Third quarter 2024 revenue of $331 million, representing a decrease of 1% year-over-year, and adjusted gross margin(1) of 49%
Third quarter International revenue increased 82% year-over-year
Year to date operating cash flow from continuing operations of $119 million and free cash flow from continuing operations of $53 million
Secured $40.0 million revolving credit facility at 7.99% interest rate
STAMFORD, Conn., Nov. 6, 2024 /PRNewswire/ — Curaleaf Holdings, Inc. (TSX: 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, 2024. All financial information is reported in accordance with U.S. generally accepted accounting principles (GAAP) and is provided in U.S. dollars unless otherwise indicated.
Boris Jordan, Chairman and CEO of Curaleaf, stated, “Third quarter revenue was $331 million, down 1% and adjusted gross margin of 49% was up 312 basis points compared to last year. Adjusted EBITDA was $75 million or 23%, consistent with last year. In the first few months in my expanded role as Chairman and CEO, my focus has been on delivering value to all shareholders through disciplined execution of fundamental operating principles. The industry has experienced the pressures of regulatory overhang, increased competition, unprecedented weather conditions, and irrational pricing strategies. This backdrop is one of the key drivers behind our shift towards focusing on sustainable, profitable organic growth by maintaining share in challenged markets and growing share where we see strategic opportunity. One example is in our international business, which was a highlight this quarter, as it grew 82% year-over-year and 17% quarter over quarter to $30 million dollars. By design, our global presence offers a diversification of revenue streams that mitigates concentration risk.”
Third Quarter 2024 Financial Highlights
_________________________
1
Adjusted EBITDA, adjusted gross profit and free cash flow from continuing operations are non-GAAP financial measures, and adjusted EBITDA margin and adjusted gross margin are non-GAAP financial ratios, in each case without a standardized definition under GAAP and which may not be comparable to similar measures used by other issuers. See “Non-GAAP Financial Performance Measures” below for definitions and more information regarding Curaleaf’s use of non-GAAP financial measures and non-GAAP financial ratios. See “Reconciliation of Non-GAAP financial measures” below for a reconciliation of each non-GAAP financial measure used in this press release from the most directly comparable GAAP financial measure.
Nine Months Ended September 30, 2024 Financial Highlights
Third Quarter 2024 Operational Highlights
Post Third Quarter 2024 Operational Highlights
Third Quarter 2024 Revenues, net by Segment
Domestic
International
Total
Retail revenue
$ 243,253
$ 9,997
$ 253,250
Wholesale revenue
57,199
18,484
$ 75,683
Other
504
1,093
$ 1,597
Total revenues, net
$ 300,956
$ 29,574
$ 330,530
Balance Sheet and Cash Flow
As of September 30, 2024, the Company had $90.0 million of cash and $557.4 million of outstanding debt net of unamortized debt discounts.
During the nine months ended September 30, 2024, Curaleaf invested $65.6 million, net in capital expenditures, focused on cultivation, automation, and selective retail expansion in strategic markets.
Shares Outstanding
For the third quarter of 2024 and 2023, the Company’s weighted average Subordinate Voting Shares plus Multiple Voting Shares outstanding amounted to 742,535,355 and 725,319,477 shares, respectively.
Conference Call Information
The Company will host a conference call and audio webcast for investors and analysts on Wednesday, November 6, 2024 at 5:00 P.M. ET to discuss Q3 2024 earnings results. The call can be accessed by dialing 1-844-512-2926 in the U.S., Canada 1-416-639-5883, or internationally from 1-412-317-6300. The conference pin # is 1873022.
A replay of the conference call can be accessed at 1-877-344-7529 in the U.S., Canada 1-855-669-9658, or internationally from 1-412-317-0088, using the replay pin # 4809848.
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 6, 2024 and will end at 11:59 P.M. ET on November 13, 2024.
