Columbia Care Reports First Quarter 2019, Fourth Quarter and Full Year 2018 Financial Results


Ryan Allway

May 19th, 2019

News


NEW YORK–(BUSINESS WIRE)–Columbia Care Inc. (NEO: CCHW) (“Columbia Care”, or the “Company”), one of the largest multi-state operators in the medical cannabis industry, with licenses in 15 jurisdictions in the US and the EU, today reported financial results for its first quarter ended March 31, 2019 and fourth quarter and full year ended December 31, 2018. All financial information is provided in US dollars unless otherwise indicated.

First Quarter 2019 Financial Highlights

  • Revenue of $12.9 million, an increase of 45% from the prior year period
  • Gross profit, excluding changes in the fair value of biological assets and inventory sold, of $4.4 million, an increase of 29% over the prior year period
  • Net loss of ($25.1) million compared to ($9.7) million for the prior year period, reflecting the Company’s investment in its growth initiatives
  • Adjusted EBITDA of ($10.4) million compared to ($2.3) million for the prior year period, reflecting new market expansion, pre-opening facility expenses, organizational growth and expenses related to the Company’s go-public transaction1
  • Pro-forma cash as of March 31, 2019 of $169.6 million including proceeds from the closing of the Company’s go-public transaction on April 26, 2019 with zero debt

Subsequent to the end of the first quarter 2019, Columbia Care has launched a new line of industrial hemp-based CBD products in conjunction with the opening of its newest dispensaries in Brooklyn, NY and San Diego, CA. Additionally, since the beginning of the year, Columbia Care has entered into lease agreements for dispensaries in Delaware, the District of Columbia and 13 new facilities in targeted markets in Florida.

Our strong year over year growth in 2018 has continued into 2019 with the launch of our state-of-the-art dispensary in Brooklyn as well as our entry into two of the largest medical cannabis markets in the United States, California and Florida,” said Nicholas Vita, Chief Executive Officer of Columbia Care. “Access to the public capital markets will allow us to accelerate growth as we expand operations in 12 of our 14 existing jurisdictions and enables us to expedite the commercialization of our hemp-based CBD brands into traditional consumer retail channels. By leveraging our extensive patient data and institutional experience, we are committed to delivering products, services and brands designed to meet the needs of consumers in markets where we believe we can have the largest impact.”

Discussion of First Quarter 2019, Fourth Quarter 2018 and Full Year 2018 Results

Revenue for the first quarter of 2019 totaled $12.9 million, compared to $8.8 million for the first quarter of 2018, representing an increase of 45%. Fourth quarter and full year 2018 revenue was $11.0 million and $39.3 million respectively, compared to fourth quarter and full year 2017 revenue of $8.1 million and $29.2 million, representing increases of 36% and 35%, respectively, over the prior year periods.

Revenue increased exclusively due to the Company’s organic growth in its licensed jurisdictions coupled with higher consumer demand for Columbia Care’s wide array of proprietary medical cannabis products, curated third-party products and wholesale operations.

Excluding changes in the fair value of biological assets and inventory sold, gross profit was $4.4 million in the first quarter of 2019, or an increase of 29% over the prior year period. For the fourth quarter and full year 2018, gross profit excluding changes in the fair value of biological assets and inventory sold was $3.9 million and $16.5 million, or an increase of 1% and 20%, respectively, over the prior year periods.

The Company’s gross profit for the first quarter of 2019 was ($2.2) million, compared to $1.2 million or a decrease of $3.4 million from the prior year period. Fourth quarter and full year 2018 gross profit was ($0.6) million and $17.1 million respectively, compared to fourth quarter and full year gross profit of $20.0 million and $53.7 million respectively. The overall decrease reflects increased gross profit before fair value adjustments related to increased demand for the Company’s product offerings, offset by adjustments for unharvested biological assets.

Net loss for the first quarter of 2019 was ($25.1) million, compared to ($9.7) million, an increase of $15.4 million compared to the prior year period, primarily due to higher operating expenses related to the Company’s expansion in both new and existing markets. Net loss for the fourth quarter and full year 2018 was ($20.4) million and ($39.7) million, respectively, compared to net income of $2.8 million and $2.9 million for same periods in 2017, primarily due to fair value adjustments as well as the Company’s on-going investment in its growth initiatives.

