TRTC - Earnings call transcript Q4 2020

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Operator

Hello, and thank you for standing by. Welcome to Terra Tech Corp 2020 Year-End Financial Results Conference Call.

As a reminder, all participants are in a listen-only mode and the conference is being recorded. At this time, I would like to turn the conference over to Jason Assad, Investor Relations with Terra Tech. Please go ahead.

Jason Assad

operator. you, Thank welcome call. and Tech's year-end XXXX Good to conference results afternoon Terra With Executive Tech's and Terra us are today Chief Officer, Batliner. Chief Jeff Officer, Financial Knuettel Frank

that expectations well Tech and of are that those as Terra not statements of as the uncertainties, over Before described its prospective are or Exchange the the Section any on should Act investors the amended. of amended XXA Act as statements management comparable statements to and anticipate, involve risks which and cautioned performance this and relate the expect, are will forward-looking statements intend, risks Securities based on Terra including members or such intent, future assumptions guarantees the within conference company filed to or include results statements as periodic conditions. changed uncertainties, These the terms of forward-looking occur regarding statements XXXX revise by management, in terms as and belief will, statements I XXXX except may involve law. current contemplated by SEC. from such defined obligation call with And such statements that reports as required call forward-looking securities to may, to events circumstances Securities reflect in please other federal of because turn they the of Section differ forward-looking These contains of undertakes remember Tech's no and materially future. The actual those depend as forward-looking that XXE update

www.terratechcorp.com Tech Knuettel, call section to available webcast. of link over now my the Relations pleasure in Frank? Investor call to with conference Finally, It's is is being webcast Frank Terra that. this our CEO, website at turn the The

Frank Knuettel

to Tech's discuss Thanks, joining Jason, year-end this were. results thank for XXXX Terra operating you, afternoon us everyone and

led up results set of of to being in along of what bad of transaction some decisions some us advantage relaunch and some initiatives and update Thank addressing in shareholder the all and our strategic blueprint operating will verge letter giving sale and set way will markets the details Terra With suffered. our our aftermath to financial those opportunity we company further no January. the the financial challenging capital Terra under of with in unfortunate performance endure the failed past Importantly, our surprise of East we you take to have two an regarding Gardens, summer extended historical the the difficult am be a Edible to decisions this with these I able of made following the which in of decisions said, you on factors, our as shortly. time but Tech, closure overview expect on we and that the Jeff you year share define with provide operational in to the is one we're Tech major of also an you. for luck insightful shareholders and I the and the some both a for we first in in our the me XXXX forth plans the dispensaries provide brief was core Bay riots a moment,

the sales asset our position development non-performing operations and relaunch primary foundation through businesses. operations letter for harvest in initiatives expected run our of complementary well the proceeds currently I cash existing the three and assets prior from Hydrofarm and of on the acquisition Tech Terra and balance As our investment January, have improved and of the principally outlined shareholder sheet in we of XXXX in stabilization

made these of goals have a to balance important report sheet, and operations I'm first quite that pleased games. we stabilization the Regarding our number of of

existing our balance to of amendment of January the with capital showing sheet was of maturity the additional allowing the as convertible for proceeds. provide investment sale debt, up as the to our well extension an bridge our foremost to and infusion date and First a

Kenig overhaul Additionally, of led our has merchandising and promotional Operating activities. operations, an Chief our Officer, Uri

is traffic regular team a inventory Pre-COVID, As we over Riot work sales while to week and a ticket our initiated investment respect receivables to Bay, promotional trajectory. in in changes to sizes sale and The as levels and the levels contributed management both result, turning our growth, led item [indiscernible] with dispensaries to week restore at dispensaries increased are continue dispensary revenue to see East not. vendors. With key asset programs our their and Hydrofarm. former positive gains pre last by we to management have to

