Trulieve Reports Third Quarter 2022 Results and Drives Forward Progress on Strategic Vision – PR Newswire


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TALLAHASSEE, Fla., Nov. 9, 2022 /PRNewswire/ — Trulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF) (“Trulieve” or “the Company”), a leading and top-performing cannabis company in the U.S., today announced its results for the quarter ended September 30, 2022. Results are reported in U.S. dollars and in accordance with U.S. Generally Accepted Accounting Principles unless otherwise indicated. Numbers may not sum perfectly due to rounding.  
Q3 2022 Financial and Operational Highlights*
*See “Non-GAAP Financial Measures” below for additional information and a reconciliation to GAAP for all Non-GAAP metrics.
Recent Developments
Management Commentary
“Our team demonstrated tremendous flexibility and cross functional capabilities during the third quarter,” said Kim Rivers, Trulieve CEO. “We navigated macroeconomic pressure, changes to dosing limits in our core state of Florida, and the impact of Hurricane Ian while making further progress streamlining the organization.”   
Rivers continued, “U.S. cannabis has significant white space ahead, with many states yet to implement medical or adult use programs and a growing appetite for substantive federal reform. Trulieve has been preparing for this next phase of industry evolution for years, building our regional hub strategy, scaling cutting edge cultivation and manufacturing capacity, expanding our leading retail platform, investing in data technology and perfecting the customer journey.”
Outlook
We anticipate fourth quarter results will be influenced by holiday retail performance and promotional activity across core markets during the latter half of the quarter. Based on our performance year to date and current trends, we are targeting the low end of 2022 guidance of $1.25 billion to $1.3 billion in revenue and $415 million to $450 million in Adjusted EBITDA.
Financial Highlights*
Results of Operations
For the Three Months Ended
For the Nine Months Ended
(Figures in millions and %
change based on these
figures)

September
30, 2022

September
30, 2021

change
June 30,
2022

change
September
30, 2022

September
30, 2021

change
Revenue
$
301
$
224
34 %
$
319
-6 %
$
938
$
633
48 %
Gross Profit
$
168
$
154
9 %
$
184
-9 %
$
532
$
434
23 %
Gross Margin %
56 %
69 %
58 %
57 %
69 %
Adjusted Gross Profit
$
172
$
155
11 %
$
184
-6 %
$
541
$
441
23 %
Adjusted Gross Margin %
57 %
69 %
58 %
58 %
70 %
Operating Expenses
$
196
$
88
123 %
$
143
37 %
$
488
$
219
123 %
Operating Expenses %
65 %
39 %
45 %
52 %
35 %
Net Income (Loss)**
$
(115)
$
19

$
(22)

$
(169)
$
90

Net Income (Loss) Continuing Ops
$
(77)
$
19

$
(22)

$
(129)
$
90

Adjusted Net Income (Loss)
$
4
$
36
-90 %
$
(1)

$
5
$
122

Diluted Shares Outstanding
189
137
187
188
131
EPS Continuing Ops
$
(0.41)
$
0.14

$
(0.11)

$
(0.68)
$
0.68

Adjusted EPS
$
0.02
$
0.26
-92 %
$
0.00

$
0.03
$
0.91

Adjusted EBITDA
$
99
$
98
1 %
$
111
-11 %
$
315
$
284
11 %
Adjusted EBITDA Margin %
33 %
44 %
35 %
34 %
45 %
*See “Non-GAAP Financial Measures” below for additional information and a reconciliation to GAAP for all Non-GAAP metrics.
**Includes discontinued operations.
Conference Call
The Company will host a conference call and live audio webcast on November 9, 2022, at 5:30 P.M. Eastern time, to discuss its third quarter 2022 financial results. Interested parties can join the conference call by dialing in as directed below. Please dial in 15 minutes prior to the call.
North American toll free: 1-888-254-3590
International: 1-786-789-4797                              
A live audio webcast of the conference call will be available at:
https://app.webinar.net/xX6Q5JE71z3
A powerpoint presentation and archived replay of the webcast will be available at
https://investors.trulieve.com/events-presentations
The Company’s Form 10-Q for the quarter ended September 30, 2022, will be available on the SEC’s website or at https://investors.trulieve.com/financial-information/quarterly-results. The Company’s Management Discussion and Analysis for the period and the accompanying financial statements and notes will be available under the Company’s profile on SEDAR and on its website at https://investors.trulieve.com/financial-information/quarterly-results. This news release is not in any way a substitute for reading those financial statements, including the notes to the financial statements.
Trulieve Cannabis Corp.
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands, except per share data)

