is intended to provide additional
information and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
GAAP. The Company believes this definition is a useful measure to
assess the performance of the Company as it provides more
meaningful operating results by excluding the effects of expenses
that are not reflective of the Company’s underlying business
performance and other one-time or non-recurring expenses.
For more information regarding TerrAscend: Keith
StaufferChief Financial Officerir@terrascend.com855-837-7295
Briana ChesterMATTIO
Communications424-465-4419terrascend@mattio.com
TerrAscend Corp. |
Unaudited Interim Condensed Consolidated Balance
Sheets |
(Amounts expressed in thousands of United States dollars, except
for share and per share amounts) |
|
|
|
At |
|
At |
|
|
June 30, 2023 |
|
December 31, 2022 |
Assets |
|
|
|
|
Current Assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
28,915 |
|
|
$ |
26,158 |
|
Restricted cash |
|
|
3,106 |
|
|
|
605 |
|
Accounts receivable, net |
|
|
9,478 |
|
|
|
22,443 |
|
Investments |
|
|
1,932 |
|
|
|
3,595 |
|
Inventory |
|
|
54,015 |
|
|
|
46,335 |
|
Assets held for sale |
|
|
— |
|
|
|
17,349 |
|
Prepaid expenses and other current assets |
|
|
8,674 |
|
|
|
4,937 |
|
Current assets from discontinued operations |
|
|
509 |
|
|
|
571 |
|
|
|
|
106,629 |
|
|
|
121,993 |
|
Non-Current Assets |
|
|
|
|
Restricted cash - Non-current |
|
|
2,500 |
|
|
|
— |
|
Property and equipment, net |
|
|
208,995 |
|
|
|
215,812 |
|
Deposits |
|
|
406 |
|
|
|
837 |
|
Operating lease right of use assets |
|
|
32,824 |
|
|
|
29,451 |
|
Intangible assets, net |
|
|
269,594 |
|
|
|
239,704 |
|
Goodwill |
|
|
99,952 |
|
|
|
90,328 |
|
Other non-current assets |
|
|
848 |
|
|
|
3,462 |
|
|
|
|
615,119 |
|
|
|
579,594 |
|
Total Assets |
|
$ |
721,748 |
|
|
$ |
701,587 |
|
|
|
|
|
|
Liabilities and Shareholders' Equity |
|
|
|
|
Current Liabilities |
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
50,841 |
|
|
$ |
44,286 |
|
Deferred revenue |
|
|
3,092 |
|
|
|
2,935 |
|
Loans payable, current |
|
|
23,928 |
|
|
|
48,335 |
|
Contingent consideration payable, current |
|
|
4,434 |
|
|
|
5,184 |
|
Operating lease liability, current |
|
|
1,911 |
|
|
|
1,857 |
|
Lease obligations under finance leases, current |
|
|
275 |
|
|
|
521 |
|
Corporate income tax payable |
|
|
45,934 |
|
|
|
23,077 |
|
Other current liabilities |
|
|
1,608 |
|
|
|
2,599 |
|
Current liabilities from discontinued operations |
|
|
1,466 |
|
|
|
9,111 |
|
|
|
|
133,489 |
|
|
|
137,905 |
|
Non-Current Liabilities |
|
|
|
|
Loans payable, non-current |
|
|
180,400 |
|
|
|
145,852 |
|
Operating lease liability, non-current |
|
|
35,207 |
|
|
|
31,545 |
|
Lease obligations under finance leases, non-current |
|
|
2,139 |
|
|
|
6,713 |
|
Derivative liability |
|
|
5,750 |
|
|
|
711 |
|
Convertible debt |
|
|
6,447 |
|
|
|
— |
|
Deferred income tax liability |
|
|
35,596 |
|
|
|
30,700 |
|
Financing obligations |
|
|
10,754 |
|
|
|
11,198 |
|
