Curaleaf Misses EPS by 170%

---

Curaleaf Misses EPS by 170%  – however, there was several positive aspects of today’s earnings call:

– Third quarter 2021 Revenue of $317 million, an increase of 2% sequentially and 74% YoY

– Third quarter 2021 Adjusted EBITDA(1) of $71 million, an increase of 69% YoY

– Third quarter cash flow from operations of $52 million or 16% of revenue

– Completed on October 1, 2021, the previously announced acquisition of Los Sueños Farms

– Entered into definitive agreement to acquire Tryke Companies, a vertically integrated MSO operating in Nevada, Arizona, and Utah

Curaleaf Holdings, Inc. (CSE: CURA) (OTCQX: CURLF) (“Curaleaf” or the “Company”), a leading international provider of consumer products in cannabis, today reported its financial and operating results for the third quarter ended September 30, 2021. All financial information is provided in U.S. dollars unless otherwise indicated.

Earnings Call: Monday, November 8, 2021, at 5:00 P.M. ET
Conference ID # is 2599473
Replay ID # is 10160750

A webcast of the call can be accessed on the investor relations section of the Curaleaf website at ir.curaleaf.com
The teleconference will be available for replay starting at approximately 7:00 P.M. ET
on November 8, 2021, and will end at 7:00 P.M. ET on November 15, 2021

Boris Jordan, Executive Chairman of Curaleaf commented, “During the third quarter we delivered record revenue of $317 million, representing 2% sequential and 74% year-over-year growth. We also generated $52 million of positive operating cash flow. While we faced some transient headwinds during the quarter, we continued to execute well against our strategic initiatives, prioritizing growth and gaining market share. As a result, we remain on track to achieve our $1.2 to $1.3 billion annual revenue guidance, albeit at the lower end of the range, representing growth of over 90%. Strategic M&A remains a key pillar our growth plan. We closed the Los Sueños Farms acquisition in October, and today announced another highly strategic deal to acquire Tryke Companies, a vertically integrated MSO which bolsters our leadership position in Nevada, Arizona, and Utah and will be immediately accretive to our margins and cash flow.”

Joe Bayern, Chief Executive Officer of Curaleaf stated, “We continued to successfully execute our plan for long-term growth in the third quarter with a focus on our four pillars of competitive advantage – research & development, commercialization, national distribution, and marketing and brand building. We expanded our scale and reach by strategically growing our retail and wholesale presence and significantly increasing our cultivation capacity both organically and, more recently, through M&A. Significant investments in R&D are a cornerstone of our competitive advantage, and we continued to set ourselves apart with the introduction Cliq by Select in the third quarter, while also expanding our innovative Select Squeeze and Nano Bites products to new markets. Looking to the balance of 2021 and beyond, we will continue to execute our long-term strategy with a focus on gaining market share in a sustainable and profitable manner.”

Third Quarter Operating Highlights

• Opened two new dispensaries located in Bordentown, New Jersey and Wells, Maine bringing total retail locations to 109 as of September 30, 2021.
• Expanded the number of U.S. wholesale accounts by 6% sequentially, exceeding 2,100 active accounts as of September 30, 2021.
• On track to organically add 275,000 square feet of flower canopy by year-end 2021.
• Introduced Select Squeeze THC infused beverage enhancer in several new markets including Michigan, New Jersey, and New York.
• Launched Cliq by Select premium vape system, a unique hardware design featuring a proprietary pod and durable stainless-steel encasing in Arizona, California, Nevada, and Oregon with additional markets expected by year-end 2021.

Post-Third Quarter Operating Highlights

• Closed the previously announced acquisition of Los Sueños Farms and its related entities bringing total Curaleaf cultivation capacity to approximately 4.4 million square feet and retail locations to 111 as of November 8, 2021.
• Entered into a definitive agreement to acquire Tryke Companies, a vertically integrated MSO operating in Nevada, Arizona, and Utah. Tryke owns and operates the Reef-branded dispensaries with four highly trafficked retail stores in Nevada and two in Arizona and brings an extensive and highly complementary vertical portfolio of retail and wholesale distribution, licenses, and cultivation assets to Curaleaf. For more information, please refer to the Company’s press release at https://ir.curaleaf.com/.

Total revenue was $317 million for the third quarter of 2021, an increase of 2% from $312 million in the second quarter of 2021 and 74% from $182 million in the third quarter of 2020.

Retail revenue reached $225 million, representing 1% sequential growth and 66% year-over-year growth. Retail revenue represented 71% of total revenue. During the third quarter the Company opened two new dispensaries including one in Bordentown, New Jersey and one in Wells, Maine, reaching 109 dispensaries as of quarter end.

Wholesale revenue grew 3% sequentially and 105% year-over-year to $92 million and represented 29% of total revenue. During the third quarter, total wholesale accounts increased approximately 6% sequentially and exceeded 2,100 accounts at quarter end.