Adjusted EBITDA for the first quarter of 2019 was ($10.4) million, compared to ($2.3) million, a decrease of $8.1 million compared to the prior year period. Adjusted EBITDA for the fourth quarter and full year 2018 was ($7.5) million and ($15.6) million, respectively, compared to Adjusted EBITDA of ($1.5) million and ($4.7) million for same periods in 2017. Changes in Adjusted EBITDA were primarily driven by higher operating expenses related to the Company’s expansion in both new and existing markets. See “Non-IFRS Financial Measures”.

As of March 31, 2019, the Company had $59.1 million cash on hand. On a pro forma basis, incorporating the closing of its go-public transaction, the Company had $169.6 million cash on hand as of March 31, 2019 with no debt.

Conference Call and Webcast Details

The Company will report complete financial results for the first quarter 2019 and fourth quarter and full year 2018 on Tuesday, May 14th, 2019 at 8:00 a.m. EDT. To access the live conference call via telephone, please dial 1-877-407-8914 (US Callers) or 1-201-493-6795 (international callers), no passcode is required. A live audio webcast of the call will also be available in the Investor Relations section of the Company’s website at https://ir.col-care.com/.

A replay of the audio webcast will be available in the Investor Relations section of the Company’s website approximately 2 hours after completion of the call and will be archived for 30 days.

Non-IFRS Financial Measures

In this press release, Columbia Care refers to certain non-IFRS financial measures, such as gross profit excluding changes in fair value of biological assets. These measures do not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. Columbia Care considers certain non-IFRS measures to be meaningful indicators of the performance of its business. A reconciliation of such non-IFRS financial measures to their nearest comparable IFRS measure is included in this press release.

About Columbia Care Inc.

Columbia Care Inc. (“Columbia Care” or the “Company”) is one of the largest and most experienced multi-state operators in the medical cannabis industry, with licenses in 15 jurisdictions in the US and the EU. With over 1,000,000 successful sales transactions since its inception, Columbia Care is a patient-centered organization setting the standard for compassion, professionalism, quality, caring and innovation, working in collaboration with some of the most renowned and innovative teaching hospitals and medical centers in the world. The Company is committed to providing the type of education and transparency patients deserve and quality of product that clinicians expect. In New York, among the many products Columbia Care manufactures and sells, EleCeed™, TheraCeed™ and ClaraCeed™ are the flagship pharmaceutical product lines and are available in tablet, vaporization, tincture, suppository and topical formulations. For more information on Columbia Care, please visit www.col-care.com.

Forward-Looking Statements

This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation which are based upon Columbia Care’s current internal expectations, estimates, projections, assumptions and beliefs and views of future events. Forward-looking information can be identified by the use of forward-looking terminology such as “expect”, “likely”, “may”, “will”, “should”, “intend”, “anticipate”, “potential”, “proposed”, “estimate” and other similar words, including negative and grammatical variations thereof, or statements that certain events or conditions “may”, “would” or “will” happen, or by discussions of strategy. Forward-looking information include estimates, plans, expectations, opinions, forecasts, projections, targets, guidance or other statements that are not statements of fact. Any forward-looking information speaks only as of the date on which it is made, and, except as required by law, Columbia Care does not undertake any obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Columbia Care to predict all such factors. When considering these forward-looking statements, readers should keep in mind the risk factors and other cautionary statements in Columbia Care’s final prospectus dated March 21, 2019 and filed with the applicable Canadian securities regulatory authorities on SEDAR at www.sedar.com. The risk factors and other factors noted in Columbia Care’s Annual Information Form could cause actual events or results to differ materially from those described in any forward-looking information.

