E TerrAscend Q4 Report Shows Strong Revenue Growth, Margin Expansion And Cash Generation

TerrAscend | Committed to quality cannabis products, brands and services

TerrAscend Corp. (OTCQX: TRSSF), a leading North American cannabis operator with vertically integrated operations in Pennsylvania, New Jersey, and California, in addition to operating as a licensed producer in Canada, reported financial results for its fourth-quarter ending December 31, 2020, today, as follows:

Q4 Financial Highlights

(Unless otherwise stated, the results are in Canadian dollars - to convert to other currencies go here - and compared to the previous quarter.)

  • Net Sales: increased 28% to $65M as a result of:
    • an increase in cultivation capacity in Pennsylvania and California,
    • the first sales into the New Jersey market,
    • the continued growth and ramp-up at its three retail stores in Pennsylvania as well as two new store locations in California.
  • Gross Margin: increased to 60% from 59%
    • the result of a higher mix as well as improved yields and lower cost per pound from the Pennsylvania operations
  • Gen./Admin. Exp.: reduced to 23% of net sales from 27%
    • the result of tight control of costs combined with continued robust revenue growth
  • Adjusted EBITDA: increased 44% to $26M
  • Adjusted EBITDA Margin: increased to 40% of net sales from 35%.
    • driven by improvements in both gross margin and G&A leverage.
  • Net Income: loss increased by 521% to $(109)M
    • largely impacted by a net increase in fair value of warrant and derivative liability of $124 million and a revaluation of contingent consideration of $5 million.
  • Adj. Net Income: increased by 54% to $20M from $13M
    • the second straight quarter the company has recorded a positive result 
  • Cash Flow: increased to $24M from $0
    • driven by continued ramp-up in U.S. operations partially offset by income taxes

Management Commentary

Jason Wild, Executive Chairman said:

  • "In Q4, we drove strong revenue growth, margin expansion, and cash generation by focusing on operational excellence, disciplined cost control, and effective allocation of capital...
  • The business is firing on all cylinders and we are only now just beginning to realize the benefits of our recently completed investments:  
    • Sales from facility expansions in Pennsylvania, New Jersey, and California are just starting to come to market,
    • our acquisition in Maryland is expected to close imminently,
    • and two additional retail stores are set to open in New Jersey."
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