First Quarter 2022 Revenue of $313 Million, up 20% YoY
First Quarter 2022 Adjusted EBITDA(1)of $73 Million, up 16% YoY
First Quarter 2022 Cash Flow from Operations of $57.4 Million or 18% of Revenue
WAKEFIELD, Mass., May 9, 2022 /PRNewswire/ — Curaleaf Holdings, Inc. (CSE: CURA) (OTCQX: CURLF) (“Curaleaf” or the “Company”), a leading international provider of consumer products in cannabis, today reported its financial and operating results for the first quarter ended March 31, 2022. All financial information is provided in U.S. dollars unless otherwise indicated.
Earnings Call: Monday, May 9, 2022, at 5:00 P.M. ET
Conference ID # is 8760576
Replay ID # is 3727058
U.S. Callers: +1-888-317-6003
International Callers: +1-412-317-6061
Canadian Callers: +1-866-284-3684
U.S. Replay: +1-877-344-7529
International Replay (Toll): +1-412-317-0088
Canadian Replay: +1-855-669-9658
The teleconference will be rebroadcasted starting at 7:00 P.M. ET
on May 9, 2022 and will end at 7:00 P.M. ET on May 16, 2022
Our national footprint has always been a key advantage of our growth strategy, and despite a tough macro environment during the first quarter, Curaleaf continued to grow share in several important markets.
Boris Jordan, Executive Chairman of Curaleaf
We saw strong month-over-month growth beginning in March and heading into the second quarter, boosting confidence in our ability to hit full year revenue guidance of $1.4 billion – $1.5 billion.
Jordan added, “Given renewed optimism surrounding federal banking reform, a record breaking 4/20, the exciting launch last month of New Jersey adult-use sales, and the prospect of New York following suit, 2022 is shaping up to be another milestone year.”
Our continued focus on research & development of innovative new products, commercialization, national distribution and brand building were cornerstones of the first quarter.
Joe Bayern, Chief Executive Officer of Curaleaf
From the launch of our proprietary ACE extraction system in Florida – which produces the purest live rosin product in the market – to new products launched in the last 12 months generating 17% of our revenues, our long-term focus on attracting new consumers with highly formulated products backed by science continues to drive growth. This advantage will help Curaleaf continue to expand Adjusted EBITDA margins.
First Quarter Operating Highlights
- Added 11 new retail dispensaries, closing the quarter with 128 total locations, and serviced over 2,200 wholesale partner accounts.
- Completed the acquisition of Bloom Dispensaries, a vertically integrated, single state cannabis operator in Arizona, which added four retail dispensaries and two adjacent cultivation and processing facilities totaling approximately 63,500 sq. ft.
- Launched a solventless Select Live Rosin product in Florida featuring an aromatic, pure cannabis flavor created through the Company’s live harvesting, flash-freezing and proprietary extraction process.
Post First Quarter Operating Highlights
- Commenced adult-use sales in New Jersey, an estimated $2.3 billion market by 2026 according to BDSA.
- Signed a distribution agreement with WB Canna Co. & Wellness which will launch Curaleaf’s Hemp and Select CBD product lines in the U.S. Virgin Islands, Puerto Rico, Aruba, Bermuda, Barbados, Cayman, Costa Rica, Guatemala, Jamaica, and Saint Maarten, as well as additional markets in Latin America.
- Expanded Select’s CBD line with the launch of Select CBD Bites, available across the U.S. in-store and online. Select’s latest offering is infused with purified, broad-spectrum hemp to provide targeted wellness benefits featuring diverse cannabinoids without the psychoactive effects of THC.
- Executed historic 4/20 with net revenue increasing 45% year-over-year.
Total revenue increased by 20% to $313 million during the first quarter of 2022, compared to $260 million in the first quarter of 2021. The Company’s year-over-year revenue growth primarily reflects continued organic growth driven by new retail store openings, the addition of new wholesale partner accounts, product launches, and the expansion of cultivation and production facilities.
Retail revenue increased by 21% to $226 million during the first quarter of 2022, compared to $188 million in the first quarter of 2021, representing 72% of total revenue. Growth in retail revenue was primarily due to strong organic growth across Curaleaf’s footprint and the opening of 26 new stores over the year, namely in Arizona, Florida, and Pennsylvania.
Wholesale revenue increased 19% to $86 million during the first quarter of 2022, compared to $72 million in the first quarter of 2021, representing 27% of total revenue. Growth in wholesale revenue was due to an over 10% year-over-year expansion in the number of wholesale accounts as well as additional capacity coming online in key markets.
