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Ayr Wellness Reports Fourth Quarter and Full Year 2022 Results

Ayr Wellness Inc.
Ayr Wellness Inc.

MIAMI, March 09, 2023 (GLOBE NEWSWIRE) --  Ayr Wellness Inc. (CSE: AYR.A, OTCQX: AYRWF) (“Ayr” or the “Company”), a leading vertically integrated U.S. multi-state cannabis operator (“MSO”), is reporting financial results for the fourth quarter and full year ended December 31, 2022. Unless otherwise noted, all results are presented in U.S. dollars.

David Goubert, President & CEO of Ayr, said, “I’d like to thank our team for pulling together to deliver a strong fourth quarter, growing our adjusted EBITDA by 20% sequentially, and a second straight quarter of generating positive cash flow from operations. In the past few months, our team has begun the process of evaluating every aspect of our business with fresh eyes, conducting a thorough review of our markets, our people, and our processes, all in service seeking to maximize the financial health of our Company and better position Ayr as a retailer of choice and house of brands.”

“Throughout that process, we have implemented cost saving measures, stepped back from certain markets that didn’t align with our core business goals, and invested further into markets and activities that did meet those goals. By better prioritizing our time, our attention, and our capital, we find ourselves better positioned to capture growth opportunities in our existing and future footprint, which we anticipate will help us grow our cash flow profile, our revenue, and adjusted EBITDA margins consistently throughout 2023.”

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Fourth Quarter Financial Summary ($ in millions, excl. margin items)

 

Q4 2021

Q3 2022

Q4 2022

% Change
Q4/Q4

% Change
Q4/Q3

Revenue

$111.8

 

$119.6

 

$124.6

 

11.5

%

4.2

%

Gross Profit

$51.2

 

$49.5

 

$55.1

 

7.6

%

11.3

%

Adjusted Gross Profit1

$63.3

 

$62.9

 

$70.5

 

11.3

%

12.1

%

Operating Loss²

$(13.9

)

$(20.7

)

$(176.2

)

NA

 

NA

 

Adjusted EBITDA1

$26.1

 

$21.7

 

$26.0

 

-0.5

%

20.1

%

Adjusted EBITDA Margin1

 

23.4

%

 

18.1

%

 

20.9

%

-250bps

 

280bps

 

Full Year 2022 Financial Summary ($ in millions, excl. margin items)

 

FY 2021

FY 2022

% Change
Y/Y

Revenue

$357.6

 

$465.6

 

30.2

%

Gross Profit

$138.1

 

$190.4

 

37.9

%

Adjusted Gross Profit1

$207.3

 

$248.5

 

19.9

%

Operating Loss²

$(56.0

)

$(243.0

)

NA

 

Adjusted EBITDA1

$98.0

 

$86.8

 

-11.4

%

Adjusted EBITDA Margin1

 

27.4

%

 

18.6

%

-880bps

 

1Adjusted EBITDA, Adjusted Gross Profit and Adjusted EBITDA Margin are non-GAAP measures, and accordingly are not standardized measures and may not be comparable to similar measures used by other companies. See Definition and Reconciliation of Non-GAAP Measures below. For a reconciliation of Operating Loss to Adjusted EBITDA as well as Gross Profit to Adjusted Gross Profit, see the reconciliation table appended to this release.

2Based on the current market conditions, including the impact of price compression, the Company incurred a non-cash goodwill impairment charge of $149M, reducing the carrying value of goodwill across all reporting units.

Fourth Quarter and Recent Highlights

  • Retail Updates

    • Opened two new dispensaries in Florida during the fourth quarter and an additional two stores in the first quarter of 2023, bringing Ayr’s total footprint to 55 dispensaries across the state.

    • Began adult-use sales alongside the Company’s established medical sales at Ayr’s Somerville, Massachusetts retail dispensary.

    • Announced Ayr’s three retail locations in New Jersey, formerly known as Garden State Dispensary, are now operating under the AYR Dispensary brand.

