8-K
Trulieve Cannabis Corp. (TCNNF)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): March 30, 2022
TRULIEVE CANNABIS CORP.
(Exact Name of Registrant as specified in its charter)
| British Columbia | 000-56248 | 84-2231905 |
|---|---|---|
| (State or Other Jurisdiction<br><br>of Incorporation) | (Commission<br><br>File Number) | (IRS Employer<br><br>Identification No.) |
| 6749 Ben Bostic Road<br><br>Quincy, FL | 32351 | |
| --- | --- | |
| (Address of principal executive offices) | (Zip Code) |
(850) 508-0261
(Registrant’s telephone number, including area code)
Not Applicable
(Registrant’s name or former address, if change since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act: None.
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging Growth Company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ☒
| Item 2.02 | Results of Operations and Financial Condition. |
|---|
On March 30, 2022, Trulieve Cannabis Corp. (the “Company”) announced via press release its results for the fourth fiscal quarter and year ended December 31, 2021. A copy of the Company’s press release is hereby furnished to the Commission and incorporated herein by reference as Exhibit 99.1.
| Item 7.01 | Regulation FD Disclosure. |
|---|
The Company from time to time presents at various industry and other conferences and provides summary business information. A copy of the slide presentation that will be used by representatives of the Company in connection with such presentations (the “Corporate Presentation”) is attached to this Current Report on Form 8-K as Exhibit 99.2. The Corporate Presentation is current as of March 30, 2022, and the Company disclaims any obligation to correct or update this material in the future.
The information in the press release attached as Exhibit 99.1 and the Corporate Presentation attached as Exhibit 99.2 are intended to be furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such filing.
| Item 9.01. | Financial Statements and Exhibits. |
|---|
(d) Exhibits
| Exhibit<br>No. | Description |
|---|---|
| 99.1 | Press release dated March 30, 2022 |
| 99.2 | Corporate Presentation dated March 30, 2022 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Trulieve Cannabis Corp. | |
|---|---|
| By: | /s/ Eric Powers |
| Name: | Eric Powers |
| Title: | Chief Legal Officer |
Date: March 30, 2022
EX-99.1
Exhibit 99.1
Trulieve Caps Transformational Year with Record
Fourth Quarter and Full Year 2021 Results
| • | Record revenue of $938.4 million in 2021, up 80% year over year, and quarterly revenue of$305.3 million, up 36% sequentially |
|---|---|
| • | Industry leading U.S. retail network of 162 dispensaries, up 116% from 2020, supported by over4.0 million square feet of cultivation and processing capacity, up 107% from 2020, as of March 30, 2022 |
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Tallahassee, FL – March 30, 2022 – 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 and full year ended December 31, 2021. Results are reported in U.S. dollars unless otherwise indicated.
2021 Full Year Financial and Operational Highlights*
| • | Revenue increased 80% year-over-year to $938.4 million in 2021. |
|---|---|
| • | Gross profit of $566.1 million and gross margin of 60.3% in 2021 compared to gross profit of<br>$386.4 million and gross margin of 74.1% in 2020. |
| --- | --- |
| • | Adjusted gross profit of $621.4 million and adjusted gross margin of 66.2% in 2021 compared to adjusted<br>gross profit of $389.9 million and adjusted gross margin of 74.8% in 2020.* The decline in adjusted gross margin is primarily attributable to strategic diversification into new lower margin markets and channels. |
| --- | --- |
| • | Net income of $18.0 million and adjusted net income of $123.4 million*, which excludes $105.4 million<br>of non-recurring compensation, fair value of inventory step up, and transaction, acquisition and integration charges primarily associated with the Harvest Health & Recreation Inc.<br>(“Harvest”) acquisition. |
| --- | --- |
| • | Adjusted EBITDA of $384.6 million, or 41.0% of revenue in 2021 compared to adjusted EBITDA of<br>$260.1 million, or 49.9% of revenue in 2020.* |
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| • | Cash at year end of $234 million. |
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| • | Raised $227 million in equity and $350 million in five year senior secured notes at 8% interest,<br>representing industry leading terms for U.S. plant touching cannabis operators. |
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| • | Welcomed two new members to the Board of Directors, which now includes four women representing half of the Board.<br> |
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| • | Closed seven total acquisitions valued at ~$1.5 billion in 2021 including Harvest and Keystone Shops. The<br>Harvest acquisition closed in less than five months from the announcement, accelerating integration and optimization activities. |
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| • | Added 84 dispensaries in 2021, increasing retail footprint by 112% to 159 retail locations nationwide at year<br>end. |
