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): May 12, 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:
| Title of each class | Trading<br><br>Symbol(s) | Name of each exchange<br><br>on which registered |
|---|---|---|
| N/A | N/A | N/A |
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 May 12, 2022, Trulieve Cannabis Corp. (the “Company”) announced via press release its results for the first fiscal quarter ended March 31, 2022. 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 May 12, 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 May 12, 2022 |
| 99.2 | Corporate Presentation dated May 12, 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: May 12, 2022
EX-99.1
Exhibit 99.1
Trulieve Starts Year with Record
First Quarter 2022 Results
| • | Record revenue of $318.3 million, up 64% year over year and 4% sequentially <br> |
|---|---|
| • | First quarter 2022 cash flow from operations of $45.1 million and cash balance of$267 million |
| --- | --- |
| • | Industry leading U.S. retail network of 162 dispensaries, supported by over 4.0 millionsquare feet of cultivation and processing capacity, up 95% and 93% year over year, respectively, as of March 31, 2022 |
| --- | --- |
Tallahassee, FL – May 12, 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 ended March 31, 2022. Results are reported in U.S. dollars unless otherwise indicated.
Q1 2022 Financial Highlights*
| • | Revenue increased 64% year over year to $318.3 million from $193.8 million and 4% sequentially.<br> |
|---|---|
| • | Gross profit of $178.2 million and GAAP gross margin of 56.0% in the first quarter compared to gross profit<br>of $132.4 million and GAAP gross margin of 43.4% in the fourth quarter of 2021. |
| --- | --- |
| • | Net loss of $32.0 million, a sequential improvement of 55%, and adjusted net income of $1.7 million*, which<br>excludes $17.2 million of transaction, acquisition, integration, and other non-recurring charges primarily associated with the Harvest acquisition, $13.8 million in asset impairments associated with<br>the closing of redundant cultivation activities and a loss of $2.7 million due to the divestiture of a duplicative non-operating location. |
| --- | --- |
| • | Adjusted EBITDA of $105.5 million*, or 33.2% of revenue in the first quarter compared to adjusted EBITDA of<br>$100.9 million*, or 33.0% of revenue in the fourth quarter of 2021. |
| --- | --- |
| • | Cash at quarter end of $267 million, bolstered by $45.1 million in cash flow from operations and the<br>closing of $75 million senior secured notes at 8% due October 2026. |
| --- | --- |
| * | See “Non-GAAP Financial Measures” below for additional<br>information and a reconciliation to GAAP for all Non-GAAP metrics. |
| --- | --- |
Q1 2022 OperationalHighlights
| • | Completed the rebranding to Trulieve of all 22 affiliated and acquired retail locations in Maryland and<br>Pennsylvania. |
|---|---|
| • | Opened 3 new dispensaries in Boca Raton and Riverview, Florida and Philadelphia, Pennsylvania.<br> |
| --- | --- |
| • | Exited the first quarter 2022 with operations in 11 states, with 30% of our retail locations outside of the state<br>of Florida. |
| --- | --- |
| • | Acquired 64K square feet of operational indoor cultivation capacity in Arizona. |
| --- | --- |
| • | Successfully launched Cultivar Collection^TM^, Muse^TM^, Modern Flower^TM^, Momenta^TM^, and Roll<br>One^TM^ brands across markets including Florida, Maryland, Massachusetts, Pennsylvania and West Virginia. |
| --- | --- |
| • | Implemented nationwide Supplier Diversity Initiative. |
| --- | --- |
Recent Events
| • | Achieved record revenue, units sold, and number of customers served on 4/20. |
|---|---|
| • | Opened 3 new dispensaries in Fort Myers and Zephyrhills, Florida and Framingham, Massachusetts.<br> |
| --- | --- |
| • | Currently operate 165 retail dispensaries and over 4.0 million square feet of cultivation and processing<br>capacity in the United States. |
| --- | --- |
Management Commentary
“Thanks to the efforts of all of our Trulieve employees, we’re off to a great start in 2022, with strong first quarter results underpinned by topline growth and cash flow,” said Kim Rivers, Trulieve CEO. “Once again we did what we said we would do, improving performance with our focus on the customer, hub strategy, branded products, and disciplined capital allocation.”
Rivers continued, “We delivered another record quarter while making substantive progress on our plan to optimize assets while preparing for future growth and catalysts. In 2022 we expect our strong balance sheet, access to capital and financial discipline will uniquely position us to capitalize on market opportunities created by the macroeconomic factors impacting our industry.”
