Conference Call with Investors and Analysts to be Held on December
17, 2018
Third Quarter 2018 and Year-to-Date 2018 Highlights
-
Third quarter revenue1 of $12.2 million, up 335%
year-over-year and 51% quarter-over-quarter.
-
Year-to-date revenue of $25.1 million, up 248% from the prior year.
-
Third quarter pro forma revenue2 of $16.3 million and
year-to-date pro forma revenue of $35.1 million.
-
Third quarter net income of $3.9 million, compared to net loss of $0.2
million in the prior-year period.
-
Third quarter adjusted EBITDA3 of $5.3 million, compared to
adjusted EBITDA of less than $0.1 million in the prior-year period.
-
Successfully raised $205 million in growth capital through three
capital raises in 2018.
-
Operations in seven states, with binding transactions pending in two
more states.
-
Deepened and strengthened management team through numerous key hires
from Fortune 100 and other major companies.
-
Hired more than 400 employees in 2018, bringing total staff to nearly
500 employees.
CHICAGO--(BUSINESS WIRE)--
Cresco
Labs, Inc. (CSE:CL) (“Cresco” or “the Company”) one of the largest
vertically integrated multistate cannabis operators in the United
States, today released its financial results for the third quarter and
nine months ended September 30, 2018. All financial information
presented in this release is in U.S. dollars, unless otherwise noted.
Subsequent to the end of third quarter 2018, the Company completed a
business combination with Randsburg International Gold Corp. upon which
its subordinate voting shares were approved for listing on the Canadian
Securities Exchange (“CSE”) under the symbol “CL.” Cresco’s shares began
trading on the CSE on Monday, December 3, 2018. The Company is in the
process of receiving approval by FINRA to list on the OTC market in the
U.S. and is currently trading under the symbol “CRLBF.” Concurrent with
its public listing on the CSE, Cresco launched its new investors website
at investors.crescolabs.com.
1 Revenue presented in the text herein is calculated net of
excise taxes.
2 Pro forma revenue and adjusted EBITDA
information reflect consolidated results of less than majority owned
affiliates.
3 See "Non-IFRS Financial Measures" at the
end of this press release for more information regarding Cresco Labs’
use of non-IFRS financial measures.
Management Commentary
“As one of the early cannabis companies to establish a national
geographic footprint with substantial population reach and production
capacity, Cresco is leading the way in normalizing and professionalizing
our industry,” said Charles Bachtell, Co-founder and CEO of Cresco Labs.
“As a multi-state operator (“MSO”), we have repeatedly proven our
ability to get access to markets, get operational, get product to
markets, and get disproportionate market share. Early on in our
formation, we realized that cannabis is a natural fit within
consumer-packaged goods (“CPG”) – an industry that requires consistency,
reliability and availability. We therefore developed a unique and
sophisticated ‘house of brands’ that addresses each major market segment
and covers all price points. In essence, we developed a disciplined
business blueprint that enables our rapid entry into regulated markets,
where operator obligations are stringent, where our products can be
accessible to customers, and where we can capture leading market share
right from the start.
“Through our differentiated business approach, we have already proven
that our capital starts working immediately to the benefit of our
shareholders, regulators, legislators and consumers,” Bachtell
continued. “Now, with increased access to the capital markets through
our public listing, we can take our expansion strategy to the next
level. We believe that Cresco has built the foundation needed to
generate strong growth and attractive shareholder returns in the years
ahead.”
Financial Results for the Third Quarter Ended September 30, 2018
Revenue for the third quarter of 2018 was $12.2 million, an increase of
335% compared to revenue of $2.8 million for the third quarter of 2017.
The increase in revenue was driven by market expansion and gains in
market share in the states where the Company operates. Third quarter
revenue increased 51% compared to $8.1 million for the second quarter of
2018.
On a pro forma basis, revenue for the third quarter was $16.3 million
compared to $11.8 million for the second quarter of 2018, an increase of
39%.