Other long term liabilities |
|
|
16,367 |
|
|
|
15,792 |
|
|
|
|
292,660 |
|
|
|
242,511 |
|
Total Liabilities |
|
|
426,149 |
|
|
|
380,416 |
|
Commitments and Contingencies |
|
|
|
|
Shareholders' Equity |
|
|
|
|
Share Capital |
|
|
|
|
Series A, convertible preferred stock, no par value, unlimited
shares authorized; 12,350 and 12,608 shares outstanding as of
June 30, 2023 and December 31, 2022, respectively |
|
|
— |
|
|
|
— |
|
Series B, convertible preferred stock, no par value, unlimited
shares authorized; 600 and 600 shares outstanding as of
June 30, 2023 and December 31, 2022, respectively |
|
|
— |
|
|
|
— |
|
Series C, convertible preferred stock, no par value, unlimited
shares authorized; nil and nil shares outstanding as of
June 30, 2023 and December 31, 2022, respectively |
|
|
— |
|
|
|
— |
|
Series D, convertible preferred stock, no par value, unlimited
shares authorized; nil and nil shares outstanding as of
June 30, 2023 and December 31, 2022, respectively |
|
|
— |
|
|
|
— |
|
Proportionate voting shares, no par value, unlimited shares
authorized; nil and nil shares outstanding as of June 30, 2023
and December 31, 2022, respectively |
|
|
— |
|
|
|
— |
|
Exchangeable shares, no par value, unlimited shares authorized;
63,492,038 and 76,996,538 shares outstanding as of June 30,
2023 and December 31, 2022, respectively |
|
|
— |
|
|
|
— |
|
Common shares, no par value, unlimited shares authorized;
286,807,780 and 259,624,531 shares outstanding as of June 30,
2023 and December 31, 2022, respectively |
|
|
— |
|
|
|
— |
|
Additional paid in capital |
|
|
945,926 |
|
|
|
934,972 |
|
Accumulated other comprehensive income |
|
|
1,330 |
|
|
|
2,085 |
|
Accumulated deficit |
|
|
(653,623 |
) |
|
|
(618,260 |
) |
Non-controlling interest |
|
|
1,966 |
|
|
|
2,374 |
|
Total Shareholders' Equity |
|
|
295,599 |
|
|
|
321,171 |
|
Total Liabilities and Shareholders' Equity |
|
$ |
721,748 |
|
|
$ |
701,587 |
|
|
|
|
|
|
|
|
|
|
TerrAscend Corp. |
Unaudited
Interim Condensed Consolidated Statements of Operations and
Comprehensive Loss |
(Amounts expressed in
thousands of United States dollars, except for share and per share
amounts) |
|
|
For the
Three Months Ended |
For the Six
Months Ended |
|
|
June 30, 2023 |
|
June 30, 2022 |
|
June 30, 2023 |
|
June 30, 2022 |
Revenue |
|
$ |
72,437 |
|
|
$ |
64,221 |
|
|
$ |
142,157 |
|
|
$ |
113,281 |
|
Excise and
cultivation tax |
|
|
(313 |
) |
|
|
(261 |
) |
|
|
(635 |
) |
|
|
(736 |
) |
Revenue, net |
|
|
72,124 |
|
|
|
63,960 |
|
|
|
141,522 |
|
|
|
112,545 |
|
|
|
|
|
|
|
|
|
|
Cost of
Sales |
|
|
35,898 |
|
|
|
40,009 |
|
|
|
71,396 |
|
|
|
72,970 |
|
|
|
|
|
|
|
|
|
|
Gross
profit |
|
|
36,226 |
|
|
|
23,951 |
|
|
|
70,126 |
|
|
|
39,575 |
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
General and administrative |
|
|
30,476 |
|
|
|
32,925 |
|
|
|
58,206 |
|
|
|
54,349 |
|
Amortization and depreciation |
|
|
2,242 |
|
|
|
2,581 |
|
|
|
4,271 |
|
|
|
4,756 |
|
Impairment of property and equipment |