1 See “Non-IFRS Financial Measures”
TABLE 1 – CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in US $ thousands, except unit and per unit figures, unaudited)
First Quarter 2019 Q1 2019 Q1 2018
Revenue $ 12,870 $ 8,849
Production costs (8,469 ) (5,436 )
Gross profit before fair value adjustments $ 4,401 $ 3,413
Fair value adjustments biological assets, net (6,604 ) (2,196 )
Gross profit $ (2,203 ) $ 1,217
Operating expenses $ (21,925 ) $ (9,451 )
Operating loss $ (24,128 ) $ (8,234 )
Other income (expense), net (389 ) (744 )
Provision for income taxes (615 ) (719 )
Net income (loss) $ (25,132 ) $ (9,697 )
Net loss attributable to non-controlling interests (272 ) (261 )
Net income (loss) attributable to Columbia Care members $ (24,860 ) $ (9,436 )
Weighted average common units outstanding – basic 14,613,453 12,254,119
Weighted average common units outstanding – diluted 14,613,453 12,254,119
Earnings (loss) per common unit attributable to Columbia Care members – basic $ (1.70 ) $ (0.77 )
Earnings (loss) per common unit attributable to Columbia Care members – diluted $ (1.70 ) $ (0.77 )
Fourth Quarter and Full Year 2018 Q4 2018 Q4 2017 FY 2018 FY 2017
Revenue $ 10,983 $ 8,057 $ 39,328 $ 29,183
Production costs (7,053 ) (4,161 ) (22,874 ) (15,513 )
Gross profit before fair value adjustments $ 3,930 $ 3,896 $ 16,454 $ 13,670
Fair value adjustments biological assets, net (4,521 ) 16,087 673 40,046
Gross profit $ (591 ) $ 19,983 $ 17,127 $ 53,716
Operating expenses $ (18,557 ) $ (10,090 ) $ (50,790 ) $ (37,389 )
Operating loss $ (19,148 ) $ 9,893 $ (33,663 ) $ 16,327
Other income (expense), net 419 (2,056 ) (3,166 ) (8,265 )
Provision for income taxes (1,690 ) (5,016 ) (2,831 ) (5,203 )
Net income (loss) $ (20,419 ) $ 2,821 $ (39,660 ) $ 2,859
Net loss attributable to non-controlling interests (28 ) (116 ) (863 ) (502 )
Net income (loss) attributable to Columbia Care members $ (20,391 ) $ 2,937 $ (38,797 ) $ 3,361
Weighted average common units outstanding – basic 14,087,999 12,069,792 12,893,741 11,819,891
Weighted average common units outstanding – diluted 14,087,999 12,735,559 12,893,741 12,286,848
Earnings (loss) per common unit attributable to Columbia Care members – basic $ (1.45 ) $ 0.24 $ (3.01 ) $ 0.28
Earnings (loss) per common unit attributable to Columbia Care members – diluted $ (1.45 ) $ 0.23 $ (3.01 ) $ 0.27
TABLE 2 – RECONCILIATION OF IFRS TO NON-IFRS MEASURES
(in US $ thousands, unaudited)
First Quarter 2019 Q1 2019 Q1 2018
Net income (loss) $ (25,132 ) $ (9,697 )
Provision for income taxes 615 719
Depreciation and amortization 2,870 987
Net interest and debt amortization 447 745
EBITDA $ (21,200 ) $ (7,246 )
Unit-based compensation 4,232 2,788
Fair value adjustments biological assets, net 6,604 2,196
Adjusted EBITDA $ (10,364 ) $ (2,262 )
Fourth Quarter and Full Year 2018 Q4 2018 Q4 2017 FY 2018 FY 2017
Net income (loss) $ (20,419 ) $ 2,821 $ (39,660 ) $ 2,859
Provision for income taxes 1,690 5,016 2,831 5,203
Depreciation and amortization 1,291 1,207 4,677 3,898
Net interest and debt amortization (88 ) 2,054 3,165 8,264
EBITDA $ (17,526 ) $ 11,098 $ (28,987 ) $ 20,224
Unit-based compensation 5,540 3,519 14,058 15,164
Fair value adjustments biological assets, net 4,521 (16,087 ) (673 ) (40,046 )
Adjusted EBITDA $ (7,465 ) $ (1,470 ) $ (15,602 ) $ (4,658 )
TABLE 3 – CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(in US $ thousands, unaudited)
First Quarter 2019 Q1 2019 Q1 2018
Net cash used in operating activities $ (15,073 ) $ (6,212 )
Net cash used in investment activities (12,399 ) (642 )
Net cash provided by financing activities 40,295 7,585
Net increase in cash 12,823 731
Cash balance – beginning of period 46,241 13,297
Cash balance – end of period 59,064 14,028
Fourth Quarter and Full Year 2018 Q4 2018 Q4 2017 FY 2018 FY 2017
Net cash used in operating activities $ (7,759 ) $ (1,696 ) $ (24,766 ) $ (9,467 )
Net cash used in investment activities (20,428 ) (4,731 ) (27,872 ) (23,766 )
Net cash provided by financing activities 51,515 10,346 85,582 44,288
Net increase in cash 23,328 3,919 32,944 11,055
Cash balance – beginning of period 22,913 9,378 13,297 2,242
Cash balance – end of period 46,241 13,297 46,241 13,297
TABLE 4 – CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (SELECT ITEMS)
(in US $ thousands, unaudited)
MARCH 31

2019

DECEMBER 29

2018

Cash $ 59,064 $ 46,241
Total current assets 131,169 160,122
Property and equipment, net 51,554 39,794
Right of use assets 33,654
Total assets 254,215 233,927
Total current liabilities 24,589 15,309
Total liabilities 70,798 30,238
Total equity 183,417 203,689

Contacts

Investors:
Investor Relations
+1.212.271.0915
[email protected]

Media:
Josephine Belluardo, Ph.D.
LifeSci Public Relations
+1.646.751.4361
[email protected]

Ryan Allway

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.


