Vireo Well being Broadcasts Third Quarter 2020 Monetary Outcomes

MINNEAPOLIS, Nov. 25, 2020 /PRNewswire/ — Vireo Well being Worldwide, Inc. (“Vireo” or the “Firm”) (CNSX: VREO; OTCQX: VREOF), the science-focused, multi-state hashish firm with lively operations in solely medical-only markets and licenses in six states and the Commonwealth of Puerto Rico, at the moment reported monetary outcomes for its third quarter ended September 30, 2020. All foreign money figures referenced on this press launch mirror U.S. greenback quantities.

“Our third-quarter outcomes show the bettering nature of our enterprise and success of current initiatives to enhance working and monetary efficiency,” stated Chairman and Chief Government Officer, Kyle Kingsley, M.D. “For the previous a number of quarters we have been targeted on positioning our vertically-integrated portfolio of belongings to supply sustained and worthwhile development, and we imagine at the moment’s outcomes are an encouraging indicator that we’re nearing a crucial inflection level in money circulation era from operations.”

Dr. Kingsley continued, “Because of the onerous work of our groups bettering prices and manufacturing efficiencies, Vireo is positioned to enhance margins as we proceed rising our Inexperienced Items™ retail dispensary footprint and profit from doubtless tailwinds of regulatory adjustments. Every of our present growth initiatives stay on time and price range, and with seven new dispensaries anticipated to open earlier than the top of Q1 2021 and the potential for a majority of our state-based markets to cross adult-use laws inside the subsequent yr, we imagine Vireo is poised for robust enhancements in income development and profitability.”

Third Quarter 2020 Monetary Highlights

The Firm generated income in seven states in the course of the third quarter: Arizona, Maryland, Minnesota, New Mexico, New York, Ohio, and Pennsylvania. Complete income, together with contributions from discontinued operations, elevated 68 % year-over-year to $13.Four million. Reported income, excluding discontinued operations, was $11.9 million or a rise of 67 % as in comparison with Q3 2019.

Retail income was roughly $9.9 million in Q3 2020, a rise of 61 % in comparison with $6.2 million in Q3 2019. The rise in retail income was principally as a result of higher affected person enrollment and common income per affected person in Minnesota and New Mexico, in addition to contributions from retail dispensaries in Pennsylvania. Wholesale income of $2.Zero million elevated by $1.1 million as in comparison with $980,921 in Q3 2019, with the rise primarily pushed by the expansion of wholesale operations in Maryland.

Gross revenue earlier than organic asset changes was $5.1 million, or 43 % of income, as in comparison with gross revenue of $1.Eight million or 25 % of income in the identical interval final yr. The development in gross revenue in comparison with the prior yr was the results of operational effectivity positive aspects in a number of markets, improved working leverage by means of larger gross sales volumes and manufacturing facility upgrades accomplished final yr.

Complete working bills within the third quarter had been $6.9 million, an enchancment of $1.Three million or 16 % as in comparison with $8.2 million within the third quarter of 2019. The discount in working bills was attributable to decrease skilled charges and promoting, common and administrative bills together with start-up bills associated to buildout and pre-revenue operations in some markets. Excluding depreciation and share-based compensation, working bills within the third quarter of 2020 had been $6.1 million, or 51 % of gross sales, as in comparison with $7.5 million or 105 % of gross sales within the third quarter of 2019.

Complete different earnings was $10.5 million throughout Q3 2020, in comparison with an expense of $825,868 in Q3 2019. The numerous variance in different earnings as in comparison with the prior yr quarter was primarily attributable to a one-time acquire on the divestiture of the Firm’s former Pennsylvania manufacturing and processing operations (“PAMS”) of $16.Four million. This transaction closed on August 11, 2020.

EBITDA, as described in accompanying disclosures and footnotes, was $8.1 million throughout Q3 2020, in comparison with a lack of $15.9 million in Q3 2019. Adjusted EBITDA was a lack of $675,808 in Q3 2020, as in comparison with a lack of $5.2 million in Q3 2019. Please discuss with the Supplemental Info and Reconciliation of Non-IFRS Monetary Measures on the finish of this press launch for extra data.

