Green Thumb Industries Inc. Q1 2023 Earnings Call
I'll lead off with an overview of our results and some observations on the current state of the industry.
Anthony will discuss our operations.
Mark will dive into the financials and then we'll open the call to questions.
Zooming out.
Given that the industry is still feeling pricing compression inflationary pressure on input costs lack of progress in D. C and limited access to capital we feel good about delivering solid results in the first quarter.
We posted $249 million in revenue GAAP net income was $9 1 million or four cents per basic and diluted share adjust.
Adjusted EBITDA was $76 million or 31% of revenue.
More than 300 basis point improvement year over year.
In the face of double digit pricing compression expanding margins more than 300 basis points year over year, it feels pretty good.
Finally, our cash flow from operations was $75 million.
The most important message I can convey this quarter is that green thumb remains a fiscally sound enterprise with a strong balance sheet, including cash totaling $185 million at quarter end.
The management team here appreciates this setup, which gives us the optionality as we continue to execute our long term growth strategy in a patient and deliberate manner.
As I've said before this is a marathon not a sprint and there will always be hurdles to jump.
Luckily our team is quite skilled at navigating challenges, we remain engaged and excited about the future and our ability to play offense with large amounts of cash and time on our side.
At the end of 2022 legal cannabis industry in the U S reached $26 billion.
And it's estimated by analysts to grow to 75 billion over the next decade.
Green thumb is in the fortunate position to strategically play this growth opportunity.
We operate in attractive states that give us access to 50% of the U S adult population.
We don't need to shed any assets or closed facilities to fund future initiatives.
And we have the dry powder in cash flow to explore options that will create profitable growth and sustainable value.
As Buffett has taught us only when the tide goes out you learn who has been swimming naked.
I am confident that we have a great foundation team and board in place.
Last week, we welcome Ethan nailed it in one of the nation's experts on drug policy reform to our board of directors.
<unk> deep understanding of the cannabis industry and passion for our mission make him a perfect fit for our board.
Even his appointment will further strengthen our corporate governance and we look forward to his contributions to the team.
As we've discussed from the start we have always been disciplined stewards of capital and resist growth for growth's sake, we can sleep at night by playing the long game.
We have plenty of runway for meaningful growth as we scale our business in our 15 operating states several of which have yet to launch adult use sales.
Such as Virginia.
Soda, Maryland, and New York to name a few.
Like I said earlier, we have the capital to invest in expanding our platform in 2023, and we plan to open around 15 retail stores across Virginia, Pennsylvania, Minnesota, Nevada and Florida.
On April 17th we added two new stores rise, new hope in Minnesota, and rise growth city in Pennsylvania, bringing our total store count to 79.
On the production side of the business, we will continue to make investments in our cultivation facilities in our product development.
We are continuously inspired to pursue new and outstanding experiences for our consumers.
For example, infuse pre rolls and one of the fastest growing categories in cannabis and we recently added show dogs to the Dog-walker pack, a new line of infused canvas pre rolls.
Like our four legged best friends show dogs are the perfect companion for an elevated journey, it's all about new experiences and even greater heights.
And for 'twenty, We launched show dogs in Illinois, and plan to expand to additional markets, including Massachusetts, Maryland in Nevada later this year.
I'm very proud of our family of brands that range across the canvas value chain.
We have something for everyone from our premium brands to our value brands like good Dream and Hampshire.
The latter of which is gaining market share according to BDSI.
Having these sought after value brands is especially important when consumers are trading down during an economic squeeze.
We are seeing average ticket down transactions continued to increase and our value segment.
That's the beauty of a diversified portfolio in action, we want everyone to have access to safe satisfying and personally affordable wellbeing.
It's easy to be passionate about your business. When you know you're contributing to the wellbeing of millions of Americans.
I want to thank our entire team for never losing sight of that it drives each of US every day.
We also will never lose sight of people left behind those incarcerated for cannabis possession, the black and brown communities that had been disproportionately harmed by the failed war on drugs and those struggling to participate in this great American growth story.
Reversing this damage wont happen overnight, but we will continue to fight the good fight.
Now I'll turn the call over to Anthony to discuss our operations in more detail Anthony.
Thanks, Dan Good afternoon, everyone. Thanks for joining.
As Ben mentioned, we had a solid start to 2023.
Despite continued price compression in many of our markets along with persistent inflationary pressure. The company was able to deliver close to $250 million of revenue and over $76 million and adjusted EBITDA in the first quarter.
This allowed us to generate over 75 million in cash flow from operations solidifying our strong capital position.
While macro factors remain outside of our control we continue to manage the business using a cautious lens.
Obsesses over cash flow generation and balance sheet stability.
