Curaleaf Holdings, Inc. (CSE: CURA) (“Curaleaf” or the “Company”), a leading vertically integrated cannabis operator in the United States, today reported its unaudited financial and operating results for the third quarter and nine months ended September 30, 2018.
| WAKEFIELD, Mass., /PRNewswire/ --
Curaleaf Holdings, Inc. (CSE: CURA) (“Curaleaf” or the “Company”), a leading vertically integrated cannabis operator in the United States, today reported its unaudited financial and operating results for the third quarter and nine months ended September 30, 2018. “Boasting the largest retail dispensary footprint under a single, unified brand, with now 33 locations across 10 states, Curaleaf has established itself as a leader in the burgeoning U.S. cannabis industry. The expansion of our retail footprint was one of several key factors that drove significant year-over-year quarterly revenue growth of 289%, a majority of which was attributable to organic growth,” said Joe Lusardi, Chief Executive Officer of Curaleaf. “With the closing of our US$400 million private placement and going-public transaction in October, we strengthened both our balance sheet and ability to accelerate our growth objectives in 2019. With a strengthened balance sheet, we are actively seeking accretive acquisitions in several major markets across the United States, including Maryland, Massachusetts, Nevada, Florida, Arizona and Connecticut. We are confident that strong organic growth, combined with a sound M&A strategy, will allow Curaleaf to establish the first national cannabis retail dispensary brand in the United States.” Financial Highlights for the Third Quarter Ended September 30, 2018
Financial Highlights for the Nine Months Ended September 30, 2018
Year-to-Date Highlights Industry Firsts
Acquisition Activity
Retail Footprint Expansion
Capital Markets, Financing Activities and Growth Strategy
Financial Results for Third Quarter Ended September 30, 2018 Total revenue for the third quarter 2018 increased 289% to $21.4 million, compared to $5.5 million in the third quarter of 2017. The increase was primarily attributable to growth in the Company’s retail and wholesale segment. Revenue for the third quarter of 2018 increased 47%, compared to $14.6 million in the second quarter of 2018. Retail and wholesale revenue increased 472% to $16.6 million during the quarter, compared to $2.9 million in the third quarter of 2017. This increase was primarily driven by increased sales attributable to new retail dispensaries in Florida, New York and Massachusetts and the acquisition of Swell in April of 2018. On a pro-forma basis, including revenue generated by non-profit entities, gross revenue for the third quarter was $25.0 million. Total gross profit excluding the impact of biological assets for the third quarter 2018 was $13.8 million, representing a gross margin of 64%, compared to gross profit of $3.0 million and a gross margin of 55% in the third quarter of 2017. As Curaleaf continues to grow its business and achieve scale particularly in limited license markets, including Florida, New York, Maryland and Massachusetts, the Company expects its gross profits margin to expand meaningfully in 2019. Adjusted EBITDA(1) loss was $5.5 million for the 2018 third quarter, compared to a loss of $0.2 million for the third quarter of 2017. Net loss for the third quarter 2018 was $33.7 million, compared to net income of $0.5 million in the third quarter of 2017. The increase in net loss was primarily driven by a $25 million one-time, non-cash, accounting entry as part of the RTO transaction and investments in new stores openings and facilities. Financial Results for the Nine Months Ended September 30, 2018 Total revenue for the nine months ended September 30, 2018 increased 247% to $45.1 million, compared to $13 million in the same period of 2017. Increased revenues are primarily attributable to growth in the Company’s retail and wholesale segment. Retail and wholesale revenue increased 463% to $33.8 million during the nine months ended September 30, 2018, compared to $6 million in the same period of 2017. This is primarily driven by increased sales from the opening of new retail dispensary and production facilities. Total gross profit excluding the impact of biological assets for the nine months ended September 30, 2018 was $25.9 million, representing a total gross margin of 57%, compared to gross profit of $6.9 million and a gross margin of 53% in the same period of 2017. Adjusted EBITDA(1) loss was $12.9 million for the nine months ended September 30, 2018 due to forward spending on cultivation and manufacturing capacity, dispensary openings and increased marketing activities. Net loss for the nine months ended September 30, 2018 was $40.8 million, compared to a net loss of $3.5 million in the same period of 2017. The increase in net loss was again, primarily driven by a one-time, non-cash, accounting entry as part of the RTO transaction and investments including new stores openings and facilities. Balance Sheet and Liquidity As of September 30, 2018, the Company had $48 million of cash. On October 29, 2018, the Company received net proceeds of approximately $380 million from the completion of its private placement offering. As of today, the Company has approximately $320 million in cash after paying an aggregate of $65m for the minority buyouts in Florida and Connecticut of $25 million and $40 million respectively. As of October 25, 2018, total common shares were 457,635,788, of which 335,465,083 are subordinated voting shares and 122,170,705 are multiple voting shares. Fully diluted, the Company has 508,120,208 shares outstanding. Outlook for Full Year 2019 For the full year 2019, Curaleaf estimates revenue of $400 million enterprise wide, including revenue generated by the non-profits, and free cash flow of $100 million. The Company anticipates completing two acquisitions in the fourth quarter of 2018 in Maryland and Massachusetts. At the end of 2018, Curaleaf anticipates at least 40 operational stores. The guidance for fiscal 2019 are based on a number of assumptions, including:
