Slide 1: 2023 Third Quarter Financial Results
2023 Third Quarter Financial Results November 9, 2023 Terrascend.com TSX: TSND | OTCQX: TSNDF
Slide 2: Executive Leadership Speakers
Executive Leadership Speakers Jason Wild Ziad Ghanem Keith Stauffer Executive Chairman Chief Executive Officer Chief Financial Officer (TSX: T S N D | O T C Q X : T S N D F ) 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 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: Company Overview
Company Overview Jason Wild, Executive Chairman terrascend.com
Slide 6: Q3 2023 Financial Highlights
Q3 2023 Financial Highlights $89.2 M 53.6% 5th Consecutive Net Revenue Q3 2023 Gross Quarter of Positive Profit Margin Cash Flow from Continuing Operations 8th Consecutive $24.2 M, +89% QoQ Quarter of Sequential Adjusted EBITDA from $9.4 M Revenue Growth Continuing Operations* Cash Flow from Continu
Slide 7: Raising 2023 Guidance
Raising 2023 Guidance Net Revenue Adj EBITDA* (in millions, US$) (in millions, US$) % Rev 15.7% 19.9% 22.7% +29% YoY $320 +87% YoY $317 $73 $63 $248 $39 FY 2022 FY 2023E FY 2023E (updated) FY 2022 FY 2023E FY 2023E (previous) (previous) (updated) Implies Q4 Net Revenue of $89 million and Adjusted EB
Slide 8: Sector Leading 2023 YOY Revenue Growth
Sector Leading 2023 YOY Revenue Growth 29% 22% 8% 6% 2% 2% 0% -2% -10% -10% i d s no f bs e ve YR sh s ea e ar n es tri La ie ra ce Ju A al C ln s ul Ve as du r o el a Tr Cu sc bi rr W In e Te um Cr b nd um l Co e sc Th A en re Note: Peer forecasts are based on Needham consensus G Source: Needham Mu
Slide 9: Ready to Go “Deep and Wide”
Ready to Go “Deep and Wide” MICHIGAN PENNSYLVANIA Scaled vertical Scaled vertical operations operation with CALIFORNIA including cultivation, large scale cultivation and manufacturing, industry leading manufacturing, Population retail with 19 and 6 medical Population dispensaries 10 locations, and S
Slide 10: (TSX: T S N D | O T C Q X : T S
(TSX: T S N D | O T C Q X : T S N D F ) p. 10
Slide 11: Taking Action
Taking Action The cannabis industry and its employees deserve to be treated equally, on an even playing field with every other business and TerrAscend is committed to help deliver that well deserved change. (TSX: T S N D | O T C Q X : T S N D F ) p. 11
Slide 12: Business Overview
Business Overview Ziad Ghanem, Chief Executive Officer terrascend.com
Slide 13: New Jersey
#2 New Jersey Market 3Q ’23 Highlights Share • Largest and Most Profitable Market • According to BDSA, in August Improved Market Share Position from #3 to #2 Lodi (Dispensary) • In Sept. achieved 18.6% market share, only 0.2% from #1 spot of 18.8% • Cultivation Yields Up 50% Since January • Drove gr
Slide 14: Maryland
Maryland 3Q ’23 Highlights • First Full Quarter of Adult-Use • Adult-use began July 1, 2023 • Market sales run rate of ~$1 billion annually, roughly doubling the medical market • Vertically Integrated Operations Herbiculture • Leveraging same successful strategy as NJ (Dispensary) • 4 retail locatio
Slide 15: Pennsylvania
Pennsylvania 3Q ’23 Highlights • Market Overview • Population of 13 million • Current medical market size already over $1.2B • Return to Growth • 6 Apothecarium locations grew 6% sequentially and 8% year over year Processing) • Wholesale business grew 20% sequentially and 10% year over year • Gross
Slide 16: Michigan
Michigan 3Q ’23 Highlights • Focused on Margin and Profitability • Largest US market per capita and #2 market size Harrison at over $3 Billion (Cultivation / Processing • Improved gross margins by 1,800 basis points & Distribution) since acquiring the business Monitor (Cultivation / Processing) • Ec
Slide 17: Financial Overview
Financial Overview Keith Stauffer, Chief Financial Officer terrascend.com
Slide 18: Third Quarter 2023 Net Revenue Growth
Third ThirdQuarter Quarter2023 Net Revenue 2023 Financial Growth Results YoY increase driven by growth across Maryland, Pennsylvania and New Jersey Net Revenue Third Quarter 2023 Highlights (in millions, US$) $89.2 • Revenue: $89.2M versus $66.2M in Q3 2022 $72.1 $23.1 • +23.7% growth sequentially a
Slide 19: Third Quarter 2023 Gross Profit Margin
Third Quarter 2023 Gross Profit Margin Third Quarter 2023 Highlights • Gross Profit Margin: 53.6% versus 50.2% +660bps in Q2 2023 and 47.0% in Q3 2022 YoY • A 340-basis point improvement quarter- 53.6% over-quarter and up 660 basis points year- over-year 50.2% 47.0% • Driven by progress across all s
Slide 20: General & Administrative Expenses
General General & Administrative Expenses* & Administrative Expenses* Third Quarter 2023 Highlights (in millions, US$) • General & Administrative Expenses*: 30.8% of revenue in Q3, a reduction of 870-basis points sequentially, from 39.5% in Q2 $27.5 • Predominately due to tight control of costs whil
Slide 21: GAAP Net Income/(Loss) and Adjusted EBITDA
GAAP Net Income/(Loss) and Adjusted EBITDA* GAAP Net Loss Adj EBITDA* (in millions, US$) from continuing operations (in millions, US$) +89% QoQ -$8.4 $24.2 -$12.9 $12.8 $12.8 Q3 2022 Q2 2023 Q3 2023 Q2 2023 Q3 2023 % Rev 19.3% 17.8% 27.1% * Adj EBITDA is a non-GAAP financial measure. Please refer to
Slide 22: Balance Sheet and Cash Flow
Balance Sheet and Cash Flow • Cash, and cash equivalents, including restricted cash, were $28.5 million as of 9/30/23, compared to $34.5 million as of 6/30/23. • Net cash provided by continuing operations was $9.4 million, representing 5th consecutive quarter of positive cashflow from continuing ope
Slide 23: Raised 2023 Full Year Guidance
Raised 2023 Full Year Guidance • FY ‘23: $320M net revenue, +29% YOY and $73M Adjusted EBITDA from continuing operations, +87% YOY • Adjusted EBITDA from continuing operations guidance represents a 22.7% margin for the year • 2023 FY guidance implies Q4 net revenue of $89 million and Adjusted EBITDA
Slide 24: Thank You
Thank You terrascend.com
Slide 25: 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 September 30, 2023, June 30, 2023, and September 30, 2022. For the three months ended September 30, 2023 June
Slide 26: Appendix – Reconciliation of Non-GAAP Measures
Appendix – Reconciliation of Non-GAAP Measures The table below reconciles Free Cash Flow for the quarters ended September 30, 2023, June 30, 2023, and September 30, 2022. For the three months ended June 30, September 30, 2023 September 30, 2022 2023 Net cash (used in) provided by operating activitie