Ayr Wellness Inc. (CSE:AYR) (OTCQX:AYRWF) reported Thursday financial results for the third quarter ended September 30, 2022, with revenue of $119.6 million, up by 24.4% from $96.2 million in the same period of 2021.
“Ayr executed on its growth and profitability objectives during the third quarter, with our financial results largely in line with expectations,” Jonathan Sandelman, founder and CEO of Ayr, stated. “We grew retail market share in 6 of the 7 states where we operate, and while economic headwinds and inflationary pressures continued to impact the consumer wallet throughout the quarter, we maintained strong unit volumes across nearly all of our markets, demonstrating the defensibility of cannabis as a consumer staple.
Q3 Financial Highlights
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Gross profits amounted to $49.5 million, versus $40.1 million in the third quarter last year.
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Operating loss was $20.7 million, which compares to operating loss of $8.9 million in the corresponding period of 2021.
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Adjusted EBITDA was $21.7 million, down by 16.7% from $26.0 million in the third quarter of 2021.
“Talent remains a focus point for Ayr as we continue to optimize our existing foundation, as reflected in our hiring of David Goubert as Ayr’s first President,” Sandelman continued. “David brings decades of retail, customer experience, and supply chain expertise to our team. We’re also happy to announce that the Board of Directors has named Joyce Johnson-Miller as the Company’s Lead Independent Director, further strengthening our corporate governance.
Recent Business Updates
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Opened two Greater Boston adult-use dispensaries in the heart of Boston’s Back Bay and Watertown.
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Opened two new dispensaries in Florida during the third quarter and an additional two stores in November, bringing Ayr’s total footprint to 52 dispensaries across the state.
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Introduced Lost in Translation (LIT), an award-winning cannabis brand known for sought after genetics and terpene profiles, in Massachusetts, Florida, Pennsylvania, New Jersey and Arizona.
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Introduced HAZE live resin concentrates and vapes across the company’s footprint in Florida and Nevada.
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Launched Levia water-soluble tinctures in Arizona and Nevada in August, representing the first expansion of Levia outside of Massachusetts.
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Introduced Secret Orchard vapes in Nevada.
Financing and Capital Structure
The company deployed $7.9 million of capital expenditures in Q3 and ended the quarter with a cash balance of $100.8 million.
As of September 30, 2022, the company had approximately 71.3 million fully diluted shares outstanding based on a treasury method calculation as of that date.
Outlook
Based on the results to date coupled with an uncertain macroeconomic backdrop, management is updating their assumptions underlying its previously issued guidance. Consistent with prior quarter sequential growth trends, the company expects adjusted EBITDA and operating income to grow approximately 10% sequentially from Q3 2022 to Q4 2022 and expects further growth in 2023 as future milestones come online. This guidance assumes further price compression in the wholesale and retail market. Ayr’s expectations for future results are based on the assumptions and risks detailed in its MD&A for the period ended September 30, 2022 as filed on SEDAR and with the SEC.
Price Action
Ayr Wellness shares closed Wednesday market session 1.10% lower at $3.6 per share.