During the quarter. The company continued its aggressive capital spend investing $65 million across its fleet.
CPG Capex accounted for approximately 80% of our spend as the company continued making substantial progress on its facility investments and New York, New Jersey, Minnesota and Virginia.
All four projects remain on track to open late this year and will provide meaningful commercial opportunities in 2024 and beyond.
In retail the company is focused on expanding its overall footprint as we anticipate opening approximately 15 new stores this year.
As Ben mentioned, we opened our growth city, Pennsylvania, and New Hope, Minnesota stores in April and have about a dozen or so additional stores under development in Nevada, Pennsylvania, Virginia, Minnesota in Florida that should open before yearend.
Throughout the rest of the year. In addition to completing our capital projects. Our team is focused on the following.
One driving operating efficiencies to combat continued pricing and cost pressures.
Given the rate of growth the company experienced since 2018, we have an opportunity to continue to refine our processes, especially within the CPG side of our business.
In addition, any revenue grow should provide incremental leverage to our fixed cost infrastructure.
Two continuing to allocate our resources and capital to markets and activities at <unk>.
Optimize the current operating environment, along with long term company objectives.
This means focusing on the consumer through innovation and expansion of our product portfolios as well as driving further development of our Omnichannel strategy.
Last optimize our opportunity in Maryland come July one.
As a reminder, we have four stores and an established wholesale business in Maryland, and we're all excited to celebrate this historic event with our team and want a green thumbs earliest medical cannabis markets.
Should any listeners find themselves in Maryland, Please come see us in Hagerstown, Joppa silver spring Orbis as debt.
We'll be sure to have something special, especially for our garage rewards members.
Kudos to the state or quickly establishing a framework that provides consumers with accessibility to high quality lab tested cannabis products.
In conclusion, while we recognize our industry is experiencing a challenging time, we remain incredibly bullish on our business and the demand for candidates by the consumer.
We never anticipated our growth to be linear we remain confident in our team and our ability to achieve strong profitable growth over the long term.
With that I'll turn the call over to Matt to review our financial results.
Thanks, Anthony and Hello, everyone.
As Ben mentioned, we generated over $248 million in revenue in the first quarter of 2023 the.
The two 4% increase compared to the prior year quarter.
The revenue increase was primarily driven by the operations of the retail segment.
Our strong retail performance in the first quarter was supported by the commencement of adult use sales in New Jersey, Rhode Island and Connecticut.
Along with increased store traffic and our open and operating retail stores, particularly in Virginia, Minnesota in Maryland.
Overall retail revenue increased 9% versus the first quarter of 2022 comp.
Comparable sales decreased 6% for the first quarter last year on a base of 73 stores.
Cpg's gross revenue in the quarter increased 4% versus last year.
Gross profit for the first quarter was $124 7 million or 52% revenue compared to $122 9 million or 57% of revenue last year.
And gross margin was primarily driven by price compression.
Turning to Opex selling general administrative expense for the first quarter was $8 5 million or 32, 4% of revenue compared to $68 4 million or 28, 2% of revenue for the first quarter of 2022.
SG&A, excluding depreciation amortization onetime transaction costs and stock based comp, which we referred to as normalized operating costs approximated $56 million compared to $61 million last year.
Disciplined expense management remains a top priority as we navigate this challenging environment.
The company generated net income of $9 1 million or <unk> <unk> per basic and diluted share during the quarter.
This compares with net income of $28 9 million 12 per basic and diluted share reported last year.
Adjusted EBITDA.
<unk> excludes noncash stock based compensation and other non operating cost was $76 2 million, 37% of revenue for the quarter as compared to $67 million or 27, 6% of revenue for the first quarter last year.
We ended the first quarter with a strong balance sheet, including cash of $185 4 million and working capital of $177 million compared to $149 2 million a year ago.
At quarter end, we had $277 8 million in debt with the majority being the $250 million of senior notes at 7% due in April of 2025.
In closing I'm very proud of our execution in the first quarter.
Confident in our ability to execute our strategic plan deliver high quality candidates towards patients and customers and generate strong returns for our shareholders.
With that I'll open the call to questions operator.
We will now begin the question and answer session.
To ask a question you May Press Star then one on your Touchtone phone.
People are using a speakerphone please pick up your handset before pressing the keys.
If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.
During our Q&A session, we would ask for a limit of one question per person.
At this time, we will pause momentarily to assemble our roster.
The first question today comes from Gerald Pascarelli with Wedbush Securities. Please go ahead.
Hi, good evening, thanks, very much for the question. So it looks like your gross margin definitely came in a little better than expected just given the sequential improvement and then the an improvement just in the magnitude of the year on year contractions for Matt maybe just a little bit of color on the cost environment, whether or not that is <unk>.
