Lobe Sciences Ltd. Strengths Its Balance Sheet

Curaleaf Holdings, Inc. (CSE: CURA) (OTCQX: CURLF) (“Curaleaf” or the “Company”) , a leading international provider of consumer products in cannabis, today reported its financial and operating results for the fourth quarter and year ended December 31, 2021 . All financial information is provided in U.S. dollars unless otherwise indicated.

Fourth Quarter and FY 2021 Financial Highlights (Unaudited)

($ thousands, except per share amounts)

Q4 2021

Q4 2020
(As Restated)

% yoy
Change

FY 2021

FY 2020
( As Restated)

% yoy
Change

Total Revenue

$320,011

$230,253

39%

$1,209,661

$626,637

93%

Gross profit before impact of biological assets

159,437

110,595

44%

588,051

315,489

86%

Gross profit on cannabis sales (1)(2)

158,809

109,625

45%

585,734

275,071

113%

Gross margin on cannabis sales (1)(2)

49.7%

47.8%

48.5%

46.9%

Adjusted EBITDA (1)(2)

79,675

53,784

48%

298,037

144,080

107%

Net loss attributable to Curaleaf Holdings Inc.

(27,543)

(37,067)

(101,731)

(57,161)

Net loss per share – basic and diluted

($0.04)

($0.06)

($0.15)

($0.10)

(1)

Represents a Non-IFRS financial measure or Non-IFRS ratio without a standardized definition under IFRS, which may not be comparable to similar measures used by other issuers.

(2)

See “Non-IFRS Financial and Performance Measures” below for definitions and more information regarding Curaleaf’s use of Non-IFRS financial measures and Non-IFRS ratios. See the sections entitled “Gross Profit on Cannabis Sales” and “Adjusted EBITDA” below (pgs. 3-7) for reconciliations of Non-IFRS measures to the most directly comparable IFRS measures.

(3)

Cannabis sales excludes Management Fee Income. Gross profit and gross margin on cannabis sales both exclude the impact of biological assets.

Earnings Call: Thursday, March 3, 2022 , at 5:00 P.M. ET
Conference ID # is 1618049
Replay ID # is 4919700

U.S. Live Call: +1-888-317-6003
International Live Call (Toll): +1-412-317-6061
Canada Live Call: +1-866-284-3684

U.S. Replay: +1-877-344-7529
International Replay (Toll): +1-412-317-0088
Canada Replay: +1-855-669-9658

A webcast of the call can be accessed on the investor relations section of the Curaleaf website at ir.curaleaf.com
The teleconference will be available for replay starting at approximately 7:00 P.M. ET on March 3, 2022 , and will end at 7:00 P.M. ET on March 10, 2022

Boris Jordan , Executive Chairman of Curaleaf, commented, “2021 was another exceptional year for Curaleaf. We reached a significant milestone by generating over 90% revenue growth and exceeding $1.2 billion of total revenue for the first time. We continued to deliver gross and Adjusted EBITDA margin expansion and ended the year with one of the strongest balance sheets in the industry to support our ongoing growth strategies. In addition, we announced strategic acquisitions that have strengthened our ability to continue gaining share in key U.S. markets as well as internationally. Looking to 2022, we remain focused on executing our plan for strong, above market revenue growth and margin accretion, and believe we are incredibly well positioned to benefit from significant near-term catalysts such as the anticipated launch of New Jersey’s adult use market.”

Joe Bayern , Chief Executive Officer of Curaleaf, stated, “In 2021, we made significant progress strengthening all areas of our business including growing our retail and wholesale distribution, introducing new products, expanding our cultivation and production capacity, and entering new markets such as Europe . I believe our focus and strong execution in 2021 set us up extraordinarily well for the significant growth opportunities that lie ahead in 2022 and beyond. I am incredibly proud of the hard work and dedication of all our team members who have made our continued success possible. I believe Curaleaf is better positioned than ever to capitalize on the massive and growing cannabis opportunity.”

Fourth Quarter 2021 Operating Highlights

  • Added eight new retail dispensaries including five in Florida , two in Colorado , and one in Arizona .
  • Entered into a definitive agreement to acquire Tryke Companies, a vertically integrated MSO in Nevada , Arizona , and Utah .
  • Entered into a definitive agreement to acquire Natural Remedy Patient Center, LLC, a Safford, Arizona dispensary.
  • Entered into a definitive agreement to acquire Bloom Dispensaries, a single state operator in Arizona .
  • Completed the offering of $475 million aggregate principal amount of 8.0% Senior Secured Notes due 2026 and retired all prior indebtedness, increasing liquidity and materially reducing the average interest rate on the Company’s outstanding debt.
  • Signed a national distribution agreement with Southern Glazer’s Wine & Spirits to bring Curaleaf’s Hemp and Select cbd cream product lines into Southern Glazer’s distribution network.

