iAnthus Capital Holdings, Inc. (“iAnthus” or the “Company”) (CSE: IAN) (OTCPK: ITHUF), which owns, operates, and partners with regulated cannabis operations across the United States, today reported its financial results for the three and nine months ended September 30, 2022. The Company’s Quarterly Report on Form 10-Q, which includes its unaudited interim condensed consolidated financial statements for the three and nine months ended September 30, 2022 and the related management’s discussion and analysis of financial condition and results of operations, can be accessed on the Securities and Exchange Commission’s (“SEC’s”) website at www.sec.gov, the Company’s SEDAR profile at www.sedar.com, and on the Company’s website at www.iAnthus.com.
Third Quarter 2022 Financial Highlights
- Revenue of $39.4 million, a sequential decrease of 10% from Q2 2022 and a decrease of 20% from the same period in the prior year.
- Gross profit of $16.2 million, a sequential decrease of 18% when compared to Q2 2022 and a decrease of 38% from the same period in the prior year.
- Gross margin of 41.1%, reflecting a sequential decrease of 4.1% from Q2 2022 and a decrease of 11.8% from the same period in the prior year.
- Net loss of $22.0 million, or a loss of $0.00 per share, compared to a loss of $373.6 million or a loss of $0.65 per share in Q2 2022, and a loss of $15.8 million, or a loss of $0.09 per share, in the same period in the prior year.
- Adjusted EBITDA(6) loss of $0.3 million, a sequential decrease from $2.3 million in Q2 2022 and a decrease from $8.1 million from the same period in the prior year. EBITDA and Adjusted EBITDA are non-GAAP measures. Reconciliation tables of EBITDA and Adjusted EBITDA as used in this news release to GAAP are included below.
| Table 1: Financial Results | ||||
| in thousands of US$, except share and per share amounts (unaudited)Revenue | Q3 2022$ 39,371 | Q2 2022$ 43,481 | Q3 2021$ 49,263 | |
| Gross profit | 16,181 | 19,668 | 26,057 | |
| Gross margin | 41.1 % | 45.2 % | 52.9 % | |
| Net loss | (21,995) | (373,562) | (15,835) | |
| Net loss per share | 0.00 | (0.65) | (0.09) |
| Table 2: Reconciliation of Net Income to Adjusted EBITDA | |||||
| in thousands of US$ | Q3 2022 | Q2 2022 | Q3 2021 | ||
| Net loss | (21,995) | (373,562) | (15,835) | ||
| Depreciation and amortization | 8,365 | 7,394 | 8,132 | ||
| Interest expense, net | 3,448 | 5,777 | 5,822 | ||
| Income tax expense | 4,325 | 5,391 | 4,090 | ||
| EBITDA (Non-GAAP) (6) | $ (5,857) | $(355,000) | $ 2,209 | ||
| Adjustments | |||||
| Impairment loss | — | — | 127 | ||
| Write-downs and other charges | (1,139) | 154 | — | ||
| Inventory reserve | (19) | 177 | — | ||
| Accretion expense | 1,020 | 775 | 767 | ||
| Share-based compensation (1) | 4,657 | 21,372 | 1,613 | ||
| Non-monetary gain from MPX NJ acquisition | — | — | — | ||
| Loss/(Gain) from change in fair value of financial instruments | 134 | 138 | 300 | ||
| Debt obligation fees (2) | — | 390 | 423 | ||
| Non-recurring charges (3) | 1,087 | 18,218 | 2,376 | ||
| Loss on debt extinguishment (4) | — | 316,577 | — | ||
| Other income (5) | (190) | (527) | — | ||
| Total Adjustments | $ 5,550 | $ 357,274 | $ 5,606 | ||
| Adjusted EBITDA (Non-GAAP) (6) | $ (307) | $ 2,274 | $ 7,815 | ||
| Margin | (1) % | 5 % | 16 % |
| (1) | Q2 2022 reflects $21.0 million of share-based compensation expense related to the graded vesting from the restricted stock units (“RSUs”) granted as a result of the consummation of the Company’s previously announced recapitalization transaction (the “Recapitalization Transaction”). Q3 2022 is ordinary course quarterly share-based compensation expense from the ongoing vesting of RSUs. |
| (2) | Reflects accrued interest on the exit fee associated with the holders of the Company’s 13.0% senior secured convertible debentures. As the Recapitalization Transaction closed on June 24, 2022, the Company will no longer incur debt obligation fees. |
| (3) | Includes one-time, non-recurring costs related to the Company’s Recapitalization Transaction, strategic review process, ongoing legal disputes, severance, and other non-recurring costs associated with having become a U.S. reporting company. |
| (4) | One-time loss of $316.6 million on debt extinguishment related to closing of the Recapitalization Transaction. |
| (5) | Q3 2022 reflects $0.2 million Employee Retention Tax Credits (“ERTC”). Q2 2022 includes accounts payable write-offs of $0.3 million and ERTC Tax Credits of $0.2 million. |
| (6) | See “Non-GAAP Financial Information” below for more information regarding the Company’s use of non-GAAP financial measures. |
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