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| • | Added ~1.6 million square feet of cultivation and processing capacity through organic growth and<br>acquisitions in 2021, increasing capacity by 89% to over 3.5 million square feet at year end. |
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| • | Commenced cultivation and retail operations in Massachusetts and West Virginia and received a notice of intent to<br>award a Class 1 production license in Georgia. |
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| • | Exited 2021 with operations in 11 states, with 30% of our retail locations outside of the state of Florida.<br> |
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| * | See “Non-GAAP Financial Measures” below for additional<br>information and a reconciliation to GAAP for all Non-GAAP metrics. |
| --- | --- |
Q4 2021 Financial and Operational Highlights*
| • | Revenue increased 81% in the fourth quarter compared to the fourth quarter of 2020 and 36% sequentially to<br>$305.3 million. |
|---|---|
| • | Gross profit of $132.4 million and gross margin of 43.4% in the fourth quarter of 2021 compared to gross<br>profit of $119.9 million and gross margin of 71.2% in the fourth quarter of 2020. |
| --- | --- |
| • | Adjusted gross profit of $180.6 million and adjusted gross margin of 59.1% in the fourth quarter of 2021<br>compared to adjusted gross profit of $121.7 million and adjusted gross margin of 72.2% in the fourth quarter of 2020.* |
| --- | --- |
| • | Net loss of $71.5 million and adjusted net income of $1.8 million*, which excludes $73.3 million of non-recurring fair value of inventory step up, and transaction, acquisition and integration charges primarily associated with the Harvest acquisition. |
| --- | --- |
| • | Adjusted EBITDA of $100.9 million, or 33.0% of revenue in the fourth quarter of 2021 compared to adjusted<br>EBITDA of $81.4 million or 48.3% of revenue in the same period of the prior year. |
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| • | Added 58 dispensaries in the fourth quarter including 49 acquired through Harvest and Purplemed, 9 opened in<br>Florida, Pennsylvania, and West Virginia, and completed the relocation of two dispensaries in Florida. |
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| • | Rebranded and reopened fourteen legacy Harvest dispensaries in Florida during October as required following the<br>Harvest acquisition. |
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| • | Released our inaugural ESG report, building upon the work done in our Sustainability Report in 2020.<br> |
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| * | See “Non-GAAP Financial Measures” below for additional<br>information and a reconciliation to GAAP for all Non-GAAP metrics. |
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Recent Events
| • | Closed second tranche of private placement of 8% senior secured notes due October 2026 totaling $75 million.<br> |
|---|---|
| • | Opened 3 new dispensaries in Boca Raton and Riverview, Florida and Philadelphia, Pennsylvania.<br> |
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| • | Completed the rebranding to Trulieve of 22 affiliated and acquired retail locations in Maryland and Pennsylvania.<br> |
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| • | Currently operate 162 retail dispensaries and over 4.0 million square feet of cultivation and processing<br>capacity in the United States. |
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| • | Acquired 64K square feet of operational indoor cultivation capacity in Arizona. |
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| • | Expanded or entered into new branded partnerships with Connected, El Blunto, Khalifa Kush, and Miami Mango.<br> |
| --- | --- |
| • | Announced a partnership with Survivor’s Ethan Zohn as a brand ambassador for Momenta branded products.<br> |
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| • | Launched nationwide Supplier Diversity Initiative. |
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Management Commentary
“2021 was a phenomenal year for Trulieve, full of monumental achievements, punctuated by the completion of the Harvest acquisition,” said Kim Rivers, Trulieve CEO. “We delivered another record year while making substantive progress toward achieving our long-term goals.”
Rivers continued, “Our team built upon our established track record of success, further expanding our distribution network through our hub strategy while setting the stage for continued growth. In 2022 we expect to deliver improved performance as our efforts to optimize assets and teams across our platform provide meaningful contributions to our results.”
Financial Guidance
Trulieve is introducing 2022 guidance with expected revenue in the range of $1.3 billion to $1.4 billion and adjusted EBITDA* in the range of $450 million to $500 million. Based on our current forecasts, we expect to realize improved performance in the second half of 2022 relative to the first half of 2022.