Third quarter gross profit, before the gain from biological assets, was
$5.4 million, or 45% of revenues, compared to less than $0.1 million, or
1% of revenues, for the third quarter of 2017 and $3.5 million, or 43%
of revenues, for the second quarter of 2018.
Net income for the third quarter was $3.9 million, compared to net loss
of $0.2 million for the prior-year period. Net income nearly doubled
from $2.0 million for the second quarter of 2018.
Adjusted EBITDA for the third quarter was $5.3 million, compared to less
than $0.1 million for the third quarter of 2017 and $2.1 million for the
second quarter of 2018. Pro forma adjusted EBITDA was $5.9 million for
the third quarter and $2.7 million for the second quarter of 2018.
Balance Sheet and Liquidity
As of September 30, 2018, the Company had total assets of $149.5
million, including cash and cash equivalents of $93.9 million, which
does not reflect the full amount of proceeds from financing activities
completed subsequent to the end of the quarter. Long-term liabilities
totaled $2.0 million. At September 30, 2018, the Company had a working
capital position of $105.3 million.
Subsequent to the end of the third quarter of 2018, the Company
increased its liquidity through additional capital raises:
-
In October, the Company closed a $100 million Series F private funding
raise, the second largest private funding round in U.S. cannabis
history at that time. A portion of the round was funded in late
September and a substantial amount was funded during the fourth
quarter of 2018.
-
In November, in connection with its business combination with
Randsburg International Gold Corp., Cresco raised gross proceeds of
$85 million comprised primarily of funds from institutional investors,
and on December 3, 2018, the Company began trading on CSE under the
ticker symbol "CL."
Operational Highlights
Operations
-
Nevada: Launched Mindy’s Edibles and Mindy’s Kitchen with expansive
distribution.
-
Ohio: While the program has experienced slight delays, Cresco’s first
harvest in Yellow Springs will take place in the fourth quarter and
the Wintersville dispensary will be the first dispensary in the state
to receive operational approval during the same period.
-
Pennsylvania: Developing expansion plan of 75,000 square feet in
Brookville cultivation facility including a new greenhouse that will
increase capacity by four times.
-
California: First harvest from seven-acre production site located
along the central coast.
-
Illinois: Doubled cultivation capacity and quadrupled production and
manufacturing capacity across three facilities; added a sophisticated
edibles kitchen.
Business Development
-
Illinois: Acquired 100% of the membership interests of FloraMedex, LLC
and an affiliated real estate entity, including an operational medical
marijuana dispensary in Elmwood Park.
-
Illinois: Market growth in the state has been driven by an increasing
number of registered patients and the recently passed Illinois
Alternatives to Opioids Act which, when fully implemented during the
first quarter of 2019, is expected to vastly expand the population of
patients that can access medical cannabis in place of pharmaceutical
opioid medications.
-
Massachusetts: Acquisition of Hope Heal Health, Inc. (“HHH”) and an
affiliated real estate entity with assets including state registration
and licensing that will allow for cultivation, manufacturing,
processing, and the establishment and operation of a medical marijuana
dispensary, with the ability to obtain up to three medical marijuana
dispensary licenses and three adult-use dispensary licenses.
-
Arizona: Acquisition of Arizona Facilities Supply, LLC and certain of
its subsidiaries, providing two cultivation facilities, one processing
facility and one dispensary.
Recent Developments
Awards and Recognition
-
Co-Founder and CEO Charlie Bachtell was appointed to the cannabis
subcommittee of Illinois Governor-elect JB Pritzker’s transition team.
Bachtell is the only cannabis industry operator appointed to provide
input that will shape the future of the cannabis program in Illinois.
-
Cresco was named to the prestigious “Cannabis 100” list recognizing
industry leaders and entrepreneurs by Green Entrepreneur, a
division of Entrepreneur.com.
-
Cresco was named among the best companies to work for in cannabis by MJ
Magazine.
