Terrascend Corp. · TSX:TSND
Terrascend — Q1 2024 Earnings Presentation
26 slides from Terrascend's earnings presentation, May 9, 2024
Slide 1: 2024 First Quarter Financial Results
2024 First Quarter Financial Results May 9, 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: Q1 2024 Financial Highlights – Focus on Cash Flow
Q1 2024 Financial Highlights – Focus on Cash Flow Generating sufficient cash, in excess of total accrued taxes, including the uncertain tax position related to 280E taxes $80.6 M $16.2 M 7th Consecutive Net Revenue Adjusted EBITDA from Quarter of Positive Continuing Operations* Cash Flow from Contin
Slide 7: Operational Efficiencies Across Each Core Market
Operational Efficiencies Across Each Core Market MICHIGAN PENNSYLVANIA Scaled vertical Scaled vertical operations operation with CALIFORNIA including cultivation, large scale cultivation and manufacturing, manufacturing, retail with 19 and 6 medical Population locations, and Population dispensaries
Slide 8: Improving our Balance Sheet
Improving our Balance Sheet • Actively in the process of exploring additional opportunities to improve balance sheet and well underway in a competitive process to refinance a substantial portion of debt. • There is significant interest in this process from both existing and potential new lenders. •
Slide 9: Attractive M&A Opportunities
Attractive M&A Opportunities Ample greenfield opportunity of attractive new markets to enter, for example, Ohio Population OHIO 12 Million Adult-use on the horizon MI PA NJ OH • Similar to successful expansion into Maryland, sights are now set MD on entering Ohio prior to commencement of Adult-Use.
Slide 10: Multiple Potential Paths to Cannabis Reform
Multiple Potential Paths to Cannabis Reform Recent news that the DEA is moving to re-schedule cannabis to Schedule III will result in the elimination of punitive tax treatment and will likely enable greater access to capital at a lower cost, resulting in leveling the playing field for operators in t
Slide 11: In Closing
In Closing • Pleased with first quarter results • Right team • High-performing assets • Strong cash flow • Ample greenfield opportunities to pursue additional growth • 2023 was about operational excellence and strengthening the foundation • 2024 is about expansion by capitalizing on the current envi
Slide 12: State-by-State Overview
State-by-State Overview Ziad Ghanem, President & Chief Executive Officer terrascend.com
Slide 13: New Jersey
#3 New Jersey Market 1Q ’24 Highlights Share • Largest and Most Profitable Market • According to BDSA, have consistently maintained a top 3 market share position Lodi (Dispensary) • In 2023, wholesale revenue doubled from Q2 to Q3, then grew another 25% in Q4, and remained strong in Q1 ‘24 • Maintai
Slide 14: Maryland
Maryland 1Q ’24 Highlights • Still Early Innings of Adult-Use • Adult-use began July 1, 2023 • Q1 retail revenue remained stable • Wholesale revenue grew 22% • Gross margin improved QoQ Burtonsville • Fully Vertically Integrated (Dispensary) • State-of-the-art cultivation facility Parkville Cumberla
Slide 15: Pennsylvania
Pennsylvania 1Q ’24 Highlights • Market Overview • Population of 12 million • Current medical market size already over $1.2B • According to BDSA, expected to be over $2B adult- use market by 2028 • Retail and Wholesale Growth • Seasonal decline in revenue sequentially at retail, as expected Processi
Slide 16: Michigan
Michigan 1Q ’24 Highlights • Focused on Margin and Profitability • Improving operational efficiency and driving Harrison gross margins to establish a solid foundation (Cultivation / Processing & Distribution) from which to expand footprint Monitor • Once again achieved goal of 40% gross margins (Cul
Slide 17: Financial Overview
Financial Overview Keith Stauffer, Chief Financial Officer terrascend.com
Slide 18: First Quarter Revenue
First Third Quarter Quarter2024 2023Net Revenue Financial Results YoY increases driven by acquisition of 4 retail dispensaries and launch of adult-use in Maryland, and strong wholesale growth in New Jersey and Pennsylvania Net Revenue First Quarter 2024 Highlights (in millions, US$) • Revenue: $80.6
Slide 19: Gross Profit Margin
Gross Profit Margin Slight year-over-year decrease driven by channel mix shift in NJ and scale-up related costs in MD, partially offset by improvements in MI First Quarter 2024 Highlights Gross Profit Margin • Gross Profit Margin: 48.0% versus 48.8% in Q1 2023 • YOY decrease was driven by channel mi
Slide 20: General & Administrative Expenses
General General & Administrative Expenses* & Administrative Expenses* General & Administrative Expenses* First Quarter 2024 Highlights (in millions, US$) • General & Administrative expenses* for the first quarter of 2024, excluding stock-based compensation, were $26.5 million compared to $26 million
Slide 21: Net Income (Loss) and Adjusted EBITDA
Net Income (Loss) and Adjusted EBITDA* GAAP Net Loss Adj EBITDA* from continuing operations (in millions, US$) (in millions, US$) +33% YoY ($14.9) $16.2 $12.2 ($19.2) Q1 2023 Q1 2024 Q1 2023 Q1 2024 % Rev 17.6% 20.1% GAAP Net Loss: Adjusted EBITDA: • $14.9 million net loss, compared to a $19.2 milli
Slide 22: Balance Sheet and Cash Flow
Balance Sheet and Cash Flow • Cash, and cash equivalents, including restricted cash: • $25.7 million (3/31/24), compared to $25.3 million (12/31/23) • Q1 2024 net cash provided by continuing operations: • $13.3 million, compared to $10.5 million in Q1 ‘23, representing 7th consecutive quarter of pos
Slide 23: Second Quarter 2024 Expectations
Second Quarter 2024 Expectations • Expect YoY revenue growth of 11-13%. • Anticipate gross margin and G&A rates similar to the first quarter of 2024. • Anticipate Adjusted EBITDA growth of 20-25% YoY. p. 23
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 March 31, 2024, December 31, 2023 and March 31, 2023. For the Three Months Ended March 31, 2024 December 31, 2
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 March 31, 2024, December 31, 2023 and March 31, 2023. For the Three Months Ended March 31, 2024 December 31, 2023 March 31, 2023 Net cash provided by operating activities- continuing opera