Jushi Q1 FY23 Gross Profit Grows 56.7% YoY, What About Adjusted EBITDA?

Jushi Holdings Inc. JUSHF JUSH achieved revenue of $69.9 million in Q1 2023, an increase of 12.9% compared to $61.9 million in Q1 2022.

Q1 2023 Financial Highlights

• Gross profit of $29.9 million, an increase of 56.7% compared to $19.1 million in Q1 2022.

• Gross profit margin was 42.9% of revenue, compared to 30.9% in Q1 2022 and 28.6% in Q4 2022

• Net loss of $12.4 million, a favorable decrease of 91.1% compared to a net loss of $139 million in Q4 2022, and a favorable decrease of 37% compared to net loss of $19.8 million in Q1 2022.

• Adjusted EBITDA of $7.6 million, an improvement of $8.5 million year-over-year and $1.6 million sequentially

• Cash, cash equivalents, and restricted cash of $19.4 million as of quarter end

Recent Developments

• Strengthened financial position with the closing of a $20.0 million non-dilutive debt financing with FVCbank in April 2023

• Announced change of auditor to Macias Gini & O'Connell LLP effective April 20^th

• Implemented new, optimized retail labor model beginning in Q2, which is expected to significantly reduce labor hour costs

“In the first quarter, our efficiency and cost savings plan resulted in very encouraging improvements to our margins and profitability,” stated Jim Cacioppo, CEO, chairman, and founder of the company. “Our aggressive steps to responsibly right size the business, improve efficiencies and manage costs created an approximate 13.0% year-over-year reduction in operating expenses. In April, we further executed against our cost-savings initiatives with the implementation of our new retail labor model which is expected to meaningfully cut our labor hour costs. Additionally, we continue to make upgrades throughout our grower-processor footprint to drive operational efficiencies for further savings throughout the remainder of the year.”

Cacioppo continued, “With five state-level vertically integrated operations that are all still ramping up to our desired operating performance, we are increasing our ability to sell-through Jushi-branded products at our own retail network and continuing to grow our wholesale operations. Our wholesale business revenue has nearly doubled year-over-year, while retail sales increased over 7.5% year-over-year. We look forward to the launch of our new high-end flower line, Hijinks, and other innovative product forms across our house of brands to better serve customers and grow profitability of the company. I would note that our grower-processor operations had significant improvement in gross profit margin fueled by efficiency gains. We realized benefits from cost savings initiatives, ramp-up of new production, and other enhancements made at our Massachusetts, Pennsylvania, and Virginia facilities along with improved retail operating performance.”

Balance Sheet and Liquidity

As of March 31, 2023, the company had approximately $19.4 million of cash, cash equivalents and restricted cash. During Q1 2023, the company paid approximately $4.5 million in capital expenditures. In 2023, the company expects capital expenditures for new projects to be approximately $13.0 million, of which approximately $6.0 million is discretionary growth capital, as a substantial amount of its expansion projects in Pennsylvania and Virginia were completed in fiscal year 2022. As of March 31, 2023, the company had approximately $209.0 million in principal amount of total debt, excluding leases and property, plant, and equipment financing obligations. As of May 8, 2023, the company’s issued and outstanding shares were 196.63 million and its fully diluted shares outstanding were 310.68 million.

Photo: Benzinga edit with photo by Kindel Media on Pexels

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