  • Brand/Product Updates

    • Introduced HAZE live resin concentrates and vapes across the Company’s footprint in Florida and Nevada.

    • Expanded Levia water-soluble tinctures to Ayr’s Florida retail menus.

    • Announced plans to rebrand all of the Company’s Florida stores from Liberty Health Sciences to AYR Cannabis Dispensary this summer.

  • Corporate Updates

    • Announced mutual termination of Ayr’s proposed acquisition of the equity interests of Gentle Ventures, LLC d/b/a Dispensary 33, and certain of its affiliates that collectively own and operate two licensed retail dispensaries in Chicago, Illinois.

    • Signed a definitive agreement to sell Blue Camo, LLC which comprises the Company’s Arizona assets, to AZ Goat, LLC, a group consisting primarily of the former owners of Blue Camo.

    • Entered into an option to acquire two Ohio dispensary licenses from Daily Releaf, LLC and Heaven Wellness, LLC, to begin establishing a vertical integrated presence in the state.

Full Year 2022 Highlights

  • Added 14 dispensaries across Ayr’s eight state footprint, bringing its total dispensary count to 80 stores.

  • Launched adult-use retail sales in New Jersey and Massachusetts.

  • Completed acquisitions of Cultivauna, LLC, the owner of Levia-branded cannabis infused beverages, and Herbal Remedies Dispensaries, LLC; Signed a management services agreement with Tahoe Hydroponics, LLC and NV Green, Inc.

  • Won a provisional cultivation license in Connecticut alongside Ayr’s operating partner, which will also provide Ayr with two retail licenses in the state.

  • Completed $114 million of real estate financing transactions at a blended cost of capital at closing of ~8.0% per annum.

  • Completed construction of cultivation facilities in Massachusetts, New Jersey and Ohio.

Financing and Capital Structure

The Company deployed $3.6 million of capital expenditures in Q4 and ended the year with a cash balance of $80.6 million.

As of December 31, 2022, the Company had approximately 70.9 million fully diluted shares outstanding based on a treasury method calculation as of that date.i

Outlook

The Company anticipates its financial results in the first quarter of 2023 to be consistent with industry trends, expecting revenue and adjusted EBITDA in Q1 2023 to be in-line with Q4 2022. Ayr expects to further ramp revenue, adjusted EBITDA and operating cash flow thereafter.

Conference Call

Ayr management will host a conference call, followed by a question-and-answer period.

Conference Call Date: Thursday, March 9, 2023
Time: 8:30 a.m. ET
Toll-free dial-in number: (800) 319-4610
International dial-in number: (604) 638-5340
Conference ID: 10021221

Please dial into the conference call 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact the Company’s investor relations team at ir@ayrwellness.com.

The conference will be broadcast live and available for replay here.

A telephonic replay of the conference call will also be available for one month beginning at 11:30 a.m. ET on Thursday, March 9, 2023.

Toll-free replay number: (855) 669-9658
International replay number: (412) 317-0088
Replay ID: 9867

Financial Statements

Certain financial information reported in this news release is extracted from Ayr’s Consolidated Financial Statements and MD&A for years December 31, 2022 and 2021. Ayr files its financial statements and MD&A on SEDAR and with the SEC. All financial information contained in this news release is qualified in its entirety by reference to such financial statements and MD&A.

Definition and Reconciliation of Non-GAAP Measures

The Company reports certain non-GAAP measures that are used to evaluate the performance of its businesses and the performance of their respective segments, as well as to manage their capital structures. As non-GAAP measures generally do not have a standardized meaning, they may not be comparable to similar measures presented by other issuers. Securities regulators require such measures to be clearly defined and reconciled with their most comparable GAAP measures.

Rather, these are provided as additional information to complement those GAAP measures by providing further understanding of the results of the operations of the Company from management’s perspective. Accordingly, these measures should not be considered in isolation, nor as a substitute for analysis of the Company’s financial information reported under GAAP. Non-GAAP measures used to analyze the performance of the Company’s businesses include “Adjusted EBITDA” and “Adjusted Gross Profit.”