Financial Highlights
| Results of Operations | For the Three Months Ended | For the Full Year Ended | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Figures in millions and % change based on thesefigures) | December<br>31, 2021 | December<br>31, 2020 | change | December<br>31, 2021 | December<br>31, 2020 | change | ||||||||||||
| Revenue | $ | 305.3 | $ | 168.4 | 81 | % | $ | 938.4 | $ | 521.5 | 80 | % | ||||||
| Gross Profit | $ | 132.4 | $ | 119.9 | 10 | % | $ | 566.1 | $ | 386.4 | 47 | % | ||||||
| Gross Margin % | 43 | % | 71 | % | 60 | % | 74 | % | ||||||||||
| Adjusted Gross Profit | $ | 180.6 | $ | 121.7 | 48 | % | $ | 621.4 | $ | 389.9 | 59 | % | ||||||
| Adjusted Gross Margin % | 59 | % | 72 | % | 66 | % | 75 | % | ||||||||||
| Operating Expenses | $ | 150.6 | $ | 56.0 | 169 | % | $ | 369.2 | $ | 168.1 | 120 | % | ||||||
| Operating Expenses % | 49 | % | 33 | % | 39 | % | 32 | % | ||||||||||
| Net Income (Loss) | $ | (71.5 | ) | $ | 3.0 | — | $ | 18.0 | $ | 63.0 | -71 | % | ||||||
| Adjusted Net Income | $ | 1.8 | $ | 41.8 | -96 | % | $ | 123.4 | $ | 120.5 | 2 | % | ||||||
| Diluted Shares Outstanding | 145.1 | 119.4 | 146.8 | 118.3 | ||||||||||||||
| EPS | $ | (0.49 | ) | $ | 0.03 | — | $ | 0.12 | $ | 0.53 | -77 | % | ||||||
| Adjusted EPS | $ | 0.01 | $ | 0.35 | -97 | % | $ | 0.84 | $ | 1.02 | -18 | % | ||||||
| Adjusted EBITDA | $ | 100.9 | $ | 81.4 | 24 | % | $ | 384.6 | $ | 260.1 | 48 | % | ||||||
| Adjusted EBITDA Margin % | 33 | % | 48 | % | 41 | % | 50 | % |
Analyst Event 2022
Trulieve will host an analyst event in Tallahassee, Florida on Tuesday June 7, 2022. The event will include a guided facility tour and a public webcast presentation by management. In person attendance will be limited. Analysts interested in attending the event in person should contact investor relations for additional details.
Conference Call
The Company will host a conference call and live audio webcast on March 30, 2022, at 8:30 A.M. Eastern time, to discuss its fourth quarter and full year 2021 financial results.
Interested parties can join the conference call by dialing in as directed below. Participants are asked to request the Trulieve Cannabis Corp. call. Please dial in 15 minutes prior to the call.
U.S. toll free: 1-844-824-3830
Canada toll free: 1-855-669-9657
International dial in: 1-412-542-4136
A live audio webcast of the conference call will be available at:
https://app.webinar.net/m21krRWnGKb
A powerpoint presentation is available at
https://investors.trulieve.com/events-presentations
An archived replay of the webcast will be available at:
https://investors.trulieve.com/events-presentations
The Company’s Form 10-K for the year ended December 31, 2021, is available on the SEC’s website or at
https://investors.trulieve.com/financial-filings/annual-reports. The Company’s Management Discussion and Analysis for the period and the accompanying financial statements and notes are 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.
