Jushi Holdings Inc. Reports Fourth Quarter and Full Year 2023 Financial Results
Maintained Strong Gross Profit Margin of 40.2% in Q4 2023 and 43.1% for FY 2023
Net Loss of $18.0 Million in Q4 2023 Compared to $139.9 Million in Q4 2022
Improved Adjusted EBITDA and Adjusted EBITDA Margin to $11.3 Million and 16.7% Respectively in Q4 2023 and $40.8 Million and 15.1% Respectively for FY 2023
Bolstered Margins and Achieved Jushi-branded Product Sales of Approximately 53.4% of Total Retail Revenue Across the Company's Five Vertical Markets in Q4 2023
Enhanced Product and Brand Offerings with the Debut of 175 New Unique SKUs in Q4 2023
Filed an Amended and Restated Material Change Report
BOCA RATON, Fla., March 13, 2024 (GLOBE NEWSWIRE) -- Jushi Holdings Inc. ("Jushi" or the "Company") (CSE: JUSH) (OTCQX: JUSHF), a vertically integrated, multi-state cannabis operator, is pleased to announce its financial results for the fourth quarter ("Q4 2023") and full year ended December 31, 2023 ("FY 2023"). All financial information is provided in U.S. dollars unless otherwise indicated and is prepared under U.S. Generally Accepted Accounting Principles ("GAAP").
Financial Highlights
Q4 2023
-- Total revenue of $67.8 million
-- Gross profit of $27.2 million, an increase of 24.0% year-over-year
-- Net loss of $18.0 million
-- Adjusted EBITDA1 of $11.3 million, an improvement of $5.3 million
year-over-year
-- Adjusted EBITDA1 margin of 16.7%
-- Cash, cash equivalents and restricted cash were $31.3 million
-- Net cash flows provided by operations of $4.5 million
FY 2023
-- Total revenue of $269.4 million
-- Gross profit of $116.2 million, an increase of 21.7% year-over-year
-- Net loss of $65.1 million
-- Adjusted EBITDA1 of $40.8 million, an improvement of $33.7 million
year-over-year
-- Adjusted EBITDA1 margin of 15.1%
(1) See "Use of Non-GAAP Financial Information" and "Unaudited Reconciliation of Net Income (Loss) to Adjusted EBITDA and Calculation of Adjusted EBITDA Margin" below.
Fourth Quarter 2023 Company Highlights
-- Achieved Jushi-branded product sales of approximately 53.4% of total
retail revenue in Q4 2023 across the Company's five vertical markets.
-- Increased wholesale revenue in Q4 2023, a 30% improvement over Q3 2023.
-- Launched 175 new unique SKUs throughout the Company's footprint,
including the debut of a differentiated line of troches in Pennsylvania
which are vegan and utilize natural ingredients responsibly sourced from
France.
-- Received $2.0 million in cash proceeds from the sales of non-core assets
in Q4 2023.
Post Quarter-End Developments
-- Opened relocated dispensary in Mount Pocono, Pennsylvania, marking the
17th operational Beyond Hello$(TM)$ storefront in Pennsylvania.
-- Refinanced approximately $9.9 million of unsecured debt with $4.8 million
principal amount of Second Lien Notes, fully detached warrants to
purchase an aggregate of 1,800,000 of the Company's Subordinate Voting
Shares ("SVS"), with each warrant having an exercise price of $1.00 per
SVS, and $2.8 million in cash.
-- Further reduced debt with scheduled payment of approximately $2.4 million
on the Company's first lien financing with SunStream Bancorp Inc.
Management Commentary
"Our fourth quarter was a strong finish to an incredible year for Jushi as we successfully increased our margins through our commitments to reducing operating expenses and driving operational efficiencies across the business," said Jim Cacioppo, Chief Executive Officer, Chairman, and Founder of Jushi. "Looking ahead we expect to continue to strengthen our profitability through further optimization of our grower processor facilities, including reducing green waste, increasing our yields and potency, and introducing higher margin products in our vertical markets. In addition to our improved profitability, we continue to focus on de-levering our balance sheet."
