AYR Wellness, Inc. (AYRWF) reported its Q4 financials today for the 3-month period ending December 31st, 2021. 

Q4 2021 Financial Highlights

For the three months ended December 31, 2021. (Unless otherwise noted, all results are presented in U.S. dollars and compared with the previous quarter.)

• Revenue: increased +16.2% to $111.8M
• Operating Income (Loss): increased +56.2% to $(13.9)M 
• Adj. EBITDA: increased marginally to $26.1M $26.0M
• Adj. EBITDA Margin: declined to 23.3% from 27.0%

Q4 2021 Business Highlights

•  opened two new Pennsylvania dispensaries in Montgomeryville and Bryn Mawr
• completed the construction of its 75,000 sq. ft. cultivation facility in New Jersey, which is awaiting regulatory approval to open
• completed construction of its 80,000 sq. ft. cultivation facility in Arizona, which is expected to begin generating revenue in the second quarter of 2022
• continued to grow market share in Nevada to roughly 16% as of January 2022, maintaining strong retail sales despite the fact that the overall Nevada market declined according to BDSA
• added 40% more power capacity to its Gainesville cultivation site to further improve cultivation results
• entered into a definitive agreement to acquire Gentle Ventures, LLC to establish a retail footprint in the state of Illinois
• closed its acquisition of PA Natural Medicine, LLC, which added three key dispensary locations in central Pennsylvania
• repurchased approximately 573,000 subordinate voting shares as part of its stock repurchase program for a total of over CAD $11 million
• added approximately $147 million of cash to its balance sheet following the sale of Senior Secured Notes at a yield-to-maturity of 9.8%
• deployed approximately $123 million of capital expenditures and anticipates an additional $70 million of capital expenditures for 2022

Outlook

• Given prior construction delays and uncertain regulatory timelines regarding key revenue-generating initiatives, including regulatory approval for adult-use sales and cultivation expansions in both Massachusetts and New Jersey, the Company expects financial results in the first half of 2022 to remain relatively flat, in-line with industry trends, followed by a step-function in growth beginning in Q3 2022 and continuing through Q4 2022.
• Assuming the Company receives these regulatory approvals sufficiently early in Q3 2022, the Company anticipates an annualized run-rate of $250 million of Adjusted EBITDA, $100 million of operating income and $800 million of revenue for Q4 2022.

Stock Performance

The market did not like what was reported by AYRWF today dropping to its 52-week low before advancing slightly. The stock is now DOWN -14.2% so far in March, DOWN -23.7% YTD and DOWN -68.3% from its high in 2021.