About Trulieve
Trulieve is an industry leading, vertically integrated cannabis company and multi-state operator in the U.S. operating in 11 states, with 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
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 gross profit, adjusted net income, adjusted net income per diluted share, and adjusted cash flow from operations. 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 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<br>dollars) | For the Three Months Ended | For the Full Year Ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December<br>31, 2021 | December<br>31, 2020 | December<br>31, 2021 | December<br>31, 2020 | |||||||||
| Gross Profit GAAP | $ | 132.4 | $ | 119.9 | $ | 566.1 | $ | 386.4 | ||||
| Gross Margin % GAAP | 43 | % | 71 | % | 60 | % | 74 | % | ||||
| Add (Deduct) Impact of: | ||||||||||||
| Inventory Step Up Fair Value | $ | 38.0 | $ | 1.0 | $ | 41.2 | $ | 1.0 | ||||
| Transaction, Acquisition, and Integration Costs | $ | 10.2 | $ | 0.9 | $ | 14.0 | $ | 2.6 | ||||
| Adjusted Gross Profit Non-GAAP | $ | 180.6 | $ | 121.7 | $ | 621.4 | $ | 389.9 | ||||
| Adjusted Gross Margin % Non-GAAP | 59 | % | 72 | % | 66 | % | 75 | % |
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<br>dollars) | For the Three Months Ended | For the Full Year Ended | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| December<br>31, 2021 | December<br>31, 2020 | December<br>31, 2021 | December<br>31, 2020 | |||||||
| Net Income (Loss) GAAP | $ | (71.5 | ) | $ | 3.0 | $ | 18.0 | $ | 63.0 | |
| Add (Deduct) Impact of: | ||||||||||
| Share-Based Compensation | $ | 0.0 | $ | 0.0 | $ | 4.2 | $ | 0.0 | ||
| Warrant Liability Adjustment | $ | (0.2 | ) | $ | 29.9 | $ | (0.2 | ) | $ | 42.7 |
| Inventory Step Up Fair Value | $ | 38.0 | $ | 1.0 | $ | 41.2 | $ | 1.0 | ||
| Transaction, Acquisition, and Integration Costs | $ | 30.0 | $ | 4.7 | $ | 48.7 | $ | 4.7 | ||
| Covid Related Expenses | $ | 0.2 | $ | 3.2 | $ | 6.2 | $ | 9.1 | ||
| Impairment Intangible Assets | $ | 5.4 | $ | 0.0 | $ | 5.4 | $ | 0.0 | ||
| Adjusted Net Income Non-GAAP | $ | 1.8 | $ | 41.8 | $ | 123.4 | $ | 120.5 |
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<br>dollars) | For the Three Months Ended | For the Full Year Ended | |||||||
|---|---|---|---|---|---|---|---|---|---|
| December<br>31, 2021 | December<br>31, 2020 | December<br>31, 2021 | December<br>31, 2020 | ||||||
| Earnings (Loss) Per Share GAAP | $ | (0.49 | ) | $ | 0.03 | $ | 0.12 | $ | 0.53 |
| Add (Deduct) Impact of: | |||||||||
| Share-Based Compensation | $ | 0.00 | $ | 0.00 | $ | 0.03 | $ | 0.00 | |
| Warrant Liability Adjustment | $ | 0.00 | $ | 0.25 | $ | 0.00 | $ | 0.36 | |
| Inventory Step Up Fair Value | $ | 0.26 | $ | 0.01 | $ | 0.28 | $ | 0.01 | |
| Transaction, Acquisition, and Integration Costs | $ | 0.21 | $ | 0.04 | $ | 0.33 | $ | 0.04 | |
| Covid Related Expenses | $ | 0.00 | $ | 0.03 | $ | 0.04 | $ | 0.08 | |
| Impairment Intangible Assets | $ | 0.04 | $ | 0.00 | $ | 0.04 | $ | 0.00 | |
| Adjusted Earnings Per Share Non-GAAP | $ | 0.01 | $ | 0.35 | $ | 0.84 | $ | 1.02 |
