TerrAscend Corp. (“TerrAscend” or the “Company”) (TSX: TSND, OTCQX:
TSNDF), a leading North American cannabis company, today reported
its financial results for the third quarter ended September 30,
2024. All amounts are expressed in U.S. dollars and are prepared
under U.S. Generally Accepted Accounting Principles (“GAAP”),
unless indicated otherwise. The financial results of the Company
include all entities that are consolidated in the Company's
Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2024 (the “Consolidated Entities”). Any references in
this press release to TerrAscend or the Company include references
to the Company and the Consolidated Entities.
The following financial measures are reported as
results from continuing operations due to the shutdown of the
Company’s licensed producer business in Canada, which is reported
as discontinued operations through September 30, 2023. All
historical periods have been restated accordingly.
Third Quarter 2024 Financial
Highlights
- Net Revenue was
$74.2 million, compared to $77.5 million in Q2 2024.
- Gross Profit
Margin was 48.8%, compared to 48.6% in Q2 2024.
- GAAP Net loss from
continuing operations was $21.4 million, compared to a net
loss of $6.2 million in Q2 2024.
- EBITDA from continuing
operations1 was $6.6 million, compared to $18.6 million in
Q2 2024.
- Adjusted EBITDA from
continuing operations1 was $13.7 million, compared to
$15.6 million in Q2 2024.
- Adjusted EBITDA
Margin from continuing
operations1 was 18.5%, compared to 20.2% in Q2 2024.
- Net Cash provided by
continuing operations was $1.8 million.
- Free Cash Flow1
was $1.5 million.
“Our core business was solid during the third
quarter as we maintained leading positions in our key markets,
including the #1 market share position in New Jersey. Importantly,
the third quarter marked our ninth consecutive quarter of positive
cash flow from continuing operations and the fifth consecutive
quarter of positive free cash flow. Our consistent positive cash
flow generation supports our ability to execute our growth
strategy, which includes aggressive pursuit of M&A,” stated
Jason Wild, Executive Chairman of TerrAscend. “To that end, I am
pleased that today we announced the signing of a definitive
agreement, which enables us to enter Ohio through the acquisition
of a well situated and profitable dispensary. Our intention is to
assemble a leading retail footprint in Ohio by acquiring
high-quality stores, just as we did in Maryland. From a regulatory
perspective, we are looking forward to the upcoming DEA hearing
concerning the proposed rescheduling of cannabis, and the upcoming
oral arguments in the David Boies lawsuit against U.S. Attorney
General Garland seeking equal treatment for legal, state regulated
cannabis businesses.”
Financial Summary Q3 2024 and Comparative Periods (Refer
to the Company’s 10Q for further details)All figures are
restated for the Canadian business recorded as discontinued
operations through Q3 2023.
| (in millions of U.S.
Dollars) |
|
Q3 2024 |
|
|
Q2 2024 |
|
|
Revenue, net |
|
|
74.2 |
|
|
|
77.5 |
|
| Quarter-over-Quarter |
|
|
-4.3 |
% |
|
|
|
|
| |
|
|
|
|
|
|
| Gross profit |
|
|
36.2 |
|
|
|
37.7 |
|
| Gross profit margin |
|
|
48.8 |
% |
|
|
48.6 |
% |
| |
|
|
|
|
|
|
| General & Administrative
expenses |
|
|
31.6 |
|
|
|
24.1 |
|
| Share-based compensation
expense (included in G&A expenses above) |
|
|
4.3 |
|
|
|
2.0 |
|
| G&A as a % of revenue,
net |
|
|
42.6 |
% |
|
|
31.1 |
% |
| |
|
|
|
|
|
|
| Net loss from continuing
operations |
|
|
(21.4 |
) |
|
|
(6.2 |
) |
| |
|
|
|
|
|
|
| EBITDA from continuing
operations |
|
|
6.6 |
|
|
|
18.6 |
|
| |
|
|
|
|
|
|
| Adjusted EBITDA from
continuing operations1 |
|
|
13.7 |
|
|
|
15.6 |
|
| Adjusted EBITDA Margin from
continuing operations1 |
|
|
18.5 |
% |
|
|
20.2 |
% |
| |
|
|
|
|
|
|
| Net cash provided by
operations - continuing operations |
|
|
1.8 |
|
|
|
13.1 |
|
| |
|
|
|
|
|
|
| Free Cash Flow1 |
|
|
1.5 |
|
|
|
11.7 |
|
| |
|
|
|
|
|
|
|
|
1. EBITDA from continuing operations, Adjusted
EBITDA from continuing operations, Adjusted EBITDA Margin from
continuing operations, and Free Cash Flow are non-GAAP measures
defined in the section titled “Definition and Reconciliation of
Non-GAAP Measures” below and reconciled to the most directly
comparable GAAP measure, at the end of this release.
