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TerrAscend Reports Record First Quarter 2023 Revenue

First quarter 2023 record Net Revenue of $69.4 million, an increase of 42.8% year-over-year

6th consecutive quarter of sequential revenue growth and 3rd consecutive quarter of positive and increasing cash flow from operations

Generated positive free cash flow for the first time since the first quarter of 2021

Gross profit margin improved 420 basis points sequentially to 48.8%

Progress continues towards TSX listing upon shareholder vote on June 22nd

TORONTO, May 11, 2023 /CNW/ - TerrAscend Corp. ("TerrAscend" or the "Company") (CSE: TER) (OTCQX: TRSSF), a leading North American cannabis operator, today reported its financial results for the first quarter ended March 31, 2023. All amounts are expressed in U.S. dollars and are prepared under U.S. Generally Accepted Accounting Principles (GAAP), unless indicated otherwise.

TerrAscend Corp. Logo (CNW Group/TerrAscend)
TerrAscend Corp. Logo (CNW Group/TerrAscend)

The following financial measures are reported as results from continuing operations due to the shutdown of the licensed producer business in Canada, which is reported as discontinued operations for all of 2022. All historical periods have been restated accordingly.

First Quarter 2023 Financial Highlights

  • Net Revenue was $69.4 million, an increase of 0.6% sequentially and 42.8% year-over-year.

  • Gross Profit Margin was 48.8%, compared to 44.6% in Q4 2022 and 32.1% in Q1 2022.

  • Adjusted Gross Profit Margin1 was 49.0%, compared to 45.3% in Q4 2022 and 40.3% in Q1 2022.

  • GAAP Net loss from continuing operations was $19.2 million, compared to $2.0 million in Q4 2022 and $13.8 million in Q1 2022.

  • EBITDA from continuing operations1 was $6.1 million, compared to $30.0 million in Q4 2022 and $1.1 million in Q1 2022.

  • Adjusted EBITDA from continuing operations1 was $12.2 million, compared to $12.2 million in Q4 2022 and $4.9 million in Q1 2022.

  • Adjusted EBITDA Margin from continuing operations1 was 17.6%, compared to 17.7% in Q4 2022 and 10.1% in Q1 2022.

  • Cashflow provided by (used in) continuing operations was $8.4 million compared to $7.3 million in Q4 2022 and ($18.8) million in Q1 2022.

  • Free cash flow was a positive $5.9 million compared to ($6.9) million in Q4 2022 and ($23.0) million in Q1 2022.

  • Cash and Cash Equivalents totaled $32.9 million as of March 31, 2023 as compared to $26.2 million as of December 31, 2022.

"Despite a challenging environment, revenue in the first quarter increased 42.8% year-over-year, gross margins significantly improved by 420 basis points sequentially to 48.8% and, importantly, we generated positive free cash flow of $5.9 million. This was our sixth consecutive quarter of sequential revenue growth and our third consecutive quarter with positive and increasing cash flow from operations," commented Jason Wild, Executive Chairman of TerrAscend. "2023 will show substantial revenue growth. We operate in a number of attractive states that are converting to adult-use, with Maryland starting on July 1st. While we would like to see the industry on stronger footing overall, we do believe that the distressed environment will present opportunities for us to acquire assets which could drive significant additional profitability for the Company."

Financial Summary Q1 2023 and Comparative Periods
All figures are restated for the Canadian business recorded as discontinued operations.