-
Cresco was the first-ever cannabis company to win a national
Healthcare Advertising Award.
-
Cresco was also the first-ever cannabis company to receive a Summit
International Award for creative, marketing and advertising.
Key Hires
A core principle of the Company is to build a team of subject matter
experts to propel Cresco’s growth in every vertical of the business.
Recent hires include:
-
Chief Experience Officer: Scott Wilson, former global creative
director for Nike.
-
Senior Vice President of Product Development and Commercialization:
Todd West, former Lifeway Foods executive.
-
Vice President of Consumer Experience: Cris Rivera, previously a
senior director of marketing for MillerCoors.
-
Vice President of Brand Marketing: Cory Rothschild, former director of
consumer engagement for Gatorade, a PepsiCo company.
In addition to the above key hires, Cresco has recruited experts across
every industry from companies including Stericycle, Abbvie, Abbott,
Cushman & Wakefield, Pandora and BMO Financial Group.
Conference Call and Webcast
The Company will hold a conference call and webcast to discuss its
business and financial results next Monday, December 17, 2018 at 5 p.m.
Eastern Time (4 p.m. Central Time). The conference call may be accessed
via Cresco Labs’ investors website at investors.crescolabs.com
or by dialing 866-688-4235 (409-216-0711 for international callers) and
entering conference ID 5047018. Archived access to the webcast will be
available for one year on Cresco's investors website.
Consolidated Financial Statements
The Company’s unaudited consolidated interim financial statements and
accompanying notes for the third quarter 2018 are available under the
Company's profile on SEDAR at www.sedar.com
and on Cresco’s investors website at investors.crescolabs.com.
Cresco references certain non-IFRS financial measures throughout this
press release, which may not be comparable to similar measures presented
by other issuers. Please see the “Non-IFRS Financial Measures” section
at the end of this press release for more detailed information.
About Cresco Labs, Inc.
Cresco Labs, based in Chicago, is a leading U.S. cannabis company with
experienced management, access to capital and a demonstrated growth
strategy. As a differentiated grower, processor and retailer of premium
cannabis operating in seven states, the company focuses on entering
highly regulated markets with outsized demand potential and high
barriers to entry. Its impressive speed-to-market gives Cresco a
distinct competitive advantage as it replicates its model to expand its
national footprint. Cresco’s proven ability to execute is complemented
by a cutting-edge brand strategy spearheaded by several of the brightest
minds in consumer marketing in the nation. Cresco’s products are
tailored to all major consumer segments: everyday cannabis, medicinally
focused, connoisseur grade, and chef inspired edibles by James Beard
Award-winning pastry chef Mindy Segal. Learn more about Cresco Labs at crescolabs.com.
Non-IFRS Financial Measures
EBITDA and Adjusted EBITDA are non-IFRS measures and do not have
standardized definitions under IFRS. The following information provides
reconciliations of the supplemental non-IFRS financial measures,
presented herein to the most directly comparable financial measures
calculated and presented in accordance with IFRS. The Company has
provided the non-IFRS financial measures, which are not calculated or
presented in accordance with IFRS, as supplemental information and in
addition to the financial measures that are calculated and presented in
accordance with IFRS. These supplemental non-IFRS financial measures are
presented because management has evaluated the financial results both
including and excluding the adjusted items and believe that the
supplemental non-IFRS financial measures presented provide additional
perspective and insights when analyzing the core operating performance
of the business. These supplemental non-IFRS financial measures should
not be considered superior to, as a substitute for or as an alternative
to, and should only be considered in conjunction with, the IFRS
financial measures presented herein.