The Company believes that these non-GAAP financial measures provide meaningful supplemental information regarding the Company’s performances and may be useful to investors because they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making. These financial measures are intended to provide investors with supplemental measures of the Company’s operating performances and thus highlight trends in the Company’s core businesses that may not otherwise be apparent when solely relying on the GAAP measures.

Adjusted EBITDA

“Adjusted EBITDA” represents (loss) income from operations, as reported under GAAP, before interest and tax, adjusted to exclude non-core costs, other non-cash items, including depreciation and amortization, and further adjusted to remove non-cash stock-based compensation, impairment expense, the accounting for the incremental costs to acquire cannabis inventory in a business combination, acquisition related costs, and start up costs.

Adjusted Gross Profit

“Adjusted Gross Profit” represents gross profit, as reported, adjusted to exclude the accounting for the incremental costs to acquire cannabis inventory in a business combination, interest, depreciation and amortization and start-up costs.

A reconciliation of how Ayr calculates Adjusted EBITDA and Adjusted Gross Profit is provided in the tables appended below. Additional reconciliations of Adjusted EBITDA, Adjusted Gross Profit and other disclosures concerning non-GAAP measures are provided in our MD&A for the three and twelve months ended December 31, 2022 and 2021.

Forward-Looking Statements

Certain statements in this MD&A are forward-looking statements within the meaning of applicable securities laws, including, but not limited to, those statements relating to the Company and its financial capacity and availability of capital and other statements that are not historical facts. These statements are based upon certain material factors, assumptions, and analyses that were applied in drawing a conclusion or making a forecast or projection, including experience of the Company, as applicable, and perception of historical trends, current conditions, and expected future developments, as well as other factors that are believed to be reasonable in the circumstances. Forward-looking statements are provided for the purpose of presenting information about management’s current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. These statements may include, without limitation, statements regarding the operations, business, financial condition, expected financial results, performance, prospects, opportunities, priorities, targets, goals, ongoing objectives, strategies, and outlook of the Company. Forward-looking statements are often identified by the words “may”, “would”, “could”, “should”, “will”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “project”, “expect”, “target”, “continue”, “forecast”, “design”, “goal” or negative versions thereof and other similar expressions.

Forward-looking estimates and assumptions involve known and unknown risks and uncertainties that may cause actual results to differ materially. While Ayr believes there is a reasonable basis for these assumptions, such estimates may not be met. These estimates represent forward-looking information. Actual results may vary and differ materially from the estimates.

Assumptions and Risks

Forward-looking information in this release is subject to the assumptions and risks as described in our MD&A for the year ended December 31, 2022.

Additional Information

For more information about the Company’s Q4 and full year 2022 operations and outlook, please view Ayr’s corporate presentation posted in the Investors section of the Company’s website at www.ayrwellness.com.

About Ayr Wellness Inc.

Ayr is an expanding vertically integrated, U.S. multi-state cannabis operator. Based on the belief that everything starts with the quality of the plant, the Company’s mission is to cultivate the finest quality cannabis at scale and deliver remarkable experiences to its customers every day.

Ayr’s leadership team brings proven expertise in growing successful businesses through disciplined operational and financial management, and is committed to driving positive impact for customers, employees and the communities they serve. For more information, please visit www.ayrwellness.com.