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<br>dollars) | For the Three Months Ended | For the Full Year Ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December<br>31, 2021 | December<br>31, 2020 | December<br>31, 2021 | December<br>31, 2020 | |||||||||
| Net Income (Loss) GAAP | $ | (71.5 | ) | $ | 3.0 | $ | 18.0 | $ | 63.0 | |||
| Add (Deduct) Impact of: | ||||||||||||
| Interest Expense, net | $ | 14.1 | $ | 3.7 | $ | 34.8 | $ | 20.2 | ||||
| Provision For Income Taxes | $ | 40.8 | $ | 27.3 | $ | 146.1 | $ | 94.5 | ||||
| Depreciation and Amortization | $ | 28.3 | $ | 4.0 | $ | 48.1 | $ | 12.6 | ||||
| Depreciation in COGS | $ | 9.7 | $ | 4.1 | $ | 24.1 | $ | 11.5 | ||||
| EBITDA | $ | 21.3 | $ | 42.2 | $ | 271.0 | $ | 201.8 | ||||
| Inventory Step Up Fair Value | $ | 38.0 | $ | 1.0 | $ | 41.2 | $ | 1.0 | ||||
| Integration and Transition Costs | $ | 22.9 | $ | 0.0 | $ | 25.6 | $ | 0.0 | ||||
| Acquisition and Transaction Costs | $ | 1.5 | $ | 4.7 | $ | 15.8 | $ | 4.7 | ||||
| Share-Based Compensation | $ | 7.0 | $ | 0.6 | $ | 13.4 | $ | 2.8 | ||||
| Other Non-Recurring Expenses | $ | 5.2 | $ | 0.0 | $ | 6.8 | $ | 0.0 | ||||
| Covid Related Expenses | $ | 0.2 | $ | 3.2 | $ | 6.2 | $ | 9.1 | ||||
| Impairment and Disposal of Long-lived Assets | $ | 5.4 | $ | 0.1 | $ | 5.4 | $ | 0.1 | ||||
| Non-Controlling Interest | $ | 0.5 | $ | 0.0 | $ | 0.5 | $ | 0.0 | ||||
| Other Expense (Income), net | $ | (0.8 | ) | $ | (0.1 | ) | $ | (1.1 | ) | $ | (2.1 | ) |
| Fair Value of Derivative Liabilities - Warrants | $ | (0.2 | ) | $ | 29.9 | $ | (0.2 | ) | $ | 42.7 | ||
| Adjusted EBITDA Non-GAAP | $ | 100.9 | $ | 81.4 | $ | 384.6 | $ | 260.1 |
Reconciliation of Non-GAAP Adjusted Cash Provided by Operating Activities
The following table presents a reconciliation of GAAP cash provided by operating activities to non-GAAP Adjusted cash provided by operating activities, for each of the periods presented:
| (Amounts expressed in millions of United States<br>dollars) | For the Three Months Ended | For the Full Year Ended | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| December<br>31, 2021 | December<br>31, 2020 | December<br>31, 2021 | December<br>31, 2020 | |||||||
| Net Cash Provided by Operating Activities GAAP | $ | (62.2 | ) | $ | 26.8 | $ | 12.9 | $ | 99.6 | |
| Add (Deduct) Impact of: | ||||||||||
| Share-Based Compensation | $ | 0.0 | $ | 0.0 | $ | 4.2 | $ | 0.0 | ||
| Warrant Liability Adjustment | $ | (0.2 | ) | $ | 29.9 | $ | (0.2 | ) | $ | 42.7 |
| Inventory Step Up Fair Value | $ | 38.0 | $ | 1.0 | $ | 41.2 | $ | 1.0 | ||
| Transaction, Acquisition, and Integration Costs and NCI | $ | 30.0 | $ | 4.7 | $ | 48.7 | $ | 4.7 | ||
| Covid Related Expenses | $ | 0.2 | $ | 3.2 | $ | 6.2 | $ | 9.1 | ||
| Impairment Long-lived Assets | $ | 5.4 | $ | 0.0 | $ | 5.4 | $ | 0.0 | ||
| Adjusted Cash Provided by Operating Activities<br>Non-GAAP | $ | 11.1 | $ | 65.5 | $ | 118.3 | $ | 157.1 |
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 expansion, the scope and timing of adoption of cannabis in the U.S. and potential acquisitions and expansion of the Company’s operations. 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.