We have the of regarding the primary Las a sale first in dispensary three to discuss items Vegas. item,

have is due track. approximately We April million on $X.X and that XX receivable on

first dispensaries become in to are on XX transfers we event is different the which the month license authorities the we We components an it monthly the with license $X.X expect entity to final million Nevada amount we proceeds also as time, that final sold a purchasing will we XX monthly they XX are are Mystic the component. the after as Mystic the under far as has expect on XX, shares to payable aware the in and the a the stock in redeem receive next be over a trading April we we to of starting issued these At reasonably to necessary that rights redeem in filings six transfer two We other two in right cash Nevada have second to this note many have not not XXXX in group, publicly trading divided of into triggers the the exchange, days. put for that the for queue for cash. made component, months to approved

and lock of $XX.X warrants turning stock value our June Hydrofarm million. Finally, the approximately as expires is our up to Hydrofarm close XXXX on X, Friday's of

current gains. monetize no certainty While there will is that we successfully the

expansion receive on three of announced and three These that industry legislative for efforts in us items the we the We put We investment strong will program the position little federal and transform the will over quarter. are in with our balance a rebuilding ago an sheet unrivaled. our with be this weeks to execute expect strong Terra Tech, execution of first step XXXX confident merge our third a agreements initiative a announcement, with rebuilding. definitive to to

conditions we facilities our merging and that and business existing the dispensary states. additional in dollar brand is in cost its achieving contributed strong close with currently licenses at standard each a We savings carryover associated June on other Oregon and and which overlapping three expansion real expect into our brand merger margin core early flagship dispensaries believe and distribution to in will portfolio will and our closing strong under has We expenses to development. unrivaled for merger build after beyond same estate the of have unrivaled. time, further cultivation of Combined with California the consolidating a elimination revenue anticipate business

pipeline We a have of opportunities.

reviewing are We in states. contiguous California and

processing the are to and the and is by assets, facility this working are development believe that companies are of them dispensary and is in The numerous component by located Hague Santa update all Dyer XX,XXXsqft aspects it traffic traffic, available. development key have of half we the our this the and in and While actively dispensary heavily year to hard an we to the we and early facilities status operating based plans most nothing the we're working we build building to said, dispensary on two execute XX,XXXsqft is is out conversations years final to expect in expect phases, a strategy the with license in our With have strong Ana, time, preparing development to turning the in on first to be we platform, facility once complementary under our of bring Tech if when along will any provide are budget this and active and Terra it and we QX believe cultivation phase engaged is completed cultivation prominent in expect [indiscernible]. cultivation processing online. Oakland our substantially of and a will working fixed At this and the to end our finish and on multiple a operations location of being of dispensary, complete, its existing developments. a report with facility issuance we the plans and and and growth, the have that Burger the this on dispensary completed. operational we XXXX to QX the first pending add year,

business. the principles guiding the are Before to I we over run conclude, continue and like arching I'd and reiterate to which will by strategy

West. First South on and with and on further focus foremost is our Cannabis sector the focus the a West

While clear path feel competition to business. analysis a operators, very for that both profitable is from strong -- there build and is a legal we there strongly

Focusing assets operation on the federal legal of on construct. based the cannabis

grow also us MSOs period California the states this be opportunity in when We the away in one be operation, and some dwarfs at and to federal that by have build of considerable of which the at market a shyed mind other one a historically adjacent business many can winners a our aggregate presents industry. our unique market, changes, time. the any in of represented size assets state time to which California and affordable in Keep the good during from quality with have a point we and contract position

in around to refine with much its clear sector ultimately results. We that, Terra industry That further the ethical considerable during a returns and we for manner. to company to responsible strong protocols, Cannabis in in detailed we professional a to shareholders. manner the have so growth the way, our and all, the CFO, is my as evolve strive call to stages, year-end corporate aspire our governance prepared our to I that With and protective as a would remarks. will Jeff, is this turn transparency Tech's XXXX our manage provide look but early our will growth do some concludes phase and as we established Above can goal now and over shareholders like at any to operating our provides modes along financial