Forward Looking Statements
This press release contains “forward-looking information” within the
meaning of applicable Canadian securities legislation and may also
contain statements that may constitute "forward-looking statements"
within the meaning of the safe harbor provisions of the United States
Private Securities Litigation Reform Act of 1995. Such forward-looking
information and forward-looking statements are not representative of
historical facts or information or current condition, but instead
represent only the Company's beliefs regarding future events, plans or
objectives, many of which, by their nature, are inherently uncertain and
outside of the Company's control. Generally, such forward-looking
information or forward-looking statements can be identified by the use
of forward-looking terminology such as, ‘may,’ ‘will,’ ‘should,’
‘could,’ ‘would,’ ‘expects,’ ‘plans,’ ‘anticipates,’ ‘believes,’
‘estimates,’ ‘projects,’ ‘predicts,’ ‘potential’ or ‘continue’ or the
negative of those forms or other comparable terms. The Company’s
forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the Company’s actual
results, performance or achievements to be materially different from any
future results, performance or achievements expressed or implied by the
forward-looking statements, including but not limited to those risks
discussed under "Risk Factors" in the company’s CSE Listing Statement
filed with SEDAR; and other factors, many of which are beyond the
control of the Company. Readers are cautioned that the foregoing list of
factors is not exhaustive. Because of these uncertainties, you should
not place undue reliance on the Company’s forward-looking statements. No
assurances are given as to the future trading price or trading volumes
of Cresco’s shares, nor as to the Company’s financial performance in
future financial periods. The Company does not intend to update any of
these factors or to publicly announce the result of any revisions to any
of the Company’s forward-looking statements contained herein, whether as
a result of new information, any future event or otherwise. Except as
otherwise indicated, this press release speaks as of the date hereof.
The distribution of this press release does not imply that there has
been no change in the affairs of the Company after the date hereof or
create any duty or commitment to update or supplement any information
provided in this press release or otherwise.
|
Cresco Labs, LLC
|
Consolidated Statements of Financial Position
|
For the Three and Nine Months Ended September 30, 2018 and 2017
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
2018
|
|
|
2017
|
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
|
Cash and Cash Equivalents
|
|
|
$ 93,916,298
|
|
|
$ 27,043,219
|
Accounts Receivable, Net
|
|
|
2,897,429
|
|
|
1,010,620
|
Biological Assets
|
|
|
7,546,787
|
|
|
2,636,654
|
Inventory, Net
|
|
|
7,746,264
|
|
|
3,191,109
|
Other Current Assets
|
|
|
488,934
|
|
|
183,515
|
|
|
|
|
|
|
|
Total Current Assets
|
|
|
112,595,712
|
|
|
34,065,117
|
|
|
|
|
|
|
|
Property and Equipment, Net
|
|
|
23,571,685
|
|
|
4,973,447
|
Intangible Assets, Net
|
|
|
3,577,005
|
|
|
247,083
|
Investments
|
|
|
8,362,427
|
|
|
989,611
|
Security Deposits - Related Parties
|
|
|
1,354,458
|
|
|
1,342,049
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
|
$ 149,461,287
|
|
|
$ 41,617,307
|
|
|
|
|
|
|
|
LIABILITIES AND MEMBERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
Accounts Payable and Other Accrued Expenses
|
|
|
$ 5,748,055
|
|
|
$ 2,640,582
|
Subscription Deposits Refundable
|
|
|
-
|
|
|
399,800
|
Notes Payable - Related Parties
|
|
|
-
|
|
|
328,125
|
Due to Related Parties
|
|
|
1,522,901
|
|
|
725,000
|
|
|
|
|
|
|
|