September 30,
2022

December 31,
2021

ASSETS
Current assets:
Cash and cash equivalents
$
114,468
$
230,085
Restricted cash

3,013
Accounts receivable, net
11,309
8,563
Inventories, net
301,239
209,943
Notes receivable – current portion
715
1,530
Prepaid expenses and other current assets
62,068
68,145
Assets associated with discontinued operations
2,838
3,615
Total current assets
492,637
524,894
Property and equipment, net
795,506
779,413
Right of use assets – operating, net
100,864
111,723
Right of use assets – finance, net
75,305
66,764
Intangible assets, net
1,027,058
1,081,240
Goodwill
791,495
765,358
Notes receivable, net
12,059
12,147
Other assets
21,531
17,640
Long-term assets associated with discontinued operations
4,503
52,167
TOTAL ASSETS
$
3,320,958
$
3,411,346
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities
87,773
93,801
Income tax payable
4,681
28,084
Deferred revenue
6,385
7,168
Notes payable – current portion, net
4,823
10,052
Operating lease liabilities – current portion
10,779
10,020
Finance lease liabilities – current portion
8,719
6,185
Construction finance liabilities – current portion
1,137
991
Contingencies
25,590
13,017
Liabilities associated with discontinued operations
390
92
Total current liabilities
150,277
169,410
Long-term liabilities:
Notes payable
7,942
6,456
Private placement notes, net
540,301
462,929
Warrant liabilities
268
2,895
Operating lease liabilities
110,625
107,570
Finance lease liabilities
75,011
65,244
Construction finance liabilities
182,257
175,198
Deferred tax liabilities
220,206
241,882
Other long-term liabilities
8,616
8,400
Long-term liabilities associated with discontinued operations
14,575
23,989
TOTAL LIABILITIES
1,310,078
1,263,973
Commitments and contingencies (see Note 22)
SHAREHOLDERS’ EQUITY
Common stock, no par value; unlimited shares authorized. 185,880,209 issued and outstanding as of September 30, 2022 and 180,504,172 issued and outstanding as of December 31, 2021.


Additional paid-in-capital
2,041,748
2,008,100
Accumulated (deficit) earnings
(31,299)
137,721
Non-controlling interest
431
1,552
TOTAL SHAREHOLDERS’ EQUITY
2,010,880
2,147,373
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$
3,320,958
$
3,411,346
Trulieve Cannabis Corp.
Condensed Consolidated Statements of Operations and
Comprehensive (Loss) Income (Unaudited)
(in thousands, except per share data)

Three Months Ended
Nine Months Ended
September 30,
2022

September 30,
2021

September 30,
2022

September 30,
2021

Revenues, net of discounts
$
300,793
$
224,092
$
937,612
$
633,037
Cost of goods sold
132,760
70,147
405,278
199,345
   Gross profit
168,033
153,945
532,334
433,692
Expenses:
Sales and marketing
75,915
51,724
224,026
142,858
General and administrative
37,646
28,223
104,840
55,874
Depreciation and amortization
30,190
7,728
88,645
19,829
Impairment and disposal of long-lived assets, net
52,035
(5)
70,151
(5)
Total expenses
195,786
87,670
487,662
218,556
  (Loss) Income from operations
(27,753)
66,275
44,672
215,136
Other income (expense):
Interest expense, net
(19,264)
(6,145)
(56,815)
(20,693)
Change in fair value of derivative liabilities – warrants
365

2,627

Impairment and disposal of non-operating assets, net
(2,604)

(6,004)