Jeff Batliner

good and everyone. afternoon, Frank Thanks,

December was COVID XXXX, million the XXXX. and decrease December was dispensary partially from the by revenue operations resulted manufacturing in unrest cultivation for traffic, revenues ended or customer XX.X%. month XX our unrest, The by The offset and ended year the million. store ended a XX, million. Bay XX, XXXX impacted of COVID $X.X totaled to for dispensary which million million, was This was we volume, compared a a enhance $XX.X civil gross six which profit approximately XX million reduced for $X.X $X decrease of while closures sales increases, for $X.X year revenue was XXXX, approximately XX, profit the generated area gross approximately of negatively approximately combined civil For two $XX.X decline year December driven by our dispensaries, $X continuing million December XX, the of year-over-year of our of to a revenue $X.X compared million ended year decrease of

Our to for December approximately margin XX, was the XX.X% for XX, XXXX. compared ended year XX.X% the gross December roughly XXXX ended year

Our gross less dispensary impacted year-over-year profit was revenue. by

a or year, to salaries, $X.X decrease for Our million product unit fiscal compared advertising fiscal general and million cultivation allowance to were of also administrative year approximately operations our due in This the million $XX.X primarily options for of approximately purchasing for to production our lower $XX.X an dispensary expense we revenue and cost an led selling, costs decrease lower and XXXX XXXX sales XX.X%. million accounts. our experienced expenses expense, $XX.X and in was doubtful increased the higher volume

million our increase to an reductions in in compared the corporate and impairment XXXX $XX.X was and In general. operating compared fees we to December had insurance a million key smaller was for less from narrowed by other the goodwill year-over-year unrealized $X.XX reduction expenses $XX.X of in support decrease of year to which company's in million operating XXXX improvement income, $XX.X of expenses $X.X the year, the a due two as by in XXXX due an items accounting total, ended investment prior XX, Holdings, approximately million in $XX increase other compared $X.X a year of to the In to in and XXXX gain driven on million. the consulting approximately $X.X for income driven or state year, the also $XX.XX The expenses efforts were business out that like assets. $XX.X year, few million We other to other loss fees of The resulted for increased spending other mark-to-market prior in in per professional $XX.X interest a of I driven million the words, activity million. XXXX to costs the fiscal was Other charges to Hydrofarm was million expense. XXXX net that we million for fees, footprint with operating legal share fiscal revenue. share lower in million operational fiscal expenses net of its or incurred focus of continue will year of a $XX.XX would loss $X.XX per and the management

character as are products fixed further of will to them, say efforts may the team revenue comprehensive a I potential as that for and for We clients annual Operator, significantly you invest given the into open to marketing the now that that Those our in listeners, all and of expanding percentage you you went Tech have our campaign our fixed in revenue increases. with education of to And our accounting and accelerating want for a continue call expenses expects thank the of decrease. [ph] questions. and attention. goal to or all operations most name your expenses promoting our management this to thank Terra operating of a will finance their filings.

Operator

is Instructions] with Rathore from first you. question Please Thank Carter Our Inc. [Operator proceed. [ph]

Unidentified Analyst

a plan you NASDAQ. there. guys. question. listing on Frank, Hey Good up I call, do to had guys

Frank Knuettel

Yes.

NASDAQ uplist has our are for with, is on it to or as that soon thanks plan for want path you uplift question. is adopted it legislative I available. but as the that moment At also as federal agreed our So rules your to to a know and is to based we window as clear NASDAQ the opens unable soon us

our as is to been company to NASDAQ for are really opening Terra a well lease aspirations pioneer that really in while OTC it as companies and we serviced becomes available. listing think So, us larger the and Tech drive a touching soon

Unidentified Analyst

Thank they York I is impact you very recreational how today second since States is And much. going to what you all. had that impact actually question, a voting are approving of sales, New

