Acreage Holdings Posts Q4 and FY 2019 Revenue of $21.1 Million and $74.1 Million, Up 101% and 251%
Q4 and FY 2019 Pro Forma Revenue Came in at $43.6 Million and $155.5 Million, Respectively
Acreage Holdings (CSE: ACRG.U) (OTCQX: ACRGF) (FSE: 0VZ), one of the largest vertically integrated U.S. multi-state operators (MSOs) announced earnings today for the fourth quarter and year ended December 31, 2019.
Acreage reported Q4 and full-year revenue of $21.1 million and $74.1 million, respectively. Those numbers represent an increase of 101% over the $10.5 million posted in Q4 2018 and 251% over the $21.1 million reported for the full-year 2018. However, compared to the prior quarter, the company’s revenue declined by nearly 6% from the $22.4 million posted in Q3 2019.
On a pro forma basis, the company’s fourth-quarter and full-year revenue came in at $43.6 million and $155.5 million, up 90% and 101% over the same time frames in 2018. Analysts were forecasting Acreage to report Q4 pro forma revenue of $49.4 million and full-year 2019 pro forma revenue of $161.6 million. Unfortunately, the company missed the mark on these projections.
On a less positive note, Acreage saw its fourth-quarter loss more than double year-over-year from $29.8 million to $65.6 million. For the full year 2019, the company’s net loss grew from the $32.3 million reported in 2018 to $195.2 million.
The company’s Q4 and full-year 2019 pro forma adjusted EBITDA loss came in at $15.8 million and $44.4 million, respectively. Analysts had projected that Acreage would report an EBITDA loss of $7.2 million for Q4 2019 and $40 million for the full-year 2019.
“While 2019 was a challenging year for the industry, I am pleased with the many accomplishments we delivered for shareholders including launching three award-winning brands, implementing our Canopy Growth strategies, and significantly growing our retail and wholesale businesses. We subsequently secured capital for our short-term operating requirements, and we are targeting positive pro-forma adjusted EBITDA in the second half of the year,” said Kevin Murphy, Chairman and CEO of Acreage Holdings.
2020 Financial and Operational Objectives
- Scale operations ASAP and built out 10 to 15 new retail dispensaries.
- Grow its wholesale business with the goal of having a wholesale revenue mix of roughly 20%.
- Reduce general and administrative costs by 12% or $7 million annually.
- Capital expenditures for cultivation, processing and dispensary buildouts of $45 to $50 million.
- Achieve positive pro forma adjusted EBITDA in the second half of 2020.
Pending Deal With Canopy
Another important factor investors should remember, Acreage Holdings and Canopy Growth (TSX: WEED) (NYSE: CGC) (FRA: 11L1) have a deal in place that gives Canopy the option to acquire Acreage if and when federal cannabis prohibition in the United States in abolished. The combination of Canada’s top licensed producer (LP) and one of America’s biggest MSOs would result in the creation of the world’s largest cannabis company with massive operations on both sides of the border and internationally.
ACRG.U Stock Price Action & Chart
Shares of Acreage Holdings’ CSE listed ACRG.U stock closed today’s trading session at $4.40 per share, down 4.56% on the day. South of the border, the company U.S. OTC Markets listed ACRGF stock closed the day down 4.47% at $4.44 per share. Overseas in Germany, Acreage’s Frankfurt listed shares closed trading today at $4.14, down 1.43%.
Disclosure: The Cannabis Investor does not hold a position in any of the stocks mentioned in this article.