Ayr Wellness Inc. (OTCQX:AYRWF) (CSE:AYR) released financial results for the three months ended March 31, 2022, revealing revenue of $111.2 million, up 90% YoY.
Q1 And Recent Highlights
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Q1 2022 adjusted EBITDA of $19.5 million, up 6% YoY
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US GAAP operating loss of $21.1 million and $8.4 million for Q1 2022 and Q1 2021, respectively
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Received final approval for adult use sales in New Jersey and Boston
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On May 18, Ayr completed the first sale from its new 80,000 square foot Phoenix cultivation facility. Concurrently, the company launched its national pre-roll brand, STiX Pre-Roll Co. in Arizona.
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The company opened two new dispensaries during the first quarter and an additional two stores in April and May, bringing Ayr’s total footprint to 47 dispensaries across the state.
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Launched Entourage vapes, one of the company’s ten national brands, Kynd premium flower, and STiX in all 47 Florida dispensaries.
M&A Highlights
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Closed acquisition of Cultivauna, LLC, the owner of Levia branded cannabis infused seltzers and water-soluble tinctures, on February 15, 2022.
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Signed a consolidating management services agreement with Tahoe Hydroponics and NV Green, Inc. on February 1, 2022, pursuant to the definitive agreement signed in July 2021.
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Closed acquisition of Herbal Remedies Dispensaries, LLC, an operator of two licensed dispensaries in Illinois, on May 25, 2022.
Financing and Capital Structure
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The company ended the quarter with a cash balance of $78.7 million.
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At March 31, 2022, there were approximately 70.0 million fully diluted shares outstanding based on a treasury method calculation as of that date.
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During the first quarter, the company deployed $33.2 million of capital expenditures and anticipates an additional $37 million of capital expenditures for the remainder of 2022.
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During the first quarter, the company secured a $26.2 million mortgage loan at a 4.625% interest rate. This loan represents the first monetization of Ayr’s $180 million real estate portfolio. Subsequent to quarter-end, Ayr closed on a second real estate backed financing, with principal of $25.8 million and a 5.5% interest rate. These financings combined have unlocked $52 million of capital for the company with an industry leading blended interest rate of 5.06%.
Jonathan Sandelman, founder, chairman and CEO of Ayr, stated, “We have made excellent progress this year to complete major capex projects and receive regulatory approvals across our footprint. We will now unlock the revenue streams from these various assets going forward – including the start of adult use sales in New Jersey and Boston next month. We invested heavily in these assets ahead of the revenue benefits which has temporarily reduced our operating margins, however we expect these investments to put our forward earnings power in a much stronger position and anticipate improvements to both our top and bottom line in the second half of 2022 as these assets come online and begin to ramp.”
Outlook
To date in 2022, the company has made progress with respect to the milestones that underpin its Q4 2022 expectations. As such, Ayr continues to anticipate an annualized run-rate of $250 million of Adjusted EBITDA, $100 million of operating income and $800 million of revenue for Q4 2022.
Photo: Courtesy of Ayr Wellness Inc.
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