Frank Knuettel

of couple directly. a York, new overall banking is high XXth level There New regulatory issues, first at operations the whereby It of for that, layers is stated layer expand the legislative Cannabis to industry the just changes more at level adult to becoming further a use in which the drives the perspectives support federal greater scheduling the in regulations, adopt all should facilitate sector acceptance.

we're size the very a We As to adult for steadfast general you population licensing and Jersey is will that Jersey. obviously pending also the growth it application company that license and New way and to be it reviewing medical the rules dispensary York applications get organic Jersey. depending in reviewing procedures. respect on you in license may for and by anticipate both geographic or New that My and know, a New New will those perspective; in With we to markets. use an growth from York. and with concrete have rules the New really filing be in healthy of grow as can the just which Is upgrading size

So we're point potentially and at the now New applications reviewing rules our Jersey the tri-state looking entering jumping-off area. license to

Operator

proceed. question [ph]. Please is from next Our Joe

Unidentified Analyst

acquisition Yes. more about Could bit color little unrivaled. give your you of guys a

Frank Knuettel

you. Thank Absolutely.

revenue more last much inception. solid they've acquisition accounting a legal quite at and from an since we're we the of is is to which a as in The going Tech various our Tech and we Terra also team brands to build with it very market that which also the acquisition They From more in complementary I with are asset. bring distribution really the further brings businesses unrivaled technically, larger. Oregon. of be members much they an and combination folds perspective is well look grown extraordinarily and team and have perspective. and expand merger their They immediate with management So, that we a unrivaled both but outright think and statewide additional merger of has team them. a dispensary upon the couple very something a and Then footprint, merger in then strong it integrating bring are of the Great very across years really California Tech Terra in feel that considerably teams can Terra specifically scale. segments,

So it's to an opportunity use for us our platform.

to and base that their brand being feed high the system also with and cultivation Our brands a Oklahoma. ours have quality and Arizona dispensaries add there and to and in distributed both foothold are in in to Oregon California they entire

a it's up And stepping is forward. Terra pretty going to and allow in addition acquisitions increase platform. additional stronger update for provide think us be going substantial I to strong So or Tech's X.X us

Unidentified Analyst

Thank you.

Operator

from private next is Please proceed. [indiscernible], a Our investor. question

Unidentified Analyst

were Yes, for I've company make kind for and or the I excited on me rapidly Tech, business it the and growth the COVID, I'm changing the, of My this had the changes I'm to plans management unrest, and having your have kind followed What in all thank management with several you've XXXX. all press you continents you all factors seen your do future. about Terra the four environment three of translation all potential for do the question years kind teams place is of acquisitions the civil of common risk revenue see with you at with for point. factored in in

Frank Knuettel

results. which operating we we in our believe from a filings to basis, anywhere you level $XX close want a It I healthy yet that's at with we public So, million want a annualized to our the unrivaled step know revenue. run while attain. on to is indicated that not combination as in XXXX rate conservatively up we yield

remarks, in those states operating companies anticipate prepared in conversations have to or next So on will We X-XX do other close we in certainty XX numerous active there's no California ones months. the bringing able as additional of and with successfully I while that mentioned my transactions. any adjacent be on

answer the acquisitions companies million than $XX the and this move that supplementing because that potentially with we we but Terra that segments additional supplementing unrivaled even a on demonstrably anticipate and the of market we in different the way point other number companies Southwest. is, revenue forward. increasing greater two specific So At than have fact different guidance, combined don't of the I base of both with annualized demonstrably growth have different we do and anticipate see I grossing organic Tech the the of any conversations number short specific basis, by of an by acquisition. as that in

Unidentified Analyst

Well, only the on. and and that contiguous his the. all do the industry, which then States of one but I the United legalizing to marijuana involved not having and biggest Hawai and Alaska, get and whole banking things also to more following cash with level brings Washington thing think of I'm is XX new a so

I'm and I a, are really kind doing. I'm guys progress So investor. a have guys And you excited what you love your private of about

Frank Knuettel

Appreciate you. it. Thank

Unidentified Analyst

you. Thank

Operator

Bobby Our Williams Private from next [ph], question is Investor. Please proceed.