Network Partners

Follow Us on Social Media

About CFN Media

CFN Media (CannabisFN) is the leading creative agency and media network dedicated to legal cannabis. We help marijuana businesses attract investors, customers (B2B, B2C), capital, and media visibility. Private and public marijuana companies and brands in the US and Canada rely on CFN Media to grow and succeed.

CFN launched in June of 2013 to initially serve the growing universe of publicly traded marijuana companies across North America. Today, CFN Media is also the digital media choice for the emerging brands in the space.

Learn How Your Company can Be Covered on CFN Media

Learn More About the CFN Media Sponsored Content Program

Disclaimer: Matters discussed on this website contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. CFN Media Group, which owns CannabisFN, is not registered with any financial or securities regulatory authority and does not provide nor claims to provide investment advice or recommendations to readers of this release. CFN Media Group, which owns CannabisFN, may from time-to-time have a position in the securities mentioned herein and will increase or decrease such positions without notice. The Information contains forward-looking statements, i.e. statements or discussions that constitute predictions, expectations, beliefs, plans, estimates, or projections as indicated by such words as "expects", "will", "anticipates", and "estimates"; therefore, you should proceed with extreme caution in relying upon such statements and conduct a full investigation of the Information and the Profiled Issuer as well as any such forward-looking statements. Any forward looking statements we make in the Information are limited to the time period in which they are made, and we do not undertake to update forward looking statements that may change at any time; The Information is presented only as a brief "snapshot" of the Profiled Issuer and should only be used, at most, and if at all, as a starting point for you to conduct a thorough investigation of the Profiled Issuer and its securities and to consult your financial, legal or other adviser(s) and avail yourself of the filings and information that may be accessed at www.sec.gov, www.pinksheets.com, www.otcmarkets.com or other electronic sources, including: (a) reviewing SEC periodic reports (Forms 10-Q and 10-K), reports of material events (Form 8-K), insider reports (Forms 3, 4, 5 and Schedule 13D); (b) reviewing Information and Disclosure Statements and unaudited financial reports filed with the Pink Sheets or www.otcmarkets.com; (c) obtaining and reviewing publicly available information contained in commonlyknown search engines such as Google; and (d) consulting investment guides at www.sec.gov and www.finra.com. You should always be cognizant that the Profiled Issuers may not be current in their reporting obligations with the SEC and OTCMarkets and/or have negative signs at www.otcmarkets.com (See section below titled "Risks Related to the Profiled Issuers, which provides additional information pertaining thereto). For making specific investment decisions, readers should seek their own advice and that of their own professional advisers. CFN Media Group, which owns CannabisFN, may be compensated for its Services in the form of cash-based and/or equity-based compensation in the companies it writes about, or a combination of the two. For full disclosure, please visit: https://www.cannabisfn.com/legal-disclaimer/. A short time after we acquire the securities of the foregoing company, we may publish the (favorable) information about the issuer referenced above advising others, including you, to purchase; and while doing so, we may sell the securities we acquired. In addition, a third-party shareholder compensating us may sell his or her shares of the issuer while we are publishing favorable information about the issuer. Except for the historical information presented herein, matters discussed in this article contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. CFN Media Group, which owns CannabisFN, is not registered with any financial or securities regulatory authority, and does not provide nor claims to provide investment advice or recommendations to readers of this release. CFN Media Group, which owns CannabisFN, may from time to time have a position in the securities mentioned herein and will increase or decrease such positions without notice. For making specific investment decisions, readers should seek their own advice and that of their own professional advisers. CFN Media Group, which owns CannabisFN, may be compensated for its Services in the form of cash-based and/or equity- based compensation in the companies it writes about, or a combination of the two. For full disclosure please visit: https://www.cannabisfn.com/legal-disclaimer/.

Copyright © Accelerize Inc. · All Rights Reserved · Privacy Policy · Legal Disclaimer

loading