|
|
10 |
|
|
|
— |
|
|
|
345 |
|
|
|
— |
|
Total operating expenses |
|
|
32,728 |
|
|
|
35,506 |
|
|
|
62,822 |
|
|
|
59,105 |
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations |
|
|
3,498 |
|
|
|
(11,555 |
) |
|
|
7,304 |
|
|
|
(19,530 |
) |
Other (income) expense |
|
|
|
|
|
|
|
|
Loss from revaluation of contingent consideration |
|
|
— |
|
|
|
34 |
|
|
|
— |
|
|
|
153 |
|
Gain on fair value of warrants and purchase option derivative
asset |
|
|
(215 |
) |
|
|
(47,345 |
) |
|
|
(653 |
) |
|
|
(53,058 |
) |
Finance and other expenses |
|
|
8,171 |
|
|
|
13,663 |
|
|
|
18,258 |
|
|
|
20,318 |
|
Transaction and restructuring costs |
|
|
389 |
|
|
|
627 |
|
|
|
392 |
|
|
|
1,242 |
|
Unrealized and realized foreign exchange (gain) loss |
|
|
(101 |
) |
|
|
(315 |
) |
|
|
(132 |
) |
|
|
41 |
|
Unrealized and realized loss on investments |
|
|
1,661 |
|
|
|
234 |
|
|
|
2,360 |
|
|
|
234 |
|
(Loss) Income from continuing operations before provision
from income taxes |
|
(6,407 |
) |
|
|
21,547 |
|
|
|
(12,921 |
) |
|
|
11,540 |
|
Provision for income taxes |
|
|
6,448 |
|
|
|
4,688 |
|
|
|
19,112 |
|
|
|
8,431 |
|
Net
(loss) income from continuing operations |
|
$ |
(12,855 |
) |
|
$ |
16,859 |
|
|
$ |
(32,033 |
) |
|
$ |
3,109 |
|
|
|
|
|
|
|
|
|
|
Discontinued operations: |
|
|
|
|
|
|
|
|
Loss from discontinued operations, net of
tax |
|
$ |
(621 |
) |
|
$ |
(2,697 |
) |
|
$ |
(4,212 |
) |
|
$ |
(4,953 |
) |
Net
(loss) income |
|
$ |
(13,476 |
) |
|
$ |
14,162 |
|
|
$ |
(36,245 |
) |
|
$ |
(1,844 |
) |
|
|
|
|
|
|
|
|
|
Foreign
currency translation |
|
|
408 |
|
|
|
280 |
|
|
|
755 |
|
|
|
3,887 |
|
Comprehensive (loss) income |
|
$ |
(13,884 |
) |
|
$ |
13,882 |
|
|
$ |
(37,000 |
) |
|
$ |
(5,731 |
) |
|
|
|
|
|
|
|
|
|
Net
(loss) income from continuing operations attributable
to: |
|
|
|
|
|
|
|
|
Common and proportionate Shareholders of the Company |
|
$ |
(14,998 |
) |
|
$ |
15,914 |
|
|
$ |
(36,362 |
) |
|
$ |
1,813 |
|
Non-controlling interests |
|
$ |
2,143 |
|
|
$ |
945 |
|
|
$ |
4,329 |
|
|
$ |
1,296 |
|
|
|
|
|
|
|
|
|
|
Comprehensive (loss) income from continuing operations
attributable to: |
|
|
|
|
|
|
|
|
Common and proportionate Shareholders of the Company |
|
$ |
(16,027 |
) |
|
$ |
12,937 |
|
|
$ |
(41,329 |
) |
|
$ |
(7,027 |
) |
Non-controlling interests |
|
$ |
2,143 |
|
|
$ |
945 |
|
|
$ |
4,329 |
|
|
$ |
1,296 |
|
|
|
|
|
|
|
|
|
|
Net
(loss) income per share |
|
|
|
|
|
|
|
|
Net (loss)
income per share - basic: |
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
(0.05 |
) |
|
$ |
0.06 |
|
|
$ |
(0.13 |
) |
|
$ |
0.01 |
|
Discontinued operations |
|
$ |
- |
|
|
$ |
(0.01 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.02 |
) |
Net (loss)
income per share - basic |
|
$ |
(0.05 |
) |
|
$ |
0.05 |
|
|
$ |
(0.15 |
) |
|
$ |
(0.01 |
) |
Weighted average number of outstanding common and proportionate
voting shares |
|
275,186,279 |
|
|
|
252,305,425 |
|
|
|
271,223,233 |
|
|
|
231,829,926 |
|
|
|
|
|
|
|