Full Year 2021 Operating Highlights

  • Significantly expanded retail, wholesale, and cultivation operations through organic growth and strategic acquisitions.
  • Increased retail locations from 96 to 117 as of December 31, 2021 .
  • Reached approximately 2,300 active wholesale accounts as of December 31, 2021 , an increase of over 90% from year end 2020.
  • Grew cultivation sites from 23 to 25.
  • Expanded total cultivation and production capacity by over 2.5 million square feet to approximately 4.4 million square feet.
  • Significant focus on R&D activities drove the introduction of 147 new products in our markets, with approximately 11% of full year 2021 revenue generated by new products launched in the last 12 months.
  • Entered the European market through the successful acquisition of EMMAC Life Sciences Group and subsequently rebranded to Curaleaf International.
  • Completed the acquisition of Los Sueños Farms, the largest outdoor grow in Colorado .
  • Post Fourth Quarter 2021 Highlights

    • Completed the acquisition of Bloom Dispensaries adding four retail locations and two cultivation and processing facilities totaling 63,500 square feet in Arizona .
    • Continued to organically expand our retail footprint, opening two additional dispensaries in Florida and three in Pennsylvania . As of March 3, 2022 , Curaleaf retail operations totaled 126 nationwide.

    Financial Results for the Fourth Quarter Ended December 31, 2021

    Revenue (Unaudited)

    ($ thousands)

    Q4 2021

    Q3 2021

    Q4 2020

    Retail revenue

    $225,592

    $224,543

    $164,932

    Wholesale revenue

    93,791

    92,041

    64,351

    Management fee income

    628

    541

    970

    Total Revenue

    $320,011

    $317,125

    $230,253

    Total revenue was a record $320 million for the fourth quarter of 2021, an increase of 1% from $317 million in the third quarter of 2021 and 39% from $230 million in the fourth quarter of 2020. The Company’s year-over-year revenue growth primarily reflects continued organic growth driven by new retail store openings, the addition of new wholesale partner accounts, product launches, and the expansion of cultivation and production facilities.

    Retail revenue was $226 million , compared with $225 million in the third quarter of 2021, and up 37% from $165 million in the fourth quarter of 2020. Retail revenue represented 71% of total revenue. Curaleaf’s year-over-year retail revenue growth was supported by 21 new stores added in 2021.

    Wholesale revenue was $94 million , an increase of 2% from the third quarter of 2021 and 46% year-over-year and represented 29% of total revenue. Wholesale revenue growth was supported by the addition of new wholesale partner accounts, which increased by more than 90% from year-end 2020 to approximately 2,300 total accounts.

    Gross Profit on Cannabis Sales (Unaudited)

    ($ thousands)

    Q4 2021

    Q3 2021

    Q4 2020

    Retail and wholesale revenue

    $319,383

    $316,584

    $229,283

    Cost of goods sold

    160,574

    172,216

    119,658

    Gross profit on cannabis sales (1)

    158,809

    144,368

    109,625

    Gross margin on cannabis sales (1)

    49.7%

    45.6%

    47.8%

    Management fee income (2)

    628

    541

    970

    Gross profit before impact of biological assets

    $159,437

    $144,909

    $110,595

    (1)

    Represents a non-IFRS measure or Non-IFRS ratio. See “Non-IFRS Financial and Performance Measures” below for definitions and more information regarding Curaleaf’s use of Non-IFRS financial measures and Non-IFRS ratios.

    (2)

    Management fee income is added to Gross Profit on Cannabis Sales to obtain Gross profit before impact of biological assets, the most comparable IFRS measure.

    Gross profit on cannabis sales was $159 million for the fourth quarter of 2021, an increase of 10% from $144 million in the third quarter of 2021 and 45% from $110 million in the fourth quarter of 2020. Gross profit margin was 49.7%, an increase of approximately 410 basis points from the prior quarter and 190 basis points from the fourth quarter of 2020. The increase in gross margin reflects continued efficiency in the Company’s cultivation and processing facilities and improving economies of scale. In addition, the sequential increase in gross margin partially reflects a loss on inventory related to the Eureka, California facility divestiture and the write down of certain other inventory in the third quarter of 2021, which did not recur.

    Net Income / (Loss) (Unaudited)

    ($ thousands)

    Q4 2021

    Q3 2021

    Q4 2020

    (As Restated)

    (As Restated)

    Total Revenue

    $320,011

    $317,125

    $230,253

    Gross profit

    179,546

    182,734

    125,462

    Income (Loss) from operations

    42,875

    42,381

    23,013

    Total other income (expense), net

    (32,649)

    (38,955)

    (17,893)

    Income tax benefit (expense)

    (40,281)

    (60,313)

    (42,022)

    Net loss

    (30,055)

    (56,887)

    (36,902)

    Less: Net loss attributable to non-controlling interest

    (2,512)

    (2,363)

    165

    Net loss attributable to Curaleaf Holdings, Inc.