Web earnings in Q3 2020 was $122,252, as in comparison with a web lack of $14.6 million in Q3 2019.  The favorable enchancment in web earnings was primarily pushed by the one-time acquire of $16.Four million on the divestiture of the Firm’s former PAMS subsidiary.

Subsequent Occasions

On October 1, 2020, Vireo introduced that it reached a definitive settlement with Ayr Methods Inc., to promote all of the belongings and liabilities of its affiliate, Ohio Medical Options, Inc. (“OMS”), for whole consideration of $4.85 million, together with $1.2 million in money. This transaction is anticipated to shut early subsequent yr.

On November 5, 2020, the Firm introduced that it entered right into a non-binding time period sheet with Inexperienced Ivy Capital and its associates for a proposed senior secured, delayed draw time period mortgage with an mixture principal quantity of as much as $46,000,000. Vireo administration expects definitive mortgage paperwork for the funding of the primary tranche to be executed in December 2020.

On November 9, 2020, the Firm introduced that it secured a purchase order choice on an extra 96 acres of land adjoining to its current amenities in Fulton County, NY for a complete buy value of roughly US $1.Three million. This feature might allow the Firm to considerably increase its cultivation and processing capability within the state within the occasion of favorable regulatory adjustments.

On November 13, 2020, a subsidiary of Jushi Holdings, Inc. notified Vireo of its intent to train its buy choice on Vireo’s subsidiary, Pennsylvania Dispensary Options (“PDS”) for $5.Zero million money. Vireo believes the closing of this transaction will happen in December 2020.

On November 16, 2020, the Firm introduced that it had exercised its proper to power the redemption of all subordinate voting share buy warrants issued to individuals within the Firm’s personal placement providing which closed on March 10, 2020. This pressured redemption is anticipated to outcome within the issuance of 13,651,574 extra subordinate voting shares and money proceeds of roughly $10.Zero million.

On November 23, 2020, the Firm filed a preliminary base shelf prospectus with the securities regulators in every province of Canada, aside from the Province of Quebec. The preliminary base shelf prospectus has not but develop into remaining for the aim of the sale of securities. The intention of the bottom shelf prospectus is to permit the Firm to extra effectively entry capital when market alternatives allow. The Firm needs to appropriate that the bottom shelf prospectus is for an quantity of as much as C$200 million not C$260 million as disclosed within the Firm’s information launch dated November 23, 2020. 

This information launch doesn’t represent a proposal to promote or the solicitation of a proposal to purchase in the USA and the securities referred to on this information launch will not be provided or bought in the USA absent registration below the U.S. Securities Act of 1933 or pursuant to an relevant exemption from the registration necessities below the U.S. Securities Act of 1933 and relevant state securities legal guidelines. A duplicate of the preliminary base shelf prospectus could be discovered on SEDAR at www.sedar.com.

Management Replace

Right this moment the Firm additionally introduced the promotions of Christian Gonzalez to the function of Chief Working Officer and Patrick Peters to the function of Government Vice President of Retail.

As Chief Working Officer, Mr. Gonzalez will lead the Firm’s nationwide manufacturing, retail, and product growth groups. Christian joined Vireo in 2018 as Normal Supervisor in Pennsylvania and since then has overseen main capability growth initiatives and helped optimized manufacturing efficiencies at Vireo’s cultivation and processing amenities in Minnesota, New York, Maryland, Arizona, and New Mexico. He’s an engineer and entrepreneur with over 15 years of producing expertise within the medical system, pharmaceutical and aerospace/protection industries.

As Government Vice President of Retail, Mr. Peters’ obligations embody the whole oversight of Vireo’s retail, ecommerce, and wholesale gross sales channels. Mr. Peters joined Vireo in 2019 to steer the Firm’s retail development initiatives which targeted on the growth of Inexperienced Items™ retail retailer openings and re-brandings nationwide. He has over 20 years of retail advertising and marketing expertise as an government chief at manufacturers similar to Calvin Klein, Kate Spade, and Juicy Couture.