Total Current Liabilities
|
|
|
7,270,956
|
|
|
4,093,507
|
|
|
|
|
|
|
|
Deferred Rent
|
|
|
2,042,405
|
|
|
1,587,230
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
|
|
|
9,313,361
|
|
|
5,680,737
|
TOTAL MEMBERS’ EQUITY
|
|
|
140,147,926
|
|
|
35,936,570
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND MEMBERS’ EQUITY
|
|
|
$ 149,461,287
|
|
|
$ 41,617,307
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cresco Labs, LLC
|
Consolidated Statement of Operations and Comprehensive Income
|
For the Three and Nine Months Ended September 30, 2018 and 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
For the Nine Months Ended
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
$ 12,728,951
|
|
|
$ 2,934,918
|
|
|
$ 26,295,137
|
|
|
$ 7,665,318
|
Excise Taxes
|
|
|
557,241
|
|
|
136,444
|
|
|
1,243,293
|
|
|
461,792
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenue
|
|
|
12,171,710
|
|
|
2,798,474
|
|
|
25,051,844
|
|
|
7,203,526
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory Production Costs Expensed to Cost of Sales
|
|
|
6,738,753
|
|
|
2,770,831
|
|
|
15,085,351
|
|
|
7,157,448
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit Before Unrealized Gain on Changes in Fair Value of
Biological Assets
|
|
|
5,432,957
|
|
|
27,643
|
|
|
9,966,493
|
|
|
46,078
|
Unrealized Gain on Changes in Fair Value of Biological Assets
|
|
|
2,739,564
|
|
|
800,264
|
|
|
4,910,133
|
|
|
1,467,703
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit After Unrealized Gain on Changes in Fair Value of
Biological Assets
|
|
|
8,172,521
|
|
|
827,907
|
|
|
14,876,626
|
|
|
1,513,781
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, General and Administration
|
|
|
3,905,075
|
|
|
862,360
|
|
|
7,610,336
|
|
|
2,243,725
|
Depreciation and Amortization
|
|
|
51,514
|
|
|
9,767
|
|
|
141,295
|
|
|
29,015
|
Advertising and Marketing
|
|
|
418,196
|
|
|
140,921
|
|
|
1,065,541
|
|
|
282,019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Expenses
|
|
|
4,374,785
|
|
|
1,013,048
|
|
|
8,817,172
|
|
|
2,554,759
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (Loss) from Operations
|
|
|
3,797,736
|
|
|
(185,141)
|
|
|
6,059,454
|
|
|
(1,040,978)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Income (Expense), Net
|
|
|
(3,674)
|
|
|
16,097
|
|
|
(21,005)
|
|
|
32,213
|
Other Income (Expense), Net
|
|
|
(36,417)
|
|
|
13,010
|
|
|
(19,287)
|
|
|
61,458
|
Shares of Income from Investment in Associate
|
|
|
177,962
|
|
|
-
|
|
|
498,786
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Other Income (Loss), Net
|
|
|
137,871
|
|
|
29,107
|
|
|
458,494
|
|
|
93,671
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
|
|
|
3,935,607
|
|
|
(156,034)
|
|
|
6,517,948
|
|
|
(947,307)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Income) Attributable to Non-Controlling Interests
|
|
|
(1,056,986)
|
|
|
-
|
|
|
(1,657,845)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) Attributable to Controlling Interest
|
|
|
$ 2,878,621
|
|
|
$ (156,034)
|
|
|
$ 4,860,103
|
|
|
$ (947,307)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cresco Labs, LLC
|
Reconciliation of Net Income to Adjusted EBITDA
|
For the Three and Nine Months Ended September 30, 2018 and 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
For the Nine Months Ended
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
|
|
|
$ 3,935,607
|
|
|
$ (156,034)
|
|
|
$ 6,517,948
|
|
|
$ (947,307)
|
Interest Income/Expense, Net
|
|
|
3,674
|
|
|
(16,097)
|
|
|
21,005
|
|
|
(32,213)
|
Other Income/Expense, Net
|
|
|
36,417
|
|
|
(13,010)
|
|
|
19,287
|
|
|
(61,458)
|
Depreciation and Amortization
|
|
|
51,514
|
|
|
9,767
|
|
|
141,295
|
|
|
29,015
|
Shares of Income from Investment in Assoc.