    ($27,543)

    ($54,524)

    ($37,067)

    Net loss attributable to Curaleaf Holdings, Inc. was $28 million , compared with a net loss of $55 million in the third quarter of 2021 and $37 million in the fourth quarter of 2020. The year-over-year improvement in net loss was primarily driven by an approximately $20 million increase in operating income and $2 million of lower income tax expense, partially offset by $15 million of higher other expense, net.

    Adjusted EBITDA (Unaudited)

    ($ thousands)

    Q4 2021

    Q3 2021

    Q4 2020

    (As Restated)

    (As Restated)

    Net loss

    ($30,055)

    ($56,887)

    ($36,902)

    Interest expense, net

    22,626

    25,054

    25,366

    Income tax expense

    40,281

    60,313

    42,022

    Depreciation and amortization (1)

    37,507

    34,739

    26,647

    Share-based compensation

    9,175

    13,180

    16,114

    Other (income) expense

    10,023

    13,900

    (7,473)

    Change in fair value of biological assets

    (20,109)

    (37,825)

    (14,866)

    Other add-backs (2)

    10,227

    18,889

    2,876

    Adjusted EBITDA (3)

    $79,675

    $71,363

    $53,784

    Adjusted EBITDA Margin (3)

    24.9%

    22.5%

    23.5%

    (1)

    Depreciation and amortization expense in Q4 2021, Q3 2021, and Q4 2020 include amounts charged to cost of goods sold on the statement of profits and losses.

    (2)

    Other add-backs in Q4 2021 primarily include acquisition related expenses, legal fees, and accounting and professional fees.

    (3)

    Represents a non-IFRS measure or Non-IFRS ratio. See “Non-IFRS Financial and Performance Measures” below for definitions and more information regarding Curaleaf’s use of Non-IFRS financial measures and Non-IFRS ratios. The table above provides a reconciliation of Net Loss, the most comparable IFRS measure, to Adjusted EBITDA, a non-IFRS measure.

    Adjusted EBITDA was $80 million for the fourth quarter of 2021, an increase of 12% from $71 million in the third quarter of 2021 and 48% from $54 million in the fourth quarter of 2020. Adjusted EBITDA margin was 24.9%, an increase of 240 basis points from 22.5% in the prior quarter and 140 basis points from 23.5% in the fourth quarter of 2020. The sequential increase in Adjusted EBITDA primarily reflects higher gross profit margin driven by continued efficiency in the Company’s cultivation and processing facilities and improving economies of scale. On a year-over-year basis, the increases in Adjusted EBITDA and Adjusted EBITDA margin primarily reflect higher revenue and gross profit margin partially offset by higher SG&A expense related to increased headcount ahead of new store openings and marketing in support of new product rollouts.

    Financial Results for the Year Ended December 31, 2021

    Revenue (Unaudited)

    ($ thousands)

    FY 2021

    FY 2020

    Retail revenue

    $859,959

    $423,183

    Wholesale revenue

    347,385

    163,036

    Management fee income

    2,317

    40,418

    Total Revenue

    $1,209,661

    $626,637

    Total revenue for the year ended 2021 was a record $1,210 million , an increase of 93% from $627 million for the year ended 2020.

    Retail revenue was $860 million for the year ended 2021, an increase of 103% from $423 million for the year ended 2020. The increase in retail revenue was primarily driven by organic growth from new store openings, expansion of cultivation and production capacity, and new product introductions. Retail revenue growth in 2021 also reflects a full year of revenue recognized from the Company’s acquisition of GR Companies, Inc. (“Grassroots”), which closed in July 2020 , and to a lesser extent, the partial year benefit of the acquisitions of EMMAC Life Sciences Limited (“EMMAC”) in August 2021 and Los Sueños Farms and related entities (“Los Sueños”) in October 2021 .

    Wholesale revenue was $347 million , an increase of 113% from $163 million for the year ended 2020. Growth in wholesale revenue was primarily due to organic growth from wholesale partner account additions, new product introductions such as Select Squeeze, Select Fresh, Clique by Select, and Select Snooze Bites, and increased cultivation and production capacity. Wholesale revenue growth also reflected the above-mentioned acquisitions of Grassroots, EMMAC and Los Sueños.