Other income (expense), net
448
89
3,016
385
Total other expense
(21,055)
(6,056)
(57,176)
(20,308)
  (Loss) Income before provision for income taxes
(48,808)
60,219
(12,504)
194,828
Provision for income taxes
28,199
41,603
116,742
105,254
   Net (loss) income from continuing operations and comprehensive (loss) income
(77,007)
18,616
(129,246)
89,574
   Net loss from discontinued operations, net of tax benefit of $12,981, $-, $14,439, and $-, respectively
(38,065)

(42,329)

Net (loss) income
(115,072)
18,616
(171,575)
89,574
   Less: Net loss and comprehensive loss attributable to non-controlling interest from continuing operations
(518)

(2,555)

   Net (loss) income and comprehensive (loss) income attributable to common shareholders
$
(114,554)
$
18,616
$
(169,020)
$
89,574
Net (loss) income per share – Continuing operations:
Basic
$
(0.41)
$
0.15
$
(0.68)
$
0.73
Diluted
$
(0.41)
$
0.14
$
(0.68)
$
0.68
Net loss per share – Discontinued operations:
Basic and diluted
$
(0.20)

$
(0.23)

Weighted average number of common shares used in computing net (loss) income per share:
Basic
188,597,094
128,146,298
187,549,359
122,983,729
Diluted
188,597,094
136,909,266
187,549,359
130,927,083
Non-GAAP Financial Measures
In addition to our results determined in accordance with GAAP, we supplement our results with non-GAAP financial measures, including adjusted EBITDA, adjusted gross profit, adjusted net income (loss), adjusted net income (loss) per diluted share. Our management uses these non-GAAP financial measures in conjunction with GAAP financial measures to evaluate our operating results and financial performance. We believe these measures are useful to investors as they are widely used measures of performance and can facilitate comparison to other companies. These non-GAAP financial measures have limitations as analytical tools in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP. Because of these limitations, these non-GAAP financial measures should be considered along with GAAP financial performance measures. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures. A reconciliation of the non-GAAP financial measures to such GAAP measures can be found below. These non-GAAP financial measures should be considered supplemental to, and not a substitute for, our reported financial results prepared in accordance with GAAP.
Reconciliation of Non-GAAP Adjusted EBITDA
The following table presents a reconciliation of GAAP net income (loss) to non-GAAP Adjusted EBITDA, for each of the periods presented: 
(Amounts expressed in millions of United
States dollars)

For the Three Months Ended
For the Nine Months Ended
September 30,
2022

September 30,
2021

June 30, 2022
September 30,
2022

September 30,
2021

Net Income (Loss) GAAP
$
(114.6)
$
18.6
$
(22.5)
$
(169.0)
$
89.6
Add (Deduct) Impact of:
Interest Expense, net
$
19.3
$
6.1
$
19.7
$
56.8
$
20.7
Provision For Income Taxes
$
28.2
$
41.6
$
45.4
$
116.7
$
105.3
Depreciation and Amortization
$
30.2
$
7.7
$
30.0
$
88.6
$
19.8
Depreciation in COGS
$
14.6
$
5.7
$
13.8
$
39.1
$
14.4
EBITDA
$
(22.3)
$
79.8
$
86.4
$
132.3
$
249.7
Impairment and Disposal of Long-lived Assets, net
$
52.0
$
0.0
$
4.3
$
70.2
$
0.0
Results of Discontinued Operations
$
38.1
$
0.0
$
1.9
$
42.3
$
0.0
Acquisition and Transaction Costs
$
7.0
$
11.1
$
7.0
$
17.2
$
14.3
Integration and Transition Costs
$
6.7
$
0.8
$
5.1
$
17.1
$
2.7
Other Non-Recurring Costs
$
1.9
$
0.2
$
3.5
$
11.6
$
1.6
Share-Based Compensation and Related Premiums
$
4.3
$
4.9
$
5.7
$
14.6
$
6.4
Legislative Campaign Contributions
$
10.0
$
0.0
$
0.0
$
10.0
$
0.0
Impairment and Disposal of Non-Operating Assets, net
$
2.6
$
0.0
$
0.7
$
6.0
$
0.0
Inventory Step Up Fair Value
$
0.0
$
0.7
$
0.6
$
1.0
$
3.2
Covid Related Expenses
$
0.2
$
0.5
$
0.2
$
0.8
$
6.0
Other Expense (Income), net
$
(0.4)
$
(0.1)
$
(1.7)
$
(3.0)
$
(0.4)
Fair Value of Derivative Liabilities – Warrants
$
(0.4)
$
0.0
$
(1.4)
$
(2.6)
$
0.0
Results of Entities Not Legally Controlled
$
(0.9)
$
0.0
$
(1.1)
$
(1.9)
$
0.0
Adjusted EBITDA Non-GAAP
$
98.8
$
98.0
$
111.3
$
315.5
$
283.7
Reconciliation of Non-GAAP Adjusted Gross Profit
The following table presents a reconciliation of GAAP gross profit to non-GAAP adjusted gross profit, for each of the periods presented:
(Amounts expressed in millions of
United States dollars)