|
|
|
(177,962)
|
|
|
-
|
|
|
(498,786)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Before Interest, Taxes, Depreciation, and Amortization
(EBITDA) (Non-IFRS)
|
|
|
3,849,250
|
|
|
(175,374)
|
|
|
6,200,749
|
|
|
(1,011,963)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments for RTO and Acquisitions (Non-IFRS)
|
|
|
358,646
|
|
|
-
|
|
|
517,545
|
|
|
-
|
Management Incentive Compensation (Share Based)
|
|
|
444,994
|
|
|
-
|
|
|
465,205
|
|
|
-
|
Financing Fees
|
|
|
641,649
|
|
|
214,360
|
|
|
889,129
|
|
|
214,360
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (Non-IFRS)
|
|
|
$ 5,294,539
|
|
|
$ 38,986
|
|
|
$ 8,072,628
|
|
|
$ (797,603)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cresco Labs, LLC
|
Reconciliation of Net Income to Adjusted EBITDA
|
For the Three and Six Months Ended June 30, 2018 and 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
For the Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
|
|
|
$ 1,981,986
|
|
|
$ (424,252)
|
|
|
$ 2,582,346
|
|
|
$ (921,204)
|
Interest Income/Expense, Net
|
|
|
8,088
|
|
|
(10,431)
|
|
|
17,331
|
|
|
16,155
|
Other Income/Expense, Net
|
|
|
(29,748)
|
|
|
16,095
|
|
|
(17,130)
|
|
|
48,449
|
Depreciation and Amortization
|
|
|
50,230
|
|
|
9,847
|
|
|
89,780
|
|
|
19,248
|
Shares of Income from Investment in Assoc.
|
|
|
(320,824)
|
|
|
-
|
|
|
(320,824)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Before Interest, Taxes, Depreciation, and Amortization
(EBITDA) (Non-IFRS)
|
|
|
1,689,732
|
|
|
(408,741)
|
|
|
2,351,503
|
|
|
(837,352)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments for RTO and Acquisitions (Non-IFRS)
|
|
|
135,023
|
|
|
-
|
|
|
158,899
|
|
|
-
|
Management Incentive Compensation (Share Based)
|
|
|
-
|
|
|
-
|
|
|
20,211
|
|
|
-
|
Financing Fees
|
|
|
247,480
|
|
|
-
|
|
|
247,480
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (Non-IFRS)
|
|
|
$ 2,072,235
|
|
|
$ (408,741)
|
|
|
$ 2,778,093
|
|
|
$ (837,352)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cresco Labs, LLC
|
Pro Forma Financial Information and Reconciliation of Net
Income to Adjusted EBITDA
|
For the Three and Nine Months Ended September 30, 2018 (Pro
Forma) and 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
For the Nine Months Ended
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
2018
|
|
|
|
|
|
2018
|
|
|
|
|
|
|
(Pro Forma)
|
|
|
2017
|
|
|
(Pro Forma)
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
$ 16,912,833
|
|
|
$ 2,934,918
|
|
|
$ 36,384,288
|
|
|
$ 7,665,318
|
Excise Taxes
|
|
|
570,619
|
|
|
136,444
|
|
|
1,264,139
|
|
|
461,792
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenue
|
|
|
16,342,214
|
|
|
2,798,474
|
|
|
35,120,149
|
|
|
7,203,526
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory Production Costs Expensed to Cost of Sales
|
|
|
9,194,649
|
|
|
2,770,831
|
|
|
21,143,167
|
|
|
7,157,448
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit (Loss) Before Unrealized Gain on Changes in Fair
Value of Biological Assets
|
|
|
7,147,565
|
|
|
27,643
|
|
|
13,976,982
|
|
|
46,078
|
Unrealized Gain on Changes in Fair Value of Biological Assets
|
|
|
2,739,564
|
|
|
800,264
|
|
|
4,910,133
|
|
|
1,467,703
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit After Unrealized Gain on Changes in Fair Value of
Biological Assets
|
|
|