Third Quarter 2024 Business and Operational
Highlights
- Achieved 9th consecutive quarter of positive cash flow provided
by continuing operations and 5th consecutive quarter of positive
free cash flow1.
- Maintained #1 market share position in New Jersey through the
third quarter of 2024, according to BDSA.
- Grew wholesale revenue in Maryland by 26%
quarter-over-quarter.
- Nearly doubled gross margin in Maryland from 25% at the end of
2023 to nearly 50% in the third quarter of 2024.
- Closed on a senior secured term loan for gross proceeds of $140
million carrying an interest rate of 12.75%, maturing in August
2028, and containing no warrants or prepayment penalties.
- The Board of Directors authorized the Company to commence a
stock repurchase program to repurchase up to $10 million of the
Company’s common shares.
- Completed a multi-year implementation of an enterprise resource
planning (ERP) tech stack, which is designed to establish a solid
foundation from which to grow organically and expand through
M&A.
Subsequent Events:
- Signed definitive agreement to
enter the Ohio market through the acquisition of a well situated
and profitable dispensary.
- Statute of limitations for the
Company’s 2020 tax filing expired which will enable the Company to
remove the uncertain tax position on its balance sheet related to a
refund in the amount of $8.4 million.
Third Quarter 2024 Financial
ResultsNet revenue for the third quarter of 2024 was $74.2
million as compared to $77.5 million for the second quarter of
2024. This decrease was mainly due to declines in wholesale revenue
in New Jersey and retail revenue in Michigan, partially offset by
26% wholesale growth in Maryland.
Gross profit margin for the third quarter of
2024 was 48.8% as compared to 48.6% in the second quarter of 2024
and 48.0% in the first quarter of 2024. This positive trend
throughout the year was driven by improvements in Maryland, while
margins have remained relatively stable in Pennsylvania, New
Jersey, and Michigan.
General & Administrative expenses (G&A)
for the third quarter of 2024 were $31.6 million as compared to
$24.1 million in the second quarter of 2024. Excluding stock based
compensation expense, and two one-time items which occurred in the
second quarter of 2024, G&A expenses were flat
quarter-over-quarter. These one-time items include a reversal of
bad debt and insurance recovery proceeds totaling $5.0 million.
Net loss from continuing operations for the
third quarter of 2024 was $21.4 million, compared to a net loss of
$6.2 million in the second quarter of 2024. The sequential increase
in net loss was driven by a $1.9 million reduction in Adjusted
EBITDA from continuing operations as well as several one-time
non-cash accounting items totaling $13 million, which include a
reversal of bad debt expense in the second quarter of 2024, a gain
on termination of a lease in the second quarter of 2024, a change
in accounting for stock based compensation expense, a loss on
extinguishment of debt related to the Company’s recent refinancing,
and a loss on fair value of derivative liabilities.
Adjusted EBITDA from continuing operations for
the third quarter of 2024 was $13.7 million, or 18.5% of revenue,
as compared to $15.6 million, or 20.2% of revenue, in the second
quarter of 2024. The reduction in Adjusted EBITDA from continuing
operations was driven by the decline in revenue
quarter-over-quarter.
Balance Sheet and Cash FlowCash
and cash equivalents, including restricted cash, were $27.2 million
as of September 30, 2024, compared to $30.5 million as of June 30,
2024. Net cash provided by continuing operations was $1.8 million
for the third quarter of 2024. This positive result represented the
Company’s ninth consecutive quarter of positive cash flow from
continuing operations. Capex spending was negligible in the
quarter. Free cash flow was $1.5 million in the third quarter,
representing the Company’s fifth consecutive quarter of positive
free cash flow.
During the quarter, $2.9 million was distributed
to the Company’s New Jersey minority partners and the Company paid
down $1.0 million of debt, excluding debt retired as part of the
Company’s senior secured term loan with FocusGrowth.
On August 1st, the Company closed on a senior
secured term loan (the “Loan”) for total gross proceeds of $140
million from funds managed by FocusGrowth Asset Management, LP
(“FocusGrowth”), a leading capital provider to the cannabis sector,
along with other members of a loan syndicate. The Loan included an
initial draw of $114 million in gross proceeds by certain of the
Consolidated Entities in Pennsylvania, Maryland and California,
followed by a second draw of $26 million in gross proceeds
completed in September 2024 by the Consolidated Entities in
Michigan. The Loan carries an interest rate of 12.75%, matures in
August 2028, contains no prepayment penalties, and is guaranteed by
the Company and TerrAscend USA, Inc. No warrants were issued as
part of the Loan. The net proceeds were used to retire the
Company’s existing indebtedness in Pennsylvania and Michigan.