Deliberate Transition from IFRS to U.S. GAAP Reporting

The Firm is presently within the means of transitioning to changing into a U.S. home registrant, and plans to start presenting its monetary statements in accordance with typically accepted accounting ideas in the USA (“U.S. GAAP”), somewhat than Worldwide Monetary Reporting Requirements (IFRS) as issued by the Worldwide Accounting Requirements Board. Starting in 2021, the Firm expects to file Annual Studies on Type 10-Ok, Quarterly Studies on Type 10-Q and Present Studies on Type 8-Ok with the U.S. Securities and Change Fee. The Firm anticipates incurring one-time bills {and professional} charges associated to this transition of roughly $0.5 million in the course of the fourth quarter.

Steadiness Sheet and Liquidity

As of September 30, 2020, the Firm had 37,337,138 fairness shares issued and excellent, and 155,376,287 shares excellent on an as-converted, fully-diluted foundation.

As of September 30, 2020, whole present belongings had been $81.Three million, together with money readily available of $16.Three million, which doesn’t embody roughly $16.Zero million in anticipated money proceeds ensuing from the redemption of warrants and divestitures of PDS and OMS. Complete present liabilities had been $20.7 million, with zero debt presently due inside 12 months.

Outlook Commentary

Dr. Kingsley concluded, “As we exit fiscal yr 2020, we’re targeted on efficiently finishing our capability growth initiatives in Arizona, Maryland, and New Mexico, in addition to our deliberate dispensary openings in Maryland, Minnesota and New Mexico. Nonetheless, money inflows from the pressured redemption of warrants and train of the PDS buy choice materialized earlier than we anticipated, and our bettering liquidity place has enabled us to start evaluating extra funding alternatives. We anticipate to supply the funding group with an replace on growth initiatives and their potential impacts to our long-term working and monetary outlook within the spring of subsequent yr.”

Convention Name and Webcast Info

Vireo Well being administration will host a convention name with analysis analysts on Wednesday, November 25, 2020 at 8:30 a.m. ET (7:30 a.m. CT) to debate its monetary outcomes for its third quarter ended September 30, 2020. events could register to attend the convention name through the next hyperlink:  http://www.directeventreg.com/registration/event/8084816. Upon registration, every participant might be supplied with name particulars and a registrant ID for Vireo’s convention ID quantity 8084816.

A dwell audio webcast of this occasion may also be accessible within the Occasions & Displays part of the Firm’s Investor Relations web site at https://investors.vireohealth.com/events-and-presentations/default.aspx and might be archived for one yr.

About Vireo Well being Worldwide, Inc.

Vireo Well being Worldwide, Inc. (“Vireo” or the “Firm”) is a physician-led hashish firm targeted on bringing the perfect of know-how, science, and engineering to the hashish business. Vireo manufactures proprietary, branded hashish merchandise in environmentally-friendly, state-of-the-art greenhouses and different amenities and distributes its merchandise by means of its rising community of Inexperienced Items^TM retail dispensaries and thru a whole bunch of third-party dispensaries in seven states. Vireo’s group of greater than 425 staff, led by scientists, engineers, and cultivation consultants, is concentrated on effectivity and the creation of best-in-class merchandise, whereas driving scientific innovation inside the hashish business and creating significant mental property. Right this moment, Vireo is licensed to develop and/or course of hashish in seven markets. The Firm is operational in six of these markets – together with the core markets of Arizona, Maryland, Minnesota, New Mexico, and New York. The Firm holds 29 whole retail dispensary licenses, of which 11 are presently open for enterprise. For extra details about Vireo, please go to www.vireohealth.com.

Extra Info

Extra data referring to the Firm’s third quarter 2020 outcomes is obtainable on SEDAR at www.sedar.com. Vireo refers to sure non-IFRS monetary measures similar to adjusted web earnings, Earnings Earlier than Curiosity, Taxes, Depreciation and Amortization (EBITDA) and adjusted EBITDA (outlined as earnings earlier than curiosity, taxes, depreciation, amortization, much less sure non-cash fairness compensation expense, one-time transaction charges, and different non-cash gadgets. These measures don’t have any standardized which means prescribed by IFRS and will not be corresponding to comparable measures offered by different issuers. Please see the Supplemental Info and Reconciliation of Non-IFRS Monetary Measures on the finish of this information launch for extra detailed data concerning non-IFRS monetary measures.