(in millions of U.S. Dollars)


Q1 2023


Q4 2022


Q1 2022

Revenue, net


69.4


69.0


48.6

Quarter-over-Quarter increase (decrease)


0.6 %


4.2 %


5.9 %

Year-over-Year increase


42.8 %


50.3 %


-2.2 %








Gross profit


33.9


30.8


15.6

Gross profit margin


48.8 %


44.6 %


32.1 %








Adjusted Gross Profit1


34.0


31.3


19.6

Adjusted Gross Profit Margin %


49.0 %


45.3 %


40.3 %








General & Administrative expense


27.7


35.2


21.5

Share-based compensation expense (included in G&A expense above)

1.7


1.6


3.4

G&A as a % of revenue, net


39.9 %


51.0 %


44.2 %








Net (loss) income from continuing operations


(19.2)


(2.0)


(13.8)








EBITDA from continuing operations1


6.1


30.0


1.1

Adjusted EBITDA from continuing operations1


12.2


12.2


4.9

Adjusted EBITDA Margin from continuing operations


17.6 %


17.7 %


10.1 %








Cash (used in) provided by operations


8.4


7.3


(18.8)

1. Adjusted Gross Profit, Adjusted Gross Profit Margin, EBITDA from continuing operations, Adjusted EBITDA from continuing operations and Adjusted EBITDA Margin from continuing operations are non-GAAP measures. Please see discussion of non-GAAP measures and reconciliation to Gross Profit (for Adjusted Gross Profit), Net Income/(Loss) (for Adjusted EBITDA from continuing operations) and Net Revenue (for Adjusted Gross Profit Margin and Adjusted EBITDA Margin from continuing operations), the closest comparable GAAP measures, at the end of this press release.


First Quarter 2023 Business and Operational Highlights

  • Applied to list common shares on the Toronto Stock Exchange (TSX), upon completion of a reorganization which is expected to qualify the Company for listing, subject to shareholder approval at the Company's annual general meeting scheduled for June 22nd, and subject to TSX approval.

  • Promoted Ziad Ghanem to Chief Executive Officer.

  • Launched Gage branded products in Maryland.

  • Partnered with The Hoffman Centers to offer free expungement services in New Jersey.

  • Held grand opening of 18th Michigan retail location at Lemonnade Center Line.

  • Appointed Jeroen De Beijer as Chief People and Culture Officer.

  • Launched adult-use cannabis sales at Cookies Detroit retail location.

  • Closed on acquisition of Allegany Medical Marijuana Dispensary (AMMD), a high performing and well located dispensary in Maryland.

  • Entered into multi-year agreement to introduce Wana's products at The Apothecarium retail stores and additional third-party retailers in New Jersey and Maryland.

Subsequent Events

  • Announced details of internal reorganization in connection with proposed uplisting to the TSX.

  • Expanded partnership with Cookies to cultivate and manufacture top-shelf genetics in Maryland.

  • Increased ownership interest in Cookies Retail Canada Corp to 95% of the issued and outstanding shares.

First Quarter 2023 Financial Results 
Net revenue for the first quarter of 2023 was $69.4 million as compared to fourth quarter of 2022 net revenue of $69.0, representing 0.6% growth sequentially and 42.8% growth year over year. The sequential growth was driven primarily by strong performance in New Jersey and the closing of the Allegany dispensary acquisition in Maryland, partially offset by first quarter versus fourth quarter seasonality.

Gross margin for the first quarter of 2023 was 48.8% as compared to 44.6% in the fourth quarter of 2022 and 32.1% in the first quarter of 2022. Adjusted gross profit margin, a non-GAAP financial measure, was 49.0% for the first quarter of 2022 as compared to 45.3% for the fourth quarter of 2022 and 40.3% for the first quarter of 2022. The 420 basis point sequential improvement in gross profit margin from the fourth quarter of 2022 to the first quarter of 2023 was driven by increased yields, optimization of mix and better utilization of capacity in New Jersey, Michigan and Maryland.

General & Administrative (G&A) expenses, excluding share-based compensation expense, for the first quarter of 2023 were $26.0 million as compared to $33.6 million in the fourth quarter of 2022 and $18.1 million in the first quarter of 2022. Excluding one-time items of $1.9 million in the first quarter primarily related to SOX implementation and legal settlements, and $9.9 million in the fourth quarter mainly related to bad debt, as previously disclosed, G&A expenses were $24.1 million and $23.7 million, respectively, with the modest increase mainly related to the acquisition of the AMMD dispensary in Maryland.  Share based compensation expense in the first quarter of 2023 was $1.7 million as compared to $1.6 million in the fourth quarter of 2022 and $3.4 million in the first quarter of 2022.