Financial Guidance
Trulieve is reiterating 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 the Company’s current forecasts, it expects 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 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| (Figures in millions and % change based on these figures) | March 31,2022 | March 31,2021 | change | ||||||
| Revenue | $ | 318.3 | $ | 193.8 | 64 | % | |||
| Gross Profit | $ | 178.2 | $ | 135.3 | 32 | % | |||
| Gross Margin % | 56 | % | 70 | % | |||||
| Adjusted Gross Profit | $ | 185.4 | $ | 139.0 | 33 | % | |||
| Adjusted Gross Margin % | 58 | % | 72 | % | |||||
| Operating Expenses | $ | 149.5 | $ | 62.7 | 138 | % | |||
| Operating Expenses % | 47 | % | 32 | % | |||||
| Net Income (Loss) | $ | (32.0 | ) | $ | 30.1 | — | |||
| Adjusted Net Income | $ | 1.7 | $ | 38.5 | -96 | % | |||
| Diluted Shares Outstanding | 187.1 | 127.6 | |||||||
| EPS | $ | (0.17 | ) | $ | 0.24 | — | |||
| Adjusted EPS | $ | 0.01 | $ | 0.30 | -97 | % | |||
| Adjusted EBITDA | $ | 105.5 | $ | 90.8 | 16 | % | |||
| Adjusted EBITDA Margin % | 33 | % | 47 | % |
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 May 12, 2022, at 8:30 A.M. Eastern time, to discuss its first quarter 2022 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/G3El4rJ48b0
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-Q for the quarter ended March 31, 2022, is 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 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:
| For the Three MonthsEnded | ||||||
|---|---|---|---|---|---|---|
| (Amounts expressed in millions of United States dollars) | March 31,2022 | March 31,2021 | ||||
| Gross Profit GAAP | $ | 178.2 | $ | 135.3 | ||
| Gross Margin % GAAP | 56 | % | 70 | % | ||
| Add (Deduct) Impact of: | ||||||
| Inventory Step Up Fair Value | $ | 0.4 | $ | 2.5 | ||
| Transaction, Acquisition, and Integration Costs | $ | 6.8 | $ | 1.2 | ||
| Adjusted Gross Profit Non-GAAP | $ | 185.4 | $ | 139.0 | ||
| Adjusted Gross Margin % Non-GAAP | 58 | % | 72 | % |
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:
| For the Three MonthsEnded | |||||
|---|---|---|---|---|---|
| (Amounts expressed in millions of United States dollars) | March 31,2022 | March 31,2021 | |||
| Net Income (Loss) GAAP | $ | (32.0 | ) | $ | 30.1 |
| Add (Deduct) Impact of: | |||||
| Warrant Liability Adjustment | $ | (0.8 | ) | $ | 0.0 |
| Inventory Step Up Fair Value | $ | 0.4 | $ | 2.5 | |
| Transaction, Acquisition, and Integration Costs | $ | 17.2 | $ | 2.0 | |
| Covid Related Expenses | $ | 0.4 | $ | 3.8 | |
| Divestment Non-Operating Assets | $ | 2.7 | $ | 0.0 | |
| Impairment and Disposal of Long-lived Assets | $ | 13.8 | $ | 0.0 | |
| Adjusted Net Income Non-GAAP | $ | 1.7 | $ | 38.5 |
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:
| For the Three MonthsEnded | |||||
|---|---|---|---|---|---|
| (Amounts expressed in millions of United States dollars) | March 31,2022 | March 31,2021 | |||
| Earnings (Loss) Per Share GAAP | $ | (0.17 | ) | $ | 0.24 |
| Add (Deduct) Impact of: | |||||
| Warrant Liability Adjustment | $ | 0.00 | $ | 0.00 | |
| Inventory Step Up Fair Value | $ | 0.00 | $ | 0.02 | |
| Transaction, Acquisition, and Integration Costs | $ | 0.09 | $ | 0.02 | |
| Covid Related Expenses | $ | 0.00 | $ | 0.03 | |
| Divestment Non-Operating Assets | $ | 0.01 | $ | 0.00 | |
| Impairment and Disposal of Long-lived Assets | $ | 0.07 | $ | 0.00 | |
| Adjusted Earnings Per Share Non-GAAP | $ | 0.01 | $ | 0.30 |
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:
| For the Three Months Ended | |||||
|---|---|---|---|---|---|
| (Amounts expressed in millions of United States dollars) | March 31,2022 | March 31,2021 | |||
| Net Income (Loss) GAAP | $ | (32.0 | ) | $ | 30.1 |
| Add (Deduct) Impact of: | |||||
| Interest Expense, net | $ | 17.9 | $ | 7.9 | |
| Provision For Income Taxes | $ | 42.3 | $ | 34.5 | |
| Depreciation and Amortization | $ | 29.3 | $ | 5.4 | |
| Depreciation in COGS | $ | 10.7 | $ | 3.7 | |
| EBITDA | $ | 68.2 | $ | 81.6 | |
| Inventory Step Up Fair Value | $ | 0.4 | $ | 2.5 | |
| Integration and Transition Costs | $ | 5.3 | $ | 0.4 | |
| Acquisition and Transaction Costs | $ | 3.3 | $ | 1.7 | |
| Share-Based Compensation | $ | 4.6 | $ | 0.7 | |
| Other Non-Recurring Expenses | $ | 8.6 | $ | 0.0 | |
| Covid Related Expenses | $ | 0.4 | $ | 3.8 | |
| Impairment and Disposal of Long-lived Assets | $ | 13.8 | $ | 0.0 | |
| Divestment and Sale of Non-Operating Assets | $ | 2.7 | $ | 0.0 | |
| Non-Controlling Interest | $ | 0.0 | $ | 0.0 | |
| Other Expense (Income), net | $ | (0.9 | ) | $ | 0.0 |
| Fair Value of Derivative Liabilities - Warrants | $ | (0.8 | ) | $ | 0.0 |
| Adjusted EBITDA Non-GAAP | $ | 105.5 | $ | 90.9 |
Reconciliation of Non-GAAP Adjusted Cash Provided by OperatingActivities