On August 20th, the Company announced
commencement of a share repurchase program (“Share Repurchase
Program”) to repurchase up to $10 million of the Company’s common
shares (“Shares”), from time to time over a 12-month period. The
Share Repurchase Program became effective on August 22, 2024, and
remains in effect through August 21, 2025. During the third quarter
of 2024, the Company repurchased 107,400 Shares for an aggregate
repurchase price of $133 thousand. There is currently approximately
$9.87 million remaining available under the Share Repurchase
Program.
As of November 5, 2024, there were approximately
369 million basic shares of the Company issued and outstanding,
including 292 million common shares, 13 million preferred shares,
as converted, and 63 million exchangeable shares. Additionally,
there are 44 million warrants and options outstanding at a weighted
average price of $3.78.
Conference CallTerrAscend will
host a conference call today, November 6, 2024, to discuss these
results. Jason Wild, Executive Chairman, Ziad Ghanem, President and
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.
|
Date: |
Wednesday, November 6, 2024 |
|
Time: |
5:00 p.m. Eastern Time |
|
Webcast: |
https://app.webinar.net/9j6aMNoEX1d |
|
Dial-in Number: |
1-888-510-2154 |
|
Replay: |
1-289-819-1450 or 1-888-660-6345Available until 12:00 midnight
Eastern Time Wednesday, November 20, 2024 Replay Entry Code:
37705# |
|
|
|
Financial results and analyses are available on
the Company’s website (www.terrascend.com), the SEC's Electronic
Data Gathering and Analysis Retrieval System (EDGAR) (www.sec.gov),
and SEDAR+ (www.sedarplus.ca).
The Toronto Stock Exchange (“TSX”) has
neither approved nor disapproved the contents of this news release.
Neither the TSX nor any securities regulator accepts responsibility
for the adequacy or accuracy of this release.
About TerrAscendTerrAscend is a
leading TSX-listed cannabis company with interests across the North
American cannabis sector, including vertically integrated
operations in Pennsylvania, New Jersey, Maryland, Michigan and
California through TerrAscend Growth Corp. and retail operations in
Canada through TerrAscend Canada Inc. TerrAscend operates The
Apothecarium, Gage and other 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 or licenses several synergistic businesses and
brands including Gage Cannabis, The Apothecarium, Cookies,
Lemonnade, Ilera Healthcare, Kind Tree, Legend, State Flower, Wana,
and Valhalla Confections. For more information visit
www.terrascend.com.
Caution Regarding Cannabis Operations in
the United StatesInvestors 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 InformationThis
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 the Company’s expectations regarding
liquidity and the impact of its refinancing; the Company’s ability
to execute on its growth strategy, including the pursuit of
expansion opportunities through M&A; the Company’s potential
expansion into other markets, including Ohio; and the Company’s
expectations regarding U.S federal regulatory reform.
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.sedarplus.ca and in the
section titled “Risk Factors” in the Company’s Annual Report for
the year ended December 31, 2023 filed with the Securities and
Exchange Commission (the “SEC”) on March 14, 2024, as updated by
its Quarterly Report on Form 10-Q for the quarter ended September
30, 2024 to be filed with the SEC.
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 MeasuresIn 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: (i) EBITDA from continuing operations and
Adjusted EBITDA from continuing operations as net loss, adjusted to
exclude provision for income taxes, finance expenses, depreciation
and amortization, share-based compensation, loss on extinguishment
of debt, loss (gain) from revaluation of contingent consideration,
loss (gain) on disposal of fixed assets, impairment of property and
equipment and right of use assets, bad debt recovery, unrealized
and realized loss on investments, (gain) loss on lease termination
and derecognition of finance lease, unrealized and realized foreign
exchange (gain) loss, (gain) loss on fair value of derivative
liabilities and purchase option derivative assets, Employee
Retention Credits and Transfer Fee, and certain other items, which
management believes is not reflective of the ongoing operations and
performance of the Company, (ii) Free Cash Flow as net cash
provided by operating activities from continuing operations as
presented in the Consolidated Statements of Cash Flows, less
capital expenditures for property and equipment, and (iii) General
& Administrative expenses to General & Administrative
expenses excluding stock-based compensation, bad debt and insurance
recovery. 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.
