AWH ANNOUNCES FOURTH QUARTER AND FULL YEAR 2021 FINANCIAL RESULTS
Q4 2021 Net Revenue Increased 63.0% Quarter-over-Quarter to
Full Year 2021 Net Revenue Increased 131.3% Year-over-Year to
Company Ended Q4 2021 with
Financial Highlights
- Gross Revenue:
- Q4 2021: Total revenue of
$102.0 million decreased 2.9% quarter-over-quarter and increased 71.0% year-over-year. - FY 2021: Total revenue of
$380.4 million increased 135.8% year-over-year. - Net Revenue:
- Q4 2021: Net revenue, which excludes intercompany sale of wholesale products, decreased 6.2% quarter-over-quarter to
$88.5 million , but increased 63.0% year-over year. - FY 2021: Net revenue increased 131.3% year-over year to
$332.4 million . - Net Loss:
- Q4 2021: Net loss of
$16.5 million compared to net loss of$13.0 million in Q3 2021. - FY 2021: Net loss of
$122.7 million during the year was driven down by a$32.0 million non-cash interest expense related to the Company's initial public offering ("IPO") completed inMay 2021 . The increase in net loss was further elevated due to interest expense related to one-time prepayments of legacy loans, write-offs of unamortized deferred financing costs, and$41.7 million of tax expense, compared to a tax expense of$18.7 million in the prior year. - Adjusted EBITDA1:
- Q4 2021: Adjusted EBITDA was
$19.8 million , a 16.0% decrease quarter-over-quarter and an 82.8% increase year-over-year. Adjusted EBITDA Margin was 22.3%, a 261 basis point decrease compared to the prior quarter, but a 242 basis point increase compared to prior year. - FY 2021: Adjusted EBITDA was
$79.4 million , a 157.6% increase year-over-year. Adjusted EBITDA Margin was 23.9%, a 245 basis point increase compared to the prior year. - Balance Sheet: As of
December 31, 2021 , cash and cash equivalents were$155.5 million , and net debt2, which equals total debt less unamortized deferred financing costs less cash and cash equivalents, was$103.3 million .
Full Year 2021 Business Highlights
- Completed an IPO, making AWH the first
U.S. multi-state operator to go public via an S-1 with theSEC , rather than through a special purpose acquisition company or reverse takeover; - Commenced trading on the Canadian Securities Exchange on
May 4, 2021 , followed by the OTCQX onJuly 14, 2021 ; - Added 100,000 square feet of canopy, more than doubling cultivation capacity;
- Entered the
Ohio market and completed threeOhio acquisitions; - Opened six new dispensaries and acquired two additional dispensaries, bringing total store count to 20;
- Launched a delivery program in
Massachusetts andMichigan ; - Strengthened balance sheet with
$210 million of senior debt financing; and - Launched exclusive partnerships with both
Lowell Smokes andEdie Parker .
Management Commentary
_________________________ |
|
1 |
Adjusted Gross Profit, Adjusted Gross Margin, Adjusted EBITDA and Adjusted EBITDA Margin are a non-GAAP financial measures. Please see the "Supplemental Information (Unaudited) Regarding Non-GAAP Financial Measures" at the end of this press release for a reconciliation of non-GAAP to GAAP measures. |
2 |
Total debt less cash and cash equivalents less unamortized deferred financing costs. |
Q4 2021 Financial Overview
Net revenue, which excludes intercompany sales of wholesale products, decreased 6.2% quarter-over-quarter to
Total retail revenue increased to
Gross wholesale revenue decreased to
Q4 2021 gross profit was
Q4 2021 Adjusted Gross Profit was
While Retail Gross Profit margin increased sequentially, Wholesale Gross Profit margin decreased sequentially. Adjusted Gross Profit1 margin on a consolidated-basis decreased 389 basis points quarter-over-quarter to 42.4%. This was driven by the aforementioned challenges in the wholesale business.