GAAP Net loss from continuing operations in the first quarter of 2023 was $19.2 million compared to $2.0 million in the fourth quarter of 2022 and $13.8 million in the first quarter of 2022.  The increase in net loss of $17.2 million quarter over quarter primarily relates to a $21.2 million reversal of goodwill and intangibles impairments in the fourth quarter of 2022 related to the finalization of the acquisition accounting for Gage.

Adjusted EBITDA from continuing operations for the first quarter of 2023, a non-GAAP measure, was $12.2 million, representing a 17.6% margin, compared to $12.2 million and a 17.7% margin in the fourth quarter of 2022 and $4.9 million and a 10.1% margin in the first quarter of 2022.

Balance Sheet and Cash Flow
Cash and cash equivalents were $32.9 million as of March 31, 2023, compared to $26.2 million as of December 31, 2022. Cash provided by operations was $8.4 million for the first quarter of 2023 compared to $7.3 million in the previous quarter.  The quarter-over-quarter increase was driven by reduced interest payments partially offset by an increase in inventory in Maryland related to the scale up of the new facility and the preparation for adult use beginning July 1st.  Accrued income tax related to the current quarter was $7.6 million.  No cash income tax payments were made during the quarter.  Capex spending was $2.5 million in the first quarter of 2023, primarily related to two store openings in Michigan, compared to $14.2 million in Q4 2022, primarily related to completion of the Hagerstown, MD facility, and $4.2 million in Q1 2022.   Free cash flow for the quarter was a positive $5.9 million compared to ($6.9) million in Q4 2022 and ($23.0) million in Q1 2022.

The Company received $12.7 million during the quarter related to a factoring with recourse agreement for employee retention credits.  The Company also closed on the acquisition of AMMD for all cash consideration of $9.6 million.

As of May 10, 2023 there were 351 million basic shares outstanding including 275 million common shares, 13 million preferred shares as converted, and 63 million exchangeable non-voting shares. Additionally, there are 65 million warrants and options outstanding at a weighted average price of $4.33.

Conference Call
TerrAscend will host a conference call today, May 11, 2023, to discuss these results. Jason Wild, Executive Chairman, Ziad Ghanem, Chief Executive Officer, and Keith Stauffer, Chief Financial Officer, will host the call starting at 5:00 p.m. Eastern time. A question-and-answer session will follow management's presentation.

CONFERENCE CALL DETAILS



Date:

Thursday, May 11, 2023

Time:

5:00 p.m. Eastern Time

RapidConnect URL:

https://emportal.ink/40NjnQ4

Webcast:

Click Here

Dial-in Number:

1-888-664-6392

Conference ID:

90703912

Replay:

416-764-8677 or 1-888-390-0541

Available until 12:00 midnight Eastern Time Thursday, May 25, 2023

Replay Entry Code: 703912#


Financial results and analyses are available on the Company's website (www.terrascend.com) and SEDAR (www.sedar.com).

The Canadian Securities Exchange ("CSE") has neither approved nor disapproved the contents of this news release. Neither the CSE nor its Market Regulator (as that term is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this release.

About TerrAscend
TerrAscend is a leading North American cannabis operator with vertically integrated operations in Pennsylvania, New Jersey, Maryland, Michigan and California and retail operations in Canada. TerrAscend operates The Apothecarium and Gage dispensary retail locations as well as scaled cultivation, processing, and manufacturing facilities in its core markets. TerrAscend's cultivation and manufacturing practices yield consistent, high-quality cannabis, providing industry-leading product selection to both the medical and legal adult-use markets. The Company owns several synergistic businesses and brands including Gage Cannabis, The Apothecarium, Ilera Healthcare, Kind Tree, Legend, State Flower, and Valhalla Confections. For more information visit www.terrascend.com.