For more information regarding TerrAscend: Keith
StaufferChief Financial Officerir@terrascend.com 855-837-7295
|
TerrAscend Corp. |
|
Consolidated Balance Sheet |
| (Amounts expressed
in thousands of United States dollars, except for share and per
share amounts) |
| |
| |
|
At |
|
|
At |
|
|
|
|
September 30, 2024 |
|
|
December 31, 2023 |
|
| Assets |
|
|
|
|
|
|
| Current
assets |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
26,636 |
|
|
$ |
22,241 |
|
|
Restricted cash |
|
|
606 |
|
|
|
3,106 |
|
|
Accounts receivable, net |
|
|
17,569 |
|
|
|
19,048 |
|
|
Investments |
|
|
1,751 |
|
|
|
1,913 |
|
|
Inventory |
|
|
51,424 |
|
|
|
51,683 |
|
|
Prepaid expenses and other current assets |
|
|
7,720 |
|
|
|
4,898 |
|
|
Total current assets |
|
|
105,706 |
|
|
|
102,889 |
|
| Non-current
assets |
|
|
|
|
|
|
|
Property and equipment, net |
|
|
190,526 |
|
|
|
196,215 |
|
|
Deposits |
|
|
284 |
|
|
|
337 |
|
|
Operating lease right of use assets |
|
|
42,061 |
|
|
|
43,440 |
|
|
Intangible assets, net |
|
|
210,699 |
|
|
|
215,854 |
|
|
Goodwill |
|
|
106,929 |
|
|
|
106,929 |
|
|
Other non-current assets |
|
|
725 |
|
|
|
854 |
|
|
Total non-current assets |
|
|
551,224 |
|
|
|
563,629 |
|
| Total
assets |
|
$ |
656,930 |
|
|
$ |
666,518 |
|
| |
|
|
|
|
|
|
| Liabilities and
shareholders' equity |
|
|
|
|
|
|
| Current
liabilities |
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
46,381 |
|
|
$ |
49,897 |
|
|
Deferred revenue |
|
|
4,969 |
|
|
|
4,154 |
|
|
Loans payable, current |
|
|
7,701 |
|
|
|
137,737 |
|
|
Contingent consideration payable, current |
|
|
2,546 |
|
|
|
6,446 |
|
|
Operating lease liability, current |
|
|
2,431 |
|
|
|
1,244 |
|
|
Derivative liability, current |
|
|
756 |
|
|
|
— |
|
|
Lease obligations under finance leases, current |
|
|
1,821 |
|
|
|
2,030 |
|
|
Corporate income tax payable |
|
|
11,075 |
|
|
|
4,775 |
|
|
Other current liabilities |
|
|
775 |
|
|
|
717 |
|
|
Total current liabilities |
|
|
78,455 |
|
|
|
207,000 |
|
| Non-current
liabilities |
|
|
|
|
|
|
|
Loans payable, non-current |
|
|
182,578 |
|
|
|
61,633 |
|
|
Operating lease liability, non-current |
|
|
43,103 |
|
|
|
45,384 |
|
|
Lease obligations under finance leases, non-current |
|
|
— |
|
|
|
407 |
|
|
Derivative liability, non-current |
|
|
1,727 |
|
|
|
5,162 |
|
|
Convertible debt |
|
|
8,604 |
|
|
|
7,266 |
|
|
Deferred income tax liability |
|
|
16,189 |
|
|
|
17,175 |
|
|
Contingent consideration payable, non-current |
|
|
1,827 |
|
|
|
— |
|
|
Liability on uncertain tax position and other long term
liabilities |
|
|
117,331 |
|
|
|
81,751 |
|
|
Total non-current liabilities |
|
|
371,359 |
|
|
|
218,778 |
|
| Total
liabilities |
|
|
449,814 |
|
|
|
425,778 |
|
| Commitments and
contingencies |
|
|
|
|
|
|
| Shareholders'
equity |
|
|
|
|
|
|
|
Share capital |
|
|
|
|
|
|
|
Series A, convertible preferred stock, no par value, unlimited
shares authorized; 12,350 and 12,350 shares outstanding as of
September 30, 2024 and December 31, 2023,
respectively |
|
|
— |
|
|
|
— |
|
|
Series B, convertible preferred stock, no par value, unlimited
shares authorized; 600 and 600 shares outstanding as of
September 30, 2024 and December 31, 2023,
respectively |
|
|
— |
|
|
|
— |
|
|
Exchangeable shares, no par value, unlimited shares authorized;
63,492,038 and 63,492,038 shares outstanding as of
September 30, 2024 and December 31, 2023,
respectively |
|
|
— |
|
|
|
— |
|
|
Common shares, no par value, unlimited shares authorized;
292,394,258 and 288,327,497 shares outstanding as of
September 30, 2024 and December 31, 2023,
respectively |
|
|
— |
|
|
|
— |
|
|
Treasury stock, no par value; 107,400 and nil shares outstanding as
