Trulieve's Revenue Keeps Climbing As Company Increases Guidance

Trulieve Cannabis Corp.  (CSE: TRUL) (OTCQX: TCNNF) reported revenue of $120.8 million, a 26% sequential increase for the second quarter ending June 30, 2020. It was an increase of 109% over last year’s second quarter and beat the average analyst’s estimates of $106 million according to Yahoo Finance.

Trulieve also reported a net income of $6.6 million for the second quarter, which was considerably lower than last year’s net income of $57.5 million for the same time period. Last year’s income from operations was $87 million versus this year’s $37 million. The fair value adjustment of $93 million for the 2020 second quarter was also much higher than last year’s adjustment of $21 million on the $57 million in revenues. 

The earnings per share were $0.06, which missed the analyst’s estimates of $0.16. There are five analysts covering the stock with an average price target of $23.47. The stock closed yesterday at $20.50.

“Once again our financial results reflect our exceptional ability to grow our business quarter over quarter, through continued organic expansion of our retail footprint, while maintaining industry-leading profitability. We are pleased to be able to demonstrate strong financial performance in revenue, adjusted EBITDA and free cash flow while pivoting our business to meet the changing behaviors and needs due to COVID,” stated Kim Rivers, Trulieve CEO. “Looking ahead, we are excited about the second half of the year and will continue focusing on execution and expansion.  We anticipate exceeding our goal of 68 stores and will continue our strong growth in Florida.  Massachusetts is getting closer to completion and we are excited to enter that market in 2021.  And, we believe the M&A pipeline and application processes underway will present new opportunities for expansion. Lastly, we are moving quickly down the path toward registering with the SEC and SOX compliances.”

Expenses did rise dramatically from last year’s $16 million to this year’s $36 million. Investors should be aware that for the six months ending June 30, 2020 and the year ended December 31, 2019, property and equipment
purchases from J.T. Burnette (CEO Kim River’s husband) consisted of construction-related services, totaled $35,942,463 and $46,381,877, respectively. the filing stated that “As of June 30, 2020, and December 31, 2019, $7,416,380 and $6,463,125 was included in accounts payable. The use of the Supplier was reviewed and approved by the independent
members of the Company’s board of directors, and all invoices are reviewed by the office of the Company’s general counsel.”

Big Cash Cushion

Trulieve is sitting comfortably on a big cash cushion. It has achieved a free cash flow of $39.6 million. The company also has cash and cash equivalents of $150.3 million as of June 30, 2020.

Raised Guidance

Trulieve has raised its full-year 2020 financial guidance. The company said it expects results to materially exceed previously issued revenue and adjusted EBITDA guidance ranges, driven principally by continued market share gains and operating leverage. The company is raising its guidance as follows:

In millions

Previous Guidance

Updated Guidance

Revenue

$380.0 – $400.0

$465.0 – $485.0

Adjusted EBITDA

$140.0 – $160.0

$205.0 – $225.0

Debra Borchardt

Debra BorchardtDebra Borchardt

Debra Borchardt is the CEO, Co-Founder, and Editor-In-Chief of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Masters degree in Business Journalism from New York University.


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