Caution Regarding Cannabis Operations in the United States
Investors should note that there are significant legal restrictions and regulations that govern the cannabis industry in the United States. Cannabis remains a Schedule I drug under the US Controlled Substances Act, making it illegal under federal law in the United States to, among other things, cultivate, distribute, or possess cannabis in the United States. Financial transactions involving proceeds generated by, or intended to promote, cannabis-related business activities in the United States may form the basis for prosecution under applicable US federal money laundering legislation.

While the approach to enforcement of such laws by the federal government in the United States has trended toward non-enforcement against individuals and businesses that comply with medical or adult-use cannabis programs in states where such programs are legal, strict compliance with state laws with respect to cannabis will neither absolve TerrAscend of liability under U.S. federal law, nor will it provide a defense to any federal proceeding which may be brought against TerrAscend. The enforcement of federal laws in the United States is a significant risk to the business of TerrAscend and any proceedings brought against TerrAscend thereunder may adversely affect TerrAscend's operations and financial performance.

Forward Looking Information
This news release contains "forward-looking information" within the meaning of applicable securities laws. Forward-looking information contained in this press release may be identified by the use of words such as, "may", "would", "could", "will", "likely", "expect", "anticipate", "believe, "intend", "plan", "forecast", "project", "estimate", "outlook" and other similar expressions, and include statements with respect to future revenue and profits. Forward-looking information is not a guarantee of future performance and is based upon a number of estimates and assumptions of management in light of management's experience and perception of trends, current conditions and expected developments, as well as other factors relevant in the circumstances, including assumptions in respect of current and future market conditions, the current and future regulatory environment, and the availability of licenses, approvals and permits.

Although the Company believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because the Company can give no assurance that they will prove to be correct. Actual results and developments may differ materially from those contemplated by these statements. Forward-looking information is subject to a variety of risks and uncertainties that could cause actual events or results to differ materially from those projected in the forward-looking information. Such risks and uncertainties include, but are not limited to, current and future market conditions; risks related to federal, state, provincial, territorial, local and foreign government laws, rules and regulations, including federal and state laws in the United States relating to cannabis operations in the United States; and the risk factors set out in the Company's most recently filed MD&A, filed with the Canadian securities regulators and available under the Company's profile on SEDAR at www.sedar.com and in the section titled "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission on March 16, 2023.

The statements in this press release are made as of the date of this release. The Company disclaims any intent or obligation to update any forward-looking information, whether, as a result of new information, future events, or results or otherwise, other than as required by applicable securities laws.

Definition and Reconciliation of Non-GAAP Measures
In addition to reporting the financial results in accordance with GAAP, the Company reports certain financial results that differ from what is reported under GAAP. Non-GAAP measures used by management do not have any standardized meaning prescribed by GAAP and may not be comparable to similar measures presented by other companies. The Company believes that certain investors and analysts use these measures to measure a company's ability to meet other payment obligations or as a common measurement to value companies in the cannabis industry, and the Company calculates Adjusted Gross Profit and Adjusted Gross Profit Margin as Gross Profit and gross profit margin adjusted for certain material non-cash items including the one-time relief of fair value of inventory on acquisition, non-cash write downs of inventory, sales returns and write downs of inventory as a result of a vape recall in Pennsylvania, and other one-time adjustments to gross profit that management does not believe are reflective of ongoing operations. We calculate Adjusted EBITDA from continuing operations and Adjusted EBITDA Margin from continuing operations as EBITDA from continuing operations adjusted for certain material non-cash items such as inventory write downs outside of the normal course of operations, share based compensation expense, impairment charges taken on goodwill, intangible assets and property and equipment, the gain or loss recognized on the revaluation of our contingent consideration liabilities, one-time write off of accounts receivable related to one customer that was deemed uncollectible, loan modification fees related to the modification of debt, the gain recognized on the extinguishment of debt, the gain or loss recognized on the remeasurement of the fair value of the U.S denominated preferred share warrants, one time fees incurred in connection with our acquisitions and certain other adjustments management believes are not reflective of the ongoing operations and performance. Such information is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The Company believes this definition is a useful measure to assess the performance of the Company as it provides more meaningful operating results by excluding the effects of expenses that are not reflective of the Company's underlying business performance and other one-time or non-recurring expenses.