Company/Media Contact:

Robert Vanisko
VP, Corporate Communications
T: (786) 885-0397
Email: robert.vanisko@ayrwellness.com

Investor Relations Contact:

Sean Mansouri, CFA
Elevate IR
T: (720) 330-2829
Email: IR@ayrwellness.com


Ayr Wellness Inc.
Unaudited Consolidated Balance Sheets
(Expressed in United States Dollars, in thousands, except share amounts)

 

 

Year Ended

 

 

December 31, 2022

December 31, 2021

ASSETS

 

Current

 

 

Cash

$

80,640

 

$

154,342

 

Accounts receivable, net

 

8,949

 

 

7,413

 

Inventory

 

115,053

 

 

93,363

 

Prepaid expenses, deposits, and other current assets

 

8,885

 

 

10,949

 

Total Current Assets

 

213,527

 

 

266,067

 

Non-current

 

 

Property, plant, and equipment, net

 

326,918

 

 

275,222

 

Intangible assets, net

 

938,727

 

 

978,915

 

Right-of-use assets - operating, net

 

137,368

 

 

88,721

 

Right-of-use assets - finance, net

 

44,762

 

 

17,527

 

Goodwill

 

94,108

 

 

229,910

 

Deposits and other assets

 

8,470

 

 

3,550

 

TOTAL ASSETS

$

1,763,880

 

$

1,859,912

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

Liabilities

 

 

Current

 

 

Trade payables

$

28,533

 

$

26,983

 

Accrued liabilities

 

26,238

 

 

32,724

 

Lease liabilities - operating - current portion

 

8,176

 

 

4,195

 

Lease liabilities - finance - current portion

 

10,049

 

 

3,185

 

Contingent consideration - current portion

 

63,429

 

 

39,868

 

Purchase consideration payable

 

2,849

 

 

812

 

Income tax payable

 

46,006

 

 

28,915

 

Debts payable - current portion

 

40,523

 

 

8,112

 

Accrued interest payable - current portion

 

3,191

 

 

7,542

 

Total Current Liabilities

 

228,994

 

 

152,336

 

Non-current

 

 

 

Deferred tax liabilities, net

 

68,523

 

 

70,081

 

 

Lease liabilities - operating - non-current portion

 

134,715

 

 

87,767

 

 

Lease liabilities - finance - non-current portion

 

24,693

 

 

9,406

 

 

Construction finance liabilities

 

36,181

 

 

-

 

 

Contingent consideration - non-current portion

 

26,661

 

 

145,654

 

 

Debts payable - non-current portion

 

158,820

 

 

125,746

 

 

Senior secured notes, net of debt issuance costs

 

244,682

 

 

245,408

 

 

Accrued interest payable - non-current portion

 

4,763

 

 

3,451

 

 

Other long term liabilities

 

524

 

 

-

 

TOTAL LIABILITIES

 

928,556

 

 

839,849

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

Shareholders' equity

 

 

 

Multiple Voting Shares - no par value, unlimited authorized. Issued and outstanding - 3,696,486 shares

 

-

 

 

-

 

 

Subordinate, Restricted, and Limited Voting Shares - no par value, unlimited authorized. Issued and outstanding - 60,909,492 and 56,337,175 shares, respectively

 

-

 

 

-

 

 

Exchangeable Shares: no par value, unlimited authorized. Issued and outstanding - 6,044,339 and 7,368,285 shares, respectively

 

-

 

 

-

 

 

Additional paid-in capital

 

1,349,713

 

 

1,289,827

 

 

Treasury stock - 645,300 and 568,300 shares, respectively

 

(8,987

)

 

(7,828

)

 

Accumulated other comprehensive income

 

3,266

 

 

3,266

 

 

Accumulated deficit

 

(510,668

)

 

(265,202

)

 

Equity of Ayr Wellness Inc.

 

833,324

 

 

1,020,063

 

 

Noncontrolling interest

 

2,000

 

 

-

 

TOTAL SHAREHOLDERS' EQUITY

 

835,324

 

 

1,020,063

 

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

1,763,880

 

$

1,859,912

 



Ayr Wellness Inc.
Unaudited Consolidated Statements of Operations
(Expressed in United States Dollars, in thousands, except per share amounts)

 

 

Three Months Ended

 

Year Ended

 

 

December 31, 2022

 

December 31, 2021

 

 

December 31, 2022

 

December 31, 2021

 

 

 

 

 

 

 

 

Revenues, net of discounts

$

124,623

 

$

111,769

 

 

$

465,618

 

$

357,608

 