Investor Contact
Christine Hersey, Executive Director of Investor Relations
+1 (424) 202-0210
Christine.Hersey@Trulieve.com
Media Contact
Rob Kremer, Executive Director of Corporate Communications
+1 (404) 218-3077
Robert.Kremer@Trulieve.com
EX-99.2
Fourth Quarter and Full Year 2021 Investor Presentation / March 2022 CSE: TRUL OTCQX: TCNNF Exhibit 99.2
Forward Looking Statements and Industry Data Unless the context otherwise requires, the terms “Trulieve,” “we,” “us” and “our” in this presentation refer to Trulieve Cannabis Corp. and its subsidiaries. Certain statements in this presentation constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation (collectively herein referred to as “forward-looking statements”), which can often be identified by words such as “will”, “may”, “estimate”, “expect”, “plan”, “project”, “intend”, “anticipate” and other words indicating that the statements are forward-looking. These forward looking statements relate to Trulieve’s expectations or forecasts of business, operations, financial performance, prospects, and other plans, intentions, expectations, estimates, and beliefs and include statements regarding Trulieve’s expected revenue and adjusted EBITDA for fiscal 2022, adjusted gross margin and adjusted EBITDA margin in its Long Term Model, its plans for expansion, potential acquisitions and expansion of the Company’s operations. Such forward-looking statements are expectations only and are subject to known and unknown risks, uncertainties and other important factors, including, but not limited to, risk factors included in this presentation, that could cause the Company’s actual results, performance or achievements or industry results to differ materially from any future results, performance or achievements implied by such forward-looking statements. Such risks and uncertainties include, among others, dependence on obtaining and maintaining regulatory approvals, including acquiring and renewing state, local or other licenses; engaging in activities which currently are illegal under United States federal law and the uncertainty of existing protection from United States federal or other prosecution; regulatory or political change such as changes in applicable laws and regulations, including United States state-law legalization, particularly in Florida, due to inconsistent public opinion, perception of the medical-use and adult-use cannabis industry, bureaucratic delays or inefficiencies or any other reasons; any other factors or developments which may hinder market growth; reliance on management; and the effect of capital market conditions and other factors on capital availability; competition, including from more established or better financed competitors; and the need to secure and maintain corporate alliances and partnerships, including with customers and suppliers. These factors should be considered carefully, and readers are cautioned not to place undue reliance on such forward-looking statements. You are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Although it may voluntarily do so from time to time, the Company undertakes no commitment to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Unless otherwise noted, the forecasted industry and market data contained herein are based upon management estimates and industry and market publications and surveys. The information from industry and market publications has been obtained from sources believed to be reliable, but there can be no assurance as to the accuracy or completeness of the included information. The Company has not independently verified any of the data from third-party sources, nor has the Company ascertained the underlying economic assumptions relied upon therein. While such information is believed to be reliable for the purposes used herein, the Company makes no representation or warranty with respect to the accuracy of such information. Please note: MARIJUANA IS ILLEGAL UNDER U.S. FEDERAL LAW, including its consumption, possession, cultivation, distribution, manufacturing, dispensing, and possession with intent to distribute. Forward-looking statements made in this document are made only as of the date of their initial publication, and the Company undertakes no obligation to publicly update any of these forward-looking statements as actual events unfold.
Management’s Use of 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 gross profit, adjusted net income, adjusted net income per diluted share, and adjusted cash flow from operations. 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.
Agenda Full Year and Fourth Quarter 2021 Financial Highlights Full Year and Fourth Quarter 2021 Operational Highlights Harvest Acquisition Integration Financial Outlook Recent Developments Strategic Priorities Financial Results
Full Year 2021 Financial Highlights* Full year record revenue increased +80% year-over-year to $938.4 million Gross profit of $566.1 million and gross margin of 60.3% in 2021 compared to gross profit of $386.4 million and gross margin of 74.1% in 2020 Adjusted gross profit of $621.4 million and adjusted gross margin of 66.2% in 2021 compared to adjusted gross profit of $389.9 million and adjusted gross margin on 74.8% in 2020 Net income was $18.0 million and adjusted net income of $123.4 million, which excludes $105.4 million of non-recurring charges including compensation, fair value of inventory step up, transaction, acquisition and integration charges primarily associated with the Harvest acquisition Adjusted EBITDA of $384.6 million or 41.0% of sales in 2021 compared to $260.1 million or 49.9% of sales in 2020 Cash at year end of $234 million Capital raises of $227 million in equity and $350 million in five-year senior 8% secured notes, representing industry leading terms for U.S. plant touching cannabis operators Repayment of $293 million of debt including $275 million high cost and short-term Harvest debt and $18 million of outstanding Trulieve notes *Adjusted Gross Profit, Adjusted Net Income, and Adjusted EBITDA are Non-GAAP financial measures. See slides 26-28 for reconciliation to GAAP for all Non-GAAP financial measures.
Fourth Quarter 2021 Financial Highlights* Net revenue increased 81% year-over-year and 36% sequentially to $305.3 million. Gross profit of $132.4 million and gross margin of 43.4% in the fourth quarter of 2021 compared to gross profit of $119.9 million and gross margin of 71.2% in the fourth quarter 2020. Adjusted gross profit of $180.6 million and adjusted gross margin of 59.1% in the fourth quarter of 2021 compared to adjusted gross profit of $121.7 million and adjusted gross margin of 72.2% in 2020. Net loss of $71.5 million and adjusted net income of $1.8 million, which excludes $73.3 million of one-time charges including fair value of inventory step up, and transaction, acquisition and integration charges primarily associated with the Harvest acquisition. Adjusted EBITDA of $100.9 million, or 33.0% of revenue. *Adjusted Gross Profit, Adjusted Net Income, and Adjusted EBITDA are Non-GAAP financial measures. See slides 26-28 for reconciliation to GAAP for all Non-GAAP financial measures.