Non-GAAP Financial and Performance Measures
Curaleaf reports its financial results in accordance with GAAP and uses a number of financial measures and ratios when assessing its results and measuring overall performance. Some of these financial measures and ratios are not calculated in accordance with GAAP. Curaleaf refers to certain non-GAAP financial measures and ratios, such as “adjusted gross profit”, “adjusted gross margin”, “adjusted EBITDA”, “adjusted EBITDA margin” and “Free cash flow from operations”. These measures do not have any standardized meaning prescribed by GAAP and may not be comparable to similar measures presented by other issuers. The Company defines “adjusted gross profit” as gross profit net of cost of goods sold and related other add-backs. “Adjusted gross margin” is defined by Curaleaf as adjusted gross profit divided by total revenues. “Adjusted EBITDA” is defined by Curaleaf as earnings before interest, taxes, depreciation and amortization less share-based compensation expense and other add-backs related to business development, acquisition, financing and reorganization costs. “Adjusted EBITDA margin” is defined by Curaleaf as adjusted EBITDA divided by total revenue. “Free cash flow from operations” is defined by Curaleaf as Net cash provided by operating activities from continuing operations less the Purchases of property, plant and equipment (i.e. net capital expenditures). 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 GAAP, they should not be considered in isolation of, or as a substitute for, our reported GAAP financial results as indicators of our performance, and they may not be comparable to similarly named measures from other companies. The tables below provide reconciliations of Non-GAAP measures to the most directly comparable GAAP measures.
Reconciliation of Non-GAAP financial measures
Adjusted Gross Profit from Continuing Operations (Unaudited)
($ thousands)
Three Months Ended
September 30,
2024
June 30, 2024
September 30,
2023
Gross profit from continuing operations
$ 160,516
$ 160,465
$ 150,052
Other add-backs(1)
772
2,662
2,121
Adjusted gross profit from continuing operations(2)
$ 161,288
$ 163,127
$ 152,173
Adjusted gross profit margin from continuing operations(2)
49 %
48 %
46 %
(1) Other add-backs in Q3 2024 primarily include labor and overhead write-downs primarily associated with idling capacity.
(2) Represents a Non-GAAP measure or Non-GAAP ratio. See preceding “Non-GAAP Financial and Performance Measures” section for definitions and more information regarding Curaleaf’s use of Non-GAAP financial measures and Non-GAAP ratios. The table above provides a reconciliation of Gross profit from continuing operations, the most comparable GAAP measure, to Adjusted gross profit from continuing operations, a non-GAAP measure.
Gross profit from continuing operations was $160.5 million in the third quarter of 2024, compared with $150.1 million in the prior year period. Adjusted gross profit from continuing operations for the third quarter of 2024 was $161.3 million compared with $152.2 million in the third quarter of 2023. Adjusted gross profit margin from continuing operations for the third quarter of 2024 was 49%, an increase of 312 basis points compared with the third quarter of 2023. The year-over-year increase in adjusted gross profit margin was due to lower production costs, an increase in vertical mix and higher utilization, partially offset by price compression and discounts.
Nine months ended September 30,
2024
2023
Gross profit from continuing operations
$ 481,885
$ 458,257
Other add-backs(1)
3,945
6,434
Adjusted gross profit from continuing operations(2)
$ 485,830
$ 464,691
Adjusted gross profit margin from continuing operations(2)
48 %
46 %
(1) Other add-backs for the nine months ended September 30, 2024 primarily include inventory and labor write-downs primarily associated with idling capacity.
(2) Represents a Non-GAAP measure or Non-GAAP ratio. See preceding “Non-GAAP Financial and Performance Measures” section for definitions and more information regarding Curaleaf’s use of Non-GAAP financial measures and Non-GAAP ratios. The table above provides a reconciliation of Gross profit from continuing operations, the most comparable GAAP measure, to Adjusted gross profit from continuing operations, a non-GAAP measure.
Gross profit from continuing operations was $481.9 million in the nine months ended September 30, 2024, compared with $458.3 million in the nine months ended September 30, 2023. Adjusted gross profit from continuing operations for the nine months ended September 30, 2024 was $485.8 million compared with $464.7 million in the nine months ended September 30, 2023. Adjusted gross profit margin from continuing operations for the nine months ended September 30, 2024 was 48%, an increase of 160 basis points compared with the nine months ended September 30, 2023.
Adjusted EBITDA (Unaudited)
($ thousands)
Three Months Ended
September 30,
2024
June 30, 2024
September 30,
2023
Net loss
$ (42,728)
$ (49,830)
$ (93,729)
Net income (loss) from discontinued operations
1,620
(1,277)
(25,915)
Net loss from continuing operations
(44,348)
(48,553)
(67,814)
Interest expense, net
25,097
24,810
23,581
Provision for income taxes
32,566
31,391
31,860
Depreciation and amortization(1)
54,612
52,272
45,804
Share-based compensation
6,017
6,843
6,222
Loss on impairment
642
1,774
24,790
Other (income) expense, net
(4,728)
(1,908)
2,796
Other add-backs(2)
5,435
6,334
8,018
Adjusted EBITDA(3)
$ 75,293
$ 72,963
$ 75,257
Adjusted EBITDA Margin(3)
23 %
21 %
23 %
(1) Depreciation and amortization expense include amounts charged to Cost of goods sold on the statement of operations.