|
|
|
Net (loss)
income per share - diluted: |
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
(0.05 |
) |
|
$ |
0.06 |
|
|
$ |
(0.13 |
) |
|
$ |
0.01 |
|
Discontinued operations |
|
|
— |
|
|
$ |
(0.01 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.02 |
) |
Net (loss)
income per share - diluted |
|
$ |
(0.05 |
) |
|
$ |
0.05 |
|
|
$ |
(0.15 |
) |
|
$ |
(0.01 |
) |
Weighted
average number of outstanding common and proportionate voting
shares, assuming dilution |
|
|
275,186,279 |
|
|
|
257,883,711 |
|
|
|
271,223,233 |
|
|
|
231,829,926 |
|
|
|
|
|
|
|
|
|
|
TerrAscend
Corp. |
Unaudited Interim Condensed Consolidated
Statements of Cash Flows |
(Amounts expressed in thousands of United States
dollars, except for share and per share amounts) |
|
|
|
For the Six
Months Ended |
|
|
June 30, 2023 |
|
June 30, 2022 |
Operating activities |
|
|
|
|
Net (loss) income from continuing operations |
|
$ |
(32,033 |
) |
|
$ |
3,109 |
|
Adjustments to reconcile net (loss) income to net cash used in
operating activities |
|
|
|
Non-cash write downs of inventory |
|
|
1,081 |
|
|
|
8,495 |
|
Accretion expense |
|
|
5,673 |
|
|
|
1,708 |
|
Depreciation of property and equipment and amortization of
intangible assets |
|
9,761 |
|
|
|
11,253 |
|
Amortization of operating right-of-use assets |
|
|
932 |
|
|
|
1,074 |
|
Share-based compensation |
|
|
3,694 |
|
|
|
7,819 |
|
Deferred income tax expense |
|
|
815 |
|
|
|
(787 |
) |
Gain on fair value of warrants and purchase option derivative |
|
|
(653 |
) |
|
|
(53,058 |
) |
Loss on disposal of fixed assets |
|
|
345 |
|
|
|
— |
|
Revaluation of contingent consideration |
|
|
— |
|
|
|
153 |
|
Loss on disposal of fixed assets |
|
|
— |
|
|
|
929 |
|
Release of indemnification asset |
|
|
— |
|
|
|
3,973 |
|
Unrealized and realized foreign exchange (gain) loss |
|
|
(132 |
) |
|
|
41 |
|
Unrealized and realized loss on investments / derivatives |
|
|
2,410 |
|
|
|
234 |
|
Changes in operating assets and liabilities |
|
|
|
|
Receivables |
|
|
295 |
|
|
|
(445 |
) |
Inventory |
|
|
(7,851 |
) |
|
|
208 |
|
Prepaid expense and other current assets |
|
|
(319 |
) |
|
|
1,434 |
|
Deposits |
|
|
431 |
|
|
|
206 |
|
Other assets |
|
|
714 |
|
|
|
461 |
|
Accounts payable and accrued liabilities and other payables |
|
|
4,089 |
|
|
|
(7,840 |
) |
Operating lease liability |
|
|
(337 |
) |
|
|
(614 |
) |
Other liability |
|
|
1,085 |
|
|
|
(10,353 |
) |
Contingent consideration payable |
|
|
— |
|
|
|
(410 |
) |
Corporate income tax payable |
|
|
22,127 |
|
|
|
5 |
|
Deferred revenue |
|
|
157 |
|
|
|
766 |
|
Net cash provided by (used in) operating activities-
continuing operations |
|
12,284 |
|
|
|
(31,639 |
) |
Net cash (used in) operating activities- discontinued
operations |
|
|
(3,164 |
) |
|
|
(3,337 |
) |
Net
cash provided by (used in) operating activities |
|
|
9,120 |
|
|
|
(34,976 |
) |
|
|
|
|
|
Investing activities |
|
|
|
|
Investment in property and equipment |
|
|
(4,504 |
) |
|
|
(12,500 |
) |
