Adam JacksonCresco Labs Inc. (OTCQX: CRLBF) announced its financial results for the fourth quarter and full fiscal year ending Dec. 31, 2023, as divestment efforts powered its bottom line and tripled its operating cash flow despite a slight revenue slump.
The Chicago-based Sunnyside owner posted fourth-quarter revenues of $188 million, experiencing a slight 2% decrease versus the same period in the previous year. This beat Seeking Alpha’s analyst average by $6.61 million. The downtick was attributed to certain divestitures during the period, which were part of the firm’s efforts to boost profitability.
“Everything we did in 2023 was designed to prepare us to take advantage of the monumental opportunities ahead, including; maximizing our upcoming adult-use catalysts, capitalizing on our brands and winning with independents, and expanding our retail to provide the consumer with the best cannabis experience possible,” CEO Charles Bachtell said in a statement.
Despite the revenue dip, Cresco saw a gross profit of $96 million, with an adjusted gross profit increasing by 12% year-over-year to $100 million, equating to 53% of total revenue.
The firm reported SG&A expenses of $57 million, with a year-over-year reduction in adjusted SG&A expenses to $55 million, or 29% of revenue.
The efforts contributed to a fourth-quarter net income of $5 million and an almost doubled adjusted EBITDA of $55 million, or 29% of revenue.
Full-year results
For the full fiscal year, Cresco posted a revenue of $771 million, down from $842 million in the previous year. That includes an adjusted gross profit of $377 million, or 49% of revenue.
The company faced a net loss of $180 million for the year, which included $151 million in impairment charges. Despite the loss, the firm’s focus on core operations contributed to a $35 million decrease in adjusted SG&A expenses and an improvement in adjusted EBITDA margin to 23% of revenue.
Cresco had $109 million in cash, cash equivalents, and restricted cash by the end of the period. The company also maintained its leading market share in Illinois, Pennsylvania, and Massachusetts.