 

 

 

 

 

 

 

Cost of goods sold excluding fair value items

 

69,501

 

 

58,079

 

 

 

268,957

 

 

175,646

 

Incremental costs to acquire cannabis inventory in business combinations

 

-

 

 

2,453

 

 

 

6,216

 

 

43,864

 

Cost of goods sold

 

69,501

 

 

60,532

 

 

 

275,173

 

 

219,510

 

 

 

 

 

 

 

 

Gross profit

 

55,122

 

 

51,237

 

 

 

190,445

 

 

138,098

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

Selling, general, and administrative

 

67,188

 

 

47,524

 

 

 

222,092

 

 

144,444

 

 

Impairment of goodwill

 

148,531

 

 

-

 

 

 

148,531

 

 

-

 

 

Depreciation and amortization

 

14,777

 

 

13,734

 

 

 

56,856

 

 

40,659

 

 

Acquisition expense

 

852

 

 

3,837

 

 

 

5,991

 

 

9,002

 

 

Gain on sale of assets

 

-

 

 

-

 

 

 

(8

)

 

-

 

Total operating expenses

 

231,348

 

 

65,095

 

 

 

433,462

 

 

194,105

 

 

 

 

 

 

 

 

Loss from operations

 

(176,226

)

 

(13,858

)

 

 

(243,017

)

 

(56,007

)

 

 

 

 

 

 

 

Other income (expense), net

 

 

 

 

 

 

Share of loss on equity investments

 

-

 

 

-

 

 

 

-

 

 

(32

)

 

Fair value gain on financial liabilities

 

29,649

 

 

52,947

 

 

 

63,088

 

 

83,759

 

 

Interest expense, net

 

(8,395

)

 

(5,698

)

 

 

(30,575

)

 

(16,550

)

 

Interest income

 

223

 

 

43

 

 

 

275

 

 

204

 

 

Other, net

 

(74

)

 

(20

)

 

 

120

 

 

935

 

Total other income, net

 

21,403

 

 

47,272

 

 

 

32,908

 

 

68,316

 

 

 

 

 

 

 

 

Income (loss) before income taxes and noncontrolling interests

 

(154,823

)

 

33,414

 

 

 

(210,109

)

 

12,309

 

 

 

 

 

 

 

 

Income taxes

 

 

 

 

 

 

Current tax provision

 

(13,223

)

 

(15,834

)

 

 

(46,934

)

 

(45,820

)

 

Deferred tax benefit

 

(570

)

 

6,206

 

 

 

1,558

 

 

16,559

 

Total income taxes

 

(13,793

)

 

(9,628

)

 

 

(45,376

)

 

(29,261

)

 

 

 

 

 

 

 

Net loss before noncontrolling interest

 

(168,616

)

 

23,786

 

 

 

(255,485

)

 

(16,952

)

 

Net loss attributable to noncontrolling interest

 

(2,210

)

 

-

 

 

 

(10,019

)

 

-

 

 

Net loss attributable to Ayr Wellness Inc.

$

(166,406

)

$

23,786

 

 

$

(245,466

)

$

(16,952

)

 

 

 

 

 

 

 

Basic and diluted net loss per share

$

(2.40

)

$

0.35

 

 

$

(3.58

)

$

(0.30

)

 

 

 

 

 

 

 

Weighted average number of shares outstanding (basic and diluted)

 

69,357

 

 

67,352

 

 

 

68,635

 

 

57,329

 



Ayr Wellness Inc.
Unaudited Consolidated Statements of Cash Flows
(Expressed in United States Dollars, in thousands)

 

Year Ended

 

December 31, 2022

 

December 31, 2021

 

Operating activities

 

 

Net loss before noncontrolling interest

$

(255,485

)

$

(16,952

)

Adjustments for:

 

 

Fair value gain on financial liabilities

 

(63,088

)

 

(83,759

)

Stock-based compensation

 

46,115

 

 

27,155

 

Stock-based compensation - related parties

 