(2) Other add-backs in Q3 2024 primarily include costs related to salaries and benefits, legal and professional fees and lobbyist/PR spend.
(3) Represents a non-GAAP measure or Non-GAAP ratio. See “Non-GAAP Financial and Performance Measures” below for definitions and more information regarding Curaleaf’s use of Non-GAAP financial measures and Non-GAAP ratios. The table above provides a reconciliation of Net loss, the most comparable GAAP measure to Adjusted EBITDA, a non-GAAP measure.
Adjusted EBITDA held steady at $75.3 million for the third quarter of 2024 and 2023, and Adjusted EBITDA margin remained flat at 23%.
Nine months ended September 30,
2024
2023
Net loss
$ (143,534)
$ (224,690)
Net income (loss) from discontinued operations
910
(46,410)
Net loss from continuing operations
(144,444)
(178,280)
Interest expense, net
75,669
71,935
Provision for income taxes
104,046
114,540
Depreciation and amortization(1)
158,343
144,497
Share-based compensation
20,369
14,178
(Gain) loss on impairment
(1,543)
24,790
Other income, net
(4,250)
(4,070)
Other add-backs(2)
16,809
35,422
Adjusted EBITDA(3)
$ 224,999
$ 223,012
Adjusted EBITDA Margin(3)
22 %
22 %
(1) Depreciation and amortization expense include amounts charged to Cost of goods sold on the statement of operations.
(2) Other add-backs in the current nine months ended primarily include costs related to salaries and benefits, inventory, legal and professional fees and lobbyist/PR spend.
(3) Represents a non-GAAP measure or Non-GAAP ratio. See “Non-GAAP Financial and Performance Measures” below for definitions and more information regarding Curaleaf’s use of Non-GAAP financial measures and Non-GAAP ratios. The table above provides a reconciliation of Net loss, the most comparable GAAP measure, to Adjusted EBITDA, a non-GAAP measure.
Adjusted EBITDA was $225 million in the nine months ended September 30, 2024, compared with $223 million in the prior year period, and Adjusted EBITDA margin remained flat at 22%.
Free Cash Flow (Unaudited)
($ thousands)
Nine months ended September 30, 2024
Net cash provided by operating activities from continuing operations
$ 118,585
Less: Capital expenditures
(65,558)
Free cash flow from continuing operations(1)
$ 53,027
(1) Represents a Non-GAAP measure or Non-GAAP ratio. See “Non-GAAP Financial and Performance Measures” above for definitions and more information regarding Curaleaf’s use of Non-GAAP financial measures and Non-GAAP ratios. The table above provides a reconciliation of Net cash provided by operating activities from continuing operations, a GAAP measure, to Free cash flow from continuing operations, a non-GAAP measure.
Condensed Interim Consolidated Balance Sheets (Unaudited)
($ thousands)
As of
September 30, 2024
December 31, 2023
Unaudited
Audited
Assets
Cash, cash equivalents and restricted cash
$ 89,968
$ 91,818
Other current assets
332,250
326,785
Property, plant and equipment, net
596,742
571,627
Right-of-use assets, finance lease, net
132,974
143,203
Right-of-use assets, operating lease, net
116,818
118,435
Intangible assets, net
1,126,917
1,172,445
Goodwill
634,617
626,628
Other long-term assets
44,296
45,635
Total assets
$ 3,074,582
$ 3,096,576
Liabilities, Temporary equity and Shareholders’ equity
Total current liabilities
$ 379,259
$ 494,034
Total long-term liabilities
1,610,664
1,431,250
Total shareholders’ equity
958,923
1,050,642
Redeemable non-controlling interest contingency
125,736
120,650
Total liabilities, temporary equity and shareholders’ equity
$ 3,074,582
$ 3,096,576
Condensed Interim Consolidated Statements of Operations (Unaudited)
($ thousands, except for share and per share amounts)
Three months ended
September 30,
Nine months ended
September 30,
2024
2023
2024
2023
Revenues, net:
Retail and wholesale revenues
$ 328,933
$ 331,796
$ 1,007,348
$ 997,100
Management fee income
1,597
1,376
4,400
4,263
Total revenues, net
330,530
333,172
1,011,748
1,001,363
Cost of goods sold
170,014
183,120
529,863
543,106
Gross profit
160,516
150,052