For the Three Months Ended
For the Nine Months Ended
September 30,
2022

September 30,
2021

June 30,
2022

September 30,
2022

September 30,
2021

Gross Profit GAAP
$
168.0
$
153.9
$
183.8
$
532.3
$
433.7
Gross Margin % GAAP
56 %
69 %
58 %
57 %
69 %
Add (Deduct) Impact of:
Inventory Step Up Fair Value
$
0.0
$
0.7
$
0.6
$
1.0
$
3.2
Transaction, Acquisition, and Integration Costs
$
3.8
$
0.4
$
(0.8)
$
7.4
$
3.9
Adjusted Gross Profit Non-GAAP
$
171.9
$
155.0
$
183.7
$
540.8
$
440.8
Adjusted Gross Margin % Non-GAAP
57 %
69 %
58 %
58 %
70 %
Reconciliation of Non-GAAP Adjusted Net Income
The following table presents a reconciliation of GAAP net income (loss) to non-GAAP adjusted net income, for each of the periods presented: 
(Amounts expressed in millions of United States dollars)
For the Three Months Ended
For the Nine Months Ended
September 30,
2022

September 30,
2021

June 30,
2022

September 30,
2022

September 30,
2021

Net Income (Loss) GAAP
$
(114.6)
$
18.6
$
(22.5)
$
(169.0)
$
89.6
Add (Deduct) Impact of:
Share-Based Compensation Related Premiums
$
0.0
$
4.2
$
0.0
$
0.0
$
4.2
Fair Value of Derivative Liabilities – Warrants
$
(0.4)
$
0.0
$
(1.4)
$
(2.6)
$
0.0
Inventory Step Up Fair Value
$
0.0
$
0.7
$
0.6
$
1.0
$
3.2
Transaction, Acquisition, and Integration Costs
$
25.5
$
12.2
$
15.6
$
55.9
$
18.7
Covid Related Expenses
$
0.2
$
0.5
$
0.2
$
0.8
$
6.0
Impairment and Disposal of Non-Operating Assets, net
$
2.6
$
0.0
$
0.7
$
6.0
$
0.0
Impairment and Disposal of Long-lived Assets, net
$
52.0
$
0.0
$
4.3
$
70.2
$
0.0
Results of Discontinued Operations
38.1
$
0.0
$
1.9
$
42.3
$
0.0
Adjusted Net Income (Loss) Non-GAAP
$
3.5
$
36.2
$
(0.6)
$
4.6
$
121.7
Reconciliation of Non-GAAP Adjusted Earnings Per Share
The following table presents a reconciliation of GAAP earnings (loss) per share to non-GAAP adjusted earnings per share, for each of the periods presented:
(Amounts expressed in millions of United
States dollars)