of September 30, 2024 and December 31, 2023,
respectively |
|
|
— |
|
|
|
— |
|
|
Additional paid in capital |
|
|
950,554 |
|
|
|
944,859 |
|
|
Accumulated other comprehensive income |
|
|
2,166 |
|
|
|
1,799 |
|
|
Accumulated deficit |
|
|
(746,665 |
) |
|
|
(704,162 |
) |
|
Non-controlling interest |
|
|
1,061 |
|
|
|
(1,756 |
) |
| Total shareholders'
equity |
|
|
207,116 |
|
|
|
240,740 |
|
| Total liabilities and
shareholders' equity |
|
$ |
656,930 |
|
|
$ |
666,518 |
|
| |
|
|
|
|
|
|
|
|
|
TerrAscend Corp. |
|
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 |
|
|
For the Nine Months Ended |
|
|
|
|
|
September 30, 2024 |
|
|
September 30, 2023 |
|
|
|
September 30, 2024 |
|
|
September 30, 2023 |
|
|
Revenue, net |
|
|
$ |
74,168 |
|
|
$ |
89,240 |
|
|
|
$ |
232,324 |
|
|
$ |
230,762 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cost of
sales |
|
|
|
37,952 |
|
|
|
41,435 |
|
|
|
|
119,694 |
|
|
|
112,831 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gross
profit |
|
|
|
36,216 |
|
|
|
47,805 |
|
|
|
|
112,630 |
|
|
|
117,931 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative |
|
|
|
31,552 |
|
|
|
29,299 |
|
|
|
|
83,620 |
|
|
|
87,505 |
|
|
Amortization and depreciation |
|
|
|
2,202 |
|
|
|
2,664 |
|
|
|
|
6,607 |
|
|
|
6,935 |
|
|
Impairment of property and equipment and right of use assets |
|
|
|
— |
|
|
|
— |
|
|
|
|
2,438 |
|
|
|
28 |
|
|
Other operating expense (income) |
|
|
|
8 |
|
|
|
(1,879 |
) |
|
|
|
(1,178 |
) |
|
|
(1,562 |
) |
| Total operating
expenses |
|
|
|
33,762 |
|
|
|
30,084 |
|
|
|
|
91,487 |
|
|
|
92,906 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income from
operations |
|
|
|
2,454 |
|
|
|
17,721 |
|
|
|
|
21,143 |
|
|
|
25,025 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other expense
(income) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss (gain) from revaluation of contingent consideration |
|
|
|
327 |
|
|
|
(645 |
) |
|
|
|
3,547 |
|
|
|
(645 |
) |
|
Loss on extinguishment of debt |
|
|
|
1,662 |
|
|
|
— |
|
|
|
|
1,662 |
|
|
|
— |
|
|
(Gain) loss on fair value of derivative liabilities and purchase
option derivative assets |
|
|
|
(669 |
) |
|
|
3,217 |
|
|
|
|
(2,608 |
) |
|
|
2,564 |
|
|
Finance and other expenses |
|
|
|
8,408 |
|
|
|
10,083 |
|
|
|
|
25,888 |
|
|
|
28,341 |
|
|
Transaction and restructuring costs |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
392 |
|
|
Unrealized and realized foreign exchange (gain) loss |
|
|
|
(214 |
) |
|
|
(43 |
) |
|
|
|
175 |
|
|
|
(175 |
) |
|
Unrealized and realized loss (gain) on investments |
|
|
|
(14 |
) |
|
|
5 |
|
|
|
|
213 |
|
|
|
2,365 |
|
| (Loss) income from
continuing operations before provision for income
taxes |
|
|
|
(7,046 |
) |
|
|
5,104 |
|
|
|
|
(7,734 |
) |
|
|
(7,817 |
) |
|
Provision for income taxes |
|
|
|
14,373 |
|
|
|
13,543 |
|
|
|
|
34,773 |
|
|
|
32,655 |
|
| Net loss from
continuing operations |
|
|
$ |
(21,419 |
) |
|
$ |
(8,439 |
) |
|
|
$ |
(42,507 |
) |
|
$ |
(40,472 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Discontinued
operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from discontinued operations, net of tax |
|
|
$ |
— |
|
|
$ |
(232 |
) |
|
|
$ |
— |
|
|
$ |
(4,444 |
) |
| Net loss |
|
|
$ |
(21,419 |
) |
|
$ |
(8,671 |
) |
|
|
$ |
(42,507 |
) |
|
$ |
(44,916 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Foreign currency translation
adjustment |
|
|
|
291 |
|
|
|
(280 |
) |
|
|
|
(367 |
) |
|
|
475 |
|
| Comprehensive
loss |
|
|
$ |
(21,710 |
) |
|
$ |
(8,391 |
) |
|
|
$ |
(42,140 |
) |
|
$ |
(45,391 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss from
