AYR Wellness Reports Fourth Quarter and Full Year 2024 Results

MIAMI, March 06, 2025 (GLOBE NEWSWIRE) -- AYR Wellness Inc. (CSE: AYR.A, OTCQX: AYRWF) ("AYR" or the "Company"), a leading vertically integrated U.S. multi-state cannabis operator, is reporting financial results for the fourth quarter and full year ended December 31, 2024. Unless otherwise noted, all results are presented in U.S. dollars.

Steven M. Cohen, Interim CEO of AYR, said, "Over the past quarter we have made crucial steps towards reorienting the business to reflect our forward-looking vision of AYR. And while our fourth quarter and full year results reflected ongoing macroeconomic pressures and company-specific challenges that impacted revenue and profitability, we remain confident that sustained growth and enhanced profitability are achievable within our footprint through disciplined cost reductions, streamlined operations, and improved execution."

"To strengthen execution, we have restructured our leadership team by promoting George DeNardo to President, while Julie Winter and Jamie Mendola have stepped into the roles of co-Chief Revenue Officers. These changes, along with a broader realignment of our management team, have already begun to enhance operational focus and agility throughout the organization. As we move forward, we remain committed to controlling what we can, executing with discipline, and positioning AYR for sustainable growth and profitability."

George DeNardo, President of AYR, added "One of my immediate objectives as President is to create greater synergy and collaboration between the revenue generating and supply chain functions of our business. With that in mind, our vision for 2025 is focused on investment in our core brands and further streamlining operations to achieve cost efficiencies and facilitate quicker and better decision making at every level of our operational infrastructure. As we advance initiatives across our core markets, we do so with a keen focus on balance sheet discipline and ensuring the long-term health and success of AYR."

"We have already taken key steps to further streamline our business, including eliminating redundancies and corporate overhead, refining and building on our branded product offerings, and beginning the process of optimizing our state portfolio to focus on the key markets that will drive our business forward while eliminating distractions.

This year, we are also making a pivotal investment in our future with our new state-of-the-art indoor cultivation facility in Florida, which enables us to fill a critical gap in our supply chain by providing high-quality indoor flower to our 67 dispensaries across the state. Further, we plan to expand our presence in Ohio in both the retail and wholesale channels and we are well-positioned for entry into the Virginia market."

Fourth Quarter Financial Summary ($ in millions, excl. margin items)

 
                                                  % Change   % Change 
                      Q4 2023  Q3 2024  Q4 2024     Q4/Q4      Q4/Q3 
--------------------  -------  -------  --------  --------  ---------- 
  Revenue              $114.8   $114.3    $114.0     -0.7%     -0.3% 
--------------------  -------  -------  --------  --------  -------- 
  Gross Profit          $49.4    $43.0     $35.8    -27.5%    -16.7% 
--------------------  -------  -------  --------  --------  -------- 
  Adjusted Gross 
   Profit(1)            $62.0    $60.4     $55.5    -10.5%     -8.1% 
--------------------  -------  -------  --------  --------  -------- 
  Operating Loss(2)    $(9.5)  $(17.4)  $(133.9)        NA        NA 
--------------------  -------  -------  --------  --------  -------- 
  Adjusted EBITDA(1)    $29.8    $26.1     $19.1    -35.9%    -26.8% 
--------------------  -------  -------  --------  --------  -------- 
  Adjusted EBITDA 
   Margin(1)            25.9%    22.9%     16.7%   -920bps   -620bps 
--------------------  -------  -------  --------  --------  -------- 
 
 

Full Year Financial Summary (FY 2023 excludes results from AZ for all periods) ($ in millions, excl. margin items)

 
                                                 % Change 
                              FY 2023  FY 2024      Y/Y 
----------------------------  -------  --------  -------- 
  Revenue                      $463.6    $463.6      0.0% 
----------------------------  -------  --------  -------- 
  Gross Profit                 $202.4    $176.7    -12.7% 
----------------------------  -------  --------  -------- 
  Adjusted Gross Profit(1)     $256.9    $239.2     -6.9% 
----------------------------  -------  --------  -------- 
  Operating Loss(2)           $(37.1)  $(161.0)        NA 
----------------------------  -------  --------  -------- 
  Adjusted EBITDA(1)           $114.0    $100.0    -12.3% 
----------------------------  -------  --------  -------- 
  Adjusted EBITDA Margin(1)     24.6%     21.6%   -300bps 
----------------------------  -------  --------  -------- 
 
 

(1 Adjusted EBITDA, Adjusted Gross Profit and Adjusted EBITDA Margin are non-GAAP measures, and accordingly are not standardized measures and may not be comparable to similar measures used by other companies. See Definition and Reconciliation of Non-GAAP Measures below. For a reconciliation of Operating Loss to Adjusted EBITDA as well as Gross Profit to Adjusted Gross Profit, see the reconciliation tables appended to this release.)

