Cresco Labs (CSE: CL) reported its third quarter financial results this morning, reporting marginal revenue growth to $215.5 million for the quarter. Most significantly, the company reported a substantial impairment loss, resulting in the firm reporting a net loss of $263.5 million.
Revenues for the third quarter improved slightly over the second quarter, climbing a modest 2.6% from $210.0 million to $215.5 million over the three month period. Gross profits however improved more significantly, climbing from $101.0 million to $108.3 million, representing a gross profit of 50.3%.
Operating expenses however eliminated any gains seen from a growing gross profit percentage, with total operating expenses amounting to $372.3 million, compared to $86.1 million in the prior quarter. The significant expense increase is the result of a $290.9 million impairment recorded by the company, related to the writedown of intangible assets due to a “strategic shift in California operations.”
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The company as a result saw a loss from operations of $264.0 million. Losses were pushed further after an interest expense of $13.6 million, which was then offset by an income tax recovery of $12.4 million. The company overall posted a net loss of $263.5 million, while adjusted EBITDA came in at $56.4 million.
Cash and cash equivalents as of the quarter ended totaled out at $252.8 million, with the firm reporting other current assets of $196.2 million and total current liabilities of $209.2 million.
In terms of outlook, gross profit margins are expected to be in excess of 50.0% for the remainder of the year, while adjusted EBITDA is set to hit 30.0% by the end of the year. Fourth quarter revenue has also been guided to be between $235 million and $245 million.
Cresco Labs last traded at $10.95 on the CSE.
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