continuing operations attributable to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Common and proportionate
Shareholders of the Company |
|
|
$ |
(23,148 |
) |
|
$ |
(10,601 |
) |
|
|
$ |
(48,383 |
) |
|
$ |
(46,963 |
) |
| Non-controlling interests |
|
|
$ |
1,729 |
|
|
$ |
2,162 |
|
|
|
$ |
5,876 |
|
|
$ |
6,491 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Comprehensive loss
attributable to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common and proportionate Shareholders of the Company |
|
|
$ |
(23,439 |
) |
|
$ |
(10,553 |
) |
|
|
$ |
(48,016 |
) |
|
$ |
(51,882 |
) |
|
Non-controlling interests |
|
|
$ |
1,729 |
|
|
$ |
2,162 |
|
|
|
$ |
5,876 |
|
|
$ |
6,491 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss per share -
basic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
|
$ |
(0.08 |
) |
|
$ |
(0.04 |
) |
|
|
$ |
(0.17 |
) |
|
$ |
(0.17 |
) |
|
Discontinued operations |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
(0.02 |
) |
| Net loss per share -
basic |
|
|
$ |
(0.08 |
) |
|
$ |
(0.04 |
) |
|
|
$ |
(0.17 |
) |
|
$ |
(0.19 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average number of
outstanding common shares |
|
|
|
291,647,146 |
|
|
|
287,072,972 |
|
|
|
|
291,252,902 |
|
|
|
276,562,869 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss per share -
diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
|
$ |
(0.08 |
) |
|
$ |
(0.04 |
) |
|
|
$ |
(0.17 |
) |
|
$ |
(0.17 |
) |
|
Discontinued operations |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
$ |
(0.02 |
) |
| Net loss per share -
diluted |
|
|
$ |
(0.08 |
) |
|
$ |
(0.04 |
) |
|
|
$ |
(0.17 |
) |
|
$ |
(0.19 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average number of
outstanding common shares, assuming dilution |
|
|
|
291,647,146 |
|
|
|
287,072,972 |
|
|
|
|
291,252,902 |
|
|
|
276,562,869 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TerrAscend Corp. |
|
Consolidated Statements of Cash Flows |
| (Amounts expressed
in thousands of United States dollars, except for share and per
share amounts) |
| |
| |
For the Nine Months Ended |
|
|
|
September 30, 2024 |
|
|
September 30, 2023 |
|
| Operating
activities |
|
|
|
|
|
|
Net loss from continuing operations |
$ |
(42,507 |
) |
|
$ |
(40,472 |
) |
| Adjustments to reconcile net
loss to net cash provided by operating activities |
|
|
|
|
|
|
Non-cash adjustments of inventory |
|
— |
|
|
|
728 |
|
|
Accretion expense |
|
9,162 |
|
|
|
7,497 |
|
|
Depreciation of property and equipment and amortization of
intangible assets |
|
15,029 |
|
|
|
15,179 |
|
|
Amortization of operating right-of-use assets |
|
2,185 |
|
|
|
1,630 |
|
|
Share-based compensation |
|
7,720 |
|
|
|
5,469 |
|
|
Deferred income tax (recovery) expense |
|
(986 |
) |
|
|
1,099 |
|
|
(Gain) loss on fair value of derivative liabilities and purchase
option derivative assets |
|
(2,608 |
) |
|
|
2,564 |
|
|
Gain on disposal of fixed assets |
|
(9 |
) |
|
|
(1,534 |
) |
|
Unrealized and realized loss on investments |
|
213 |
|
|
|
2,365 |
|
|
Loss (gain) from revaluation of contingent consideration |
|
3,547 |
|
|
|
(645 |
) |
|
Impairment of property and equipment and right of use assets |
|
2,438 |
|
|
|
— |
|
|
Gain on lease termination and derecognition of finance lease |
|
(1,220 |
) |
|
|
— |
|
|
Bad debt recovery |
|
(1,136 |
) |
|
|
— |
|
|
Loss on extinguishment of debt |
|
1,662 |
|
|
|
— |
|
|
Unrealized and realized foreign exchange loss (gain) |
|
175 |
|
|
|
(175 |
) |
| Changes in operating assets
and liabilities |
|
|
|
|
|
|
Receivables |
|
428 |
|
|
|
(5,224 |
) |
|
Inventory |
|
1,559 |
|
|
|
(10,750 |
) |
|
Prepaid expense and other current assets |
