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Friday, May 27, 2022
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.

Business

Cresco Labs boosts annual sales 73% to US$821.7M

But the firm acknowledges a market slowdown in Q4 it was ‘not immune to’

Cresco Labs boosts annual sales 73% to US$821.7M
Image via Cresco Labs

U.S. multistate cannabis operator Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) (FSE: 6CQ) is posting solid overall annual revenue — with a slight slow in the fourth quarter — as it reveals a blockbuster US$2-billion deal to buy rival Columbia Care Inc. (NEO: CCHW) (CSE: CCHW) (OTCQX: CCHWF).

On Wednesday, the firm released its earnings results for the fourth quarter and fiscal year, with annual sales up 73 per cent to US$821.7 million from $US476.3 million in 2020.

Cresco’s annual adjusted earnings before interest, taxes, amortization and depreciation rose 219 per cent to US$194 million from US$60.8 million.

Read more: Cresco to buy Columbia Care in US$2B blockbuster cannabis deal

Read more: Cresco Labs boosts revenues, but records US$291M charge in Q3

Net loss over the year increased significantly to negative US$217.4 million from US$23.5 million. Most of that loss is due to a non-cash impairment charge of US$291 million related to ramping down its third-party distribution business in California.

The company ended the year with $223.5 million in cash on hand.

In the fourth quarter, revenue inched up 1 per cent to US$217.8 million from US$215.5 million in the third quarter.

Adjusted EBITDA was flat in the quarter at US$57 million.

Quarterly net loss was negative US$11.9 million, improving over steep third-quarter losses due to the impairment charge. Cash flow from operations also improved to a record US$38 million.

While co-founder and CEO Charles Bachtell noted his firm’s growing revenues, margin expansion and improved EBITDA, he acknowledged the slowdown in the last part of the year.

“As we all saw, there was a slowing of market growth in the fourth quarter and we were not immune to this,” he said in a statement. “The good news is our plan is working — consumers love our brands, we maintained our leadership as the number-one wholesaler of branded cannabis, and we were the most productive retailer in the industry.”

“We remain focused on driving growth for our shareholders through optimizing operations to drive margins and market share and by opening up new markets in which to sell our leading brands.”

Company stock fell more than 7 per cent Thursday to $7.59 on the Canadian Securities Exchange.

 

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