TerrAscend Corp.
Unaudited Interim Condensed Consolidated Balance Sheets
(Amounts expressed in thousands of United States dollars, except for share and per share amounts)



At



At




March 31, 2023



December 31, 2022


Assets







Current Assets







Cash and cash equivalents


$

32,931



$

26,158


Restricted cash



606




605


Accounts receivable, net



8,993




22,443


Investments



2,026




3,595


Inventory



50,810




46,335


Assets held for sale



14,266




17,349


Prepaid expenses and other current assets



3,627




4,937


Current assets from discontinued operations



525




571





113,784




121,993


Non-Current Assets







Property and equipment, net



214,035




215,812


Deposits



740




837


Operating lease right of use assets



29,951




29,451


Intangible assets, net



243,759




239,704


Goodwill



95,713




90,328


Other non-current assets



3,594




3,462





587,792




579,594


Total Assets


$

701,576



$

701,587









Liabilities and Shareholders' Equity







Current Liabilities







Accounts payable and accrued liabilities


$

50,784




44,286


Deferred revenue



2,740




2,935


Loans payable, current



51,397




48,335


Contingent consideration payable, current



4,434




5,184


Operating lease liability, current



2,314




1,857


Lease obligations under finance leases, current



535




521


Corporate income tax payable



34,737




23,077


Other current liabilities



1,663




2,599


Current liabilities from discontinued operations



7,468




9,111





156,072




137,905


Non-Current Liabilities







Loans payable, non-current



146,168




145,852


Operating lease liability, non-current



31,836




31,545


Lease obligations under finance leases, non-current



6,614




6,713


Warrant liability



267




711


Deferred income tax liability



34,498




30,700


Financing obligations



10,979




11,198


Other long term liabilities



15,841




15,792





246,203




242,511


Total Liabilities



402,275




380,416


Commitments and Contingencies







Shareholders' Equity







Share Capital







Series A, convertible preferred stock, no par value, unlimited shares authorized; 12,350 and 12,608 shares outstanding as of March 31, 2023 and December 31, 2022, respectively







Series B, convertible preferred stock, no par value, unlimited shares authorized; 600 and 600 shares outstanding as of March 31, 2023 and December 31, 2022, respectively







Series C, convertible preferred stock, no par value, unlimited shares authorized; nil and nil shares outstanding as of March 31, 2023 and December 31, 2022, respectively







Series D, convertible preferred stock, no par value, unlimited shares authorized; nil and nil shares outstanding as of March 31, 2023 and December 31, 2022, respectively







Proportionate voting shares, no par value, unlimited shares authorized; nil and nil shares outstanding as of March 31, 2023 and December 31, 2022, respectively







Exchangeable shares, no par value, unlimited shares authorized; 63,492,038 and 76,996,538 shares outstanding as of March 31, 2023 and December 31, 2022, respectively







Common stock, no par value, unlimited shares authorized; 274,653,743 and 259,624,531 shares outstanding as of March 31, 2023 and December 31, 2022, respectively







Additional paid in capital



936,404




934,972


Accumulated other comprehensive income



1,738




2,085


Accumulated deficit



(641,517)




(618,260)


Non-controlling interest



2,676




2,374


Total Shareholders' Equity



299,301




321,171


Total Liabilities and Shareholders' Equity


$

701,576



$

701,587



TerrAscend Corp.
Unaudited Interim Condensed Consolidated Statements of Operations and Comprehensive Loss
(Amounts expressed in thousands of United States dollars, except for share and per share amounts)



For the Three Months Ended





March 31, 2023



March 31, 2022


Revenue



$

69,720



$

49,060


Excise and cultivation tax




(322)




(475)


Revenue, net




69,398




48,585










Cost of Sales




35,498




32,961










Gross profit




33,900




15,624










Operating expenses:








