Terrascend Corp. · TSX:TSND
Terrascend — Q2 2024 Earnings Presentation
25 slides from Terrascend's earnings presentation, Aug 8, 2024
Slide 1: 2024 Second Quarter Financial Results
2024 Second Quarter Financial Results August 8, 2024 Terrascend.com TSX: TSND | OTCQX: TSNDF
Slide 2: Executive Leadership Speakers
Executive Leadership Speakers Jason Wild Ziad Ghanem Keith Stauffer Executive Chairman President & Chief Financial Officer Chief Executive Officer p. 2
Slide 3: Disclaimer: Forward-Looking Information
Disclaimer Forward-Looking Information This presentation contains “forward-looking information” within the meaning of applicable securities laws, including the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of
Slide 4: Disclaimer: Definition and Reconciliation of Non-GAAP Measures
Disclaimer Definition and Reconciliation of Non-GAAP Measures In addition to reporting the financial results in accordance with generally accepted accounting principles in the United States (“GAAP”), the Company reports certain financial results that differ from what is reported under GAAP. Non-GAAP
Slide 5: Overview
Overview Jason Wild, Executive Chairman terrascend.com
Slide 6: Q2 2024 Financial Highlights – Driving Revenue and Profitability
Q2 2024 Financial Highlights – Driving Revenue and Profitability Another quarter of year-over-year net revenue and Adjusted EBITDA* growth as well as positive operating and Free Cash Flow* $77.5 M $15.6 M 8th Consecutive Net Revenue Adjusted EBITDA from Quarter of Positive Continuing Operations* Cas
Slide 7: Strengthening Balance Sheet
Strengthening Balance Sheet • Recently completed a $140 million senior secured loan • Matures in August 2028 • Non-dilutive financing bears a coupon of 12.75% • No prepayment penalties and no warrants • No other material debt maturing until late 2027 • Proceeds of this loan are being used to pay dow
Slide 8: Actively Pursuing Greenfield Expansion Opportunities
Actively Pursuing Greenfield Expansion Opportunities Uniquely positioned to enter new markets through attractive M&A, such as Ohio Population OHIO 12 Million Adult-use commenced on August 6th MI PA NJ OH • Focused on larger tier 1 licenses in OH, which allow up to MD 100,000 square feet of canopy an
Slide 9: Continued Progress With Federal Cannabis Reform
Continued Progress With Federal Cannabis Reform • Passed July 22nd comment period deadline for DEA’s proposed re-scheduling of cannabis. • According to Headset data, +92% of comments favored rescheduling or de- scheduling. • Re-scheduling would result in elimination of punitive tax treatment, provid
Slide 10: Summary
Summary • Control what we can control • Right team in place • High performing assets • Strong cash flow • Financial flexibility • Possible greenfield expansion and transformational deal opportunities * Free Cash Flow is a non-GAAP financial measure. Please refer to disclaimer on slide 3 and 4 and Re
Slide 11: State-by-State Overview
State-by-State Overview Ziad Ghanem, President & Chief Executive Officer terrascend.com
Slide 12: Driving Revenue and Efficiencies Across our Core Markets
Driving Revenue and Efficiencies Across our Core Markets MICHIGAN PENNSYLVANIA Scaled vertical Scaled vertical operations operation with CALIFORNIA including cultivation, large scale cultivation and manufacturing, manufacturing, retail with 20 and 6 medical Population locations, and Population dispe
Slide 13: New Jersey
#1 New Jersey Market 2Q ’24 Highlights Share • Largest and most profitable market. • According to BDSA, TerrAscend held the #1 market share position throughout the first half of 2024. Lodi (Dispensary) • In Q2 ’24 wholesale revenue increased 100% YOY. • At retail, returned to sequential growth for f
Slide 14: Maryland
Maryland 2Q ’24 Highlights • Retail and wholesale revenue remained stable sequentially during the quarter. • Recently completed expansion of additional rooms at Hagerstown facility. Burtonsville • Additional supply will fuel wholesale growth (Dispensary) and increase verticality in four dispensaries
Slide 15: Pennsylvania
Pennsylvania 2Q ’24 Highlights • Retail was stable in quarter and wholesale doubled year-over-year. • Growth was driven by strong performance of value-oriented Legend brand and expansion into edibles category with Valhalla and Wana brands. • Optimistic Pennsylvania will turn adult-use in 2025. Proce
Slide 16: Michigan
Michigan 2Q ’24 Highlights • Focus is on improving operational efficiency and driving gross margin to establish a solid Harrison foundation from which to expand. (Cultivation / Processing & Distribution) • Gross margin surpassed 40% for third Monitor consecutive quarter. (Cultivation / Processing) T
Slide 17: Financial Overview
Financial Overview Keith Stauffer, Chief Financial Officer terrascend.com
Slide 18: Second Quarter Net Revenue
Second Quarter Third Quarter 2024 2023 Net Revenue Financial Results YoY increase driven by strong wholesale growth in New Jersey, Pennsylvania and Maryland Net Revenue Second Quarter 2024 Highlights (in millions, US$) • Revenue: $77.5 million versus $72.1 million in Q2 2023 $72.1 $77.5 • +7.5% grow
Slide 19: Gross Profit Margin
Gross Profit Margin Year-over-year decrease driven by channel mix shift and price compression in NJ, partially offset by margin expansion in MI and MD Second Quarter 2024 Highlights Gross Profit Margin • Gross Profit Margin: 48.6% versus 50.2% in Q2 2023 • YOY decrease was driven by channel mix shif
Slide 20: General & Administrative Expenses
General General & Administrative Expenses* & Administrative Expenses* Second Quarter 2024 Highlights General & Administrative Expenses* (in millions, US$) • General & Administrative expenses* for Q2 2024, excluding stock-based compensation, were $22.1 million compared to $28.5 million in Q2 2023 • G
Slide 21: Net Loss and Adjusted EBITDA
Net Loss and Adjusted EBITDA* GAAP Net Loss Adj EBITDA* from continuing operations (in millions, US$) (in millions, US$) +21.9% ($6.2) YoY $15.6 $12.8 ($12.9) Q2 2023 Q2 2024 Q2 2023 Q2 2024 % Rev 17.8% 20.2% GAAP Net Loss: Adjusted EBITDA: • $6.2 million net loss, compared to a $12.9 million net lo
Slide 22: Balance Sheet and Cash Flow; Third Quarter 2024 Expectations
Balance Sheet and Cash Flow • Cash, and cash equivalents, including restricted cash: • Free Cash Flow*: • $30.5 million (6/30/24), compared to $25.7 million • $11.7 million as compared to ($0.2) million in (3/31/24) and $25.3 million (12/31/23) Q2 ‘23 • Q2 2024 net cash provided by continuing operat
Slide 23: Thank You
Thank You terrascend.com
Slide 24: Appendix – Reconciliation of Non-GAAP Measures
Appendix – Reconciliation of Non-GAAP Measures The table below reconciles net loss to EBITDA from continuing operations and Adjusted EBITDA from continuing operations for the quarters ended June 30, 2024 and June 30, 2023. For the Three Months Ended June 30, 2024 June 30, 2023 Revenue, net $ 77,523
Slide 25: Appendix – Reconciliation of Non-GAAP Measures
Appendix – Reconciliation of Non-GAAP Measures The table below reconciles Free Cash Flow for the quarters ended June 30, 2024 and June 30, 2023. The table below reconciles Revenue, net to General & Administrative expenses excluding stock-based compensation as a percentage of revenue, net: p. 25