Ayr Wellness Q2 Revenue Grows 20.6% YoY, Provides Outlook

Ayr Wellness Inc. AYRWF AYR revenue in Q2 2022 was $110.1 million, an increase of 20.6% year-over year, and a 1% decrease compared to Q1 2022.

Q2 Financial Highlights

• Gross profit was $40.3 million, an 80.6% increase compared to gross profit of $22.3 million in Q2 2021, and 11.5% decrease compared to gross profit of $45.5 million in Q1 2022.

• Adjusted EBITDA was $19.6 million, a decrease of 28.5% percent compared to adjusted EBITDA of $27.4 million in Q2 2021, and an increase of 0.5% compared to adjusted EBITDA of $19.5 million in Q1 2021.

• Net loss attributable to Ayr Wellness Inc., was $38.357 million compared to net loss of $20.738 million in Q2 2021.

Q2 and Recent Highlights

• Began serving adult-use customers at three New Jersey dispensaries in Woodbridge, Union and Eatontown.

• Opened first adult-use dispensaries, one in Boston’s Back Bay and one in Watertown, in July.

• Launched the flower brand, LIT, for wholesale as well as retail purchase in four Ayr Greater Boston locations.

• Announced the opening of ninth affiliated medical dispensary in Pennsylvania, AYR Indiana, in July.

• Launched Levia water-soluble tinctures in Arizona and Nevada, representing the first expansion of Levia outside of Massachusetts, in August.

• Opened three new dispensaries during the second quarter and an additional two stores in July and August, bringing Ayr’s total footprint to 50 dispensaries across the state.

M&A Highlights

• Closed acquisition of Herbal Remedies Dispensaries, LLC, an operator of two licensed retail dispensaries in Quincy, Illinois on May 25, 2022.

Financing and Capital Structure

• Ended the quarter with a cash balance of $116.7 million.

• Closed $81.5 million of real estate financing transactions during the quarter, bringing the YTD total to $108 million with an annualized blended cost of capital of 7.8%.

• Approximately 68.9 million fully diluted shares outstanding based on a treasury method calculation, as of June 30, 2022.

• Deployed $17.9 million of capital expenditures in Q2.

Jonathan Sandelman, founder and CEO of Ayr, stated, “Q2 2022 results were in line with our expectations, and we now look ahead to the second half of 2022. Our second half growth will be slower than previously expected, but the earnings power of the business remains outstanding. We continue to make investments in people and processes, while remaining prudent through these turbulent economic times. With our core operating footprint in place, the vast majority of our capex behind us, and a strong, $117 million cash position on our balance sheet, we believe that we are well-placed to weather this economic environment and emerge stronger on the other side.”

Outlook

Based on the results to date coupled with an uncertain macroeconomic backdrop, Ayr is updating its previously issued guidance regarding 2022 financial results.

The company expects revenue, adjusted EBITDA and operating income to grow approximately 10% sequentially from Q2 2022 to Q3 2022, and an acceleration in the pace of sequential growth in Q4 2022.

Price Action

Ayr Wellness shares closed Wednesday market session 2.01% lower at $4.5367 per share.

Photo by Tim Foster on Unsplash