TerrAscend Q4 Dips From Strong Q3 – New Cannabis Ventures

TerrAscend Reports Fourth Quarter and Full Year 2023 Financial Results

• Full year 2023 record Net Revenue of $317.3 million, an increase of 28.0% year-over-year
• Full year 2023 Gross Profit margin of 50.3%, a 930 basis-point improvement year-over-year
• Full year 2023 Adjusted EBITDA from continuing operations¹ of $68.8 million, an increase of 77.1% year-over-year
• Delivered first full year of both positive Cash Flow from continuing operations and Free Cash Flow²

TORONTO, March 14, 2024 (GLOBE NEWSWIRE) — TerrAscend Corp. (“TerrAscend” or the “Company”) (TSX: TSND, OTCQX: TSNDF), a leading North American cannabis company, today reported its financial results for the fourth quarter and full year ended December 31, 2023. All amounts are expressed in U.S. dollars and are prepared under U.S. Generally Accepted Accounting Principles (GAAP), unless indicated otherwise.

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 through September 30, 2023. All historical periods have been restated accordingly.

Fourth Quarter 2023 Financial Highlights

• Net Revenue was $86.6 million, an increase of 25.5% year-over-year.
• Gross Profit Margin was 48.2%, compared to 44.6% in Q4 2022.
• GAAP Net loss from continuing operations was $41.8 million, inclusive of $57.7 million of non-cash impairment charges, compared to a net loss of $2.0 million in Q4 2022. The non-cash impairment charges were recorded against goodwill and intangibles for the Company’s Michigan and California businesses.
• EBITDA from continuing operations1 was ($36.7) million, including the aforementioned non-cash impairment charges of $57.7 million, compared to $30.0 million in Q4 2022.
• Adjusted EBITDA from continuing operations¹ was $19.6 million, an increase of 60.7% year-over-year.
• Adjusted EBITDA Margin from continuing operations¹ was 22.7%, compared to 17.7% in Q4 2022.
• Cash flow provided by continuing operations was $9.4 million compared to $7.3 million in Q4 2022.
• Free Cash Flow² was $7.9 million compared to $3.9 million in Q4 2022.

Full Year 2023 Financial Highlights

• Net Revenue was $317.3 million, an increase of 28.0% year-over-year.
• Gross Profit Margin was 50.3% compared to 41.0% in 2022.
• GAAP Net Loss from continuing operations was $82.3 million, inclusive of $58.0 million of non-cash impairment charges, compared to a net loss from continuing operations of $299.4 million in 2022, inclusive of $311.1 million of non-cash impairment charges. The non-cash impairment charges were recorded against goodwill and intangibles for the Company’s Michigan and California businesses.
• EBITDA from continuing operations1 was ($3.3) million, compared to ($248.5) million in 2022, including the aforementioned non-cash impairment charges of $58.0 million in 2023 and $311.1 million in 2022.
• Adjusted EBITDA from continuing operations¹ was $68.8 million, an increase of 77.1% year-over-year.
• Adjusted EBITDA Margin from continuing operations¹ was 21.7% compared to 15.7% in 2022.
• Cash flow provided by (used in) continuing operations was $31.1 million compared to ($21.8) million in 2022.
• Free Cash Flow² was $23.4 million compared to ($61.5) million in 2022.

“We made substantial progress in 2023 across virtually all facets of our business, including significantly improving our margins, transforming our balance sheet, materially lowering our interest expense, and delivering positive free cash flow, all while driving industry leading revenue growth of 28%. I am extremely pleased that, for the first time in our history, we generated positive cash flow for a full year, with $31.1 million in cash flow from continuing operations and $23.4 million in free cash flow,” stated Jason Wild, Executive Chairman of TerrAscend. “We have the right team, high-performing assets, strong operating results and cash flow, and ample greenfield opportunities to pursue additional growth. 2023 was about operational excellence and strengthening the foundation. 2024 is about expansion by capitalizing on the current environment and entering into attractive states on accretive terms which would not have been possible two years ago.”

Original press release

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