Investment in intangible assets |
|
|
(262 |
) |
|
|
(1,330 |
) |
Principal payments received on lease receivable |
|
|
104 |
|
|
|
392 |
|
Receipt of convertible debenture payment |
|
|
738 |
|
|
|
— |
|
Deposits for property and equipment |
|
|
— |
|
|
|
(10,036 |
) |
Deposits for business acquisition |
|
|
— |
|
|
|
(852 |
) |
Payment for land contracts |
|
|
(769 |
) |
|
|
(429 |
) |
Cash portion of consideration paid in acquisitions, net of cash of
acquired |
|
(14,469 |
) |
|
|
24,716 |
|
Net
cash (used in) investing activities- continuing
operations |
|
|
(19,162 |
) |
|
|
(39 |
) |
Net cash provided by investing activities- discontinued
operations |
|
|
14,285 |
|
|
|
— |
|
Net
cash (used in) investing activities |
|
|
(4,877 |
) |
|
|
(39 |
) |
|
|
|
|
|
Financing activities |
|
|
|
|
Transfer of Employee Retention Credit |
|
|
12,677 |
|
|
|
— |
|
Proceeds from loan payable, net of transaction costs |
|
|
23,872 |
|
|
|
— |
|
Proceeds from options and warrants exercised |
|
|
81 |
|
|
|
24,158 |
|
Loan principal paid |
|
|
(40,359 |
) |
|
|
(4,968 |
) |
Loan amendment fee paid and prepayment premium paid |
|
|
(1,178 |
) |
|
|
(1,200 |
) |
Cash distributions to partners |
|
|
(3,415 |
) |
|
|
(1,436 |
) |
Capital contributions paid to non-controlling interests |
|
|
— |
|
|
|
(448 |
) |
Payments of contingent consideration |
|
|
— |
|
|
|
(6,630 |
) |
Proceeds from private placement, net of share issuance costs |
|
|
19,218 |
|
|
|
— |
|
Payments made for financing obligations and finance lease |
|
|
(941 |
) |
|
|
(460 |
) |
Net
cash provided by financing activities- continuing
operations |
|
|
9,955 |
|
|
|
9,016 |
|
Net cash (used in) financing activities- discontinued
operations |
|
|
(5,539 |
) |
|
|
(235 |
) |
Net
cash provided by financing activities |
|
|
4,416 |
|
|
|
8,781 |
|
|
|
|
|
|
Net increase in cash and cash equivalents and restricted
cash during the period |
|
8,659 |
|
|
|
(26,234 |
) |
Net effects
of foreign exchange |
|
|
(901 |
) |
|
|
(4,377 |
) |
Cash and cash equivalents and restricted cash, beginning of
the period |
|
26,763 |
|
|
|
79,642 |
|
Cash
and cash equivalents and restricted cash, end of the
period |
|
$ |
34,521 |
|
|
$ |
49,031 |
|
|
|
|
|
|
Supplemental disclosure with respect to cash
flows |
|
|
|
|
Income taxes (refund received) paid |
|
$ |
(4,582 |
) |
|
$ |
9,213 |
|
Interest paid |
|
$ |
9,259 |
|
|
$ |
14,641 |
|
Lease termination fee paid |
|
|
— |
|
|
$ |
3,300 |
|
Non-cash transactions |
|
|
|
|
Equity and warrant liability issued as consideration for
acquisition |
|
$ |
10,267 |
|
|
$ |
294,800 |
|
Shares issued for legal and liability settlement |
|
$ |
794 |
|
|
$ |
22 |
|
Accrued capital purchases |
|
$ |
529 |
|
|
$ |
9,776 |
|
|
|
|
|
|
|
|
|
|
TerrAscend Corp. |
Reconciliation of GAAP to Non-GAAP
Financial Measures |
(Amounts expressed in thousands of United States
dollars, except for share, per share amounts and
percentages)(unaudited) |
|
GAAP to Adjusted EBITDA |
|
|