707

 

 

-

 

Depreciation and amortization

 

21,050

 

 

8,125

 

Amortization on intangible assets

 

71,789

 

 

50,709

 

Impairment of goodwill

 

148,531

 

 

-

 

Share of loss on equity investments

 

-

 

 

32

 

Gain on disposal of equity investments

 

-

 

 

(178

)

(Gain) loss on disposal of property, plant, and equipment

 

(8

)

 

50

 

Incremental costs to acquire cannabis inventory in a business combination

 

6,216

 

 

43,864

 

Deferred tax benefit

 

(1,558

)

 

(16,559

)

Amortization on financing costs

 

2,292

 

 

1,744

 

Amortization on financing premium

 

(3,018

)

 

(402

)

Changes in operating assets and liabilities, net of business combinations:

 

-

 

 

Accounts receivable

 

(989

)

 

(3,916

)

Inventory

 

(18,235

)

 

(50,956

)

Prepaid expenses, deposits, and other current assets

 

1,833

 

 

(2,326

)

Trade payables

 

(7,087

)

 

(1,430

)

Accrued liabilities

 

92

 

 

7,943

 

Accrued interest payable

 

(2,685

)

 

1,446

 

Lease liabilities - operating

 

2,272

 

 

1,912

 

Income tax payable

 

17,091

 

 

5,717

 

Cash used in operating activities

 

(34,165

)

 

(27,781

)

 

 

 

Investing activities

 

 

Purchase of property, plant, and equipment

 

(62,497

)

 

(91,630

)

Capitalized interest

 

(14,927

)

 

(8,373

)

Proceeds from the sale of assets, net of transaction costs

 

31,433

 

 

-

 

Cash paid for business combinations and asset acquisitions, net of cash acquired

 

(11,546

)

 

(92,270

)

Cash paid for business combinations and asset acquisitions, bridge financing

 

-

 

 

(22,750

)

Cash paid for business combinations and asset acquisitions, working capital

 

(2,205

)

 

(4,359

)

Payments for interests in equity accounted investments

 

-

 

 

(82

)

Cash received in disposal of equity investment

 

-

 

 

1,000

 

Payments made by related corporation

 

-

 

 

135

 

Purchase of intangible asset

 

(4,000

)

 

-

 

Cash received (paid) for bridge financing

 

70

 

 

(1,200

)

Deposits for business combinations, net of cash on hand

 

(2,825

)

 

(100

)

Cash used in investing activities

 

(66,497

)

 

(219,629

)

 

 

 

Financing activities

 

 

Proceeds from exercise of warrants

 

-

 

 

55,692

 

Proceeds from exercise of options

 

300

 

 

315

 

Proceeds from financing transaction, net of financing costs

 

27,600

 

 

148,646

 

Proceeds from equity offering, net of expenses

 

-

 

 

118,052

 

Proceeds from issuance of notes payable, net of financing costs

 

51,713

 

 

-

 

Payments of financing costs

 

-

 

 

(2,142

)

Payment for settlement of contingent consideration

 

(10,000

)

 

-

 

Deposits paid for financing lease and note payable

 

(924

)

 

-

 

Tax withholding on stock-based compensation awards

 

(5,258

)

 

(28,536

)

Repayments of debts payable

 

(17,924

)

 

(8,749

)

Repayments of lease liabilities - finance (principal portion)

 

(10,117

)

 

(6,949

)

Repurchase of Equity Shares

 

(8,430

)

 

(1,815

)

Cash provided by financing activities

 

26,960

 

 

274,514

 

 

 

 

Net (decrease) increase in cash

 

(73,702

)

 

27,104

 

Cash, beginning of the period

 

154,342

 

 

127,238

 

Cash, end of the period

$

80,640

 

$

154,342

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

Interest paid during the period, net

 

49,820

 

 

14,244

 

Income taxes paid during the period

 

30,915

 

 

41,303

 

Non-cash investing and financing activities:

 

 

Recognition of right-of-use assets for operating leases

 