9,887,129
|
|
|
827,907
|
|
|
18,887,115
|
|
|
1,513,781
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, General and Administration
|
|
|
4,845,193
|
|
|
862,360
|
|
|
9,786,958
|
|
|
2,243,725
|
Depreciation and Amortization
|
|
|
60,655
|
|
|
9,767
|
|
|
160,317
|
|
|
29,015
|
Advertising and Marketing
|
|
|
593,613
|
|
|
140,921
|
|
|
1,518,100
|
|
|
282,019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Expenses
|
|
|
5,499,461
|
|
|
1,013,048
|
|
|
11,465,375
|
|
|
2,554,759
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (Loss) from Operations
|
|
|
4,387,668
|
|
|
(185,141)
|
|
|
7,421,740
|
|
|
(1,040,978)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Income (Expense), Net
|
|
|
(3,674)
|
|
|
16,097
|
|
|
(21,005)
|
|
|
32,213
|
Other Income (Expense), Net
|
|
|
(36,417)
|
|
|
13,010
|
|
|
(19,287)
|
|
|
61,458
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Other Income (Loss), Net
|
|
|
(40,091)
|
|
|
29,107
|
|
|
(40,292)
|
|
|
93,671
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
|
|
|
$ 4,347,577
|
|
|
$ (156,034)
|
|
|
$ 7,381,448
|
|
|
$ (947,307)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
For the Nine Months Ended
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
2018
|
|
|
|
|
|
2018
|
|
|
|
|
|
|
(Pro Forma)
|
|
|
2017
|
|
|
(Pro Forma)
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
|
|
|
$ 4,347,577
|
|
|
$ (156,034)
|
|
|
$ 7,381,448
|
|
|
$ (947,307)
|
Interest Income/Expense, Net
|
|
|
3,674
|
|
|
(16,097)
|
|
|
21,005
|
|
|
(32,213)
|
Other Income/Expense, Net
|
|
|
36,417
|
|
|
(13,010)
|
|
|
19,287
|
|
|
(61,458)
|
Depreciation and Amortization
|
|
|
60,655
|
|
|
9,767
|
|
|
160,317
|
|
|
29,015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Before Interest, Taxes, Depreciation, and Amortization
(EBITDA) (Non-IFRS)
|
|
|
4,448,323
|
|
|
(175,374)
|
|
|
7,582,057
|
|
|
(1,011,963)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments for RTO and Acquisitions (Non-IFRS)
|
|
|
358,646
|
|
|
-
|
|
|
517,545
|
|
|
-
|
Management Incentive Compensation (Share Based)
|
|
|
444,994
|
|
|
-
|
|
|
465,205
|
|
|
-
|
Financing Fees
|
|
|
641,649
|
|
|
214,360
|
|
|
889,129
|
|
|
214,360
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (Non-IFRS)
|
|
|
$ 5,893,612
|
|
|
$ 38,986
|
|
|
$ 9,453,936
|
|
|
$ (797,603)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: The above tables include the results of Lighthouse
Strategies, LLC and PDI Medical LLC beginning in February 2018 and
May 2018, respectively
|
|
|
Cresco Labs, LLC
|
Pro Forma Financial Information and Reconciliation of Net
Income to Adjusted EBITDA
|
For the Three and Six Months Ended June 30, 2018 (Pro Forma)
and 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
For the Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2018
|
|
|
|
|
|
2018
|
|
|
|
|
|
|
(Pro Forma)
|
|
|
2017
|
|
|
(Pro Forma)
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
$12,201,592
|
|
|
$ 2,668,683
|
|
|
$ 19,471,456
|
|
|
$ 4,730,401
|
Excise Taxes
|
|
|
403,668
|
|
|
183,539
|
|
|
693,519
|
|
|
325,348
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenue
|
|
|
11,797,924
|
|
|
2,485,144
|
|
|
18,777,937
|
|
|
4,405,053
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory Production Costs Expensed to Cost of Sales
|
|
|
6,745,653
|
|
|
2,806,935
|
|
|