Gross profit on cannabis sales was $154 million for the first quarter of 2022, compared to $128 million in the first quarter of 2021. Gross profit margin reached 49.3%, equivalent to the first quarter of 2021.
For the first quarter of 2022, net loss attributable to Curaleaf Holdings, Inc. was $20 million, compared to a net loss of $15 million in the first quarter of 2021. The net result was primarily impacted by approximately $12 million of higher income tax expense and $2 million of higher other expense, net, partially offset by a $8 million increase in operating income.
Adjusted EBITDA was $73 million for the first quarter of 2022, compared to $63 million for the first quarter of 2021. The year-over-year increase in adjusted EBITDA was primarily driven by solid revenue growth combined with operating leverage. The year-over-year decrease in Adjusted EBITDA margin reflects greater SG&A expenditures due to increased headcount in support of new store openings, higher levels of expenses related to research and development activities, and marketing in support of new product rollouts.
Balance Sheet and Cash Flow
As of March 31, 2022, the Company had $243 million of cash and $584 million of outstanding debt net of unamortized debt discounts.
During the first quarter of 2022, Curaleaf invested $30 million net in capital expenditures mostly attributable to cultivation, processing, and retail sites development activities.
As of March 31, 2022 and December 31, 2021, the Company’s weighted average subordinate voting shares outstanding amounted to 708,897,273 and 707,450,310 shares, respectively.
As of March 31, 2022 and December 31, 2021, the Company’s issued and outstanding subordinate voting shares plus multiple voting shares amounted to 709,812,195 and 708,340,434 shares, respectively.
As disclosed in the Company’s Consolidated Annual Financial Statements for the year ended December 31, 2021, the Company made an immaterial restatement to the initial purchase accounting for the Select acquisition. Adjustments have been made to the comparative period financial statements presented herein, which reflect a decrease in amortization expense, as applicable. The net impact of the adjustment on the Company’s Interim Consolidated Statements of Profits and Losses for the three months ended March 31, 2021, was a positive $2.4 million to Net loss attributable to Curaleaf Holdings, Inc.
Non-IFRS Financial and Performance Measures
Curaleaf reports its financial results in accordance with IFRS and uses a number of financial measures and ratios when assessing its results and measuring overall performance. Some of these financial measures and ratios are not calculated in accordance with IFRS. Curaleaf refers to certain Non-IFRS financial measures and ratios such as “Gross Profit on Cannabis Sales”, “Gross Margin on Cannabis Sales”, “Adjusted EBITDA”, and “Adjusted EBITDA Margin”. These measures do not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other issuers. The Company defines “Gross Profit on Cannabis Sales” as retail and wholesale revenues less cost of goods sold. “Gross Margin on Cannabis Sales” is defined by Curaleaf as gross profit on cannabis sales divided by retail and wholesale revenues. “Adjusted EBITDA” is defined by Curaleaf as earnings before interest, taxes, depreciation and amortization less share-based compensation expense and other add-backs related to business development, acquisition, financing and reorganization costs. “Adjusted EBITDA Margin” is defined by Curaleaf as Adjusted EBITDA divided by total revenue. Curaleaf considers these measures to be an important indicator of the financial strength and performance of our business. 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 IFRS, 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 provided in this press release contained in the sections “Gross Profit on Cannabis Sales” and “Adjusted EBITDA” (pgs. 3-4) provide reconciliations of Non-IFRS measures to the most directly comparable IFRS measures.
About Curaleaf Holdings
Curaleaf Holdings, Inc. (CSE: CURA) (OTCQX: CURLF) (“Curaleaf”) is a leading international provider of consumer products in cannabis with a mission to improve lives by providing clarity around cannabis and confidence around consumption. As a high-growth cannabis company known for quality, expertise and reliability, the Company and its brands, including Curaleaf and Select, provide industry-leading service, product selection and accessibility across the medical and adult-use markets. In the United States, Curaleaf currently operates in 22 states with 131 dispensaries, 26 cultivation sites, and employs over 5,700 team members. Curaleaf International is the largest vertically integrated cannabis company in Europe with a unique supply and distribution network throughout the European market, bringing together pioneering science and research with cutting-edge cultivation, extraction and production. Curaleaf is listed on the Canadian Securities Exchange under the symbol CURA and trades on the OTCQX market under the symbol CURLF. For more information, please visit https://ir.curaleaf.com.
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