Cresco Labs Reports Fourth Quarter & Full Year 2023 Financial Results Demonstrating Significant Profitability and Cash Flow Improvements
Continued execution of Year-of-the-Core strategy delivers strong gains to the bottom line and 3x improvement in full-year Operating Cash Flow
CHICAGO–(BUSINESS WIRE)–Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) (FSE: 6CQ) (“Cresco Labs” or the “Company”), the industry leader in branded cannabis products with a portfolio of America’s most popular brands and the operator of Sunnyside dispensaries, today released its financial and operating results for the fourth quarter and year ended December 31, 2023. All financial information presented in this release is reported in accordance with U.S. GAAP and in U.S. dollars, unless otherwise indicated, and is available on the Company’s investor website, here.
Fourth Quarter 2023 Highlights
- Fourth quarter revenue of $188 million, excluding the impact from strategic divestitures aimed to drive profitability, down 2% year-over-year.Gross profit of $96 million. Adjusted gross profit¹ up 12% year-over-year to $100 million, or 53% of revenue, an 850 bps improvement.
- SG&A of $57 million. Removed $54 million in annualized Adjusted SG&A¹, reducing Adjusted SG&A1 by 20% year-over-year to $55 million, or 29% of revenue.
- Fourth quarter net income of $5 million.
- Fourth quarter adjusted EBITDA¹ nearly doubled year-over-year to $55 million, or 29% of revenue, a 1,400 bps improvement.
- Retained the No. 1 share position in Illinois, Pennsylvania and Massachusetts².
Fiscal Year 2023 Highlights
- Revenue of $771 million.
- Adjusted gross profit1 of $377 million, or 49% of revenue.
- Driven by the Year-of-the-Core strategy, adjusted SG&A¹ decreased by $35 million and adjusted EBITDA margin¹ rose by over 200 bps.
- Adjusted EBITDA¹ of $174 million, or 23% of revenue.
- Net loss of $180 million for the full year which included $151 million of impairment charges.
- Generated $59 million in operating cash flows for the full year, and ended the year with $109 million of cash, cash equivalents and restricted cash.
¹See “Non-GAAP Financial Measures” at the end of this press release for more information regarding the Company’s use of non-GAAP financial measures.
²According to BDSA.
Management Commentary
I’m proud to share that our Q4 results capped off the Year of the Core with strong bottom-line growth and margin expansion, nearly doubling our Adjusted EBITDA and achieving positive free cash flow for the year. We’ve set a new standard for ourselves, making this focus on our core part of our DNA moving forward and we’re using these wins to fuel our business and capitalize on the many growth catalysts ahead.
Charles Bachtell, CEO of Cresco Labs
Everything we did in 2023 was designed to prepare us to take advantage of the monumental opportunities ahead, including; maximizing our upcoming adult-use catalysts, capitalizing on our brands and winning with independents, and expanding our retail to provide the consumer with the best cannabis experience possible.
Balance Sheet, Liquidity and Other Financial Information
- As of December 31, 2023, current assets were $278 million, including cash, cash equivalents and restricted cash of $109 million. The Company had senior secured term loan debt, net of discount and issuance costs, of $386 million and a mortgage loan, net of discount and issuance costs of $18 million.
- Total shares on a fully converted basis to Subordinate Voting Shares were 467,871,956 as of December 31, 2023.
Conference Call and Webcast
The Company will host a conference call and webcast to discuss its financial results on Wednesday, March 13, 2024, at 8:30am Eastern Time (7:30am Central Time). The conference call may be accessed via webcast or by dialing 1-833-470-1428 (US Toll Free) or 1-404-975-4839 (US Local), providing access code 614771. Archived access to the webcast will be available for one year on Cresco Labs’ investor website.
