Ascend Wellness Holdings
Q1 2024 Earnings Presentation
CSE: AAWH-U.CN; OTCQX: AAWH
CAUTIONARY STATEMENT REGARDING FORWARD
LOOKING STATEMENTS
This presentation includes forward-looking information and statements (together, "forward-looking statements"), which may include, but are not limited to, the plans, intentions, expectations, estimates, and beliefs of Ascend Wellness Holdings, Inc. ("AWH", "Ascend" or the "Company"). Words such as "expects", "continue", "will", "anticipates" and "intends" or similar expressions are intended to identify forward-looking statements. Without limiting the generality of the preceding statement, all statements in this presentation relating to estimated and projected revenue, expectations regarding production capacity, anticipated capital expenditures, expansion, profit, product demand, margins, costs, cash flows, sources of capital, growth rates, potential acquisitions, closing dates for transactions, regulatory approvals, future facility openings, and future financial and operating results are forward-looking statements. We caution investors that any such forward-looking statements are based on the Company's current projections, run rates, or expectations about future events and financial trends, the receipt of all required regulatory approvals, and on certain assumptions and analysis made by the Company in light of the experience of the Company and perception of historical trends, current conditions and expected future developments and other factors management believes are appropriate. Forward-looking statements involve and are subject to assumptions and known and unknown risks, uncertainties, and other factors which may cause actual events, results, performance, or achievements of the Company to be materially different from future events, results, performance, and achievements expressed or implied by forward-looking statements herein. Such factors include, among other, the risks and uncertainties identified in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, and in the Company's other reports and filings with the applicable Canadian securities administrators on its profile on SEDAR+ at https://www.sedarplus.ca/ and the United States Securities and Exchange Commission ("SEC") on its profile on EDGAR at www.sec.gov. Although the Company believes that any forward-looking statements herein are reasonable, in light of the use of assumptions and the significant risks and uncertainties inherent in such statements, there can be no assurance that any such forward-looking statements will prove to be accurate, and accordingly readers are advised to rely on their own evaluation of such risks and uncertainties and should not place undue reliance upon such forward-looking statements. Any forward-looking statements herein are made as of the date hereof, and except as required by applicable laws, the Company assumes no obligation and disclaims any intention to update or revise any forward-looking statements herein or to update the reasons that actual events or results could or do differ from those projected in any forward looking statements herein, whether as a result of new information, future events or results, or otherwise, except as required by applicable laws. No securities regulator nor the Canadian Securities Exchange has reviewed, approved or disapproved the content of this presentation.
To the extent any forward-looking statement in this presentation constitutes "future-oriented financial information" or "financial outlooks" within the meaning of applicable securities laws, such information is being provided for the purpose of providing information about management's current expectations and goals relating to the future of the Company and the reader is cautioned that this information may not be appropriate for any other purpose and the reader should not place undue reliance on such future-oriented financial information and financial outlooks. Future-oriented financial information and financial outlooks, as with forward-looking statements, generally are, without limitation, based on the assumptions and subject to the risks set out above, among others. The Company's actual financial position and results of operations may differ materially from management's current expectations and, as a result, the Company's financial position may differ materially from what is provided in this presentation. Such information is presented for illustrative purposes only and may not be an indication of the Company's actual financial position or results of operations. Any financial outlook or future-oriented financial information has been approved by management of the Company as of the date hereof and the Company disclaims any obligation to update such outlooks or information, except as required by applicable securities laws.
Certain information in this presentation, including industry information and estimates, is obtained from third-party sources, including public sources, and there can be no assurance as to the accuracy or completeness of such information. Although believed to be reliable, management of the Company has not independently verified any of the data from third-party sources unless otherwise stated.
OVERVIEW
Vertically integrated operator with assets in Illinois, Massachusetts, Maryland, Michigan, New Jersey, Ohio, and Pennsylvania. Owns and operates state-of-the-art cultivation facilities; grows award-winning strains and produces a curated selection of products.
Founded | 2018 |
Headquarters | New York |
Employees | ~2,400 |
States of Operation | IL, MA, MD, MI, NJ, OH, PA |
600
400
200
Revenue ($M)
332 406
144
519 577
Dispensaries / Cultivation | 36 operating(1) / 7 operating |
EV(2) | $535.2M |
Market Cap(2) | $297.6M |
EV / | 0.9x |
2024 Revenue Estimates(5) | |
EV / | 4.3x |
2024 Adj. EBITDA | |
Estimates(5) |
Total Debt, net(4) / | $310.5M / $237.6M |
Net Debt(4) | |
0
150
100
50
0
2020 2021 2022 2023 2024E(5)
Adj. EBITDA(3)($M)
93 | 107 | 124 | ||
79 | ||||
31 | ||||
2020 | 2021 | 2022 | 2023 | 2024E(5) |
- Includes 2 stores which opened subsequent to end of Q4 (Monaca, PA and Cincinnati, OH).