(2 Includes $118.1M of non-cash impairment charges including $94 million related to Florida goodwill impairment charge in the fourth quarter of 2024, based on market conditions at the time.)

Fourth Quarter and Recent Highlights

   -- Retail/Brand Updates 
 
          -- Opened new dispensaries in Florida and Ohio, AYR's 67th in Florida 
             and fourth in Ohio. AYR's new Miami, FL store is the first within 
             Miami city limits. 
 
          -- Launched Later Days Fruit-Flavored Vape Collection. 
 
   -- Recent Leadership Changes 
 
          -- In January, George DeNardo, AYR's prior Chief Operating Officer, 
             assumed the role of President, responsible for the oversight of 
             all Company-wide operations, including retail, wholesale, 
             purchasing, marketing, cultivation, and manufacturing. 
 
          -- In February, Brad Asher, AYR's Chief Financial Officer, provided 
             notice of resignation to the Company in connection with the 
             pursuit of another opportunity. Mr. Asher's resignation will be 
             effective at a mutually agreed upon date following the Company's 
             filing of 2024 annual financial statements. 
 
          -- The Company announced the resignation of Jared Cohen from its 
             Board of Directors (the "Board") and transition to board observer. 
 
          -- The Board continues to search for a permanent CEO and has retained 
             True Search, a global recruiting firm, to lead the search. 

Full Year 2024 Highlights

   -- Opened 11 dispensaries across AYR's footprint, bringing the Company's 
      total dispensary count to 97 stores. This included expansion into 
      Connecticut, AYR's eighth market with retail exposure. 
 
   -- Participated in adult-use launch in Ohio with four retail stores and 
      cultivation and production assets. 
 
   -- Received conditional license approval to open vertically integrated 
      operations in Virginia. 
 
   -- In November 2024, the New York Cannabis Control Board voted to approve 
      the application for Amethyst Health, LLC ("Amethyst Health") for 
      registration as a "Registered Organization," which would conditionally 
      allow Amethyst Health to commence medical marijuana operations in the 
      state. AYR is an operational partner and minority equity holder in 
      Amethyst Health. 
 
   -- Secured real estate financing for indoor cultivation in Florida, with 
      plans to redevelop a 98,000 square foot building within the property to 
      serve as a regulated cannabis cultivation facility. The financing was 
      completed with Innovative Industrial Properties (IIP); IIP committed to 
      funding AYR up to $30 million for the construction. Development of the 
      facility is underway with plans for contributions in the second half of 
      2025. 
 
   -- In February 2024, the Company completed the retirement or deferral of the 
      maturity of all 2024 Senior Notes and certain other debt totaling nearly 
      $400 million by two years to 2026. 
 
   -- Raised approximately $40 million of gross proceeds in new capital through 
      the issuance of $50 million of additional Senior Notes maturing in 
      December 2026. 

Capital Structure & Liquidity

The Company deployed $1.2 million of capital expenditures in Q4 and approximately $17.7 million for FY 2024, which was less than the Company's guidance of $20 million for the full year and down from $28 million in FY 2023. For FY 2025, the Company expects capital expenditure to be approximately $10 million.

The Company ended the year with a cash balance of $35.5 million, down from $50.6 million at the end of Q3 and $50.8 million at the end of FY 2023. Subsequent to year-end, the Company received $4 million in proceeds from the sale of ERC tax credits. For FY 2024, AYR generated $9.6 million of cash flow from operations.

As of year-end 2024, the Company had approximately 116.8 million fully diluted shares outstanding based on a treasury method calculation (excluding 23 million out of the money warrants exercisable at $2.12 and expiring in February 2026) and 2.9 million restricted stock units.

Outlook

For the first quarter of 2025, the Company expects revenue to be down mid-single digits compared to Q4 2024, with a modest increase in Adjusted EBITDA Margin.

Conference Call

AYR management will host a conference call today, followed by a question-and-answer period.

Date: Thursday, March 6, 2025

Time: 8:30 a.m. ET

Toll-free dial-in number: (844) 763-8274

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