Total general and administrative ("G&A") expenses for Q4 2021 were
Net loss attributable to AWH for Q4 2021 was
Adjusted EBITDA1, which adjusts for tax, interest, depreciation, amortization, equity-based compensation, and other items deemed one-time in nature, was
Full Year 2021 Financial Overview
Net revenue, which excludes intercompany sale of wholesale products, increased 131.3% year-over-year to
Total retail revenue increased to
Gross wholesale revenue increased to
Full Year 2021 gross profit was
Full Year 2021 Adjusted Gross Profit1 was
Total G&A expenses for 2021 were
Net loss attributable to AWH for 2021 was
Adjusted EBITDA1, which adjusts for tax, interest, depreciation, amortization, equity-based compensation, and other items deemed one-time in nature, was
Non-GAAP Financial Information
This press release includes certain non-GAAP financial measures as defined by the
Conference Call and Webcast
AWH will host a conference call on
About
AWH is a vertically integrated operator with assets in
Additional information relating to the Company's fourth quarter and full year 2021 results is available on the Investor Relations section of AWH's website at https://awholdings.com/investors/, the
Cautionary Note Regarding Forward-Looking Information
This news release includes forward-looking information and statements, which may include, but are not limited to, the plans, intentions, expectations, estimates, and beliefs of the Company. Words such as "expects", "continue", "will", "anticipates" and "intends" or similar expressions are intended to identify forward-looking statements. Without limiting the generality of the preceding statement, all statements in this press release relating to estimated and projected revenue, expectations regarding production capacity, anticipated capital expenditures, proceeds from sale leasebacks, expansion, profit, product demand, margins, costs, cash flows, sources of capital, growth rates and future financial and operating results are forward-looking statements. We caution investors that any such forward-looking statements are based on the Company's current projections and expectations about future events and financial trends, the receipt of all required regulatory approvals, and on certain assumptions and analysis made by the Company in light of the experience of the Company and perception of historical trends, current conditions and expected future developments and other factors management believes are appropriate.
Forward-looking information and statements involve and are subject to assumptions and known and unknown risks, uncertainties, and other factors which may cause actual events, results, performance, or achievements of the Company to be materially different from future events, results, performance, and achievements expressed or implied by forward-looking information and statements herein. Such factors include, among other, the risks and uncertainties identified in the Company's Annual Report on Form 10-K for the year ended
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS INFORMATION (UNAUDITED)
Three Months Ended |
|||||
(in thousands, except per share amounts) |
2021 |
2020 |
|||
Revenue, net |
$ |
88,495 |
$ |
54,283 |
|
Cost of goods sold |
(57,660) |
(31,391) |
|||
Gross profit |
30,835 |
22,892 |
|||
Operating expenses |
|||||
General and administrative expenses |
31,566 |
18,443 |
|||
Operating (loss) profit |
(731) |
4,449 |
|||
Other (expense) income |
|||||
Interest expense |
(7,388) |
(4,963) |
|||
Other, net |
50 |
1 |
|||
Total other expense |
(7,338) |
(4,962) |
|||
Loss before income taxes |
(8,069) |
(513) |
|||
Income tax expense |
(8,442) |
(6,990) |
|||
Net loss |
(16,511) |
(7,503) |
|||
Less: net income attributable to non-controlling interests |
— |
— |
|||
Net loss attributable to |
$ |
(16,511) |
$ |
(7,503) |
|
Net loss per share attributable to Class A and Class B stockholders of |
$ |
(0.10) |
$ |
(0.07) |
|
Weighted-average common shares outstanding — basic and diluted(1) |
171,074 |
105,207 |
(1) |
