Grown Rogue International (GRIN) Q3 2024 earnings summary

Executive summary

• Third quarter 2024 revenue rose 7% year-over-year to $7.0M, reflecting growth despite modest price compression in core markets.

• Operating cash flow before working capital changes declined 24% to $1.2M, mainly due to increased SG&A for New Jersey expansion and one-time compensation.

• Free cash flow was negative $1.2M, impacted by $2.2M in cash advances for New Jersey facility construction.

• Phase I operations commenced in New Jersey, with first harvest completed and initial product drops expected in Q4 2024.

• Expansion efforts continue in New Jersey and Illinois, with Phase II in NJ expected to complete in H1 2025 and Illinois Phase I targeted for H2 2025.

Financial highlights

• Adjusted EBITDA (aEBITDA) remained flat at $2.1M year-over-year, with aEBITDA margin declining to 30.0% from 32.1%.

• Gross profit for Q3 2024 was $3.9M, down from $4.4M in the prior year period.

• Net loss for the quarter was $0.67M, compared to a net loss of $2.0M in the same quarter last year.

• Cash and cash equivalents at quarter-end were $5.6M, down from $6.8M at the start of the year.

Outlook and guidance

• Anticipates meaningful cash flow generation from New Jersey operations as market conditions evolve.

• Expects Phase II of New Jersey facility to be completed in H1 2025, increasing production capacity to 1,100 pounds per month.

• Illinois expansion is progressing, with Phase I completion targeted for H2 2025.

• Management remains focused on disciplined, capital-efficient growth and is evaluating additional market opportunities.