Gross profit on Cannabis Sales was $144 million for the third quarter of 2021, an increase of 61% from $90 million in the third quarter of 2020. Gross profit margin was 45.6%, compared with 49.6% in the prior quarter and 49.7% in the third quarter of 2020. The change in gross margin primarily reflects a one-time loss on inventory related to the Eureka, California facility divestiture, lower revenue growth in certain Northeast markets, and the write down of certain other inventory in the third quarter of 2021, partially offset by ongoing cultivation and process efficiencies. Excluding one-time impacts, third quarter 2021 gross margin was 47.7%.

For the third quarter of 2021, net loss attributable to Curaleaf Holdings, Inc. was $57 million, compared with a net loss of $7 million in the second quarter of 2021 and $9 million in the third quarter of 2020. Higher operating income by $24 million was offset primarily by $42 million of higher tax expense, $25 million of higher other expense, and $8 million of higher interest expense compared with the third quarter of 2020. Third quarter 2021 income tax expense included certain discrete items totaling $10.6 million related to the write-off of certain California net operating losses and the year-to-date accrual for late tax payments.

Adjusted EBITDA was $71 million for the third quarter of 2021, an increase of 69% from $42 million in the third quarter of 2020. The year-over-year increase was mainly driven by revenue growth. Adjusted EBITDA margin was 22.5%, compared with 27.0% in the prior quarter and 23.2% in the third quarter of 2020, with the change primarily reflecting lower gross margin and higher SG&A expense related to increased headcount in support of new store openings, higher travel costs, and marketing in support of new product rollouts.

Balance Sheet and Cash Flow

As of September 30, 2021, the Company had $317 million of cash and $342 million of outstanding debt net of unamortized debt discounts.

During the third quarter of 2021, Curaleaf invested $44 million net in capital expenditures, focused on cultivation, processing, and selective retail expansion in strategic markets.

Shares Outstanding

As of September 30, 2021, and June 30, 2021, the Company’s weighted average shares outstanding amounted to 703,545,262 and 701,668,932 shares, respectively.

As of September 30, 2021, and June 30, 2021, Company’s issued and outstanding SVS plus MVS shares amounted to 704,818,302 and 703,260,526 shares, respectively.

Curaleaf Misses EPS by 170%

Non-IFRS Financial and Performance Measures

In this press release Curaleaf refers to certain non-IFRS financial measures such as “Gross Profit on Cannabis Sales” and “Adjusted EBITDA”. These measures do not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other issuers. The Company defines “Gross Profit on Cannabis Sales” as retail and wholesale revenues less cost of goods sold. “Adjusted EBITDA” is defined by Curaleaf as earnings before interest, taxes, depreciation and amortization less share-based compensation expense and one-time charges related to business development, acquisition, financing and reorganization costs. Curaleaf considers these measures to be an important indicator of the financial strength and performance of our business. We believe the adjusted results presented provide relevant and useful information for investors because they clarify our actual operating performance, make it easier to compare our results with those of other companies and allow investors to review performance in the same way as our management. Since these measures are not calculated in accordance with IFRS, they should not be considered in isolation of, or as a substitute for, our reported results as indicators of our performance, and they may not be comparable to similarly named measures from other companies. The following tables provide a reconciliation of each of the non-IFRS measures to its closest IFRS measure.

Curaleaf Misses EPS by 170%

---

About Cannin: Your Cannabis Stocks Resource

78% of Cannin’s fundamentals prove true within 30 days or less on 100+ recommendations over the past 2 years.

Cannin is your #1 trusted resource for cannabis stocks. Our global team of experts evaluates all emerging cannabis stock investing opportunities. In fact, we aggregate hundreds of hours of financial research and provide tips on the best cannabis stocks for 2021. 

Use Cannin as your resource for:

• Featured cannabis and hemp company analysis
• Comprehensive cannabis and hemp stock reports 

Market analysts expect the marijuana and hemp industry will have an annual value exceeding $75 Billion in the next decade. Is it too late to invest in marijuana stocks? No! This is the perfect time to invest.

Are you looking to buy stock in hemp companies or marijuana companies for 2021? If so, are you interested in new penny hemp stock companies? Or, looking for the best Canadian cannabis stocks to invest in? Maybe, you’re looking to leverage the power of algorithmic stock trading to beat the cannabis market? We can help.

Are you interested in cannabis stocks like Curaleaf, Trulieve, Aurora Cannabis, Charlotte’s Web, Canopy Growth, or Hemp Inc.?

Predict price movements of cannabis stocks several hours in advance with our proprietary algorithmic stock trading software.

• +30% Gains in 2020
• +49.8% Gains in 2019
• Backtested since 2012

In fact, we’re so confident you’ll love our algotrading cannabis stock signals, we’re willing to give you a one week risk-free trial to see it for yourself.

Profit from the best cannabis stocks – we’ll show you how at cannin.com.