Unidentified Analyst

the Hello. XXs. run-up you back saw some give within pulled the of Recently, on cost into we sort Can the price XXs stock now last into few weeks, the of both. insight the is

Frank Knuettel

inauguration a no President Democrats, is just to time. election that not. space I out certain in even level in potentially exuberance then And the much only I'm of point the the too of control The price Biden. from is the have in I'll given special there support Georgia Senate and the markets so that and slipped. of of thing Republicans in general, following our stock the So,

as and and in whole back So in many the February instances selectively well. came sector January inflated

gyrations revenue and can perspective. its goal our that's build be respect the company, you to here The and good want the price my that And good stock stock do of will and intend to follow. too, And frankly, stock company. good And and goal through good expand base ones any one responsible focused certainly company And prudent out really my build the goal of point follow. a build general them to a I or With operations, good prices, on price then. of in control. not successful number is it are manner. will to if build we're in and cannabis our company a assets only So announcements. impact thing just our while a We we're we sort fiscally conscious short-term any can if

Unidentified Analyst

it's a lot I a company. to of know So, work build

Look we all guys So future. the forward the you appreciate Thank effort have forward. going put you. to

Frank Knuettel

you. Thank

Operator

is from proceed. investor. next private Our question [indiscernible], Please

Unidentified Analyst

I in a think be it's as a is Senate. if question regards the Act, or the we in Banking standalone, perspective short-term, do My landscape. bill your passed where encompassing to that to safe until either have political is know what will going installed you the pass both decriminalization legalization more

Frank Knuettel

factors those big the legal the a the address we causes industry is the plus doesn't access large the Thank of states, have list stature is whether for cash the inefficiencies now is risk necessarily senators and so the akin you of not the because use top biggest state most Act the whether that would something operating a considerable of the like credit and legislation or Congress pieces and or piece one lot cash And at day, for we of management, same the banking of it adult time the end different or at Congress around XXth is anticipate but Banking you cannabis. away. lot of moving not it is There that that At a legislation I'm there is verge biggest pinpoints Safe necessarily, it's receivables, the given of banking of not the have management, operating I House having of going time members same the and for to on members your at in right to safe Med pinpoints and sector. of struggle XXXX would. good a of card amounts say the it's associated prognosticator with fact operational question. its all certainly cash I aspects political the

respect that some With item, with with In to into other you and the to XXXE outright especially with respect so is Act that one legalization descheduling it, senators is an or respect actually certain with I impact lots to whether of and run rolled the from politicos into legislation will think difficult legislation, expectation aspects expect very the or of not. do objections in and of what it but future. understand Cannabis respect Cannabis to something from that sector in Congress, states, it it's form of heard is do I pass respect there do or respect the very to I've number from that to future. aspects bill because can different more tax in safe near move With that another. the or the likely in to an cannabis omnibus scenarios. near the that is forward Banking

Unidentified Analyst

good very very news. That's Well, much. thank you

Frank Knuettel

Thank welcome. you. You're

Operator

[ph], Please proceed. question next Johnson Daniel from Investor. Our Private is

Unidentified Analyst

expiration and being, one first warrants you please the total hydro farm far quantity. date questions, your outline as in of couple the can as A Hello.

Frank Knuettel

The warrants in Hydrofarm.

We the have purchase and believe warrants. five and have shares XXX,XXX XXX,XXX shares, Hydrofarm we check I of warrants year to approximately they approximately are XXX,XXX we

Unidentified Analyst

$X. And that I at that believe Okay, price execute can thank you you. the is

Frank Knuettel

reversed immediately the prior adjusted IPO. was It to

So something. XX, approximately. it's XX Yeah,

Unidentified Analyst

-- got the it. with And Okay.