54,396

 

 

68,578

 

Recognition of right-of-use assets for finance leases

 

32,444

 

 

18,576

 

Issuance of promissory note related to business combinations

 

16,000

 

 

-

 

Issuance of Equity Shares related to business combinations and asset acquisitions

 

6,352

 

 

576,196

 

Issuance of Equity Shares related to equity component of debt

 

-

 

 

7,429

 

Issuance of Equity Shares related to settlement of contingent consideration

 

11,748

 

 

-

 

Issuance of promissory note related to settlement of contingent consideration

 

14,934

 

 

-

 

Repurchase of Equity Shares

 

-

 

 

7,193

 

Cancellation of Equity Shares

 

78

 

 

-

 

Capital expenditure disbursements for cultivation facility

 

8,402

 

 

-

 

 

 

 



Ayr Wellness Inc.
Unaudited Consolidated Adjusted EBITDA and Gross Profit Reconciliation
(Expressed in United States Dollars, in thousands)

 

 

 

 

Three Months Ended

Year Ended

 

 

 

 

December 31, 2022

 

December 31, 2021

 

December 31, 2022

 

December 31, 2021

 

(In thousands)

 

 

 

$

 

$

 

$

 

$

 

Loss from operations (GAAP)

 

 

 

(176,226

)

(13,859

)

(243,017

)

(56,007

)

 

 

 

 

 

 

 

 

Incremental costs to acquire cannabis inventory in a business combination

 

-

 

2,453

 

6,216

 

43,864

 

Interest (within cost of goods sold "COGS")

 

 

1,224

 

486

 

4,199

 

1,408

 

Depreciation and amortization (from statement of cash flows)

 

25,284

 

21,010

 

92,839

 

58,834

 

Acquisition costs

 

 

 

852

 

3,837

 

5,991

 

9,002

 

Stock-based compensation, non-cash

 

 

17,374

 

6,767

 

46,822

 

27,155

 

Impairment of goodwill

 

 

 

148,531

 

-

 

148,531

 

-

 

Start-up costs1

 

 

 

3,016

 

3,594

 

12,457

 

10,031

 

Other2

 

 

 

5,958

 

1,848

 

12,794

 

3,688

 

Loss (gain) on sale of assets

 

 

 

-

 

-

 

(8

)

-

 

 

 

 

 

202,239

 

39,995

 

329,841

 

153,982

 

 

 

 

 

 

 

 

 

Adjusted EBITDA (non-GAAP)

 

 

 

26,013

 

26,136

 

86,824

 

97,975

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 These are set-up costs to prepare a location for its intended use. Start-up costs are expensed as incurred and are not indicative of ongoing operations

 

 

2 Other non-core costs including non-operating adjustments, severance costs and non-cash inventory write-downs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

Year Ended

 

 

 

 

December 31, 2022

 

December 31, 2021

 

December 31, 2022

 

December 31, 2021

 

(In thousands)

 

 

 

$

 

$

 

$

 

$

 

Gross profit (GAAP)

 

 

 

55,122

 

51,237

 

190,445

 

138,098

 

 

 

 

 

 

 

 

 

Incremental costs to acquire cannabis inventory in a business combination

 

-

 

2,453

 

6,216

 

43,864

 

Interest (within COGS)

 

 

 

1,224

 

486

 

4,199

 

1,408

 

Depreciation and amortization (within COGS)

 

 

10,507

 

7,276

 

35,982

 

18,175

 

Start-up costs (within COGS)

 

 

 

747

 

1,875

 

3,900

 

5,709

 

Other (within COGS)

 

 

 

2,883

 

-

 

7,766

 

-

 

 

 

 

 

 

 

 

 

Adjusted Gross Profit (non-GAAP)

 

 

70,483

 

63,327

 

248,508

 

207,254

 

 

 

 

 

 

 

 

 

i Includes pending M&A and excludes Ayr granted but unvested service-based LTIP shares totaling 5.3 million.