    Gross Profit on Cannabis Sales (Unaudited)

    ($ thousands)

    FY 2021

    FY 2020

    Retail and wholesale revenue

    $1,207,344

    $586,219

    Cost of goods sold

    621,610

    311,148

    Gross profit on cannabis sales (1)

    585,734

    275,071

    Gross margin on cannabis sales (1)

    48.5%

    46.9%

    Management fee income (2)

    2,317

    40,418

    Gross profit before impact of biological assets

    $588,051

    $315,489

    (1)

    Represents a non-IFRS measure or Non-IFRS ratio. See “Non-IFRS Financial and Performance Measures” below for definitions and more information regarding Curaleaf’s use of Non-IFRS financial measures and Non-IFRS ratios.

    (2)

    Management fee income is added to Gross Profit on Cannabis Sales to obtain Gross profit before impact of biological assets, the most comparable IFRS measure.

    Gross profit on cannabis sales was $586 million for the year ended 2021, an increase of 113% from $275 million in 2020. Gross profit margin was 48.5% an increase of approximately 160 basis points from 46.9% in 2020. The increases in gross profit and gross margin were primarily driven by revenue growth and the continued improvement in the operating capacity and efficiency of the Company’s cultivation and processing facilities.

    Net Income / (Loss) (Unaudited)

    ($ thousands)

    FY 2021

    FY 2020

    (As Restated)

    Total Revenue

    $1,209,661

    $626,637

    Gross profit

    687,589

    390,513

    Income (Loss) from operations

    175,634

    72,437

    Total other income (expense), net

    (110,838)

    (41,641)

    Income tax benefit (expense)

    (173,926)

    (87,550)

    Net loss

    (109,130)

    (56,754)

    Less: Net loss attributable to non-controlling interest

    (7,399)

    407

    Net loss attributable to Curaleaf Holdings, Inc.

    ($101,731)

    ($57,161)

    Net loss, attributable to Curaleaf Holdings, Inc., for the year ended 2021 was $102 million , compared with a net loss of $57 million for the year ended 2020. The $103 million increase in operating income in 2021 was offset primarily by $69 million of higher total other expense, net, and $86 million of higher income tax expense. The year-over-year increase in total other expense, net, was primarily due to an approximately $38 million gain on investment in 2020 that did not recur, $27 million of higher interest expense net of interest income, and $11 million of higher other expenses, partially offset by $9 million of lower impairment charges on intangible assets.

    Adjusted EBITDA (Unaudited)

    ($ thousands)

    FY 2021

    FY 2020

    (As Restated)

    Net loss

    ($109,130)

    ($56,754)

    Interest expense, net

    89,633

    62,518

    Income tax expense

    173,926

    87,550

    Depreciation and amortization (1)

    132,644

    79,713

    Share-based compensation

    45,632

    30,879

    Other (income) expense

    21,205

    (20,877)

    Change in fair value of biological assets

    (99,538)

    (75,024)

    Other add-backs (2)

    43,665

    36,075

    Adjusted EBITDA (3)

    $298,037

    $144,080

    Adjusted EBITDA Margin (3)

    24.6%

    23.0%

    (1)

    Depreciation and amortization expense in 2021 and 2020 include amounts charged to cost of goods sold on the statement of profits and losses.

    (2)

    Other add-backs in 2021 primarily include acquisition related expenses, accounting and professional fees, legal fees, bad debt write off, employee severance costs, one-time loss on inventory related to a California facility divestiture, and inventory write-down in one of our states.

    (3)

    Represents a non-IFRS measure or Non-IFRS ratio. See “Non-IFRS Financial and Performance Measures” below for definitions and more information regarding Curaleaf’s use of Non-IFRS financial measures and Non-IFRS ratios. The table above provides a reconciliation of Net Loss, the most comparable IFRS measure, to Adjusted EBITDA, a non-IFRS measure.

    Adjusted EBITDA for the year ended 2021 was $298 million , an increase of 107% from $144 million in 2020. Adjusted EBITDA margin was 24.6%, an increase of 160 basis points from 23.0% in the prior year. The increases in Adjusted EBITDA and Adjusted EBITDA margin primarily reflect higher revenue and gross profit margin partially offset by higher SG&A expense related to increased headcount in support of new store openings and marketing in support of new product rollouts.

    Balance Sheet and Cash Flow

    As of December 31, 2021 , the Company had $299 million of cash and $436 million of outstanding debt net of unamortized debt discounts.

    During the fourth quarter of 2021, Curaleaf invested $55 million , net in capital expenditures, focused on cultivation, processing, and selective retail expansion in strategic markets. For the year ended 2021, Curaleaf invested $172 million , net in capital expenditures.

    Shares Outstanding

    As of December 31, 2021 , and September 30, 2021 , the Company’s weighted average subordinate voting shares outstanding amounted to 707,450,310 and 703,545,262 shares, respectively.

    As of December 31, 2021 , and September 30, 2021 , Company’s issued and outstanding subordinate voting shares plus multiple voting shares amounted to 708,340,434 and 704,818,302 shares, respectively.