For the Three Months Ended
For the Nine Months Ended
September 30,
2022

September 30,
2021

June 30, 2022
September 30,
2022

September 30,
2021

Earnings (Loss) Per Share GAAP
$
(0.61)
$
0.14
$
(0.12)
$
(0.90)
$
0.68
Add (Deduct) Impact of:
Share-Based Compensation Related Premiums
$
0.00
$
0.03
$
0.00
$
0.00
$
0.03
Fair Value of Derivative Liabilities – Warrants
$
(0.00)
$
0.00
$
(0.01)
$
(0.01)
$
0.00
Inventory Step Up Fair Value
$
0.00
$
0.01
$
0.00
$
0.01
$
0.02
Transaction, Acquisition, and Integration Costs
$
0.14
$
0.09
$
0.08
$
0.30
$
0.14
Covid Related Expenses
$
0.00
$
0.00
$
0.00
$
0.00
$
0.05
Impairment and Disposal of Non-Operating Assets, net
$
0.01
$
0.00
$
0.00
$
0.03
$
0.00
Impairment and Disposal of Long-lived Assets, net
$
0.28
$
0.00
$
0.02
$
0.37
$
0.00
Results of Discontinued Operations
$
0.20
$
0.00
$
0.01
$
0.23
$
0.00
Adjusted Earnings Per Share Non-GAAP
$
0.02
$
0.27
$
0.00
$
0.03
$
0.93
Forward-Looking Statements
This news release includes forward-looking information and statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements relate to the Company’s expectations or forecasts of business, operations, financial performance, prospects, and other plans, intentions, expectations, estimates, and beliefs and include statements regarding the Company’s expected revenue and adjusted EBITDA for fiscal 2022, its plans for streamlining operations and navigating short term headwinds, and its beliefs as to its positioning for cannabis 2.0. Words such as “expects”, “continue”, “will”, “anticipates” and “intends” or similar expressions are intended to identify forward-looking statements. These forward-looking statements are based on the Company’s current projections and expectations about future events and financial trends that management believes might affect its financial condition, results of operations, business strategy and financial needs, and on certain assumptions and analysis made by the Company in light of the experience and perception of historical trends, current conditions and expected future developments and other factors management believes are appropriate. Forward-looking information and statements involve and are subject to assumptions and known and unknown risks, uncertainties, and other factors which may cause actual events, results, performance, or achievements of the Company to be materially different from future events, results, performance, and achievements expressed or implied by forward-looking information and statements herein, including, without limitation, the risks discussed under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021 and in our periodic reports subsequently filed with the United Sates Securities and Exchange Commission and in the Company’s filings on SEDAR at www.sedar.com. Although the Company believes that any forward-looking information and statements herein are reasonable, in light of the use of assumptions and the significant risks and uncertainties inherent in such information and statements, there can be no assurance that any such forward-looking information and statements will prove to be accurate, and accordingly readers are advised to rely on their own evaluation of such risks and uncertainties and should not place undue reliance upon such forward-looking information and statements. Any forward-looking information and statements herein are made as of the date hereof and, except as required by applicable laws, the Company assumes no obligation and disclaims any intention to update or revise any forward-looking information and statements herein or to update the reasons that actual events or results could or do differ from those projected in any forward looking information and statements herein, whether as a result of new information, future events or results, or otherwise.
About Trulieve
Trulieve is an industry leading, vertically integrated cannabis company and multi-state operator in the U.S., with established hubs in the Northeast, Southeast, and Southwest, anchored by leading market positions in Arizona, Florida, and Pennsylvania. Trulieve is poised for accelerated growth and expansion, building scale in retail and distribution in new and existing markets through its hub strategy. By providing innovative, high-quality products across its brand portfolio, Trulieve delivers optimal customer experiences and increases access to cannabis, helping patients and customers to live without limits. Trulieve is listed on the CSE under the symbol TRUL and trades on the OTCQX market under the symbol TCNNF. For more information, please visit Trulieve.com.
Facebook: @Trulieve
Instagram: @Trulieve_
Twitter: @Trulieve  
Investor Contact
Christine Hersey, Executive Director of Investor Relations
+1 (424) 202-0210
[email protected]
Media Contact
Rob Kremer, Executive Director of Corporate Communications
+1 (404) 218-3077
[email protected]
SOURCE Trulieve Cannabis Corp.
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