Acreage Holdings Reports Fourth Quarter and Full Year 2020 Results
NEW YORK, March 09, 2021 (GLOBE NEWSWIRE) — Acreage Holdings, Inc. (“Acreage”) (CSE: ACRG.A.U, ACRG.B.U) (OTCQX: ACRHF, ACRDF) today reported financial results for the fourth quarter and full year ended December 31, 2020.
FOURTH QUARTER AND FULL YEAR FINANCIAL HIGHLIGHTS (UNAUDITED)
- Reported fourth quarter revenue of $31.5 million and full year 2020 revenue of $114.5 million, increased 50% and 55%, respectively, compared to the same periods in 2019.
- Managed entity fourth quarter revenue* of $15.7 million and full year 2020 revenue of $62.8 million, increased 41% and 73%, respectively, compared to the same periods in 2019.
- Company-owned same store sales growth* was 27%, marking the eighth consecutive quarter of double-digit same store sales improvements.
- Same store sales growth for managed entities* rose by 71% during the fourth quarter.
- Gross margin for the fourth quarter was 46.1%, a 900 basis point increase compared to the same period in 2019, and a 360 basis point increase compared to the third quarter of 2020.
- Net loss attributable to Acreage in the fourth quarter was $36.9 million, while adjusted net loss* attributable to Acreage was $9.2 million.
- Adjusted EBITDA* in the fourth quarter was a loss of $3.5 million compared to a loss of $18.3 million in the same period in 2019.
- EBITDA* for managed entities during the fourth quarter was $6.0 million compared to a loss of $2.5 million in the same period in 2019.
I am pleased Acreage continued to improve its financial and operational fundamentals during the fourth quarter and throughout the entire year of 2020. It is clear our refocused efforts on delivering profitability and generating long-term shareholder value are beginning to pay off. I am excited to continue this journey with an energized team that I am confident will reestablish Acreage as a leading, and profitable, MSO in the U.S. cannabis industry.
Peter Caldini, Chief Executive Officer of Acreage
EARNINGS CALL DETAILS
Acreage will host a conference call with management on Wednesday, March 10th at 8:30 A.M. Eastern Daylight Time. The call will be webcast and can be accessed at investors.acreageholdings.com. To listen to the live call, please go to the website at least 15 minutes early to register, download and install any necessary audio software.
ABOUT ACREAGE HOLDINGS, INC.
With its principal address in New York City, Acreage is a multi-state operator of cannabis cultivation and retailing facilities in the U.S., including the company’s national retail store brand, The Botanist. Acreage’s wide range of national and regionally available cannabis products include the award-winning The Botanist brand, the highly recognizable Tweed brand, the Prime medical brand in Pennsylvania, the Innocent edibles brand in Illinois and others. Acreage also owns Universal Hemp, LLC, a hemp subsidiary dedicated to the distribution, marketing and sale of CBD products throughout the U.S. Since its founding in 2011, Acreage has focused on building and scaling operations to create a seamless, consumer-focused, branded experience. More information is available at www.acreageholdings.com.
On June 27, 2019, Acreage implemented an arrangement under section 288 of the Business Corporations Act (British Columbia) with Canopy Growth Corporation (“Canopy Growth”), which was subsequently amended on September 23, 2020 (the “Amended Arrangement”). Pursuant to the Amended Arrangement, upon the occurrence (or waiver by Canopy Growth) of changes in federal laws in the United States to permit the general cultivation, distribution and possession of marijuana (as defined in the relevant legislation) or to remove the regulation of such activities from the federal laws of the United States (the “Triggering Event”), Canopy Growth will, subject to the satisfaction or waiver of certain closing conditions, acquire all of the issued and outstanding Class E subordinate voting shares (the “Fixed Shares”) on the basis of 0.3048 of a Canopy Growth share per Fixed Share (following the automatic conversion of the Class F multiple voting shares and subject to adjustment in accordance with the terms of the arrangement agreement entered into between Acreage and Canopy Growth on April 18, 2019, as amended on May 15, 2019 and on September 23, 2020).
In addition, Canopy Growth holds an option, exercisable at the discretion of Canopy Growth, to acquire all of the issued and outstanding Class D subordinate voting shares (the “Floating Shares”) at the time that Canopy Growth acquires the Fixed Shares, for cash or Canopy Growth shares, as Canopy Growth may determine, at a price per Floating Share based upon the 30-day volume-weighted average trading price of the Floating Shares on the CSE relative to the trading price of the Canopy Growth shares at the time of the occurrence or waiver of the Triggering Event, subject to a minimum price of US$6.41 per Floating Share.
For more information about the Amended Arrangement please see the Acreage proxy statement and management information circular dated August 17, 2020 (the “Circular”) and the respective information circulars of each of Acreage and Canopy Growth dated May 17, 2019, which are available on Acreage’s and Canopy Growth’s respective profiles on SEDAR at www.sedar.com and filed with the SEC on the EDGAR website at www.sec.gov. For additional information regarding Canopy Growth, please see Canopy Growth’s profile on SEDAR at www.sedar.com.
*NON-GAAP MEASURES, RECONCILIATION AND DISCUSSION (UNAUDITED)
This release contains tables that reconcile our results of operations reported in accordance with accounting principles generally accepted in the United States of America (“GAAP”) to adjusted results that exclude the impact of certain items identified as affecting comparability (non-GAAP). We use EBITDA, adjusted EBITDA, adjusted net loss attributable to Acreage, same store sales trends, among other measures, to evaluate our actual operating performance and for planning and forecasting future periods. We believe the adjusted results presented provide relevant and useful information for investors because they clarify our actual operating performance, make it easier to compare our results with those of other companies and allow investors to review performance in the same way as our management. Since these measures are not calculated in accordance with GAAP, they should not be considered in isolation of, or as a substitute for, our reported results as indicators of our performance, and they may not be comparable to similarly named measures from other companies. The tables below reconcile our results of operations in accordance with GAAP to the adjusted results mentioned above:
Due to the Company’s transition from IFRS to U.S. GAAP, certain expenses related to leased assets formerly classified as depreciation and interest expense are now included in EBITDA as a general and administrative expense. The Company’s lease expenses associated with non-finance leases was $2,148 and $6,465 in Q4’19 and FY’19, respectively.
MANAGED ENTITIES SELECTED FINANCIAL RESULTS
This release contains tables that display the results of entities which we have management or consulting agreements with, whom we earn a management fee from. These figures are not included within our consolidated results.