MIAMI, Nov. 13, 2024 – PRESS RELEASE – AYR Wellness Inc., a leading vertically integrated U.S. multistate cannabis operator, reported financial results for the third quarter ended Sept. 30, 2024. Unless otherwise noted, all results are presented in U.S. dollars.
Steven M. Cohen, interim CEO of AYR, said, “Our third quarter performance reflected ongoing macroeconomic pressure to the consumer wallet and increased competition in select markets, which affected revenue and offset the growth from the launch of adult-use sales in Ohio. However, our team adapted to drive gross margin expansion and operating efficiencies, improving our adjusted EBITDA despite the lower revenue.
“Notwithstanding the ongoing leadership transition, we remain focused on strengthening execution and are committed to positioning AYR for sustained growth and profitability. Particularly, in 2025, we plan to expand our presence in Ohio, develop an initial footprint in Virginia, and improve our vertical operations in Florida. Although we are disappointed by the result of the Amendment 3 referendum last week in Florida, we continue to maintain strong share in the state’s medical market and see potential for revenue growth as our new indoor cultivation facility comes online next year, which will fill a crucial gap by supplying high-quality indoor flower to our stores. We are well-positioned to navigate the near-term environment as we focus on improving execution in our key markets.”
Third Quarter Financial Summary.
1 Adjusted EBITDA, Adjusted Gross Profit and Adjusted EBITDA Margin are non-GAAP measures, and accordingly are not standardized measures and may not be comparable to similar measures used by other companies. See Definition and Reconciliation of Non-GAAP Measures below. For a reconciliation of Operating Loss to Adjusted EBITDA as well as Gross Profit to Adjusted Gross Profit, see the reconciliation tables appended to this release
Third Quarter and Recent Highlights
Received conditional approval to serve as a pharmaceutical processor by the Virginia Cannabis Control Authority with exclusive rights to service Health Service Area 1, one of five service regions in the state of Virginia.2Launched adult-use sales in Ohio with three affiliated AYR stores and wholesale operations. The company has also started the process of building out five new dispensaries in Ohio that are expected to open in the first half of 2025.In November 2024, the New York Cannabis Control Board voted to approve the application for Amethyst Health LLC for registration as a “Registered Organization,” which would conditionally allow the company to commence medical marijuana operations in the state. AYR is an operational partner and minority equity holder in Amethyst Health.Entered the Connecticut market with the opening of AYR Cannabis Manchester.Opened four retail stores during the quarter, including the company’s fourth Illinois retail store in July, and the company’s 65th and 66th stores in Florida.
Board & Management Changes
In July 2024, Louis Karger was appointed chairman of the company’s board of directors following the resignation of prior Executive Chairman Jonathan Sandelman.In September 2024, the company appointed Steven M. Cohen as interim CEO, replacing David Goubert, who stepped down as CEO and president. The board is currently conducting a search for a permanent CEO and has retained True Search, a global recruiting firm, to lead the search.In October 2024, Jamie Mendola and Julie Winter were promoted to interim co-chief revenue officers of the company, after having previously held the positions of regional senior vice presidents. George Denardo’s role as chief operating officer was expanded to provide greater oversight of marketing and greater coordination with the interim co-chief revenue officers.
Financing and Capital Structure
The company deployed $6.1 million of capital expenditures in Q3 and remains on target with the company’s guidance of approximately $20 million for the full year. AYR ended Q3 with aggregate cash, cash equivalents and a restricted cash balance of $51 million.
As of Sept. 30, 2024, the company had approximately 116.2 million fully diluted shares outstanding based on a treasury method calculation as of that date (excluding 23 million warrants expiring in February 2026 with an exercise price of $2.12).
Outlook
For the fourth quarter, the company expects revenue and adjusted EBITDA to be essentially flat compared to the third quarter of 2024. AYR also continues to expect positive GAAP cash flow from operations for calendar 2024.
The cannabis company reported $114 million in revenue and a $17 million operating loss for its third-quarter 2024 financial results. Read More