Full Year and Fourth Quarter 2021 Financial Highlights* *Adjusted Gross Profit, Adjusted Net Income, and Adjusted EBITDA are Non-GAAP financial measures. See slides 26-28 for reconciliation to GAAP for all Non-GAAP financial measures.
Fourth Quarter and Full Year 2021 Operational Highlights Trulieve closed seven acquisitions valued at $1.5 billion in 2021 Trulieve added 84 new dispensaries, increasing retail footprint by 112% to 159 retail locations nationwide, with 30% of locations outside of Florida Trulieve added ~1.6 million square feet of cultivation and processing capacity through organic growth and acquisitions, increasing capacity by 89% to over 3.5 million square feet Production in 2021 was 25.1 million units, up 77% from 14.2 million units in 2020 Introduced over 475 new SKUs in 2021, exiting the year with over 1,000 approved SKUs Full year 2021 same store sales for the legacy Trulieve portfolio declined by 1% (41 stores) Same store sales increased by 8% excluding stores opened in 2018 and before (20 stores) On a pro forma basis for the combined company 2021 same store sales increased 19% (64 stores) 159 dispensaries generated ~$2,500 sales per square foot based on days open for 2021 Trulieve commenced cultivation and retail operations in Massachusetts and West Virginia and received a notice of intent to award a Class 1 production license in Georgia Trulieve launched new products Live Meringue, Refined Crème, TruTonic and TruWax, and hydrocarbon extraction products Live Budder, Live Resin, and Live Sauz Carts in Florida Trulieve launched a branded product portfolio and integrated acquired brands Trulieve expanded leadership team with Chief Technology Officer and Chief Accounting Officer Trulieve welcomed two new members to the Board of Directors, which now includes four women representing half of the Board Trulieve issued its inaugural Environmental, Social, and Governance Report
Harvest Acquisition Integration Trulieve closed the Harvest Health & Recreation Inc. acquisition on October 1, 2021 Trulieve rebranded affiliated and acquired retail locations in Florida, Maryland, and Pennsylvania Fourteen Florida locations were closed on September 30, 2021, as required by the regulatory process and reopened throughout the month of October Maryland and Pennsylvania affiliated and acquired locations were rebranded in Q1 2022 Trulieve retired $275 million in high cost and short-term Harvest debt, some of which was due upon change in control Trulieve appointed seasoned executives from Harvest including President Steve White, General Counsel Nicole Stanton, and Corporate Controller Irina Kranz Trulieve integrated legacy Harvest brands including Alchemy, Avenue, Co2lors, loveli, Modern Flower, and Roll One
Financial Outlook Introducing Fiscal Year 2022 Guidance Revenue of $1.3 billion to $1.4 billion Adjusted EBITDA of $450 million to $500 million Open 25-30 new dispensaries, relocate up to 6 dispensaries in Florida Anticipate 2H:22 results will reflect improved performance as strategic initiatives drive performance Long Term Target Model (Two to Three Years) Adjusted gross margin 60% Adjusted EBITDA margin 40% Results may fluctuate depending upon timing of catalysts, market conditions, and investments for future growth
Recent Developments Trulieve opened 3 new dispensaries in Boca Raton and Riverview, Florida and Philadelphia, Pennsylvania Trulieve acquired 64k square feet of operational indoor cultivation capacity in Arizona Trulieve completed the rebranding of 22 affiliated and acquired retail locations in Maryland and Pennsylvania Trulieve launched Muse Live Diamonds, Muse Live Suga, Sweet Talk, Momenta, Cultivar Collection, and Miami Mango products Trulieve announced an exclusive partnership with Khalifa Kush for Florida and other northeast markets and expanded its partnership with Connected to Florida Trulieve announced a partnership with Ethan Zohn who will serve as brand ambassador for Momenta Trulieve celebrated Black History Month with a series of initiatives Trulieve launched a listening and education tour in Georgia Trulieve launched nationwide Supplier Diversity Initiative Trulieve raised a $75 million second tranche senior secured notes at 8% interest due October 2026, representing industry leading terms
Growth Initiatives
