Harvest Health & Recreation Inc
Harvest Health & Recreation — Q1 2021 Earnings Presentation
23 slides from Harvest Health & Recreation's earnings presentation, May 10, 2021
Slide 1: Earnings Conference Call May 10, 2021
Earnings Conference Call May 10, 2021 CSE: HARV OTCQX: HRVSF [email protected] Exhibit 99.2
Slide 2: Disclaimer
DISCLAIMER IMPORTANT: YOU MUST READ THE FOLLOWING BEFORE CONTINUING: The information contained in this document has been prepared by Harvest Health & Recreation Inc., a British Columbia, Canada corporation (“HHR”), and Harvest Enterprises Inc., a Delaware corporation and a wholly owned subsidiary of
Slide 3: Disclaimer: Non-GAAP Measures and Third Party Information
DISCLAIMER Use of Non-U.S. GAAP Financial Measures: To supplement its financial statements, Harvest provides investors with information related to Adjusted EBITDA, which is a financial measure that is not calculated in accordance with generally accepted accounting principles in the United States (“U
Slide 4: Agenda
AGENDA Recent Developments Strategic Overview Arizona Market and Approach First Quarter Business Highlights Liquidity Capital Allocation Core Markets First Quarter Financial Highlights Quarterly Trends First Quarter Revenue Highlights Stimulus Impact Financial Highlights
Slide 5: Recent Developments
RECENT DEVELOPMENTS On May 10, 2021, Trulieve announced its planned acquisition of Harvest Under the terms of the deal, Trulieve will acquire all of the issued and outstanding shares of Harvest Each Harvest shareholder is expected to receive 0.117 shares of Trulieve for each Harvest share, represent
Slide 6: Strategic Overview
STRATEGIC OVERVIEW Harvest has a unique opportunity to build a sustainable business during this time when the patchwork of laws and regulations limits competition Harvest identifies and invests in core markets State-regulated, limited license markets Allow opportunity to build scale Offer significan
Slide 7: Arizona Market and Approach
Arizona MARKET AND APPROACH Harvest was ready and able to start recreational sales at all 15 of its retail locations on the first day - January 22, 2021 Recreational sales represented 57% of March retail revenue in Arizona Medical sales in Arizona declined by 1.2% during the first quarter compared t
Slide 8: First Quarter Business Highlights
FIRST QUARTER BUSINESS HIGHLIGHTS On January 22, 2021, recreational cannabis sales commenced in Arizona at all 15 Harvest locations On January 25, 2021, Harvest announced a sale leaseback transaction for a 292,000 ft2 cultivation and processing facility in Alachua, FL The property was sold for $23.8
Slide 9: Liquidity
LIQUIDITY As of March 31, 2021, Harvest had ~$107 million in cash and ~$270 million in debt As of March 31, 2021, debt service for the remainder of 2021 is ~$44 million, including $10 million convertible debt Capital expenditures for the remainder of 2021 are expected between $25 million and $35 mil
Slide 10: Capital Allocation
CAPITAL ALLOCATION Harvest is focused on improving operations across the existing asset base and further expanding operations in key states Capital expenditures in 2021 are expected between $35 million and $45 million compared to $26.9 million in 2020 First quarter capital expenditures were ~$9.6 mi
Slide 11: Arizona
ARIZONA Limited License Medical/Recreational Market 124 Operational Dispensaries as of 4/01/21 143 Licenses for Retail/Up to 169 Maximum 338 Potential Cultivation and Manufacturing Operators 305,157 Medical Patients Reported March 2021 Recreational Sales Launched January 22, 2021 Harvest Operations*
Slide 12: Florida