Net loss per share and weighted-average common shares outstanding have been computed on the basis of treating the historical common unit equivalents previously outstanding as shares of Class A common stock, as such historical units converted into shares of Class A common stock in the Company's conversion to a C-Corporation prior to the initial public offering. |
Year Ended |
|||||
(in thousands, except per share amounts) |
2021 |
2020 |
|||
Revenue, net |
$ |
332,381 |
$ |
143,732 |
|
Cost of goods sold |
(196,409) |
(82,818) |
|||
Gross profit |
135,972 |
60,914 |
|||
Operating expenses |
|||||
General and administrative expenses |
116,665 |
53,067 |
|||
Settlement expense |
36,511 |
— |
|||
Total operating expenses |
153,176 |
53,067 |
|||
Operating (loss) profit |
(17,204) |
7,847 |
|||
Other (expense) income |
|||||
Interest expense |
(63,989) |
(12,993) |
|||
Other, net |
256 |
7 |
|||
Total other expense |
(63,733) |
(12,986) |
|||
Loss before income taxes |
(80,937) |
(5,139) |
|||
Income tax expense |
(41,720) |
(18,702) |
|||
Net loss |
(122,657) |
(23,841) |
|||
Less: net income attributable to non-controlling interests |
— |
1,598 |
|||
Net loss attributable to |
$ |
(122,657) |
$ |
(25,439) |
|
Net loss per share attributable to Class A and Class B stockholders of |
$ |
(0.82) |
$ |
(0.27) |
|
Weighted-average common shares outstanding — basic and diluted(1) |
149,434 |
95,165 |
(1) |
Net loss per share and weighted-average shares outstanding have been computed on the basis of treating the historical common unit equivalents previously outstanding as shares of Class A common stock, as such historical units converted into shares of Class A common stock in the Company's conversion to a C-Corporation prior to the initial public offering. |
SELECTED CONDENSED CONSOLIDATED CASH FLOW INFORMATION (UNAUDITED)
Three Months Ended |
|||||
(in thousands) |
2021 |
2020 |
|||
Net cash used in operating activities |
$ |
(19,444) |
$ |
(336) |
|
Cash flows from investing activities |
|||||
Additions to capital assets |
(17,510) |
(8,354) |
|||
Investments in notes receivable |
(791) |
(4,877) |
|||
Collection of notes receivable |
82 |
527 |
|||
Acquisition of businesses, net of cash acquired |
(9,456) |
(2,717) |
|||
Net cash provided by (used in) investing activities |
(27,675) |
(15,421) |
|||
Cash flows from financing activities |
|||||
Proceeds from issuance of debt |
— |
52,624 |
|||
Repayments of debt |
(854) |
(785) |
|||
Repayments under finance leases |
— |
(141) |
|||
Debt issuance costs |
(44) |
(3,193) |
|||
Taxes withheld under equity-based compensation plans, net |
(1,012) |
— |
|||
Net cash (used in) provided by financing activities |
(1,910) |
48,505 |
|||
Net (decrease) increase in cash, cash equivalents, and restricted cash |
(49,029) |
32,748 |
|||
Cash, cash equivalents, and restricted cash at beginning of period |
204,510 |
25,349 |
|||
Cash, cash equivalents, and restricted cash at end of period |
$ |
155,481 |
$ |
58,097 |
Year Ended |
|||||
(in thousands) |
2021 |
2020 |
|||
Net cash used in operating activities |
$ |
(41,738) |
$ |
(6,004) |
|
Cash flows from investing activities |
|||||
Additions to capital assets |
(88,428) |
(26,419) |
|||
Investments in notes receivable |
(2,976) |
(5,559) |
|||
Collection of notes receivable |
327 |
527 |
|||
Proceeds from sale of assets |
930 |
26,750 |
|||
Acquisition of businesses, net of cash acquired |
(23,086) |
(26,044) |
|||
Purchases of intangible assets |
— |
(127) |
|||
Net cash used in investing activities |
(113,233) |
(30,872) |
|||
Cash flows from financing activities |
|||||
Proceeds from issuance of common stock in public offerings, net |
86,065 |
— |
|||
Proceeds from issuance of debt |
259,500 |
101,886 |
|||
Repayments of debt |
(79,267) |
(19,591) |
|||
Repurchase of warrants |
(4,156) |
— |
|||
Proceeds from finance leases |
— |
3,750 |
|||
Repayments under finance leases |
— |
(478) |
|||
Debt issuance costs |
(8,775) |
(3,399) |
|||
Taxes withheld under equity-based compensation plans, net |
