Cresco Labs Q1 Revenue Declines 9.4% YoY, What About Adjusted EBITDA?

Zinger Key Points
  • Gross profit of $86 million compared to $107 million in Q1 2022.
  • Gross profit margin of 44.2% compared to 50.1% in Q1 2022.

Cresco Labs Inc. CRLBF CL (FSE:6CQ) released its financial and operating results for the first quarter ended March 31, 2023, revealing revenue of $194 million, a decrease of 9.4% compared to $214 million in Q1 2022.

Q1 2023 Financial Highlights

  • Gross profit of $86 million compared to $107 million in Q1 2022.

  • Gross profit margin of 44.2% compared to 50.1% in Q1 2022.

  • Adjusted EBITDA of $29 million, compared to $51 million in Q1 2022.

  • First quarter net loss of $28 million, compared to a net loss of $24 million in Q1 2022.

  • As of March 31, 2023, current assets were $286 million, including cash, cash equivalents and restricted cash of $90 million. The company had senior secured term loan debt, net of discount and issuance costs, of $382 million.

“We are pleased with our first quarter results. Our team generated $194 million of sales. Our revenue performance was solid across our footprint, with some softening in Illinois that caused sequential decline in revenue as well as much of the margin pressure. Our team’s relentless prioritization of providing the highest perceived value to the consumer is paying off, evidenced by Cresco Labs maintaining industry wholesale leadership with the number one selling portfolio of branded products and an incredibly productive retail platform. Our branded products reached the shelves of 1,600 dispensaries across our 10-state wholesale footprint and our Sunnyside dispensaries rang up almost 1.2 million orders,” stated Charles Bachtell, CEO of Cresco Labs.

Capital Markets and M&A Activity

As previously announced, in March 2022, Cresco Labs entered into an arrangement agreement with Columbia Care Inc. CCHWF pursuant to which, Cresco Labs agreed to acquire all of the issued and outstanding common shares and proportionate voting shares of Columbia Care. The company continues to collaborate closely with Columbia Care on the required divestiture transactions to find a path forward that makes both strategic and financial sense.

The company has no update on the timing for execution of agreements relating to outstanding divestiture transactions.

Photo: Benzinga edit with photos by Kindel Media on Pexels

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