    Other

    The Company has made an immaterial restatement to the initial purchase accounting for the Select acquisition.  Adjustments have been made to all of the comparative period financial statements presented herein, which reflect a decrease in intangible assets, deferred tax liability, and amortization expense, as well as an increase in goodwill and income tax expense, as applicable. The net impact of these adjustments on the Company’s Consolidated Statements of Profits and Losses for the year ended December 31, 2020 , was a positive $4.6 million to Net loss attributable to Curaleaf Holdings, Inc. Additional detail will be provided in the Company’s Consolidated Annual Financial Statements.

    Non-IFRS Financial and Performance Measures

    Curaleaf reports its financial results in accordance with IFRS and uses a number of financial measures and ratios when assessing its results and measuring overall performance. Some of these financial measures and ratios are not calculated in accordance with IFRS. Curaleaf refers to certain Non-IFRS financial measures and ratios such as “Gross Profit on Cannabis Sales”, “Gross Margin on Cannabis Sales”, “Adjusted EBITDA”, and “Adjusted EBITDA Margin”. These measures do not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other issuers. The Company defines “Gross Profit on Cannabis Sales” as retail and wholesale revenues less cost of goods sold. “Gross Margin on Cannabis Sales” is defined by Curaleaf as gross profit on cannabis sales divided by retail and wholesale revenues. “Adjusted EBITDA” is defined by Curaleaf as earnings before interest, taxes, depreciation and amortization less share-based compensation expense and other add-backs related to business development, acquisition, financing and reorganization costs. “Adjusted EBITDA Margin” is defined by Curaleaf as Adjusted EBITDA divided by total revenue. Curaleaf considers these measures to be an important indicator of the financial strength and performance of our business. We believe the adjusted results presented provide relevant and useful information for investors because they clarify our actual operating performance, make it easier to compare our results with those of other companies and allow investors to review performance in the same way as our management. Since these measures are not calculated in accordance with IFRS, they should not be considered in isolation of, or as a substitute for, our reported results as indicators of our performance, and they may not be comparable to similarly named measures from other companies. The tables provided in this press release contained in the sections “Gross Profit on Cannabis Sales” and “Adjusted EBITDA” (pgs. 3-7) provide reconciliations of Non-IFRS measures to the most directly comparable IFRS measures.

    Consolidated Statements of Financial Position (Unaudited)

    ($ thousands)

    December 31,

    December 31,

    2021

    2020

    (As Restated)

    Assets

    Current assets:

    Cash

    $

    299,329

    $

    73,542

    Accounts receivable

    64,570

    28,830

    Inventory, net

    391,195

    197,991

    Biological assets

    78,600

    46,210

    Assets held for sale

    80,583

    58,504

    Prepaid expenses and other current assets

    35,667

    10,140

    Current portion of notes receivable

    2,315

    2,645

    Total current assets

    952,259

    417,862

    Deferred tax asset

    2,593

    5,528

    Notes receivable

    842

    2,000

    Property, plant and equipment, net

    379,720

    242,855

    Right-of-use assets, net

    285,111

    267,168

    Intangible assets, net

    1,010,008

    707,634

    Goodwill

    605,496

    538,825

    Investments

    4,401

    16,264

    Prepaid acquisition consideration

    132,234

    Other assets

    22,048

    35,135

    Total assets

    $

    3,262,478

    $

    2,365,505

    Liabilities and Shareholders’ Equity

    Current liabilities:

    Accounts payable

    $

    26,751

    $

    47,043

    Accrued expenses

    87,583

    57,475

    Income tax payable

    140,019

    79,649

    Current portion of lease liability

    19,279

    15,710

    Current portion of notes payable

    1,966

    6,500

    Current contingent consideration liability

    9,155

    Liabilities held for sale

    18,472

    7,181

    Other current liabilities

    12,171

    6,568

    Total current liabilities

    315,396

    220,126

    Deferred tax liability

    299,333

    200,805

    Notes payable

    434,123

    285,001

    Lease Liabilities

    298,281

    270,495

    Non-controlling interest redemption liability

    72,140

    2,694

    Contingent consideration liability

    28,839

    1,898

    Other long term liability

    5,876

    3,698

    Total liabilities

    1,453,988

    984,717

    Shareholders’ equity:

    Share capital

    2,225,940

    1,754,412

    Treasury shares

    (5,208)

    (5,208)

    Reserves

    (162,085)

    (177,744)

    Accumulated other comprehensive income (deficit)

    (9,996)

    Accumulated deficit

    (291,395)

    (190,071)

    Redeemable non-controlling interest

    (72,140)

    (2,694)

    Total Curaleaf Holdings, Inc. shareholders’ equity

    1,685,116

    1,378,695

    Non-controlling interest

    123,374

    2,093

    Total shareholders’ equity

    1,808,490

    1,380,788

    Total liabilities and shareholders’ equity

    $

    3,262,478

    $

    2,365,505

    Consolidated Statements of Profits and Losses (Unaudited)

