Green Thumb Industries Inc., a leading national cannabis consumer packaged goods company and owner of Rise™ Dispensaries, today reported its financial results for the fourth quarter and full-year ended December 31, 2020. Financial results are reported in accordance with U.S. generally accepted accounting principles (“GAAP”) and all currency is in U.S. dollars.
Highlights for the quarter ended December 31, 2020:
Highlights for the year ended December 31, 2020:
See definition and reconciliation of non-GAAP measures elsewhere in this release.
Management Commentary
“This was a solid quarter to top off a milestone year for the Green Thumb team. In the fourth quarter, we delivered substantial revenue growth, expanded gross margins, recorded our fourth consecutive quarter of improved operating leverage and achieved positive GAAP net income and EPS for the second quarter in a row. The entire Green Thumb team should be proud of these full year 2020 numbers: $557 million of revenue, $180 million of Adjusted EBITDA, $15 million of GAAP net income, 7 cents a share of GAAP EPS and over $95 million in cash flow from operations,” said Green Thumb Chairman, Founder and Chief Executive Officer Ben Kovler.
Kovler continued, “To start off 2021, we completed our U.S. initial public offering and first sale of SEC-registered shares directly to U.S. investors. We view the institutional support as a vote of confidence in our proven operating model and a leading indicator of what’s to come for the industry. The capital markets are waking up to the great American cannabis growth story and the ‘Green Wave’ is picking up steam.
“November 2020 also validated that Americans across the country from all walks of life want expanded access to cannabis. The new administration has indicated strong support for advancing comprehensive cannabis reform that will focus on social equity and recognize the wellness benefits of cannabis. The Green Thumb team is more energized than ever to provide consumers with more choices for well-being, create more jobs and opportunity for communities, and continue our advocacy for social equity.
“Green Thumb is well-positioned. Our balance sheet is strong, our brands are connecting with consumers and our capital projects are on track. At the same time, we will maintain our focus on diligent execution and high-value capital expenditure allocation that will create sustainable value for all our stakeholders. The real fun is just beginning.”
Investing in Community and Team Well-Being
Fourth-Quarter and Full-Year 2020 Financial Overview
Total revenue for the fourth quarter 2020 was $177.2 million, up 12.8% sequentially and up 133.8% from $75.8 million for the fourth quarter 2019. For the full year 2020, total revenue was $556.6 million, up 157.2% from the prior year. Revenue growth was primarily driven by increased scale in the Company’s Consumer Packaged Goods and Retail businesses, especially in Illinois and Pennsylvania. Key year-over-year performance drivers were the expanded distribution of Green Thumb’s branded products, 11 new store openings and increased traffic in the Company’s 51 open and operating retail stores.
In the fourth quarter of 2020, Green Thumb generated revenue from all 12 of its markets: California, Colorado, Connecticut, Florida, Illinois, Maryland, Massachusetts, Nevada, New Jersey, New York, Ohio and Pennsylvania. The Company continued to invest in the expansion of its cultivation and manufacturing capabilities in Illinois, Maryland, Massachusetts, New Jersey, Ohio and Pennsylvania.
Gross profit for the fourth quarter 2020 was $100.5 million or 56.7% of revenue compared to $40.6 million or 53.6% of revenue for the fourth quarter 2019. For the full-year, gross margin was $304.2 million or 54.7% of revenue, increasing 520 basis points vs. 2019. Gross margin performance was driven by increased scale in the consumer packaged goods and retail business.
Total selling, general and administrative expenses for the fourth quarter were $53.2 million or 30.0% of revenue, compared to $46.7 million or 61.6% of revenue for the fourth quarter 2019. Improved operating costs as a percentage of revenue were driven primarily by increased operating leverage in the Company’s Consumer Packaged Goods and Retail businesses. Total selling, general and administrative expenses for the full year 2020 were $198.1 million or 35.6% of revenue, an increase from $134.7 million in the prior year, or 62.2% of revenue.
Total other income was $3.5 million for the fourth quarter 2020, primarily reflecting favorable fair value adjustments on the Company’s equity investments net of interest and warrant expense associated with the Company’s senior secured notes. Total other expense for the full year was $3.2 million.
Net income attributable to the Company for the fourth quarter 2020 was $22.5 million or $0.11 per basic and diluted share, compared to a net loss of $14.1 million, or a loss of $0.07 per basic and diluted share in the prior year. Net income for the full year 2020 was $15.0 million or $0.07 per basic and diluted share.