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:
| For the Three Months Ended | |||||
|---|---|---|---|---|---|
| (Amounts expressed in millions of United States dollars) | March 31,2022 | March 31,2021 | |||
| Net Cash Provided by Operating Activities GAAP | $ | 45.1 | $ | 59.6 | |
| Add (Deduct) Impact of: | |||||
| Warrant Liability Adjustment | $ | (0.8 | ) | $ | 0.0 |
| Inventory Step Up Fair Value | $ | 0.4 | $ | 2.5 | |
| Transaction, Acquisition, and Integration Costs and NCI | $ | 17.2 | $ | 2.0 | |
| Covid Related Expenses | $ | 0.4 | $ | 3.8 | |
| Divestment Non-Operating Assets | $ | 2.7 | $ | 0.0 | |
| Impairment and Disposal of Long-lived Assets | $ | 13.8 | $ | 0.0 | |
| Adjusted Cash Provided by Operating Activities<br>Non-GAAP | $ | 78.8 | $ | 68.0 |
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
First Quarter 2022 Investor Presentation / May 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, 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 First Quarter 2022 Financial Highlights First Quarter 2022 Operational Highlights Financial Outlook Recent Developments Strategic Priorities Financial Results
First Quarter 2022 Financial Highlights* Revenue increased 64% year-over-year and 4% sequentially to $318.3 million Gross profit of $178.2 million and gross margin of 56.0% in the first quarter of 2022 compared to gross profit of $132.4 million and gross margin of 43.4% in the fourth quarter 2021 Net loss of $32.0 million, a sequential improvement of 55% Adjusted net income of $1.7 million excludes: $17.2 million transaction, acquisition, integration, and other non-recurring charges $13.8 million in asset impairments associated with the closing of redundant cultivation facilities $2.7 million loss due to the divestiture of a duplicative, non-operating location Adjusted EBITDA of $105.5 million, or 33.2% of revenue Cash at quarter end of $267 million, bolstered by $45.1 million in cash flow from operations and the closing of $75 million senior secured notes at 8% interest due October 2026, representing industry leading terms *Adjusted net income and Adjusted EBITDA are Non-GAAP financial measures. See slides 24-26 for reconciliation to GAAP for all Non-GAAP financial measures.
First Quarter 2022 Financial Highlights* *Adjusted EBITDA is a Non-GAAP financial measure. See slides 24-26 for reconciliation to GAAP for all Non-GAAP financial measures.
First Quarter 2022 Operational Highlights Trulieve opened 3 new dispensaries in Boca Raton and Riverview, Florida and Philadelphia, Pennsylvania Production in Q1 2022 was 9.8 million units, up 91% year over year 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 Successfully launched Cultivar CollectionTM, MuseTM, Modern FlowerTM, MomentaTM, and Roll OneTM brands across markets including Florida, Maryland, Massachusetts, Pennsylvania and West Virginia 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 launched nationwide Supplier Diversity Initiative
Financial Outlook Reiterating Full 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
Recent Developments Achieved record revenue, units sold, and number of customers served on 4/20 holiday Launched “4.20 For All” NFT collection Launched adult use sales at Napa, California dispensary Announced new brand partnership with DeLisioso Brands in Florida Expanded brand partnership with Khalifa Kush in Arizona Acquired West Virginia dispensary permit, expanding to 10 retail permits Trulieve opened 3 new dispensaries in Fort Myers and Zephyrhills, Florida and Framingham, Massachusetts Operate 165 retail dispensaries and >4.0 million square feet of cultivation and processing capacity as of May 12, 2022
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 RSO tinctures Value sized edibles Primo buds
Regional Hubs: Cultivation, Processing, Retail Capacity FL CA MA PA AZ MD WV NV AZ CO CT GA 165 Stores As of May 12, 2022 All stores owned, operated, or affiliated >4.0 M ft2 Cultivation & Processing As of March 31, 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 28 stores >0.5M ft2 cultivation & processing SOUTHEAST 115 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 115 medical dispensaries Florida market has 22 vertical licenses issued and 428 approved dispensaries as of May 6, 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 and Non-Recurring Charges Transaction related charges $0.4 million fair value of inventory step up charge $17.2 million transaction, acquisition, integration, and other non-recurring charges $13.8 million in asset impairments associated with the closing of redundant cultivation facilities $2.7 million loss due to the divestiture of a duplicative, non-operating location 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 24-26 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