11,948,417
|
|
|
4,386,620
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit (Loss) Before Unrealized Gain on Changes in Fair
Value of Biological Assets
|
|
|
5,052,271
|
|
|
(321,791)
|
|
|
6,829,520
|
|
|
18,433
|
Unrealized Gain on Changes in Fair Value of Biological Assets
|
|
|
761,279
|
|
|
623,161
|
|
|
2,170,569
|
|
|
667,439
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit After Unrealized Gain on Changes in Fair Value of
Biological Assets
|
|
|
5,813,550
|
|
|
301,370
|
|
|
9,000,089
|
|
|
685,872
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, General and Administration
|
|
|
2,971,329
|
|
|
610,928
|
|
|
4,941,867
|
|
|
1,382,166
|
Depreciation and Amortization
|
|
|
60,111
|
|
|
9,847
|
|
|
99,661
|
|
|
19,248
|
Advertising and Marketing
|
|
|
506,280
|
|
|
99,183
|
|
|
924,486
|
|
|
141,098
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Expenses
|
|
|
3,537,720
|
|
|
719,958
|
|
|
5,966,014
|
|
|
1,542,512
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (Loss) from Operations
|
|
|
2,275,830
|
|
|
(418,588)
|
|
|
3,034,075
|
|
|
(856,640)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Income (Expense), Net
|
|
|
(8,088)
|
|
|
10,431
|
|
|
(17,331)
|
|
|
(16,115)
|
Other Income (Expense), Net
|
|
|
29,748
|
|
|
(16,095)
|
|
|
17,130
|
|
|
(48,449)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Other Income (Loss), Net
|
|
|
21,660
|
|
|
(5,664)
|
|
|
(201)
|
|
|
(64,564)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
|
|
|
$ 2,297,490
|
|
|
$ (424,252)
|
|
|
$ 3,033,874
|
|
|
$ (921,204)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
For the Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2018
|
|
|
|
|
|
2018
|
|
|
|
|
|
|
(Pro Forma)
|
|
|
2017
|
|
|
(Pro Forma)
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
|
|
|
$ 2,297,490
|
|
|
$ (424,252)
|
|
|
$ 3,033,874
|
|
|
$ (921,204)
|
Interest Income/Expense, Net
|
|
|
8,088
|
|
|
(10,431)
|
|
|
17,331
|
|
|
16,155
|
Other Income/Expense, Net
|
|
|
(29,748)
|
|
|
16,095
|
|
|
(17,130)
|
|
|
48,449
|
Depreciation and Amortization
|
|
|
60,111
|
|
|
9,847
|
|
|
99,661
|
|
|
19,248
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Before Interest, Taxes, Depreciation, and Amortization
(EBITDA) (Non-IFRS)
|
|
|
2,335,941
|
|
|
(408,741)
|
|
|
3,133,736
|
|
|
(837,352)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments for RTO and Acquisitions (Non-IFRS)
|
|
|
135,023
|
|
|
-
|
|
|
158,899
|
|
|
-
|
Management Incentive Compensation (Share Based)
|
|
|
-
|
|
|
-
|
|
|
20,211
|
|
|
-
|
Financing Fees
|
|
|
247,480
|
|
|
-
|
|
|
247,480
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (Non-IFRS)
|
|
|
$ 2,718,444
|
|
|
$ (408,741)
|
|
|
$ 3,560,326
|
|
|
$ (837,352)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: The above tables include the results of Lighthouse
Strategies, LLC and PDI Medical LLC beginning in February 2018 and
May 2018, respectively
|
|
View source version on businesswire.com:
https://www.businesswire.com/news/home/20181210005394/en/
Media
Jason Erkes, Cresco Labs
Chief Communications
Officer
press@crescolabs.com
312-953-2767
Investors
Aaron Miles, Cresco Labs
Vice President,
Investor Relations
310-622-8255
Kimberly Esterkin, Kristen Papke, Ashley Grossman, Financial Profiles
CLinvestors@finprofiles.comCresco Labs
Source: Cresco Labs