Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) (FSE: 6CQ) (“Cresco Labs” or the “Company”), a vertically integrated, multi-state operator and the number one U.S. wholesaler of branded cannabis products, today announced its financial results for the second quarter ended June 30, 2021. All financial information presented in this release is reported in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) and U.S. dollars, unless otherwise noted, and all comparisons to prior quarter and prior year are made on an as-converted basis under U.S. GAAP.
Second Quarter 2021 Financial Highlights
- Revenue of $210.0 million, an increase of 17.7% quarter-over-quarter and 122.8% year-over-year
- Gross profit excluding fair value markup for acquired inventory of $107.0 million, or 51.0% of revenue, an increase of 22.2% quarter-over-quarter and 233.3% year-over-year
- Net Income1 of $2.7 million, an increase of $26.8 million quarter-over-quarter and $44.4 million year-over-year
- Adjusted EBITDA2 of $45.5million, an increase of 30.1% quarter-over-quarter
- Record net wholesale revenue of $108.7 million, an increase of 13.7% quarter-over-quarter and 97.9% year-over-year
- Record retail revenue of $101.3 million from 33 stores, an increase of 22.3% quarter-over-quarter and 157.6% year-over-year
Financial Outlook
The Company reaffirms the previously provided guidance of:
- Annualized revenue run-rate of $1 billion by the end of 2021
- Gross profit margins in excess of 50% in the remaining two quarters of 2021
- Adjusted EBITDA2 margin run-rate of at least 30% by the end of 2021
| (1) | Net income includes amounts attributable to non-controlling interests. |
| (2) | See “Non-GAAP Financial Measures” at the end of this press release for more information regarding the Company’s use of non-GAAP financial measures. |
Management Commentary
“Q2 was a strong quarter of head down execution at Cresco Labs and once again we are hitting our stride as we enter the next phase of growth. During the quarter we continued to invest in infrastructure, operationalized new assets, and deployed our proven playbook to build top positions in the most important U.S. cannabis markets,” said Charles Bachtell, Co-Founder and CEO of Cresco Labs. “We are very proud of the record performance this quarter, driven primarily by organic growth, and we’re even more excited about what lies ahead as we begin recognizing contributions from growth initiatives initiated over the last 18 months. We remain dedicated to our differentiated strategy and continue to lay the foundation for long-term leadership in the U.S. cannabis industry.”
Balance Sheet and Liquidity
- As of June 30, 2021, current assets were $293.7 million, including cash and cash equivalents of $131.0 million. The Company had working capital of $99.1 million and term loan debt, net of issuance costs, of $189.4 million.
- Total shares outstanding on a fully converted basis were 417,848,980 as of June 30, 2021.
Capital Markets and M&A Activity
- On April 14, 2021, the Company closed the acquisition of Bluma Wellness Inc.
Conference Call and Webcast
The Company will host a conference call and webcast to discuss its financial results and provide investors with key business highlights on Friday, August 13, 2021, at 8:30am Eastern Time (7:30am Central Time). The conference call may be accessed via webcast or by dialing 1-844-200-6205 (US Toll Free), 1-646-904-5544 (US Local), 44-208-0682-558 (Int’l) and providing access code 354624. Archived access to the webcast will be available for one year on the Cresco Labs’ investor relations website.
