Glass House Brands FY22 Revenue Grows 31%, What About Adjusted EBITDA?

Glass House Brands Inc. GLASF GHBWF GLAS GLAS released financial results for its fourth quarter ending December 31, 2022, revealing Q4 net sales of $32.2 million increased 75% from $18.4 million in Q4 2021 and 14% sequentially from $28.3 million in Q3 2022.

Q4 2022 Financial Highlights

• Gross profit was $10.2 million, or 32% of net revenues, compared to $(0.4) million, or (2)%, in Q4 2021 and $8.7 million, or 31% in Q3 2022.

• Gross Margin was 32%, compared to (2)% in Q4 2021 and gross margin of 31% in Q3 2022.

• Adjusted EBITDA was $(2.6) million, compared to $(9.1) million in Q4 2021 and $(2.7) million in Q3 2022.

• Cash balance was $14.1 million at quarter-end, down 19% from Q3 2022 quarter end.

Fiscal Year 2022 Financial Highlights

• Net revenues for 2022 were $90.9 million, an increase of 31% from 2021.

• Gross profit was $21.5 million, or 24% of net revenue, compared to $16.0 million and 23% of net revenue in 2021.

• Adjusted EBITDA loss was $21.4 million in the full year 2022 compared to a loss of $11.8 million for the full year 2021.

2023 Outlook

• The company accelerated its cash flow guidance of positive free cash flow excluding expansion capex from the third quarter of 2023 to the second quarter of 2023.

• Positive adjusted EBITDA in Q2 2023 and maintaining it for the remainder of the year.

• Q1 2023 revenue is expected to be between $27 million and $29 million.

• The company expects Q1 gross margins to improve slightly from Q4 levels of 32% despite the lower seasonal production in cultivation and its projected Q1 23 cost of production of $200 per pound based on a projected 45,000 pounds of biomass production.

• Q1 Adjusted EBITDA to improve from Q4 but to be slightly negative.

• Ending cash balance for Q1 23 is forecast to be ~$12.5 million.

• Revenue guidance of $160 million for FY 2023

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