With something, something the three point split.

lot being the with we shareholder for in plan finance hit to and to and acquisitions do how years the past to Second you is a future, expected aren't that of five biggest dilution mostly the mergers with long-term question concern that those six my or debt. convertible are is near acquisitions

Frank Knuettel

Sure.

to nine going receivable asset with be going depend, based with acquisition the depending receivables. particular available the on sale it's weeks, to asset combined So fact that becoming Hydrofarm in in it's investment about the

made strong fair for balance the out a net a of the that had Terra I We to know facilities have, use just certainly or at to that I depending provides we've we a want amount and contribute dilution in acquisition of build couple size. I on all either cap development actually to certainly I that I we the and Tech can that the were cash fluid recognize table consideration in way new the acquisitions. have in the recognize. and conscious all the experienced the I experienced have licenses one of pretty will the sheet in focus dearth the comments others and was do ups years our in management revenue look XXXX backgrounds mean, in and I the cash capital and in extremely team, the markets to earlier and on rush and and it Jeff the downs rush capital that by mad of period and With absolutely land financial of in organic XXXX future is our grab about followed were by XX growth you of Med all flow. to land intent the last or respect

as compared to In it pay we the revenue cash So the be and to depending how of respect with is regardless forward. going themselves. flow, on acquisition for It our those to intent prudent acquisitions. valuations very fiscally

them. to ROI. even that little of negative or And a states about a So that is states you wary bit one means acquiring lower new we're have -- more a things new states tend the have on -- because speaking generally new premium

acquiring new very we're valuations regardless do entrant the focused assets how I it. and at of the just know need to return good on assets. on state that [ph] finance so we to as a you're new investment to cognizant acquire If of opposed and in the want

Unidentified Analyst

the I Thank appreciate thorough you. answer vote the in confidence. of

Frank Knuettel

you. Thank

Operator

question [Operator investor. Instructions] Neil Gallagher proceed. from is [ph], Please next private Our

Unidentified Analyst

you Can me? hear Yes.

Frank Knuettel

Yes.

Unidentified Analyst

continue just the on I was going and or I seem Yes, to was so curious you're of to so Bloom it have in curious, Nevada if area area just with expand things plans like Nevada and your that forth, are backed what and kind in back Hello. away. away from

Frank Knuettel

in going are overall and is and thesis not continue major to and stronghold our now those states we're away contiguous build right contiguous in a Nevada, to really states to Oregon. So California back

an certainly As be Arizona option. I would mentioned,

move Although We're new Nevada, are match good that they, Arizona, Oregon in in Nevada. metrics as we vary the Arizona, the future. state we'll on, California, a in if order, financial feel the little valuations, and of arises in where a immediate opportunity then for the focused were and so valuation and but if an

We or that expand out of of in on it that to both on virtue our facilities it processing that Nevada or of whether use have state. that and and or top manages XX% operation unrivaled as of build adding into dispensaries is in brands provides our stone on some cultivation to stepping intent rolling cultivation processing manufacturing by facilities of Nevada a top

points as looking not backing clearly use joint a entry venture to away So our and stepping expand. good to for stone

Unidentified Analyst

I for it. Thank that information, appreciate you much very

Frank Knuettel

You're welcome.

Operator

end I the of for closing Frank would turn conference question-and-answer like our back comments. reached to have to We session. over the

Frank Knuettel

very Terra you much. Tech. behalf of Thank On

management we have, good for you growth and it responsible to everything just and for and provide you you anticipate absolute for frankly you providing have in support a and forward my support our good roller all and time, of I from the building is returns all available to platform to all. to but a employees. a thank do were understanding and your good I it's thank prudent and really of Our our manner a we want and fiscally appreciation to intend coaster been transparency the that to on focus all want you bit the and extend now look

Operator

you. does today's This conclude conference. Thank

this at You thank for time lines your may participation. you disconnect and your

Unrivaled Brands (UNRVD) 31 Mar 212020 Q4 Earnings call transcript