Columbia Care posts revenue of $139.3 million in the fourth quarter, a net loss

Columbia Care (NEO: CCHW) this morning announced its fourth quarter and full year financial results, a day after revealing it would be acquired by Cresco Laboratories (CSE: CL) in an all-stock transaction. The company posted record quarterly revenue of $139 million for the period ended December 31, 2021.

The results released this morning are in line with preliminary data released ten days ago, when the company postponed its earnings release date. Revenue increased 5% quarter-over-quarter from $132.3 million to $139.3 million, with the quarter also marking the company’s transition to US GAAP accounting.

“We are pleased to report record results for the full year and fourth quarter of 2021, in what has been a truly transformational year for Columbia Care,” CEO Nicholas Vita said of the results.

Cost of sales for the quarter was $82.0 million, resulting in gross profit of $57.3 million. Selling, general and administrative expenses, however, amounted to $69.8 million, showing that the company still has a long way to go before profitability. Goodwill impairment charges of $72.3 million pushed the quarter further into the red, with an overall operating loss of $84.8 million recorded for the quarter.

After a $31.0 million increase in other income, the company posted a net loss of $54.7 million for the three-month period, while adjusted EBITDA was $20.6 million. dollars.

For the full year, revenue was $460.1 million, a 156% year-over-year improvement from $179.5 million. Gross profit was $194.0 million, which was heavily offset by $232.1 million of general and administrative expenses, as well as this goodwill charge of $72.3 million. dollars, resulting in an operating loss of $110.4 million for the year.

For the full year, the company recorded a net loss of $146.9 million, while adjusted EBITDA was $57.9 million.

Cash and cash equivalents would be $82.2 million, with total current assets of $226.4 million. However, total current liabilities are currently set at $244.0 million.

In terms of annual guidance, the company was forecasting revenue of between $470 million and $485 million under IFRS. By these standards, the company recorded a turnover of 473 million dollars. Adjusted gross margin, however, missed out, coming in at 45% vs. 46%+ estimate, while adjusted EBITDA came in at $85m on an IFRS basis, barely meeting the $85-95m guidance.

Going forward, the company expects to generate US GAAP revenue of $625-675 million for 2022, while adjusted EBITDA is expected to be between $120-135 million. The forecast would assume adult-use sales beginning in the second quarter of 2022 in New Jersey.

Commenting on the recently announced merger, Vita said, “In a changing industry, opportunities to better achieve our mission through consolidation have led us to this historic moment. With Columbia Care’s strategic national footprint in the most attractive markets and Cresco’s success in execution and incredibly popular brands, together we will create the largest and most investable cannabis company. There’s no better team in the industry to maximize the potential of this market-defining combination.

Columbia Care last traded at $3.85 on the Neo.

Information for this briefing was found via Sedar and the companies mentioned. The author has no security or affiliation related to this organization. Not a buy or sell recommendation. Always do additional research and consult a professional before purchasing a title. The author holds no license.

Ann J. Cox