Acreage Holdings Reports Third Quarter 2020 Results
NEW YORK, Nov. 11, 2020 (GLOBE NEWSWIRE) — Acreage Holdings, Inc. (“Acreage”) (CSE: ACRG.A.U, ACRG.B.U), (OTC: ACRHF, ACRDF) today reported financial results for the third quarter of 2020.
THIRD QUARTER FINANCIAL HIGHLIGHTS (UNAUDITED)
- Reported revenue was $31.7 million, a 42% increase compared to the same period in 2019, and a 17% increase compared to the second quarter of 2020.
- Partner revenue was $17.0 million, a 79% increase compared to the same period in 2019, and a 2% increase compared to the second quarter of 2020.
- Company-owned same store sales growth was 36%, marking the seventh consecutive quarter of double-digit same store sales comparisons.
- Same store sales growth for our managed entities was 22%.
- Gross margin was 42.5%, an 80 basis point decrease compared to the same period in 2019, and a 110 basis point increase compared to the second quarter of 2020. The year over year gross margin decline was in large part due to a one-time significant wholesale opportunity in Massachusetts, which did not repeat this year.
- Net loss attributable to Acreage was $35.7 million, while adjusted net loss* attributable to Acreage was $14.3 million.
- Adjusted EBITDA* was a loss of $6.9 million compared to a loss of $11.7 million in the same period in 2019.
- Managed Entities’ EBITDA* was $4.7 million compared to a loss of $0.6 million in the same period in 2019.
I am pleased with another solid quarter of improving fundamentals. Our refocused strategy continues to work. Operational excellence led to improved financials and a stronger balance sheet.
Bill Van Faasen, Interim Chief Executive Officer of Acreage
Our core profitability is in sight in the first half of 2021. Much work remains, but we are absolutely on the right path both short and long-term, with a team that’s as energized and results-focused as it’s ever been.
EARNINGS CALL DETAILS
Acreage will host a conference call with management on Thursday, November 12th at 8:30 A.M. EST. 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.
Headquartered 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 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, 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:
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.