FLORIDA Limited License Medical Market 335 Approved Dispensaries All Vertical Licenses – No Wholesale Market 551,563 Qualified Patients Reported 05/07/21 Harvest Operations* 8 open retail dispensaries Alachua: 292,000 ft2 indoor cultivation and processing facility Gainesville: 37,500 ft2 greenhouse
Slide 13: Maryland
MARYLAND Limited License Medical Market 102 Dispensary Licenses 19 Cultivation Licenses/24 Processing Licenses 127,649 Patients Reported February 2021 Harvest Operations* 3 open retail dispensaries Hancock: 101,750 ft2 indoor cultivation, 8,400 ft2 processing facility and 12,000 ft2 greenhouse culti
Slide 14: Pennsylvania
PENNSYLVANIA Limited License Medical Market 114 Operational Dispensaries 28 Cultivation and Processing Facilities Online ~530,000 Patients and Caregivers April 2021 Harvest Operations* 9 open retail dispensaries; licensed for 15 total Reading: 46,800 ft2 indoor cultivation and processing facility Ca
Slide 15: First Quarter Financial Highlights
FIRST QUARTER FINANCIAL HIGHLIGHTS First quarter sales grew +101% year over year and +27% sequentially First quarter gross margin of 53.9% increased by 9.1% sequentially from 44.8% +3.1% was due to revised/terminated licensing contracts +6% was due to decreased promotional activity SG&A of $27.2 mil
Slide 16: Quarterly Trends
QUARTERLY TRENDS *Refer to reconciliation of Adjusted EBITDA, a Non-GAAP Measure, on slide 20
Slide 17: First Quarter Revenue Highlights
FIRST QUARTER REVENUE HIGHLIGHTS First quarter same store sales comp was +134% year over year (29 stores) and +52% sequentially (34 stores) Traffic increased 61% while basket size decreased 5% sequentially, driven by recreational sales launch in Arizona and a return to more normalized traffic patter
Slide 18: Financial Highlights
FINANCIAL HIGHLIGHTS INCOME STATEMENT HIGHLIGHTS SAME STORESALES COMPARISON. (USD milions) qu2t 0420 03:20 0220 a:20 YEARIVEAR qua1_a420 03:20 07:20 Revenue 38869957 AAD Net Sales Be 5% 4 49% Gross Profit 79° 313 BABA Trafic 11% 3% HH Gross Margin 539% 448% 46.6% 421% 41.0% Basket ne 1% 2% BK SBA m2
Slide 19: Financial Highlights: Balance Sheet and Diluted Shares
FINANCIAL HIGHLIGHTS BALANCE SHEET HIGHLIGHTS (USD millions) Q1:21_@4:20 Cash 10778 Debt 270265 DILUTED SHARE COUNT ESTIMATE {millions as of March 31, 2021 on as if converted basis) Subordinate Voting Shares 1453 Multiple Voting Shares* 16 Super Voting Shares 20 Total Shares Outstanding 4109 *conver
Slide 20: Reconciliation of Non-GAAP Financial Measures
FINANCIAL HIGHLIGHTS Reconciliation of Non-GAAP Financial Measures The table below reconciles Net Loss to Adjusted EBITDA for the periods indicated. Three months ended March 2021 2020 Net loss (GAAP) before non-controlling interest $§ (22,968) $ (15,472) ‘Add (deduct) impact of: Net interest and oth
Slide 21: Retail Presence
RETAIL PRESENCE As of 05/10/2021; Dates listed in table represent timing of initial revenue contribution. ARIZONA 710 W Elliot Rd #102 Tempe Opened 05/2013 15190 N Hayden Rd Scottsdale Opened 09/2016 1691 Industrial Blvd Lake Havasu Acquired 07/2017 3828 S Vermeersch Rd Avondale Opened 09/2017 1821
Slide 22: Harvest Is a Leading U.S. Multi-State Operator
HARVEST IS A LEADING U.S. MULTI-STATE OPERATOR 2011 YEAR FOUNDED >1,200+ EMPLOYEES $1.7B ENTERPRISE VALUE(1) $400M+ REVENUE TARGET(2) 39 RETAIL LOCATIONS(1) Harvest Health & Recreation is well positioned as an industry leader in the U.S. combining a targeted strategy, talented management team and di
Slide 23: Thank You
THANK YOU CSE: HARV OTCQX: HRVSF [email protected]
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