- 2020 revenue of $355 million, growth of approximately 200%
- Gross profit margin of 63% for full year 2020
- 2020 net income of $245 million
- 2020 adjusted EBITDA of $170 million, 48% margin
Verano Holdings Corp. (CSE:VRNO) (“Verano” or “the Company”), a leading multi-state cannabis company, today announced its results for the year ended December 31, 2020. The financial information included herein is reported on a pro forma consolidated basis assuming the completion of the business combination of Verano Holdings, LLC (“Verano”), Majesta Minerals Inc. (“Majesta”) and Alternative Medical Enterprises, LLC, Plants of Ruskin, LLC, RVC 360, LLC, and affiliated companies (collectively, “AltMed”) which was completed on February 11, 2021, with 2019 comparative information on the same pro forma consolidated basis and without taking into account any anticipated synergies or other adjustments. All currency is in U.S. dollars, unless otherwise noted.
Full Year 2020 Financial Highlights
- 2020 revenues increased 196% year-over-year to $355 million.
- Gross profit for full year 2020, on an unadjusted basis and not including the impact of biological assets, was $224 million or 63% of revenue, compared to $51 million or 43% of revenue in 2019.
- 2020 SG&A expense was $85 million or 24% of revenue, compared to $56 million or 46% of revenue in 2019.
- Net income in 2020, including the impact of biological assets, was $245 million compared to $10 million in 2019.
- 2020 EBITDA1 on an unadjusted basis was $153 million or 43% of revenues. Adjusted EBITDA1 was $170 million in 2020 which translates to a margin of 48%.
- Cash flow from operations for 2020 was $151 million, 2020 Free Cash Flow1 was $53 million.
Recent Operational Highlights
- Throughout 2020 and 2021 year-to-date, on a pro forma basis which includes the impact of AltMed, the Company opened 36 dispensaries. The Company has completed, or is in the process of completing, expansion of seven active cultivation facilities, in addition to the buildout of an eighth in Massachusetts.
- On February 17, 2021, the Company commenced trading on the Canadian Securities Exchange (the “CSE”) following completion of a reverse takeover transaction (the “RTO”) with Majesta. Concurrent with the completion of the RTO, the Company completed the acquisition of AltMed.
- Subsequent to going public, the Company has announced and/or closed eight accretive acquisitions, strengthening its presence in Arizona, Illinois, Pennsylvania and Ohio. Pending customary closing requirements, the Company would add 17 dispensaries, 14 active and three planned, and approximately 20,000 sq. ft. in cultivation capacity.
- The Company has a total active footprint of 73 retail stores and 770,000 square feet of cultivation square footage (includes pending acquisitions and construction in-progress).
- On March 11, 2021, Verano completed a private placement bought deal financing raising gross proceeds of approximately C$100 million. Special Warrants sold in the offering were priced at C$28.50 per warrant and are exercisable into one class A subordinate voting share of the Company.
- The Company received approval to be quoted on the Over-The-Counter market, trading under the symbol VRNOF – gives U.S. investors direct access to invest in Verano.
(1) See Non-IFRS Financial Measures below.
“2020 was a very productive year for Verano. While the global community faced unprecedented challenges, we were encouraged to see our industry embraced for its ability to positively impact health and wellness, while creating countless jobs and generating substantial tax revenue at a time that many other businesses could not,” said George Archos, Co-Founder and CEO of Verano. “Our 2020 results, in combination with progress made year-to-date in 2021, are a testament to our team’s proven ability to execute on our focused growth strategy both efficiently and profitably, including accretive M&A activity to fortify our presence in core markets, as well as material organic expansion across our national footprint at the retail level and in cultivation and production capacity. I’m tremendously proud of what the Verano team has accomplished to date, and I anticipate that we’ll continue to deliver added shareholder value throughout 2021 as we realize results from a very active 2020, all while maintaining industry-leading margins and adding great depth to our leadership.”
Balance Sheet and Liquidity
As of December 31, 2020, current assets on a pro forma consolidated basis were $321 million, including cash and cash equivalents of $31 million. The Company had working capital of $178 million and total debt, not including lease liabilities and net of issuance costs, of $38 million.
Total shares on an as-converted basis are 293,199,219 as of 4/5/21.
The financial information reported in this news release is based on the audited financial statements of Verano, Majesta and AltMed and the related management discussion and analysis (“MD&A”) for the year ended December 31, 2020 available under the Company’s profile on SEDAR at www.SEDAR.com. All financial information contained in this news release is qualified in its entirety with reference to such audited financial statements and the MD&A, which both were also filed on SEDAR in conjunction with this release.
Non-IFRS Financial Measures
Verano refers to certain non-IFRS measures to evaluate the performance of the Company. The terms “EBITDA”, “Adjusted EBITDA” and “Free Cash Flow” do not have any standardized meaning prescribed within International Financial Reporting Standards (“IFRS”) and therefore may not be comparable to similar measures presented by other companies. Such measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. EBITDA is calculated herein as net earnings from operations before interest expense, tax expense, depreciation, and amortization. Adjusted EBITDA is calculated herein as EBITDA adjusted for one-time expenses related to other expenses, gain from investment in associates and acquisition related costs. Free Cash Flow is calculated as cash flow from operations minus capital expenditures.
Management believes that these non-IFRS financial measures provide useful information to readers as a supplement to reported IFRS financial information. Management reviews these non-IFRS financial measures on a regular basis and uses them to evaluate and manage the performance of the Company’s operations. These measures should be evaluated only in conjunction with the Company’s comparable IFRS financial measures.
Conference Call and Webcast
A conference call and audio webcast with analysts and investors will be held today at 8:30 a.m. Eastern Time/7:30 a.m. Central Time, to discuss the results and answer questions.
- Investors and participants can register for the call by visiting http://www.directeventreg.com/registration/event/4829146. After registering instructions will be shared on how to join the call for those who wish to dial in.
- Live and archived webcast will be available on the Events and Presentations page of Verano’s investor relations website at investors.verano.com.