Green Thumb Reports Q4 2023 Financials: Record Revenue, Expands Buyback Program By $50 Million

Green Thumb Industries Inc. (CSE: GTII) has unveiled its financial performance for the fourth quarter and full year ending December 31, 2023. In Q4, revenue surged to $278 million – a record for the firm, marking a significant 7% increase compared to the previous year.

“Even with price compression in some markets and inflationary impacts on consumer spending, we saw our year-over-year revenues increased 7.3% in Q4,” CEO Ben Kovler said in the earnings call.

Net income reached $3 million, translating to $0.01 per basic and diluted share, compared to a net loss of $51.2 million in the prior year period. Notably, adjusted EBITDA hit a record $91 million, representing a robust 33% of revenue, with cash flow from operations totaling $71 million. Cash reserves stood at $162 million by the quarter’s end.

The company’s expansion efforts included the opening of seven RISE Dispensaries, strategically located with six in Florida and one in New York.

“We plan to continue to build out our physical store presence, taking a hard look at those states that convert to adult-use market soon,” commented Green Thumb President Anthony Georgiadis on the firm’s expansion plans.

Additionally, Green Thumb made substantial investments, purchasing $25 million of senior debt and $15 million of its subordinate voting shares under its share repurchase program.

For the full year, the firm reported revenue of $1.1 billion, marking a 4% increase over the previous year. Cash flow from operations saw a substantial 42% year-over-year growth, reaching $225 million while net income for the year amounted to $36 million, or $0.15 per basic and diluted share.

Adjusted EBITDA for the year hit $326 million, representing 31% of revenue, indicating a 5% increase over the previous year. The company purchased $40 million of its own shares during the year and maintaining a strong balance sheet to support future growth endeavors.

The company attributes the jump in its financial bottomline partly to consumer packaged goods (CPG) operations, with CFO Matt Faulkner noting that they “did see some improvement in margin in the quarter, thanks in part to improved scale and efficiency in CPG.”

“We definitely had strong performance on the CPG side of the business, better operational utilization,” echoed Georgiadis.

Faulkner also discussed in the earnings call the potential impact of rescheduling cannabis on Green Thumb’s tax expenses, suggesting a significant reduction in tax burden if rescheduling occurs. However, he indicates that the firm will evaluate various options for utilizing the saved cash, such as stock buybacks, debt repayment, mergers & acquisitions, or capital expenditures.

“With rescheduling, we think the savings there from a tax perspective, it should cut our tax burn in about half or so,” Faulkner seconded.

Provision for income taxes in Q4 came down to $24.7 million, a jump from last year’s benefit from income taxes of $7.7 million.

Green Thumb’s capital allocation strategy included repurchasing $25 million of senior debt during the fourth quarter, bringing the remaining principal balance to $225 million as of December 31, 2023.

The board of directors also authorized a $50 million increase in its share repurchase program, bringing the total remaining repurchase capacity to approximately $60 million.

“We believe that this share repurchase program is an appropriate tool for creating shareholder value without compromising our growth initiatives,” Kovler added.

As of December 31, 2023, current assets amounted to $342.8 million, with cash and cash equivalents totaling $161.6 million, while total debt outstanding was $308.5 million.

Green Thumb last traded at $17.12 on the CSE.

Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization unless otherwise mentioned. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Leave a Reply