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This article has been updated to correct the spelling of David Goubert’s name.
Ayr Wellness Inc. is rallying for a second straight day on Wednesday after posting first-quarter results that included positive moves on its balance sheet, stronger-than-expected revenue and a 200-person reduction in head count.
Ayr Wellness’s
AYRWF,
stock is up 18% to $1.18 in its first trading day holding above $1 a share since early March.
The company reported an adjusted first-quarter loss of 13 cents a share, ahead of the average analyst estimate for a loss of 38 cents a share, according to estimates compiled by First Call.
Ayr Wellness’s first-quarter revenue rose 3% from the fourth quarter, to $117.67 million, below the target of $124.9 million.
The company also managed to build up its cash by $20 million while focusing on cost-cutting and expanding in new markets.
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Ayr also boosted its liquidity by reaching agreements with the sellers for amendments to contingent consideration for its acquisitions of Garden State Dispensary in New Jersey and Sira Naturals in Massachusetts.
The move resolves what would have been a potential near-term dilution event for shareholders related to Ayr’s purchase of Garden State Dispensary, the company said.
“It was kind of a big cloud hanging over us in 2023,” Ayr CEO Dave Goubert told MarketWatch.
Ayr said last week it hired Moelis & Company LLC as a financial adviser, as it explores capital structure alternatives to extend upcoming debt maturities.
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Looking ahead, Goubert said the company continues to eye growth in medical cannabis in Florida and adult-use cannabis New Jersey, as well as potential adult-use legalization in Pennsylvania.
Ayr Wellness currently operates 60 dispensaries in Florida and plans to open 10 more by the end of the year. The medical-cannabis business in Florida now totals about $2 billion but could go up to $6 billion with adult-use legalization.
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Ayr Wellness ended the quarter with $96.5 million in cash, a sequential increase of $19.7 million, or 26%.
The company drew in $18 million from the sale of units in Arizona and $10 million from the closing of a real-estate-financing transaction. These gains were partially offset by repayments of debt principal and capital expenditures totaling about $14 million.
Goubert was named incoming CEO of Ayr in October after most recently serving as president and chief customer officer at Neiman Marcus.
Also read: Ayr walks away from $55 million dispensary deal in Chicago and pivots toward business ‘optimization’
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