- Includes 211.4M Class A Common Shares, 65k Class B shares, 18.7M of unvested Restricted Stock Units and/or Restricted Stock Awards, and 0.5M dilutive options that are in the money at quarter end. Dilution was calculated using the treasury stock method and a 3/31/24 share price of US$1.29 on the CSE. There are also 4.6M warrants outstanding, none of which were in the money at quarter-end: 1.3M have an exercise price of $4.00/sh; 3.1M have an exercise price of $3.10/sh; and 0.2M have an exercise price of $2.64/sh. A total of 3.8M options are outstanding at quarter-end, of which a total of 2.1M are exercisable.
- Please see appendix of this presentation for reconciliation of "non-GAAP" to "GAAP" measures. We have not presented a quantitative reconciliation of the forward-lookingnon-GAAP financial measure "Adjusted EBITDA" to its most directly comparable GAAP financial measure because it is impracticable to forecast certain items without unreasonable efforts due to the uncertainty and inherent difficulty of predicting the occurrence and financial impact of the periods in which such financial impact might be recognized.
- Total Debt, net is equal to Total Debt less unamortized deferred financing costs. Net Debt is equal to Total Debt, net less Cash & Equivalents.
- Based on consensus estimates as of 4/23/24. See discussion of forward-looking statements on slide 2.
EXPANDING FOOTPRINT
7 States
36 operating dispensaries
ILLINOIS | NEW JERSEY | MICHIGAN |
10 retail | 3 retail | 8 retail |
3 partner retail planned1 | 1 partner retail planned1 | 1 cultivation / processing |
1 cultivation / processing | 1 cultivation / processing |
MASSACHUSETTS | PENNSYLVANIA | |
OHIO | 3 retail | |
3 retail | 3 planned medical retail licenses3 | |
2 cultivation / processing | 5 medical retail2 | 1 cultivation / processing |
1 cultivation / processing | ||
MARYLAND | ||
4 retail |
ILLINOIS | MASSACHUSETTS |
NEW JERSEY
MICHIGAN
OHIO
PENNSYLVANIA
MARYLAND
Current Operations
2020 YE | 2021 YE | |
12 Dispensaries | 20 Dispensaries | |
74,000 ft2 Canopy | 175,000 ft2 Canopy |
(1) Includes partnership transactions in Illinois and New Jersey, which are not yet closed and subject to regulatory approval.
(2) Includes pending acquisition of Ohio Patient Access LLC.
(3) License is owned by AWH, but the site is not yet operational and/or under construction. Includes 3 Pennsylvania dispensaries.
(4) See discussion of forward-looking statements on slide 2.
Note: Timeline illustrative; does not necessarily reflect scale. Canopy includes total canopy (vegetation, flower, and propagation).
CURRENT | PIPELINE(4) | |
36 Operating Dispensaries(2) | 39 Operating Dispensaries(2,3) | |
3 Additional Dispensary Licenses(3) | + 4 Partner Dispensaries(1) | |
255,000 ft2 Canopy |
KEY MARKET AND BUSINESS HIGHLIGHTS
Strong Q1 2024 Financial Results
- 25% Y/Y Revenue(1) growth
- 39% Y/Y Adjusted EBITDA(2) growth, with 239 bps margin expansion
- Positive Cash from Operations for fifth consecutive quarter
Federal Catalysts on the Horizon
- Historic decision by DEA to agree with HHS recommendation
- DOJ lawsuit oral arguments on 5/22/24
Business Updates
- Pursuing partnership strategy to further expand retail footprint; this strategy combined with continued wholesale growth will help to offset increased competition in NJ and IL
- Readying for Adult-Use in Ohio; 5 stores ready for adult-use, which is expected to start by summer; actively pursuing 3 additional dispensaries
Refinancing Update
- Initiated Dutch Auction process to consider debt pay down
- Positive discussions in early process to refinance 2025 Term Loan
- Net revenue excludes revenue from intercompany sales.
