Vireo Growth Inc

Good morning and welcome to Vireo Growth, Inc.' 's first quarter 2025 results call. The company would like to remind everyone that today's conference call may contain forward-looking statements within the meaning of U.S. and Canadian securities laws. These statements are based on management's current expectations and involves risk and uncertainties that could differ materially from actual events and those described in such forward-looking statements. For more information on forward-looking statements, please refer to cautionary note regarding forward-looking statements in the company's earnings release. I will now hand the call over to Chief Executive Officer John Maserakis. Please go ahead, sir.

Thank you. Good morning, everyone. I'll begin with a brief summary of our Q1 performance as we're marching towards closing our pending merger transactions, and then Tyson will provide some extra detail on the financials. Our first quarter results were in line with our expectations for Vireo's core markets. First quarter revenue increased 1.9% year over year to 24.5 million and was down slightly sequentially compared to the fourth quarter. We experienced continued growth in Maryland, stable performance in Minnesota, and expected declines in New York medical sales. Sales of wholesale products from our indoor facility in New York commenced in Q1 and have continued to ramp meaningfully in Q2. We are progressing towards closing our merger transactions in Q2. The closing of these transactions will meaningfully enhance our profitability profile with positive net income, strengthen the capabilities of our leadership team, and provide a unique opportunity to build competitive advantages in our other markets with a proprietary technology and analytics platform. We expect to provide investors with additional updates on our combined platform and outlook later this year once all of the transactions have closed. We're very happy with the progress made so far, and we don't anticipate any issues with integration. That concludes my prepared remarks. I'll now hand the call over to Tyson.

Thank you, John, and thanks to everyone for joining us. I'll run through a quick summary of key income statement line items and then review our balance sheet in more detail. First quarter revenue of $24.5 million increased 1.9% year over year. It was down slightly on a sequential basis compared to the fourth quarter. For a complete review of our revenue performance by state and sales channel for first quarter, please refer to the accompanying market sales tables in today's earnings release, which will also be filed with our 10Q later today. GAAP gross margin performance was roughly flat compared to the first quarter of last year. It was impacted by approximately $300,000 in one-time fees related to the mutual termination of our agreement with Grown Rogue. Excluding this impact, gross margin would have improved 120 basis points compared to the first quarter of last year to 51.8%. SG&A expenses were $7.5 million, or 30.5% of sales. Excluding severance expenses of approximately $400,000, SG&A expenses were flat compared to the first quarter of last year, or 29% of sales. Operating income was $1.9 million, compared to $4.7 million in Q1 of last year. First quarter operating income was impacted by one-time transaction expenses of $1.2 million, related to our pending merger transactions. including the impact of one-time transaction expenses, severance, and Grown Road termination fees, operating income would have been approximately $3.9 million during the first quarter. The remaining variance to Q1 2024 operating income is due to an increase in stock-based compensation. Excluding New York assets held for sale, total current assets at the end of Q1 were $128.5 million, and the end of the quarter with cash on hand of $86.3 million. Excluding New York liabilities held for sale, and the impact of uncertain tax positions. Total current liabilities at the end of the quarter were $13.3 million with zero current debt. We had $62.6 million in long-term debt outstanding, which matures in early 2027. As of March 31st, 2025, the company had a total of 472,078,412 shares outstanding on a treasury method basis using a share price of US 45 cents. We remain in a healthy financial position and are focused on driving returns for shareholders through prudent capital deployment against our highest growth opportunities. We believe our liquidity position will help support improved access to capital in the future, and we expect to remain both patient and opportunistic as we look to continue innovating and investing in growth opportunities in our pipeline. That concludes my prepared remarks. I'll now hand the call back to John for some closing comments.