Ascend Wellness Holdings Inc. reported revenues for the fourth-quarter that ended Dec. 31, 2020, down 3% from last year. However, the company posted an annual grain of 8.3%.
Fourth quarter earnings
The total net revenue fell 4% from the previous quarter to $136 millions, and was lower than revenue last year of $140million for the same time period. Yahoo Finance’s average analyst forecast for revenue was $140 million.
According to the company, the decrease in retail revenues was due to a softening in sales in Illinois and Massachusetts. This is the result of a combination between pricing pressures and volume. This decline was partly offset by adult-use sales that started in Ohio in the previous quarter, and new partner store openings in Illinois.
The third-party wholesale revenues totaled 45.6 million dollars, a decrease of 5% compared with the previous quarter. This was due to declines from Illinois and New Jersey partially offset by improvement in Massachusetts.
Ascend posted a quarterly net loss at $16,8 million, which is an improvement from the $28,3 million loss reported in the third quarter of 2024 and the $19 million loss last year. The company explained that the improvement was mainly due to the fact that certain one-time cost were not recognized during the third quarter 2024. It also attributed the increase in margins as well the benefit of some cost-saving initiatives.
The full-year earning
Ascend’s net revenues for the entire year increased by 8.3% over last year to $561.6 millions. Retail sales increased by 0.3% to $372.2 millions, while wholesale sales increased by 28.5% to $189.4million.
However, the company’s net loss was $85m compared with a $48.2m loss in 2023.
“The fourth quarter marked the first full quarter with our new management team in place, and I am pleased with the initial progress we made on our key initiatives – improving profitability, maximizing asset efficiency and driving cash flow generation,” CEO Sam Brill said. This was accomplished by our team, which achieved our annualized $30 million cost saving target ahead of schedule. Now that this goal has been reached, we are focusing on driving revenue growth.
The total general and administrative costs were $40,8 million for the quarter or 30,0% of revenues, as opposed to $46,1 million or 32.6% in the third quarter 2024. The company attributed the improvement of G&A expenses as a percentage of revenue primarily due to certain cost-savings initiatives, lower headcount in the current quarter, and the absence of certain one-time expenses recognized in the third quarter of 2024.
Cash and cash equivalents stood at $88.3 millions as of December 31, 2024. This represents a sequential rise of $23million. Net debt for the company was $220.2 millions.
The company has made significant progress in improving its margins and profits. The CFO Roman Nemchenko stated that this has led to a sequential improvement of 450 basis points in Adjusted EBITDA and $30.1 in Free Cash flow generated during the quarter. We have also taken measures to reduce our stock levels by implementing a more stringent purchase plan to eliminate the backlog.