Mr. Cacioppo continued, "During the year, we launched new SKUs into the market that were developed using the proprietary retail data and consumer insights we have gathered across our footprint. Focusing on proprietary retail data and consumer insights during the development process has helped us develop products that are in demand and fit into the marketplace enabling us to add more Jushi-branded products on shelves. These new products, including S ch Kind Grind and Fine Grind, have been performing exceptionally well and have helped grow our Jushi-branded sales to approximately 53% of our total retail revenue across our vertical footprint in Q4 2023."
Mr. Cacioppo concluded, "I am incredibly proud of what our team has accomplished this past year, and we believe we are extremely well-positioned and ready for potential new adult-use markets to come online in key states such as Virginia and Pennsylvania."
Financial Results for the Fourth Quarter Ended December 31, 2023
($ in millions)
Quarter Ended Quarter Ended
December 31, December 31,
2023 2022 % Change
---------------------- --------------- --------------- ----------
Revenue $ 67.8 $ 76.8 (11.8)%
Gross profit $ 27.2 $ 22.0 24.0 %
Selling, general and
administrative
expenses $ 25.2 $ 39.1 (35.6)%
Asset impairments $ 8.6 $ 122.0 (93.0)%
Net loss $ (18.0) $ (139.9) 87.1 %
Adjusted EBITDA(1) $ 11.3 $ 6.0 88.3 %
Revenue in Q4 2023 decreased 11.8% to $67.8 million as compared to $76.8 million in the fourth quarter of 2022 ("Q4 2022"). The year-over-year decrease in revenue can be attributed to a reduction in Nevada and Pennsylvania sales due to increased competition and pricing pressures, a reduction in Illinois sales due to the impact of the state of Missouri beginning adult-use (i.e. recreational) cannabis sales, and the closure of four underperforming stores in California and Pennsylvania. The decrease was partially offset by increased sales in Ohio, Massachusetts, and Virginia.
In our five vertical markets, Jushi-branded product sales grew as a percentage of total retail sales from 47% in Q4 2022, to 52% in Q3 2023, to approximately 53% in Q4 2023.
Gross profit in Q4 2023 was $27.2 million, or 40.2% of revenue, compared to $22.0 million, or 28.6% of revenue in Q4 2022. Year-over-year improvements in gross profit and gross profit margin were driven by increased operating efficiencies at the Company's grower-processor facilities, as well as increased sell-through of our branded products which have higher margins. This increase was partially offset by market price compression and increased competition in Nevada and Pennsylvania, as well as in Illinois due to the impact of the state of Missouri beginning adult-use.
Selling, general and administrative expenses for Q4 2023 were $25.2 million compared to $39.1 million in Q4 2022. The decrease was primarily driven by lower salaries, wages, and employee-related expenses due to a decrease in the number of employees as the Company worked to right size the organization, as well as due to changes to the Company's staffing model at retail stores. Additionally, lower share-based compensation expense reflects lower value of share-based compensation granted as well as forfeitures of unvested equity awards.
Asset impairments for Q4 2023 were $8.6 million compared to $122.0 million in Q4 2022. The asset impairment charges primarily related to indefinite-lived assets.
The net loss for Q4 2023 was $18.0 million, compared to a net loss of $139.9 million in Q4 2022. The decrease in the net loss was driven primarily by asset impairment charges in Q4 2022 as discussed above, lower fair value gain on derivatives, and loss on redemption of the 10% senior notes in 2022, partially offset by increased gross profit.
Adjusted EBITDA(1) in Q4 2023 was $11.3 million compared to $6.0 million in Q4 2022. The improvement in Adjusted EBITDA(1) is primarily due to increased gross profit due to realizing the benefits of operational efficiencies and a reduction in selling, general and administrative expenses as discussed above.
(1) See "Use of Non-GAAP Financial Information" and "Unaudited Reconciliation of Net Income (Loss) to Adjusted EBITDA and Calculation of Adjusted EBITDA Margin" below.
Financial Results for the Year Ended December 31, 2023
($ in millions)
Year Ended December Year Ended December
31, 2023 31, 2022 % Change
--------------- --------------------- -------------------- ----------
Revenue $ 269.4 $ 284.3 (5.2)%
Gross profit $ 116.2 $ 95.5 21.7 %
Selling,
general and
administrative
expenses $ 110.5 $ 156.2 (29.3)%
Asset
impairments $ 8.6 $ 159.6 (94.6)%
Net loss $ (65.1) $ (202.3) 67.8 %
Adjusted
EBITDA(1) $ 40.8 $ 7.1 474.6 %
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