Goodness Growth Q2 Revenue Slightly Above Estimates - Hits $14.2M Representing 16.5% YoY Growth; Josh Rosen Appointed To Its Board Of Directors


Goodness Growth Holdings, Inc. GDNS OTCQX: GDNSF)) reported its second-quarter financial results Friday with revenue of $14.2 million, slightly above Seeking Alpha estimates of $14.09 million and representing 16.5% growth from the same period of 2020.

"Our second quarter performance was in line with our expectations, and we were pleased to see increased scale and efficiency of operations contribute to record gross margin performance during the quarter," chairman and CEO Kyle Kingsley, M.D. stated. 

Second Quarter Financial Highlights

  • Gross profit was $6.9 million, or 48.6% of revenue, as compared to gross profit of $3.6 million or 29.4 percent of revenue in Q2 last year. The improvement in gross profit was driven by higher throughput across all markets resulting in decreased fixed cost per unit.
  • Adjusted EBITDA was a loss of $1.0 million in Q2 2021, as compared to a loss of $1.8 million in Q2 2020.
  • Net loss in Q2 2021 was $5.5 million, as compared to a net loss of $16.1 million in Q2 2020. The improvement in net loss was driven by the increase in gross profit margin and lower operating and other expenses, partially offset by increased income tax expense.
  • Total operating expenses in the second quarter were $10.2 million, a reduction of $5.5 million as compared to $15.6 million in the second quarter of 2020.
  • Total other expenses were $1.3 million during Q2 2021, a reduction of $2.4 million compared to $3.7 million in Q2 2020. The decrease was primarily attributable to a gain on derivative liability of $1.5 million during the quarter.
  • As of June 30, 2021, total current assets were $42.0 million, including cash on hand of $20.8 million. Total current liabilities were $16.1 million, with $1.1 million in debt due within 12 months.

‘Horizon Strategy’ And Outlook

  • Following its previously revealed Horizon strategy, Goodness Growth plans to open an additional 6-10 Green Goods retail dispensaries by the end of fiscal year 2022.
  • Management has provided various outlook ranges for performance in fiscal year 2022, the achievement of which depends on several milestones not necessarily the company, such as starting adult-use cannabis sales in New Mexico and New York.

Second Quarter Operational Milestones

  • Goodness Growth completed the planned expansion of its cultivation and processing facility in New Mexico, which is now fully operational. The Company now has four operating dispensaries and 13,000 sq. ft. of cultivation capacity in the New Mexico market, which is expected to transition to adult-use sales in the spring of 2022, pending development of operating regulations.
  • The company announced the launch of its ground medical cannabis flower products in New York state.
  • On June 8-9, 2021, the company hosted its inaugural Investor Day events, during which participants discussed the long-term outlook for its various state markets and
  • announced that its subsidiary, Resurgent Biosciences, plans to expand its research into psychedelics.

Recent Activities

  • In July, the Minneapolis, Minnesota-based company revealed that its subsidiary will buy a medical cannabis dispensary located in Baltimore. Upon finalizing the transaction, Goodness Growth will run two dispensaries in Maryland.
  • In August, the company announced in a separate news release that it had appointed Josh Rosen to its Board of Directors, expanding its number of board seats to seven.

Price Action

Goodness Growth’s shares were trading 0.93% lower at $1.61 per share at the time of this writing Friday morning.

Photo: Courtesy of Avery Meeker on Unsplash

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Posted In: CannabisEarningsNewsMarketsGoodness Growth Holdings earningsJosh RosenKyle Kingsley
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