Strategic Priorities Deliver Exceptional Customer Experiences and Build Brand Loyalty Provide superb service, expedient transactions, and frictionless returns Innovate across product and consumer categories Expand through Hub Strategy Invest in cornerstone markets: Florida, Pennsylvania, and Arizona Expand in new and existing markets Pursue organic license awards and strategic M&A opportunities Distribute Branded Products through Branded Retail and Wholesale Channels Expand distribution of branded products through branded retail locations Convert acquired, affiliated and/or operated retail locations to Trulieve brand Develop and expand wholesale channels with initial emphasis on AZ, MA, MD, PA Focus on Profitable Growth and Create Shareholder Value
Customer Experience and Brand Loyalty Customer Experience Service, convenience, frictionless returns Customer loyalty rewards High quality products, broad selection New and innovative products Clones (MA only) Refined Crème, TruTonic powdered drink mix, and TruWax Live Budder, Live Diamonds, Live Meringue, Live Resin, Live Sauz carts, Live Suga Mini pre-rolls Ratio products, including CBG and CBN Value sized edibles Primo buds
Regional Hubs: Cultivation, Processing, Retail Capacity FL CA MA PA AZ MD WV NV AZ CO CT GA 162 Stores As of March 30, 2022 All stores owned, operated, or affiliated >4.0 M ft2 Cultivation & Processing As of March 30, 2022 Operational Arizona California Colorado Connecticut Florida Massachusetts Maryland Nevada Pennsylvania West Virginia Pre-Revenue Georgia SOUTHWEST 22 stores >0.4M ft2 cultivation & processing NORTHEAST 27 stores >0.5M ft2 cultivation & processing SOUTHEAST 113 stores >3.1M ft2 cultivation & processing
Cornerstone Markets: Florida, Pennsylvania, Arizona Limited license markets Leading market presence in retail Cultivation, processing and manufacturing operations Potential for expansion and optimization Potential future catalysts with adult use expansion in Florida and Pennsylvania Fast and favorable returns on capital investments
Cornerstone Market: Florida Limited License Medical Market Trulieve operates 113 medical dispensaries Florida market has 22 vertical licenses issued and 413 approved dispensaries as of March 25, 2022 Cultivation and processing capacity expansion is ongoing Increasing production of differentiated products across all segments and form factors in response to customer preferences Opening additional dispensaries and relocate up to six dispensaries in 2022
Cornerstone Market: Pennsylvania Limited License Medical Market 19 affiliated retail locations Pennsylvania market has 50 retail permits (3 locations per permit), 25 grower/processor licenses, and up to 10 research/clinical permits Ongoing expansion of indoor cultivation and processing capacity through affiliated facilities Launched ground flower and minis in Q1 2022, additional launches pending approvals Wholesale distribution to 100% of the PA market
Cornerstone Market: Arizona Limited License Adult Use and Medical Market Trulieve operates 17 retail dispensaries Arizona market has 131 core vertical licenses, 13 rural/underserved county licenses, and 26 future social equity licenses Expansion of cultivation and processing ongoing Plan to open two additional locations in 2022
Distribution of Branded Products through Branded Retail and Wholesale Channels Trulieve Brands VALUE MID PREMIUM
Distribution of Branded Products through Branded Retail and Wholesale Channels Partner Brands
Financials
Transaction Related Charges Fourth quarter financial results represent an initial reset following the Harvest acquisition Transaction related charges Fair value of inventory charges in 1H:22 Transaction, acquisition and integration charges throughout 2022 Initial inefficiencies immediately following deal close Contributions from lower margin operations Depreciation expense and amortization of intangibles expense increased by $20.4 million due to Harvest and will continue at higher expense level over useful life We expect reported results to improve in 2022 with greater improvements in 2H:22 as our strategic initiatives and optimization of assets drive performance
Financial Highlights* *Adjusted Gross Profit, Adjusted Net Income, and Adjusted EBITDA are Non-GAAP financial measures. See slides 26-28 for reconciliation to GAAP for all Non-GAAP financial measures.
Financial Highlights
Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures
Thank You CSE: TRUL OTCQX: TCNNF @Trulieve/@Trulieve_IR ir@trulieve.com