- Please see appendix of this presentation for reconciliation of "non-GAAP" to "GAAP" measures.
FLAGSHIP LOCATIONS
From strategically located in the retail corridor near St. Louis to minutes from the George Washington Bridge, NJ Turnpike, and NJ Rt. 46
- Prioritize high-traffic locations
- Significant parking
- Optimized retail footprint
6
Monaca, PA
RETAIL UPDATE
Continued progress despite traditional Q1 seasonality
2 51%
STORES OPENED SINCE | OF RETAIL SALES FROM |
AWH PRODUCED | |
THE END OF 4Q23 | |
PRODUCT | |
- Retail revenue in line with expectations, up 15% Y/Y and down 2% Q/Q to $95.2M
- Retail revenue contributes 67% of total net revenue
Loyalty program continues to grow; 89% of retail transactions now loyalty members
- 7 dispensaries in the pipeline, including 4 partner stores
STRENGTHENING IN - HOUSE PRODUCT BENCH
Completing the good-better-best spectrum; continue to complement with partner brands
#1 in MA1 | #3 in IL1 |
#3 in NJ1 |
Grab n' Go, Ready
to Rip
IL, MA, NJ, OH, PA
$$$$$
Flower, Pre-rolls
The easy way up
IL, MA, MI, NJ, OH,
PA
$$$$$
Flower, Pre-rolls,
Vapes
The smoke you
smoke when you
wanna great smoke
IL, MA, MI, NJ, OH,
PA
$$$$$
Flower, Pre-rolls,
Concentrates, Vapes
and Gummies
Putting you in the
zone to get sh*t
done
IL, MA
$$$$$
THC-V products
Only the finest
cannabis products
IL, MI, NJ, PA
$$$$$
Premium flower, Pre- rolls, Concentrates, Vapes
Curated fire phenos
IL, MA
$$$$$
Super-premium flower, Pre-rolls
GOOD | BETTER | BEST |
(1) According to BDSA
WHOLESALE UPDATE
Brand portfolio jumps another spot in brand rankings
3rd 40%
MOVED UP +1 TO 3rd | INCREASE IN 3rd PARTY |
LARGEST BRAND(1) | WHOLESALE DOORS Y/Y |
HOUSE IN IL, MA, NJ |
- Gross wholesale revenue up 35% Y/Y and 4% Q/Q to $79.0M
- Net wholesale revenue up 50% Y/Y and 10% Q/Q to $47.2M
- Kitchen operational and initial flower rooms planted in Amesbury, MA cultivation; gummies on shelves in MA
- Secured two long-term cultivation and manufacturing supply agreements in Maryland
(1) According to BDSA | 9 |
Q1 FINANCIAL HIGHLIGHTS
Y/Y: Q1'23 VS. Q1'24
Net Revenue1 | Adj. EBITDA / Margin2 | ||||||||
US$ Millions | US$ Millions | ||||||||
22.8% | |||||||||
+25% | $142.4 | 20.4% | +39% | ||||||
$114.2 | $23.3 | $32.5 | |||||||
Margin: | |||||||||
+239 bps | |||||||||
1Q23 | 1Q24 | ||||||||
1Q23 | 1Q24 | ||||||||
Q/Q: Q4'23 VS. Q1'24 | |||||||||
Net Revenue1 | Adj. EBITDA / Margin2 | ||||||||
US$ Millions | US$ Millions | ||||||||
23.1% | 22.8% | ||||||||
$140.2 | +1.6% | $142.4 | $32.4 | +0.4% | $32.5 | ||||
Margin: | |||||||||
-28 bps | |||||||||
4Q23 | 1Q24 | ||||||||
4Q23 | 1Q24 |
- Net revenue excludes revenue from intercompany sales.
- Please see appendix of this presentation for reconciliation of "non-GAAP" to "GAAP" measures.
Y/Y
• Revenue growth driven by 8 store openings, acquisition of 4 stores in MD, and gross wholesale growth in 6 markets.
• Adj. EBITDA dollars up driven by contributions from NJ cultivation, MD retail, MA cultivation and retail, and PA retail.
Q/Q
• Revenue increases driven by growth in gross wholesale in IL, NJ, PA and OH; partially offset by retail declines in NJ, MA, IL, and MI.
• Adj. EBITDA dollars up primarily driven by contributions from NJ and IL cultivation, and MA retail.
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Disclaimer
Ascend Wellness Holdings Inc. published this content on 07 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 May 2024 11:40:03 UTC.