Multistate cannabis operator AYR Wellness Inc. (OTCQX: AYRWF) reported a revenue increase of 18% year over year, reaching $116.7 million for the second quarter ending June 30.
The figure marks a decent climb from last year’s $98.9 million for the same period. Still, it missed Yahoo Finance’s average analysts’ average estimate of $120.78 million.
The company recorded a net loss of $30.6 million, showing an improvement from last year’s $37.4 million in Q2 2022. AYR also reported a record adjusted EBITDA of $29.4 million, a 78% surge versus $16.5 million in the previous year.
In a statement, David Goubert, AYR’s CEO, emphasized the company’s strides toward “generating meaningful cash flow.” He highlighted its record EBITDA and improved operating loss of $4.5 million, marking an 81% year-over-year improvement.
Financial adjustments were made during the period to defer over $120 million of obligations. The maneuvers, Goubert stated, show a dedicated effort to fortify AYR’s position. The company’s overarching strategy focuses on working capital, liquidity, and inventory management.
Goubert said, “Along with the amendments to various earnout considerations completed in May, we also reached contingent agreements to extend the maturity of $69 million in promissory notes by two years and recently refinanced and upsized our Gainesville cultivation facility mortgage. As a result of the collective amendments to the vendor notes, contingent promissory notes and earn-out payments, and refinancing and upsizing of our Gainesville facility mortgage, we have extended the payment terms of more than $120 million of obligations, inclusive of the $69 million of contingent agreements.”
Retail growth remained steady. The second quarter saw the launch of its 86th retail location. A 1% sales increase sequentially was noted, and transactions climbed by 6%. Expansion in Florida is evident, it said, with 10 new stores in 2023, pushing the total to 62. The company’s goal is to cap off the year with 64 Florida outlets.
The company also mentioned an exclusive deal with Kiva Confections, introducing its “collection of award-winning cannabis edibles to the Florida market for the first time via AYR’s retail locations across the state.” It also acquired one of Nevada’s top cannabis producers, Tahoe Hydroponics.
Second-quarter capital expenditures hit $6.7 million, leaving a cash balance of $60 million. A subsequent refinancing strategy added a net cash influx of $14 million.
AYR remains bullish about its trajectory, emphasizing commitments to its financial health. Projections indicate revenue and EBITDA growth through 2023-24 and a positive cash flow by year’s end.