    ($ thousands, except for share and per share amounts)

    Three Months Ended

    December 31,

    2021

    2020

    (As Restated)

    Revenue:

    Retail and wholesale revenue

    $

    319,383

    $

    229,283

    Management fee income

    628

    970

    Total revenue

    320,011

    230,253

    Cost of goods sold

    160,574

    119,658

    Gross profit before impact of biological assets

    159,437

    110,595

    Realized fair value amounts included in inventory sold

    (102,234)

    (57,265)

    Unrealized fair value gain on growth of biological assets

    122,343

    72,132

    Gross profit

    179,546

    125,462

    Operating expenses:

    Selling, general and administrative

    100,257

    68,289

    Share-based compensation

    9,175

    16,114

    Depreciation and amortization

    27,239

    18,046

    Total operating expenses

    136,671

    102,449

    Income (Loss) from operations

    42,875

    23,013

    Other income (expense):

    Interest income

    134

    24

    Interest expense

    (13,470)

    (13,695)

    Interest expense related to lease liabilities

    (9,290)

    (11,695)

    Gain on investment

    (2,807)

    26,954

    Impairment of intangible assets

    (8,901)

    (23,659)

    Other income (expense)

    1,685

    4,178

    Total other income (expense), net

    (32,649)

    (17,893)

    Income (Loss) before provision for income taxes

    10,226

    5,120

    Income tax benefit (expense)

    (40,281)

    (42,022)

    Net loss

    (30,055)

    (36,902)

    Less: Net income (loss) attributable to non-controlling interest

    (2,512)

    165

    Net loss attributable to Curaleaf Holdings, Inc.

    $

    (27,543)

    $

    (37,067)

    Loss per share attributable to Curaleaf Holdings, Inc. – basic and diluted

    $

    (0.04)

    $

    (0.06)

    Weighted average common shares outstanding – basic and diluted

    707,450,310

    660,398,593

    Consolidated Statements of Profits and Losses (Unaudited)

    ($ thousands, except for share and per share amounts)

    Twelve Months Ended

    December 31,

    2021

    2020

    (As Restated)

    Revenue:

    Retail and wholesale revenue

    $

    1,207,344

    $

    586,219

    Management fee income

    2,317

    40,418

    Total revenue

    1,209,661

    626,637

    Cost of goods sold

    621,610

    311,148

    Gross profit before impact of biological assets

    588,051

    315,489

    Realized fair value amounts included in inventory sold

    (365,642)

    (149,586)

    Unrealized fair value gain on growth of biological assets

    465,180

    224,610

    Gross profit

    687,589

    390,513

    Operating expenses:

    Selling, general and administrative

    370,106

    227,274

    Share-based compensation

    45,632

    30,879

    Depreciation and amortization

    96,217

    59,923

    Total operating expenses

    511,955

    318,076

    Income (Loss) from operations

    175,634

    72,437

    Other income (expense):

    Interest income

    629

    6,484

    Interest expense

    (53,549)

    (47,903)

    Interest expense related to lease liabilities

    (36,713)

    (21,099)

    Gain on investment

    (2,974)

    37,560

    Impairment of intangible assets

    (14,573)

    (23,659)

    Other income (expense)

    (3,658)

    6,976

    Total other income (expense), net

    (110,838)

    (41,641)

    Income (Loss) before provision for income taxes

    64,796

    30,796

    Income tax benefit (expense)

    (173,926)

    (87,550)

    Net loss

    (109,130)

    (56,754)

    Less: Net income (loss) attributable to non-controlling interest

    (7,399)

    407

    Net loss attributable to Curaleaf Holdings, Inc.

    $

    (101,731)

    $

    (57,161)

    Loss per share attributable to Curaleaf Holdings, Inc. – basic and diluted

    $

    (0.15)

    $

    (0.10)

    Weighted average common shares outstanding – basic and diluted

    698,759,274

    557,192,899

    Consolidated Statements of Cash Flows (Unaudited)

    ($ thousands, except for share and per share amounts)

    Twelve Months Ended

    December 31,

    2021

    2020

    (As Restated)

    Cash flows from operating activities:

    Net loss

    $

    (109,130)

    (56,754)

    Adjustments to reconcile loss to net cash provided (used) in operating activities:

    Depreciation and amortization

    132,644

    79,713

    Share-based compensation

    45,632

    29,361

    Non-cash Bonus

    1,518

    Non-cash interest expense

    44,859

    6,590

    Unrealized gain on changes in fair value of biological assets

    (465,180)

    (224,610)