Contact Info

Investor Inquiries:
Sam Gibbons
Vice President, Investor Relations
[email protected] 
(612) 314-8995

Media Inquiries:
Albe Zakes
Vice President, Company Communications
[email protected]  
(267) 221-4800

Ahead-Trying Assertion Disclosure

This press launch comprises “forward-looking data” inside the which means of relevant United States and Canadian securities laws. To the extent any forward-looking data on this press launch constitutes “monetary outlooks” inside the which means of relevant United States or Canadian securities legal guidelines, such data is being offered as preliminary monetary outcomes and the reader is cautioned that this data will not be applicable for every other goal and the reader mustn’t place undue reliance on such monetary outlooks. Ahead-looking data contained on this press launch could also be recognized by way of phrases similar to “plans,” “expects” or “doesn’t anticipate,” “is anticipated,” “look ahead to,” “price range” “scheduled,” “estimates,” “forecasts,” “will proceed,” “intends,” “anticipates,” “doesn’t anticipate,” “believes,” “ought to,” “mustn’t,” or variations of such phrases and phrases or signifies that sure actions, occasions or outcomes “could,” “might,” “would,” “may,” “ought to,” or “will” “be taken,” “happen,” or “be achieved.”  Ahead-looking data could embody, with out limitation, statements concerning the operations, enterprise, monetary situation, anticipated monetary outcomes, efficiency, prospects, alternatives, priorities, targets, targets, ongoing targets, milestones, methods and outlook of Vireo, and contains statements about, amongst different issues, the worth of belongings, the quantity of liabilities, the designation of sure companies or belongings as “core” or “non-core,” selections about allocation of capital and different assets, future developments, the long run operations, potential market alternatives together with the potential results of the approval of adult-use hashish in a number of markets, potential alternatives to monetize belongings, strengths and technique of the Firm. Ahead-looking data is offered for the aim of presenting details about administration’s present expectations and plans referring to the long run and readers are cautioned that such statements will not be applicable for different functions. These statements shouldn’t be learn as ensures of future efficiency or outcomes. Ahead-looking data contains statements with respect to the alternatives for the Firm to leverage rising scale to enhance gross sales development and working efficiency; the anticipation that the medical-only state markets during which the Firm’s subsidiaries function might enact recreational-use laws over the near-to mid-term future; the anticipated advantages of strategic initiatives; the results of discount of company overhead and SG&A bills; enchancment to unit economics; growth of retail dispensaries in key markets; the expectation that such growth will drive stronger income development, working margins and free money circulation; the anticipated closing of sure divestitures and the timing thereof; the anticipated advantages of the land buy choice acquired by the Firm in New York; the Firm’s anticipation that it’s going to enter into definitive mortgage paperwork with Inexperienced Ivy Capital and obtain proceeds from a resultant mortgage; the expectation {that a} preliminary base shelf prospectus will develop into remaining or that any securities might be bought below a base shelf prospectus; the anticipated share issuance and proceeds associated to the Firm’s redemption of all subordinate voting share buy warrants issued to individuals within the March 10, 2020, personal placement; the transition of the Firm’s monetary reporting from IFRS to U.S. GAAP; and updates on precise and proposed growth initiatives, together with estimates of the timing of completion of such initiatives. Ahead-looking data contains each identified and unknown dangers, uncertainties and different elements which can trigger the precise outcomes, efficiency or achievements of the Firm or its subsidiaries to be materially completely different from any future outcomes, efficiency or achievements expressed or implied by the forward-looking statements or data contained on this press launch. Monetary outlooks, as with forward-looking data typically, are, with out limitation, primarily based on the assumptions and topic to varied dangers as set out herein. Our precise monetary place and outcomes of operations could differ materially from administration’s present expectations and, consequently, our income and money readily available could differ materially from the income and money values offered on this press launch. Ahead-looking data relies upon a lot of estimates and assumptions of administration, believed however not sure to be affordable, in mild of administration’s expertise and notion of traits, present circumstances and anticipated developments, in addition to different elements related within the circumstances, together with assumptions in respect of present and future market circumstances, the present and future regulatory setting; and the supply of licenses, approvals and permits.