|
(1,303 |
) |
|
|
(808 |
) |
|
Deposits |
|
53 |
|
|
|
411 |
|
|
Other assets |
|
77 |
|
|
|
718 |
|
|
Accounts payable and accrued liabilities and other payables |
|
(7,812 |
) |
|
|
7,395 |
|
|
Operating lease liability |
|
(1,804 |
) |
|
|
(1,566 |
) |
|
Other liability |
|
(473 |
) |
|
|
1,542 |
|
|
Uncertain tax position liabilities |
|
36,698 |
|
|
|
— |
|
|
Corporate income tax payable |
|
6,300 |
|
|
|
35,140 |
|
|
Deferred revenue |
|
815 |
|
|
|
1,149 |
|
| Net cash provided by
operating activities- continuing operations |
|
28,203 |
|
|
|
21,712 |
|
|
Net cash used in operating activities - discontinued
operations |
|
— |
|
|
|
(3,660 |
) |
| Net cash provided by
operating activities |
|
28,203 |
|
|
|
18,052 |
|
| |
|
|
|
|
|
| Investing
activities |
|
|
|
|
|
|
Investment in property and equipment |
|
(4,623 |
) |
|
|
(6,224 |
) |
|
Investment in note receivable, net of interest received |
|
(1,523 |
) |
|
|
— |
|
|
Investment in intangible assets |
|
(115 |
) |
|
|
(262 |
) |
|
Insurance recovery for property and equipment |
|
871 |
|
|
|
— |
|
|
Success fees related to Alternative Treatment Center license |
|
— |
|
|
|
(3,750 |
) |
|
Receipt of convertible debenture payment |
|
— |
|
|
|
738 |
|
|
Payment for land contracts |
|
(630 |
) |
|
|
(1,047 |
) |
|
Cash portion of consideration paid in acquisitions, net of cash of
acquired |
|
(250 |
) |
|
|
(17,032 |
) |
| Net cash used in
investing activities - continuing operations |
|
(6,270 |
) |
|
|
(27,577 |
) |
|
Net cash provided investing activities - discontinued
operations |
|
— |
|
|
|
14,285 |
|
| Net cash used in
investing activities |
|
(6,270 |
) |
|
|
(13,292 |
) |
| |
|
|
|
|
|
| Financing
activities |
|
|
|
|
|
|
Transfer of Employee Retention Credit |
|
— |
|
|
|
12,677 |
|
|
Proceeds from loan payable, net of transaction costs |
|
129,382 |
|
|
|
23,869 |
|
|
Proceeds from options and warrants exercised |
|
— |
|
|
|
81 |
|
|
Loan principal paid |
|
(144,771 |
) |
|
|
(46,029 |
) |
|
Loan amendment fee paid and prepayment premium paid |
|
— |
|
|
|
(1,178 |
) |
|
Capital distributions paid to non-controlling interests |
|
(4,433 |
) |
|
|
(6,966 |
) |
|
Proceeds from private placement, net of share issuance costs |
|
— |
|
|
|
21,260 |
|
|
Payments made for financing obligations and finance lease |
|
(356 |
) |
|
|
(1,158 |
) |
|
Repurchases of common shares |
|
(138 |
) |
|
|
— |
|
| Net cash (used in)
provided by financing activities- continuing
operations |
|
(20,316 |
) |
|
|
2,556 |
|
|
Net cash used in financing activities- discontinued operations |
|
— |
|
|
|
(5,539 |
) |
| Net cash used in
financing activities |
|
(20,316 |
) |
|
|
(2,983 |
) |
| |
|
|
|
|
|
| Net increase in cash
and cash equivalents and restricted cash during the
period |
|
1,617 |
|
|
|
1,777 |
|
| Net effects of foreign
exchange |
|
278 |
|
|
|
(24 |
) |
| Cash and cash
equivalents and restricted cash, beginning of the
period |
|
25,347 |
|
|
|
26,763 |
|
| Cash and cash
equivalents and restricted cash, end of the period |
$ |
27,242 |
|
|
$ |
28,516 |
|
| |
|
|
|
|
|
|
|
|
TerrAscend Corp. |
|
Consolidated Statements of Cash Flows
(Continued) |
| (Amounts expressed
in thousands of United States dollars, except for share and per
share amounts) |
| |
| |
For the Nine Months Ended |
|
|
|
September 30, 2024 |
|
|
September 30, 2023 |
|
|
Supplemental disclosure with respect to cash
flows |
|
|
|
|
|
|
Cash paid (received) for income tax, net |
$ |
(8,449 |
) |
|
$ |
(4,582 |
) |
|
Interest paid |
|
17,931 |
|
|
|
16,683 |
|
|
Lease termination fee paid |
|
271 |
|
|
|
217 |
|
| Non-cash
transactions |
|
|
|
|
|
|
Equity and warrant liability issued for acquisitions and