(1) See “Non-IFRS Financial and Performance Measures” below for more information regarding Curaleaf’s use of Non-IFRS financial measures. Consolidated Financial Statements and Management’s Discussion and Analysis The Company’s unaudited consolidated interim financial statements and accompanying notes as at and for the three and nine months ended September 30, 2018 are available under the Company’s profile on SEDAR at www.sedar.com and on the Investor Relations section of the Company’s website at ir.curaleaf.com. Conference Call and Webcast Information Curaleaf will host a conference call and audio webcast on Monday, November 26th at 4:30 p.m. EST to answer questions about the Company’s operational and financial highlights. The dial-in numbers for the conference call are +1-877-407-9039 (U.S. Toll-Free) or +1-201-689-8470 (International). Please dial-in 10 to 15 minutes prior to the start time of the conference call and an operator will register your name and organization. The conference call will also be available via webcast, which can be accessed through the Investor Relations section of Curaleaf’s website, https://ir.curaleaf.com/ir-calendar. For interested individuals unable to join the conference call, a dial-in replay of the call will be available until December 10, 2018 and can be accessed by dialing +1-844-512-2921 (U.S. Toll Free) or +1-412-317-6671 (International) and entering replay pin number: 13684909. The online archive of the webcast will be available on https://ir.curaleaf.com/ir-calendar for 30 days following the call. About Curaleaf Holdings, Inc. Curaleaf Holdings, Inc. is the parent of Curaleaf, Inc., a leading vertically integrated cannabis operator in the United States. Headquartered in Wakefield, Massachusetts, Curaleaf, Inc. has a presence in 12 states. Curaleaf, Inc. operates 33 dispensaries, 12 cultivation sites and 10 processing sites with a focus on highly populated, limited license states, including Florida, Massachusetts, New Jersey and New York. Curaleaf, Inc. leverages its extensive research and development capabilities to distribute cannabis products in multiple formats with the highest standard for safety, effectiveness, consistent quality and customer care. Curaleaf is committed to being the industry’s leading resource in education and advancement through research and advocacy. Curaleaf Inc.'s Florida operations were the first in the cannabis industry to receive the Safe Quality Food certification under the Global Food Safety Initiative, setting a new standard of excellence. For more information please visit www.curaleaf.com. Non-IFRS Financial and Performance Measures In this press release Curaleaf refers to certain non-IFRS financial measures such as Adjusted EBITDA, being Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) less certain non-cash equity compensation expense, including one-time transaction fees and all other non-cash items. These measures do not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other issuers. Adjusted EBITDA loss for the three-month period of $5.5 million is calculated as the Company’s loss from operations of $6.8 million less Depreciation and amortization of $1.3 million. For the nine-month period, adjusted EBITDA loss of $12.9 million is calculated as the Company’s loss from operations of $16.7 million less Depreciation and amortization of $3.8 million. Forward Looking Information Certain statements in this press release are forward-looking statements and are prospective in nature. Forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events, many of which, by their nature, are inherently uncertain and outside of the Company’s control and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. These statements generally can be identified by the use of forward-looking words such as “may”, “should”, “will”, “could”, “intend”, “estimate”, “plan”, “anticipate”, “expect”, “believe” or “continue”, or the negative thereof or similar variations. Forward-looking statements in this news release include, but are not limited to, information concerning the ability of the Company to successfully achieve business objectives, and expectations for other economic, business, and/or competitive factors. Those assumptions and factors are based on information currently available to the Company. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking information and statements are the following: the ability of the Company to develop the Company’s brand and meet its growth objectives, the ability of the Company to complete acquisitions that are accretive to the Company’s revenue, the ability of the Company to obtain and/or maintain licenses to operate in the jurisdictions in which it operates or in which it expects or plans to operate. Should one or more of these risks, uncertainties or other factors materialize, or should assumptions underlying the forward-looking information or statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Readers should not place undue reliance on forward-looking statements and forward-looking information. The forward-looking information contained in this release is made as of the date hereof and the Company assumes no obligation to update or revise any forward-looking statements or forward-looking information that are incorporated by reference herein, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. The foregoing statements expressly qualify any forward-looking information contained herein. All subsequent written and oral forward-looking information and statements attributable to the Company or persons acting on its behalf is expressly qualified in its entirety by this notice. Company Contact: Investor Contact: Media Contact:
SOURCE Curaleaf, Inc. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company Codes: CNSX:CURA, OTC-PINK:LDVTF, OtherOTC:LDVTF | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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