EBITDA for the fourth quarter 2020 was $61.3 million or 34.6% of revenue compared to $7.8 million or 10.3% of revenue for the fourth quarter 2019. EBITDA for the full year was $158.6 million, or 28.5% of revenue. Adjusted Operating EBITDA for the fourth quarter 2020, which excluded non-cash stock-based compensation of $4.1 million, was $65.4 million or 36.9% of revenue as compared to $13.8 million or 18.2% of revenue for the fourth quarter 2019. The significant improvement in EBITDA and Adjusted Operating EBITDA was driven primarily by revenue growth and increased scale-driven operating leverage from both the Consumer Packaged Goods and Retail businesses. For additional information on these non-GAAP financial measures, see below under “Non-GAAP Financial Information.” Adjusted EBITDA for the full year was $179.6 million or 32.3% of revenue, compared to $27.8 million or 12.8% of revenue last year.
Balance Sheet and Liquidity
As of December 31, 2020, current assets were $183.9 million, including cash and cash equivalents of $83.8 million. Total debt outstanding was $99.1 million, $342.0 thousand of which is due within 12 months.
Total basic and diluted weighted average shares outstanding for the three months ended December 31, 2020 were 213.2 million and 217.2 million respectively.
Capital Markets & Financing
In October, Green Thumb amended its previously announced sale and leaseback transaction with IIP for its Toledo, Ohio manufacturing facility, securing an additional $25.0 million to fund the construction of a cultivation facility on the property for total investment value of $32.2 million.
In February 2021, subsequent to the quarter end, the Company raised approximately $156.0 million through direct public sales of approximately 4.7 million shares in the Company’s U.S. IPO. The U.S. shares are registered with the SEC. The offering was made pursuant to the Form S-1 Registration Statement, declared effective by the SEC on February 8, 2021, and completed on a “self-underwritten, best efforts” basis.
Expansion of Consumer Packaged Goods Business
Retail Service Business Development
Non-GAAP Financial Information
This press release includes certain non-GAAP financial measures as defined by the SEC. Reconciliations of these non-GAAP financial measures to the most directly comparable financial measure calculated and presented in accordance with GAAP are included in the financial schedules attached to this press release. This information should be considered as supplemental in nature and not as a substitute for, or superior to, any measure of performance prepared in accordance with GAAP.
Definitions
EBITDA: Earnings before interest, taxes, other income or expense and depreciation and amortization.
Adjusted Operating EBITDA: Earnings before interest, taxes, depreciation, and amortization, adjusted for other income, non-cash share-based compensation, one-time transaction related expenses, or other non-operating costs.
Conference Call and Webcast
Green Thumb will host a conference call on Wednesday, March 17, 2020 at 5:00 pm ET to discuss its fourth-quarter and full-year 2020 financial results for the year ended December 31, 2020. The conference call may be accessed by dialing 877-273-8145 (Toll-Free) or 647-689-5400 (International) with conference ID: 8054618. A live audio webcast of the call will also be available on the Investor Relations section of Green Thumb’s website at https://investors.gtigrows.com and will be archived for replay.
About Green Thumb Industries:
Green Thumb Industries Inc. (“Green Thumb”), a national cannabis consumer packaged goods company and owner of Rise™ dispensaries, promotes well-being through the power of cannabis while giving back to the communities in which it serves. Green Thumb manufactures and distributes a portfolio of branded cannabis products including Beboe, Dogwalkers, Dr. Solomon’s, incredibles, Rythm and The Feel Collection. The company also owns and operates rapidly growing national retail cannabis stores called Rise™. Headquartered in Chicago, Illinois, Green Thumb has 13 manufacturing facilities, licenses for 97 retail locations and operations across 12 U.S. markets. Established in 2014, Green Thumb employs over 2,300 people and serves thousands of patients and customers each year. The company was named a Best Workplace 2018 by Crain’s Chicago Business and MG Retailer magazine in 2018 and 2019.
Investor Contact: | Media Contact: |
Jennifer Dooley | Linda Marsicano |
Chief Strategy Officer | VP, Corporate Communications |
InvestorRelations@gtigrows.com | lmarsicano@gtigrows.com |
310-622-8257 | 773-354-2004 |