Ayr Wellness Inc. (CSE: AYR.A, OTCQX: AYRWF) (“Ayr” or the “Company”), a vertically-integrated cannabis multi-state operator (MSO), on March 11, 2021 in connection with its fourth quarter and year-end 2020 results, provided an outlook for 2022, which included target revenues of US$725 million and Adjusted EBITDA (see “Non-IFRS Measures below) of US$325 million. As 2021 is expected to be a transitional year, no outlook is being provided for 2021.
In developing the guidance set forth above, Ayr made the following assumptions and relied on the following factors and considerations (as well as those referred to under “Forward-Looking Information” below):
- The targets are subject to the timing of pending M&A transactions:
- Arizona and Ohio will close by the end of Q1 2021
- New Jersey will close by the end of Q3 2021
- The targets are subject to the timing of on-line dates for cultivation and manufacturing capacity as well as retail store openings:
- Pennsylvania:
- 45,000 sq ft of cultivation and manufacturing capacity will come on-line in Q2 2021, followed by an additional 38,000 in Q3 2021 and an additional cultivation expansion in Q3 2022
- Four additional retail locations will open in the second half of 2021, bringing total store count to six
- Arizona: 80,000 sq ft of additional cultivation and manufacturing capacity will come on-line in Q4 2021
- New Jersey:
- 76,000 sq ft of additional cultivation and manufacturing capacity will come on-line in Q1 2022
- Adult-use sales will begin in Q1 2022
- Massachusetts:
- Three adult-use retail locations in Greater Boston will be approved to open and will open by Q1 2022
- 93,000 sq ft of additional cultivation and manufacturing capacity will come on-line in Q2 2022
- Florida:
- 42 retail locations in Florida by the end of 2021
- Steady, gradual improvement in cultivation yields in Florida and retail throughput in 2021 to reach annual retail revenues of roughly $4 million per store in 2022, in-line with the state average
- Ohio:
- 58,000 sq ft of cultivation and manufacturing capacity will come on-line in Q3 2022
Note: 2022 guidance is based on IFRS accounting standards. Ayr Wellness expects to transition to US GAAP beginning in Q1 2021 and any impact on the 2022 outlook related to the change in accounting standards is planned to be discussed in detail on the Q1 2021 conference call.
The Ayr Wellness fourth quarter and full year 2020 results press release dated March 11, 2021 can be found here. The conference call is available for replay here.
A telephonic replay of the conference call is through March 18, 2021.
Toll-free replay number: (855) 859-2056
International replay number: (404) 537-3406
Replay ID: 2287507
Financial Statements
Certain financial information reported in this news release is extracted from Ayr’s Consolidated Financial Statements for the year ended December 31, 2020. Ayr files its annual financial statements on SEDAR. All such financial information contained in this news release is qualified in its entirety by reference to such financial statements.
Definition and Reconciliation of Non-IFRS Measures
The Company reports certain non-IFRS measures that are used to evaluate the performance of its businesses and the performance of their respective segments, as well as to manage their capital structures. As non-IFRS measures generally do not have a standardized meaning, they may not be comparable to similar measures presented by other issuers. Securities regulators require such measures to be clearly defined and reconciled with their most comparable IFRS measure.
The Company references non-IFRS measures and cannabis industry metrics in this document and elsewhere. Non-IFRS measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these are provided as additional information to complement those IFRS measures by providing further understanding of the results of the operations of the Company from management’s perspective. Accordingly, these measures should not be considered in isolation, nor as a substitute for analysis of the Company’s financial information reported under IFRS. Non-IFRS measures used to analyze the performance of the Company’s businesses include “Adjusted EBITDA.”
The Company believes that these non-IFRS financial measures provide meaningful supplemental information regarding the Company’s performances and may be useful to investors because they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making. These financial measures are intended to provide investors with supplemental measures of the Company’s operating performances and thus highlight trends in the Company’s core businesses that may not otherwise be apparent when solely relying on the IFRS measures.
Adjusted EBITDA
“Adjusted EBITDA” represents income (loss) from operations, as reported, before interest and tax, adjusted to exclude non-recurring items, other non-cash items, including stock-based compensation expense, depreciation and amortization, the adjustments for the accounting of the fair value of biological assets, and further adjusted to remove acquisition related costs.
A reconciliation of how Ayr calculates Adjusted EBITDA is provided below. Additional reconciliations of Adjusted EBITDA and other disclosures concerning non-IFRS measures is provided in our MD&A for the year ended December 31, 2020. As well, the Company reminds you that Adjusted EBITDA is a non-IFRS measure.