General and administrative




27,730




21,424


Amortization and depreciation




2,029




2,175


Impairment of property and equipment




335





Total operating expenses




30,094




23,599










Income (loss) from operations




3,806




(7,975)


Other (income) expense








Loss from revaluation of contingent consideration







119


Gain on fair value of warrants and purchase option derivative asset




(438)




(5,713)


Finance and other expenses




10,087




6,655


Transaction and restructuring costs




3




615


Unrealized and realized foreign exchange (gain) loss




(31)




356


Unrealized and realized loss on investments




699





Loss from continuing operations before provision from income taxes




(6,514)




(10,007)


Provision for income taxes




12,664




3,743


Net loss from continuing operations



$

(19,178)



$

(13,750)










Discontinued operations:








   Loss from discontinued operations, net of tax




(3,591)




(2,256)


Net loss



$

(22,769)



$

(16,006)










Foreign currency translation




347




3,607


Comprehensive loss



$

(23,116)



$

(19,613)










Net (loss) income from continuing operations attributable to:








Common and proportionate Shareholders of the Company



$

(21,364)



$

(14,101)


Non-controlling interests




2,186




351










Comprehensive (loss) income from continuing operations attributable to:








Common and proportionate Shareholders of the Company



$

(25,302)



$

(19,964)


Non-controlling interests




2,186



$

351










Net loss per share








Net loss per share - basic:








Continuing operations



$

(0.08)



$

(0.07)


Discontinued operations



$

(0.01)



$

(0.01)


Net loss per share - basic



$

(0.09)



$

(0.08)


Weighted average number of outstanding common and proportionate voting shares




267,211,093




211,126,932










Net loss per share - diluted:








Continuing operations



$

(0.08)



$

(0.07)


Discontinued operations



$

(0.01)



$

(0.01)


Net loss per share - diluted



$

(0.09)



$

(0.08)


Weighted average number of outstanding common and proportionate voting shares, assuming dilution




267,211,093




211,126,932



TerrAscend Corp.
Unaudited Interim Condensed Consolidated Statements of Cash Flows
(Amounts expressed in thousands of United States dollars, except for share and per share amounts)


For the Three Months Ended



March 31, 2023



March 31, 2022



Operating activities








Net loss from continuing operations


$

(19,178)



$

(13,750)



Adjustments to reconcile net loss to net cash used in operating activities








Non-cash write downs of inventory



797




1,073



Accretion expense



4,763




(1,337)



Depreciation of property and equipment and amortization of intangible assets



4,771




4,642



Amortization of operating right-of-use assets



454




487



Share-based compensation



1,713




3,356



Deferred income tax expense



1,446




(1,134)



Gain on fair value of warrants and purchase option derivative



(438)




(5,713)



Gain on disposal of fixed assets



307






Revaluation of contingent consideration






119



Loss on derecognition of right of use assets



205






Release of indemnification asset






(25)



Unrealized and realized foreign exchange (gain) loss



(31)




356



Unrealized and realized loss on investments



699






Changes in operating assets and liabilities








Receivables



773




(2,656)



Inventory



(4,969)




3,755



Prepaid expense and other current assets



1,203




985



Deposits



97




(593)



Other assets



(131)




571



Accounts payable and accrued liabilities and other payables



6,882




(11,151)



Operating lease liability



(473)




(271)



Other liability



(14)




(437)



Contingent consideration payable






(324)



Corporate income tax payable



11,773




4,869



Deferred revenue



(195)




395



Net cash (used in) / provided by operating activities- continuing operations



10,454




(16,783)



Net cash (used in) operating activities- discontinued operations



(2,020)




(2,064)



Net cash (used in) / provided by operating activities



8,434




(18,847)











Investing activities








Investment in property and equipment



(2,497)




(3,812)



Investment in intangible assets



(14)




(106)



Principal payments received on lease receivable



111




156



Receipt of convertible debenture payment



738




-



Deposits for property and equipment






(6,058)



Deposits for business acquisition






(602)