non-controlling interest |
$ |
4,674 |
|
|
$ |
8,600 |
|
|
Equity issued for price protection on contingent consideration |
|
693 |
|
|
|
— |
|
|
Accrued capital purchases |
|
526 |
|
|
|
936 |
|
|
Warrant issued as consideration for services |
|
— |
|
|
|
1,000 |
|
|
Promissory note issued as consideration for acquisitions |
|
— |
|
|
|
11,689 |
|
|
Shares issued for legal and liability settlement |
|
— |
|
|
|
794 |
|
|
|
|
|
|
|
|
|
|
TerrAscend Corp.Reconciliation of GAAP to Non-GAAP
Financial Measures(Amounts expressed in thousands of
United States dollars, except for percentages)(unaudited)
The table below reconciles net loss from continuing operations
to EBITDA from continuing operations and Adjusted EBITDA from
continuing operations:
|
|
|
For the Three Months Ended |
|
|
|
|
September 30, 2024 |
|
|
June 30, 2024 |
|
|
Revenue, net |
|
$ |
74,168 |
|
|
$ |
77,523 |
|
| |
|
|
|
|
|
|
| Net loss |
|
|
(21,419 |
) |
|
|
(6,237 |
) |
| Net loss margin % |
|
|
-28.9 |
% |
|
|
-8.0 |
% |
| |
|
|
|
|
|
|
| Loss from discontinued
operations |
|
|
— |
|
|
|
— |
|
| Loss from continuing
operations |
|
|
(21,419 |
) |
|
|
(6,237 |
) |
| |
|
|
|
|
|
|
| Add (deduct) the impact
of: |
|
|
|
|
|
|
| Provision for income
taxes |
|
|
14,373 |
|
|
|
10,729 |
|
| Finance expenses |
|
|
8,610 |
|
|
|
9,132 |
|
| Amortization and
depreciation |
|
|
5,036 |
|
|
|
4,993 |
|
| EBITDA from continuing
operations |
|
|
6,600 |
|
|
|
18,617 |
|
| Add (deduct) the impact
of: |
|
|
|
|
|
|
| Share-based compensation |
|
|
4,275 |
|
|
|
1,960 |
|
| Loss on extinguishment of
debt |
|
|
1,662 |
|
|
|
— |
|
| Loss (gain) from revaluation
of contingent consideration |
|
|
327 |
|
|
|
1,827 |
|
| Loss (gain) on disposal of
fixed assets |
|
|
8 |
|
|
|
(17 |
) |
| Bad debt recovery |
|
|
— |
|
|
|
(4,169 |
) |
| Unrealized and realized loss
on investments |
|
|
(14 |
) |
|
|
227 |
|
| (Gain) loss on lease
termination and derecognition o finance lease |
|
|
(51 |
) |
|
|
(1,169 |
) |
| Unrealized and realized
foreign exchange (gain) loss |
|
|
(214 |
) |
|
|
104 |
|
| (Gain) loss on fair value of
derivative liabilities and purchase option derivative assets |
|
|
(669 |
) |
|
|
(2,922 |
) |
| Other one-time items |
|
|
1,793 |
|
|
|
1,176 |
|
| Adjusted EBITDA from
continuing operations |
|
$ |
13,717 |
|
|
$ |
15,634 |
|
| Adjusted EBITDA Margin from
continuing operations |
|
|
18.5 |
% |
|
|
20.2 |
% |
| |
|
|
|
|
|
|
|
|
The table below reconciles Net cash provided by
(used in) operating activities – continuing operations to Free Cash
Flow:
|
|
|
For the Three Months Ended |
|
|
|
|
September 30, 2024 |
|
|
June 30, 2024 |
|
|
Net cash provided by operating activities- continuing
operations |
|
$ |
1,823 |
|
|
$ |
13,129 |
|
| Capital expenditures for
property and equipment |
|
|
(351 |
) |
|
|
(1,476 |
) |
| Free Cash Flow |
|
$ |
1,472 |
|
|
$ |
11,653 |
|
| |
|
|
|
|
|
|
|
|
The table below reconciles General &
Administrative expenses to General & Administrative expenses
excluding stock-based compensation, bad debt and insurance
recovery:
|
|
|
For the Three Months Ended |
|
|
|
|
September 30, 2024 |
|
|
June 30, 2024 |
|
|
General & Administrative expenses |
|
|
31,552 |
|
|
|
24,060 |
|
| Less: stock-based
compensation |
|
|
4,275 |
|
|
|
1,960 |
|
| Less: bad debt and insurance
recovery |
|
|
— |
|
|
|
(5,040 |
) |
| General & Administrative
expenses excluding stock-based compensation, bad debt and insurance
recovery |
|
$ |
27,277 |
|
|
$ |
27,140 |
|
TerrAscend (TSX:TSND)
Graphique Historique de l'Action
De Nov 2024 à Déc 2024
TerrAscend (TSX:TSND)
Graphique Historique de l'Action
De Déc 2023 à Déc 2024