    Realized fair value amounts included in inventory sold

    365,642

    149,586

    Impairment loss

    14,573

    23,659

    (Gain)/loss on debt retirement

    152

    (Gain)/loss on investment

    2,974

    (Gain)/loss on sale of property, plant and equipment

    3,333

    550

    Deferred taxes

    19,214

    11,720

    Gain on contingent liability

    (37,566)

    Changes in operating assets and liabilities

    Accounts receivable

    (29,402)

    5,956

    Biological assets

    80,414

    55,707

    Inventories

    (185,607)

    (92,384)

    Prepaid expenses and other current assets

    (24,902)

    4,748

    Other assets

    5,641

    (17,702)

    Accounts payable

    (10,298)

    9,958

    Income taxes payable

    59,768

    57,753

    Accrued expenses

    15,709

    4,552

    Net cash provided by (used in) operating activities

    (33,964)

    12,355

    Cash flows from investing activities:

    Purchases of property, plant and equipment, net

    (171,955)

    (126,273)

    Proceeds from sale of entity

    29,828

    1,004

    Payments made on completion on acquisitions

    (37,820)

    (59,695)

    Prepayment of acquisition consideration

    (7,500)

    Cash acquired from acquisitions

    14,500

    Payments received on notes receivable

    3,717

    (4,646)

    Note receivable from third party

    (2,244)

    Net cash used in investing activities

    (163,974)

    (197,110)

    Cash flows from financing activities:

    Cash received from financing agreement

    531,093

    186,235

    Proceeds from sale leaseback

    24,419

    42,466

    Debt issuance costs

    (5,564)

    Minority buyouts

    (1,190)

    (2,508)

    Lease liability payments

    (52,775)

    (26,762)

    Proceeds from minority interest investment in Curaleaf International

    83,979

    Cash received in private placement

    24,552

    Prepayment penalties on retired notes payable

    (23,827)

    Principal payments on notes payable

    (366,749)

    (2,920)

    Acquisition escrow shares returned and retired

    (8,312)

    Exercise of stock options

    3,157

    3,013

    Issuance of common shares, net of issuance costs

    240,569

    Net cash provided by financing activities

    424,800

    224,076

    Net change in cash

    226,862

    39,321

    Cash at beginning of period

    73,542

    42,310

    Cash held for sale

    (8,089)

    Effect of exchange rate on cash

    (1,075)

    Cash at end of period

    $

    299,329

    $

    73,542

    About Curaleaf Holdings
    Curaleaf Holdings, Inc. (CSE: CURA) (OTCQX: CURLF) (“Curaleaf”) is a leading international provider of consumer products in cannabis with a mission to improve lives by providing clarity around cannabis and confidence around consumption. As a high-growth cannabis company known for quality, expertise and reliability, the Company and its brands, including Curaleaf and Select, provide industry-leading service, product selection and accessibility across the medical and adult-use markets. In the United States , Curaleaf currently operates in 23 states with 126 dispensaries, 26 cultivation sites, and employs over 5,600 team members. Curaleaf International is the largest vertically integrated cannabis company in Europe with a unique supply and distribution network throughout the European market, bringing together pioneering science and research with cutting-edge cultivation, extraction and production. Curaleaf is listed on the Canadian Securities Exchange under the symbol CURA and trades on the OTCQX market under the symbol CURLF. For more information, please visit https://ir.curaleaf.com .