Payments made for land contracts



(308)






Cash portion of consideration paid in acquisitions, net of cash of acquired



(9,611)




24,716



Net cash (used in) / provided by investing activities- continuing operations



(11,581)




14,294



Net cash (used in) /provided by investing activities- discontinued operations






(381)



Net cash (used in) / provided by investing activities



(11,581)




13,913











Financing activities








Transfer of Employee Retention Credit



12,677






Proceeds from options and warrants exercised



81




23,925



Loan principal paid



(1,204)






Capital contributions paid to non-controlling interests



(1,884)




(227)



Payments of contingent consideration






(6,630)



Payments made for financing obligations



(157)






Net cash provided by financing activities- continuing operations



9,513




17,068



Net cash provided by financing activities- discontinued operations



(115)






Net cash (used in) /provided by financing activities



9,398




17,068











Net increase in cash and cash equivalents and restricted cash during the period



6,251




12,134



Net effects of foreign exchange



523




(3,369)



Cash and cash equivalents and restricted cash, beginning of the period



26,763




79,642



Cash and cash equivalents and restricted cash, end of the period


$

33,537



$

88,407











Supplemental disclosure with respect to cash flows








Income taxes (refund received) paid


$

(551)



$

8



Interest paid


$

2,456



$

8,271



Lease termination fee paid





$

3,300



Non-cash transactions








Equity and warrant liability issued as consideration for acquisition


$

750



$

294,800



Shares issued for liability settlement


$

593



$

22



Accrued capital purchases


$

555



$

56



 



For the Three Months Ended

(in thousands of U.S. Dollars)


March 31, 2023


December 31, 2022


March 31, 2022

Revenue, net


69,398


69,041


48,585








Gross profit


33,900


30,798


15,624

Add the impact of:







Relief of fair value of inventory upon acquisition




1,806

Non-cash write downs of inventory




1,894

Other one time adjustments to gross profit


94


453


238

Adjusted Gross Profit


33,994


31,251


19,562

Adjusted Gross Profit Margin %


49.0 %


45.3 %


40.3 %

 



For the Three Months Ended

(in thousands of U.S. Dollars)


March 31, 2023


December 31, 2022


March 31, 2022

Revenue, net


69,398


69,041


48,585








Net loss


$                 (22,769)


$                 (12,522)


$                 (16,006)

Net Loss Margin %


-32.8 %


-18.1 %


-32.9 %

Loss from discontinued operations


3,591


10,572


2,256

Loss from continuing operations


(19,178)


(1,950)


(13,750)








Add (deduct) the impact of:







Provision for income taxes


12,664


14,819


3,743

Finance expenses


7,875


12,046


6,605

Amortization and depreciation


4,771


5,046


4,525

EBITDA from continuing operations


6,132


29,961


1,123

Add (deduct) the impact of:







Relief of fair value upon acquisition




1,806

Vape recall




1,894

Share-based compensation


1,713


1,638


3,356

Impairment of goodwill and intangible assets



(20,158)


Impairment of property and equipment and loss on disposal of fixed assets


334


241


Loss on lease termination and derecognition of ROU asset


205


1,162


Loss (gain) from revaluation of contingent consideration



(1,250)


119

Restructuring and executive severance



45


Legal settlements



623


Other one-time items


1,358


998


1,974

Bad debt expense write offs in Michigan



9,941


Loan modification fees



2,507


Employee Retention Credits Transfer Fee


2,235


(9,440)


Gain on extinguishment of debt



(4,153)


(Gain) loss on fair value of warrants and purchase option derivative asset


(437)


32


(5,713)

Indemnification asset release




(25)

Unrealized and realized loss on investments


699


(34)


Unrealized and realized foreign exchange loss (gain)


(31)


99


356

Adjusted EBITDA from continuing operations


$                   12,208


$                   12,212


$                     4,890

Adjusted EBITDA Margin from continuing operations


17.6 %


17.7 %


10.1 %

SOURCE TerrAscend

Cision
Cision

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