(1,012) |
— |
|||
Net cash provided by financing activities |
252,355 |
82,168 |
|||
Net increase in cash, cash equivalents, and restricted cash |
97,384 |
45,292 |
|||
Cash, cash equivalents, and restricted cash at beginning of period |
58,097 |
12,805 |
|||
Cash, cash equivalents, and restricted cash at end of period |
$ |
155,481 |
$ |
58,097 |
|
|||||
(in thousands) |
2021 |
2020 |
|||
Cash and cash equivalents |
$ |
155,481 |
$ |
56,547 |
|
Restricted cash |
— |
1,550 |
|||
Inventory |
65,588 |
28,997 |
|||
Other current assets |
36,943 |
47,084 |
|||
Property and equipment, net |
239,656 |
120,540 |
|||
Operating lease right-of-use assets |
103,958 |
84,642 |
|||
Intangible assets, net |
59,271 |
50,461 |
|||
|
42,967 |
22,798 |
|||
Other noncurrent assets |
19,572 |
15,129 |
|||
Total Assets |
$ |
723,436 |
$ |
427,748 |
|
Total current liabilities |
$ |
108,804 |
$ |
115,285 |
|
Long-term debt, net |
230,846 |
152,277 |
|||
Operating lease liabilities, noncurrent |
197,295 |
156,400 |
|||
Other noncurrent liabilities |
1,423 |
— |
|||
Total stockholders' equity |
185,068 |
3,786 |
|||
Total Liabilities and Stockholders' Equity |
$ |
723,436 |
$ |
427,748 |
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (UNAUDITED)
We define "Adjusted Gross Profit" as gross profit excluding non-cash inventory costs. We define "Adjusted Gross Margin" as Adjusted Gross Profit as a percentage of net revenue. Our "Adjusted EBITDA" is a non-GAAP measure used by management that is not defined by
The following table presents Adjusted Gross Profit for the fourth quarter and year ended
Three Months ended |
year ended |
||||||||||
($ in thousands) |
2021 |
2020 |
2021 |
2020 |
|||||||
Gross Profit |
$ |
30,835 |
$ |
22,892 |
$ |
135,972 |
$ |
60,914 |
|||
Depreciation and amortization included in cost of goods sold |
3,000 |
1,059 |
9,612 |
3,696 |
|||||||
Equity-based compensation included in cost of goods sold |
2,580 |
— |
2,929 |
— |
|||||||
Non-cash inventory adjustments |
1,115 |
— |
4,914 |
146 |
|||||||
Adjusted Gross Profit |
$ |
37,530 |
$ |
23,951 |
$ |
153,427 |
$ |
64,756 |
|||
Adjusted Gross Margin |
42.4% |
44.1% |
46.2% |
45.1% |
The following table presents Adjusted EBITDA for the fourth quarter and year ended
Three Months Ended |
Year Ended |
||||||||||
($ in thousands) |
2021 |
2020 |
2021 |
2020 |
|||||||
Net loss |
$ |
(16,511) |
$ |
(7,503) |
$ |
(122,657) |
$ |
(23,841) |
|||
Income tax expense |
8,442 |
6,990 |
41,720 |
18,702 |
|||||||
Other (income) expense |
(50) |
(1) |
(256) |
(7) |
|||||||
Interest expense |
7,388 |
4,963 |
63,989 |
12,993 |
|||||||
Depreciation and amortization |
2,627 |
1,695 |
10,036 |
7,914 |
|||||||
Depreciation and amortization included in cost of goods sold |
3,000 |
1,059 |
9,612 |
3,696 |
|||||||
Non-cash inventory adjustments |
1,115 |
— |
4,914 |
146 |
|||||||
Equity-based compensation |
8,565 |
339 |
15,350 |
680 |
|||||||
Equity-based compensation included in cost of goods sold |
2,580 |
— |
2,929 |
— |
|||||||
Start-up costs(1) |
1,211 |
2,104 |
5,465 |
8,097 |
|||||||
Transaction-related and other non-recurring expenses(2) |
1,434 |
1,160 |
11,209 |
2,164 |
|||||||
Litigation settlement |
— |
— |
36,511 |
— |
|||||||
Loss on sale of assets |
(44) |
— |
605 |
286 |
|||||||
Adjusted EBITDA |
$ |
19,757 |
$ |
10,806 |
$ |
79,427 |
$ |
30,830 |
|||
Adjusted EBITDA Margin |
22.3% |
19.9% |
23.9% |
21.4% |
(1) |
One-time costs associated with acquiring real estate, obtaining licenses and permits, and other costs incurred before commencement of operations at certain locations. |
(2) |
Legal and professional fees associated with the Company's go-public transaction and other non-recurring expenses. |
View original content:https://www.prnewswire.com/news-releases/awh-announces-fourth-quarter-and-full-year-2021-financial-results-301498334.html
SOURCE
Investor Contact, Vice President, Investor Relations, Rebecca Koar, (617) 453-4042 ext. 90102, IR@awholdings.com; Media Contact, MATTIO Communications, Mark Sinclair, 650-269-9530, AWH@mattio.com