A boost to net sales has pushed cross-border operator TerrAscend, Corp. (CSE: TER) into profitable territory.
On Thursday, the company released its earnings for the quarter ending March 31.
In a statement, CEO Jason Ackerman called TerrAscend’s shift into adjusted earnings before interest, taxes, depreciation and amortization profitability “a transformational milestone.”
Stock in the business rose 6 per cent to $2.99 on the Canadian Securities Exchange Thursday.
The company reported an adjusted EBITDA of 4.9 million, up from a loss of negative $5.7 in the previous quarter.
Net sales increased 34 per cent for the quarter to $34.8 million, from $25.9 million in the previous sequential fiscal period.
In its last quarterly report, TerrAscend laid plain its strategy to focus on more profitable U.S. markets, and that strategy looks to be paying off.
Net sales in the U.S were $30.9 million for the quarter, contributing 89 per cent of total consolidated net sales. The increase was driven by the operational scale-up of TerrAscend’s stateside footprint, notably by tripling its cultivation capacity and adding two Apothecarium dispensaries in Pennsylvania.
The company ended the quarter with $31.4 million in cash and cash equivalents, up from $11.9 in the previous quarter.
Earlier in the year, Ackerman characterized his company as Canopy Growth, Corp.‘s (TSX: WEED) betting horse in the U.S. sector after receiving hefty capital injections from the titan operator.
Read more: Canopy Growth lends TerrAscend $80.5 million
Based on the success of operations to-date, TerrAscend says it anticipates second-quarter 2020 net sales of approximately $45 million, representing 30 per cent quarter-over-quarter growth. It also predicts ongoing expansion of gross margin and adjusted EBITDA margin.
Now-permanent CEO Ackerman says U.S. operations continue to perform ahead of plan.
“With our Pennsylvania expansion complete and construction of our New Jersey facilities well underway, we’re confident in the ongoing growth targets that we have set,” he said in the statement. “We remain focused on prudently investing our capital in the markets where we see the greatest and most profitable opportunities.”
Top image via Deposit Photos