For the three months ended |
|
|
June 30, 2023 |
|
March 31, 2023 |
|
June 30, 2022 |
Revenue, net |
|
|
72,124 |
|
|
|
69,398 |
|
|
|
63,960 |
|
|
|
|
|
|
|
|
Net (loss)
income |
|
$ |
(13,476 |
) |
|
$ |
(22,769 |
) |
|
$ |
14,162 |
|
Net (loss)
income margin % |
|
|
-18.7 |
% |
|
|
-32.8 |
% |
|
|
22.1 |
% |
|
|
|
|
|
|
|
Loss from
discontinued operations |
|
|
621 |
|
|
|
3,591 |
|
|
|
2,697 |
|
(Loss)
income from continuing operations |
|
|
(12,855 |
) |
|
|
(19,178 |
) |
|
|
16,859 |
|
|
|
|
|
|
|
|
Add (deduct)
the impact of: |
|
|
|
|
|
|
Provision
for income taxes |
|
|
6,448 |
|
|
|
12,664 |
|
|
|
4,688 |
|
Finance
expenses |
|
|
7,963 |
|
|
|
7,875 |
|
|
|
10,315 |
|
Amortization
and depreciation |
|
|
4,991 |
|
|
|
4,771 |
|
|
|
6,493 |
|
EBITDA from continuing operations |
|
|
6,547 |
|
|
|
6,132 |
|
|
|
38,355 |
|
Add (deduct)
the impact of: |
|
|
|
|
|
|
Relief of
fair value upon acquisition |
|
|
— |
|
|
|
— |
|
|
|
549 |
|
Non-cash
write downs of inventory |
|
|
— |
|
|
|
— |
|
|
|
5,894 |
|
Vape
recall |
|
|
— |
|
|
|
— |
|
|
|
1,071 |
|
Share-based
compensation |
|
|
1,981 |
|
|
|
1,713 |
|
|
|
4,463 |
|
Loss from
revaluation of contingent consideration |
|
|
— |
|
|
|
— |
|
|
|
34 |
|
Other
one-time items |
|
|
2,932 |
|
|
|
1,358 |
|
|
|
924 |
|
Employee
Retention Credits Transfer Fee |
|
|
— |
|
|
|
2,235 |
|
|
|
— |
|
Loss on
lease termination and derecognition of ROU asset |
|
|
— |
|
|
|
205 |
|
|
|
— |
|
Gain on fair value of warrants and purchase option derivative
asset |
|
(215 |
) |
|
|
(437 |
) |
|
|
(47,345 |
) |
Indemnification asset release |
|
|
— |
|
|
|
— |
|
|
|
3,998 |
|
Impairment of property and equipment and loss on disposal of fixed
assets |
|
10 |
|
|
|
334 |
|
|
|
929 |
|
Unrealized
and realized loss on investments |
|
|
1,661 |
|
|
|
699 |
|
|
|
234 |
|
Unrealized
and realized foreign exchange gain |
|
|
(101 |
) |
|
|
(31 |
) |
|
|
(315 |
) |
Adjusted EBITDA from continuing operations |
|
$ |
12,815 |
|
|
$ |
12,208 |
|
|
$ |
8,791 |
|
Adjusted
EBITDA Margin from continuing operations |
|
|
17.8 |
% |
|
|
17.6 |
% |
|
|
13.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP to Adjusted Gross
Profit |
|
|
|
|
|
For the three months ended |
|
|
|
|
June 30, 2023 |
|
|
March 31, 2023 |
|
June 30, 2022 |
|
Revenue, net |
|
|
|
72,124 |
|
|
|
69,398 |
|
|
63,960 |
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
|
36,226 |
|
|
|
33,900 |
|
|
23,951 |
|
Add the impact of: |
|
|
|
|
|
|
|
|
|
Relief of fair value of
inventory upon acquisition |
|
|
|
— |
|
|
|
— |
|
|
549 |
|
Non-cash write downs of
inventory |
|
|
|
— |
|
|
|
— |
|
|
5,894 |
|
Vape recall |
|
|
|
— |
|
|
|
— |
|
|
1,071 |
|
Other one time adjustments to
gross profit |
|
|
|
— |
|
|
|
94 |
|
|
— |
|
Adjusted Gross
Profit |
|
|
|
36,226 |
|
|
|
33,994 |
|
|
31,465 |
|
Adjusted Gross Profit Margin
% |
|
|
|
50.2 |
% |
|
|
49.0 |
% |
|
49.2 |
% |
TerrAscend (TSX:TSND)
過去 株価チャート
から 5 2024 まで 6 2024
TerrAscend (TSX:TSND)
過去 株価チャート
から 6 2023 まで 6 2024