Though the Firm believes that the expectations and assumptions on which such forward-looking data relies are affordable, undue reliance shouldn’t be positioned on the forward-looking data as a result of the Firm may give no assurance that they may show to be appropriate, together with preliminary monetary expectations concerning the annualized discount of company overhead and SG&A bills. Precise outcomes and developments could differ materially from these contemplated by these statements. Ahead-looking data is topic to quite a lot of dangers and uncertainties that would trigger precise occasions or outcomes to vary materially from these projected within the forward-looking data. Such dangers and uncertainties embody, however will not be restricted to, dangers associated to preliminary monetary outcomes being topic to the completion of the Firm’s monetary closing procedures and never being audited or reviewed by the Firm’s impartial registered public accounting agency; the timing of recreational-use laws in markets the place the Firm presently operates; present and future market circumstances, together with the market value of the subordinate voting shares of the Firm; dangers associated to the COVID-19 pandemic; federal, state, native and overseas authorities legal guidelines, guidelines and laws, together with federal and state legal guidelines in the USA referring to hashish operations in the USA; restricted working historical past; adjustments in legal guidelines, laws and tips; operational, regulatory and different dangers; execution of enterprise technique; administration of development; issue to forecast; conflicts of curiosity; dangers inherent in an agricultural enterprise; liquidity and extra financing; overseas personal issuer standing and the danger elements set out within the Firm’s itemizing assertion dated March 19, 2019, filed with the Canadian securities regulators and accessible below the Firm’s profile on SEDAR at www.sedar.com and within the Firm’s registration assertion on Type 10, filed November 5, 2020 on EDGAR with the U.S. Securities and Change Fee.

The statements on this press launch are made as of the date of this launch. The Firm disclaims any intent or obligation to replace any forward-looking data, whether or not because of new data, future occasions or outcomes or in any other case, aside from as required by relevant securities legal guidelines.

Supplemental Info

The monetary data reported on this press launch relies on audited monetary statements for the fiscal yr ended December 31, 2019 and unaudited condensed interim consolidated monetary statements for the third quarter ended September 30, 2020. All monetary data contained on this press launch is certified in its entirety close to such monetary statements. To the extent that the monetary data contained on this press launch is inconsistent with the knowledge contained within the Firm’s audited monetary statements, the monetary data contained on this press launch shall be deemed to be modified or outmoded by the Firm’s audited monetary statements. The making of a modifying or superseding assertion shall not be deemed an admission for any functions that the modified or outmoded assertion, when made, constituted a misrepresentation for functions of relevant securities legal guidelines.

Reconciliation of Non-IFRS Monetary Measures

EBITDA, Adjusted EBITDA, and Adjusted Working Bills are non-IFRS measures and don’t have standardized definitions below IFRS. The next data gives reconciliations of the supplemental non-IFRS monetary measures, offered herein to probably the most instantly comparable monetary measures calculated and offered in accordance with IFRS. The Firm has offered the non-IFRS monetary measures, which aren’t calculated or offered in accordance with IFRS, as supplemental data and along with the monetary measures which might be calculated and offered in accordance with IFRS. These supplemental non-IFRS monetary measures are offered as a result of administration has evaluated the monetary outcomes each together with and excluding the adjusted gadgets and imagine that the supplemental non-IFRS monetary measures offered present extra perspective and insights when analyzing the core working efficiency of the enterprise. These supplemental non-IFRS monetary measures shouldn’t be thought-about superior to, as an alternative choice to or as a substitute for, and ought to be thought-about along with, the IFRS monetary measures offered.

Reconciliation of Web Loss to Adjusted EBITDA

Reconciliation of Complete Working Bills to Adjusted Working Bills

SOURCE Vireo Well being Worldwide, Inc.

Associated Hyperlinks

www.vireohealth.com