    Disclaimer

    This press release contains “forward-looking information” and “forward-looking statements” within the meaning of Canadian securities laws and United States securities laws (“forward-looking statements”). Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based on management’s current beliefs, expectations or assumptions regarding the future of the business, plans and strategies, operational results and other future conditions of the Company. In addition, the Company may make or approve certain statements in future filings with Canadian securities regulatory authorities, in press releases, or in oral or written presentations by representatives of the Company that are not statements of historical fact and may also constitute forward-looking statements. All statements, other than statements of historical fact, made by the Company that address activities, events or developments that the Company expects or anticipates will or may occur in the future are forward-looking statements, including, but not limited to, statements preceded by, followed by or that include words such as “assumptions”, “assumes”, “guidance”, “outlook”, “may”, “will”, “would”, “could”, “should”, “believes”, “estimates”, “projects”, “potential”, “expects”, “plans”, “intends”, “anticipates”, “targeted”, “continues”, “forecasts”, “designed”, “goal”, or the negative of those words or other similar or comparable words and includes, among others, information regarding: its outlook for and expected operating margins, capital allocation, free flow cash and other financial results; growth of its operations via expansion, for the effects of any transactions; expectations for the potential benefits of any transactions; statements relating to the business and future activities of, and developments related to, the Company after the date of this press release, including such things as future business strategy, competitive strengths, goals, expansion and growth of the Company’s business, operations and plans; expectations that planned acquisitions will be completed; expectations regarding cultivation and manufacturing capacity; expectations regarding receipt of regulatory approvals; expectations that licenses applied for will be obtained; potential future legalization of adult-use and/or medical cannabis under U.S. federal law; expectations of market size and growth in the U.S. and the states in which the Company operates; expectations for other economic, business, regulatory and/or competitive factors related to the Company or the cannabis industry generally; and other events or conditions that may occur in the future. Forward-looking statements may relate to future financial conditions, results of operations, plans, objectives, performance or business developments. These statements speak only as at the date they are made and are based on information currently available and on the then current expectations. Holders of securities of the Company are cautioned that forward-looking statements are not based on historical facts but instead are based on reasonable assumptions and estimates of management of the Company at the time they were provided or made and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, as applicable, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements, including, but not limited to, risks and uncertainties related to: the available funds of the Company and the anticipated use of such funds; the availability of financing opportunities; legal and regulatory risks inherent in the cannabis industry; risks associated with economic conditions, dependence on management and currency risk; risks relating to U.S. regulatory landscape and enforcement related to cannabis, including political risks; risks relating to anti-money laundering laws and regulation; other governmental and environmental regulation; public opinion and perception of the cannabis industry; risks related to contracts with third-party service providers; risks related to the enforceability of contracts; reliance on the expertise and judgment of senior management of the Company, and ability to retain such senior management; risks related to proprietary intellectual property and potential infringement by third-parties; the concentrated voting control of the Company’s Chairman and the unpredictability caused by the capital structure; risks relating to the management of growth; increasing competition in the industry; risks inherent in an agricultural business; risks relating to energy costs; risks associated to cannabis products manufactured for human consumption including potential product recalls; reliance on key inputs, suppliers and skilled labor; cybersecurity risks; ability and constraints on marketing products; fraudulent activity by employees, contractors and consultants; tax and insurance related risks; risks related to the economy generally; risk of litigation; conflicts of interest; risks relating to certain remedies being limited and the difficulty of enforcement of judgments and effect service outside of Canada ; risks related to future acquisitions or dispositions; sales by existing shareholders; limited research and data relating to cannabis; as well as those risk factors discussed under “Risk Factors” in the Company’s Annual Management, Discussion and Analysis dated March 11, 2021 , and in the Company’s Annual Information Form dated April 28, 2021 (both of which documents have been filed on the Company’s SEDAR profile at www.sedar.com and on its EDGAR profile at www.sec.gov/edgar/html ) and as described from time to time in documents filed by the Company with Canadian securities regulatory authorities. The purpose of forward-looking statements is to provide the reader with a description of management’s expectations, and such forward-looking statements may not be appropriate for any other purpose. In particular, but without limiting the foregoing, disclosure in this press release as well as statements regarding the Company’s objectives, plans and goals, including future operating results and economic performance may make reference to or involve forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. A number of factors could cause actual events, performance or results to differ materially from what is projected in the forward-looking statements. You should not place undue reliance on forward-looking statements contained in this press release. Such forward-looking statements are made as of the date of this press release. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. The Company’s forward-looking statements are expressly qualified in their entirety by this cautionary statement.

    This press release contains future-oriented financial information and financial outlook information (collectively, “FOFI”) about the Company’s prospective results of operations, production and production efficiency, commercialization, revenue and cash on hand, all of which are subject to the same assumptions, risk factors, limitations, and qualifications as set second in the above paragraph. FOFI contained in this document was approved by management as of the date of this document and was provided for the purpose of providing further information about the Company’s future business operations. The Company disclaims any intention or obligation to update or revise any FOFI contained in this document, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. Readers are cautioned that the FOFI contained in this document should not be used for purposes other than for which it is disclosed herein. The financial information reported in this press release is based on management prepared financial statements for the quarter and year ended December 31, 2021 . Accordingly, such financial information may be subject to change. Financial statements for the period will be released and filed under the Company’s profiles on SEDAR at www.sedar.com no later than March 11, 2022 . All financial information contained in this press release is qualified in its entirety with reference to such financial statements. While the Company does not expect there to be any material changes, to the extent that the financial information contained in this press release is inconsistent with the information contained in the Company’s financial statements, the financial information contained in this press release shall be deemed to be modified or superseded by the Company’s financial statements. The making of a modifying or superseding statement shall not be deemed an admission for any purposes that the modified or superseded statement, when made, constituted a misrepresentation for purposes of applicable securities laws.

    Neither the Canadian Securities Exchange nor its Regulation Service Provider has reviewed and does not accept responsibility for the adequacy or accuracy of the content of this press release.

    Cision View original content: https://www.prnewswire.com/news-releases/curaleaf-reports-fourth-quarter-and-fiscal-year-end-2021-results-301495401.html

    SOURCE Curaleaf Holdings, Inc.

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