The multi-state cannabis company reported financial results for its second quarter ended June 30, 2022.
Goodness Growth delivered approximately $21.1 million in total revenue during the period, a gain of 48.2% versus the same period last year — beating the Yahoo Finance Average analyst estimate for revenues of $19.62 million.
The net loss in the quarter was $6.2 million versus a net loss of $7 million in the same period last year. The company said that the change versus the prior year was driven by the improvement in operating income, offset by increased interest expenses. Operating income in the second quarter was $300,000, a gain of $3.5 million versus an operating loss of $3.2 million in the same period last year. The improvement in operating performance was driven by increased revenue and gross profit dollars, as well as a slight reduction in total operating expenses, the company said.
“Our second quarter results reflect improved margin performance driven by continued growth in our Minnesota, New Mexico, and Maryland markets, as well as benefits from the recent wind down of operations in Arizona which we discussed last quarter,” said chairman and CEO Kyle Kingsley.
Gross profit was $10.4 million, or 49.2% of revenue, versus a gross profit of $6.9 million or 48.6% of revenue in the same quarter last year. The company said that the improvement in gross profit dollars was driven by higher production volume and increased sales, with relatively stable margin performance.
The company said it saw $10.1 million worth of total operating expenses in the second quarter, a reduction of $100,000 versus $10.2 million in the same period last year.
Goodness Growth said that total other expenses were $5.4 million during the second quarter, versus $2.9 million in the same period last year. It said that the variance in other expenses is primarily attributable to increased interest expenses related to the company’s credit facility.
EBITDA was $1.1 million during the second quarter, versus a loss of $2.4 million in the same period last year.
For adjusted EBITDA, the company posted $2.3 million in the quarter, versus a loss of $1.0 million in the prior year. Diluted loss per share in the second quarter was five cents versus diluted earnings per share of six cents in the same period last year.
“GAAP gross margin performance includes activities related to our Arizona operations, which were wound down prior to the end of the second quarter,” Kingsley added. “Excluding Arizona operations, we estimate that second-quarter pro forma gross margins would have been approximately 55.0 percent.”
The company said it had 128,111,328 equity shares issued and outstanding on an as-converted basis, and 159,619,637 shares outstanding on an as-converted, fully diluted basis.
Total current assets for Goodness Growth were $46.4 million. The company said it had $17 million worth of cash on hand, which included net proceeds received from an increase on its delayed draw loan of $13.5 million during the second quarter. The company’s current liabilities were $18.5 million.
“Strong sales growth catalysts resulting from the recent regulatory changes in Minnesota and New Mexico are expected to persist into next year, and we’re also looking forward to contributions from the launch of edibles products which occurred in Minnesota earlier this month, Kingsley said. “Finally, our expansion project in New York is progressing ahead of the launch of adult-use sales in that important market, and we continue to expect our pending transaction to be acquired by Verano Holdings Corp. will close sometime during the fourth quarter of this year.”