Proving at all relative to last year, how we should think about margins on a go forward basis using this as a benchmark just trying to reconcile it back some of the commentary that you made previously thank you.
Hi, Gerald obviously, Anthony here I'll take it that's a great question. So look we're up we're pleased with our year over year margin improvement.
The team for their execution.
As you know, it's hard to predict kind of margins on.
On a quarter to quarter basis, but.
And as we said before.
Despite some of the price compression that we're seeing we've got a number of levers within the business that we can pull to try to.
Kind of minimize the impact on the overall profitability.
So really what we're doing is we're focusing on the long term.
Taking a market to market.
And really just focusing on cash flow generation.
On a per market basis.
Got it.
Thanks, very much for the color I'll pass it on.
The next question comes from Matt Mcginley with Needham.
Please go ahead.
Thank you so on the G&A I'm, a little bit surprised that the $6 million quarter over quarter bump in G&A dollars given that you didn't add any stores is that $56 million in core G&A. The new base to build from that that will then build I guess with new store growth or was there some spend in the first quarter that that's.
May not repeat again in that maybe there's something incorporate or what have you that that won't repeat later into the year I'm just trying to understand kind of what the what's the big driver of the sequential increase was.
Thanks, Matt This is Matt I'll take that so when we think about SG&A. Yes, we were pleased with performance in the first quarter, but at the same time when we look when we look forward.
We're constantly watching the SG&A line.
In conjunction with top line performance, but we do expect the SG&A line to grow, especially in the second half of the year. When we were talking about the number of new stores were projected to open which is going to increase that SG&A and on a relative basis. So I will say, we do expect that to increase come the back half.
And what drove that increase in this quarter.
There are there are a number of items Matt that.
We could we can point to but a lot of it is really just staying staying disciplined.
What what we're incurring what costs. We are we are willing to take on for the business and how we can manage those on a on a go forward basis. So theres nothing overly significant that we can point to as a single driver.
A confluence of a series of events.
Okay. Thank you.
The next question comes from Michael Lavery with Piper Sandler. Please go ahead.
Oh.
Thank you and good afternoon.
Just would love to get your sense of the industry landscape and how you think.
And what it takes for it to evolve obviously price compression is still an issue pretty broadly.
Right.
Youre in a position to be acquisitive, if you find the right thing but.
Are there interesting assets, what does it take to get rationalized.
Rationalization in the industry or consolidation just would love to.
I guess some of your thoughts of how that might play out and what it would take to see some improvement there.
Sure Hey, Michael extend thanks for the question I think you summed it up well, we're seeing pricing compression in the mid double digits depends on which markets you look at and there we're seeing much higher 20% to 30% unit growth year over year across the country. So we're seeing continued demand for the products and we're seeing this capital cycle continue to take shape I would say for us in the M&A environment.
So it brings a lot we understand what's going on out there, but don't look for massive transformational M&A from us.
As you go forward certainly there are some things that are interesting. It's been the same strategy for a while integrating deals its hard close big deals it's hard.
It's even hard to measure those returns so we love our portfolio today, we loved the states we're in and as I tried to say the prepared remarks, we have the growth embedded in the portfolio now.
And we're putting in massive amounts of capital into our business directly that's far cheaper than even these bargain basement quote unquote M&A prices that are out there because there's hair on the story. So I love to cleanly build a brand new facility in Cottage Grove, Minnesota, and understand that investment and what the returns on those are going to be or low more virginia or in Hackensack, New Jersey.
Essentially us buying our own business at much much cheaper and any M&A with less problems, because we ground up or we know what we're doing we think after this many years.
So that's a little bit how we look at it theres market share for us to take this massive growth out there and we think we're in a position to play offense and initiate things begin new new projects, new product innovations and new investments in the brands that now have national reach to develop that relationship here until these middle innings with the consumer which is where we should start to see our dial shift as we.
Down this capex cycle into the next middle innings of the industry.
That's great color. Thank you.
Sure.
The next question comes from Eric <unk> with Craig Hallum. Please go ahead.
Hi, Thanks for taking my question.
Just wondering if you could comment on some of the working capital changes in the quarter that impacted cash flow from ops.
Well this is Matt I can I can take that one of one of the main things when we think about cash flow from operations in the quarter.
Minder, there's not a Q1 tax payment in the quarter. So we did benefit from that and in this quarter, but on the downside you have two tax payments that will be coming in the second quarter. So when we look forward to the second quarter, we will see.
A more flattish cash flow from operations, so when you balance.
The two out.
We should be in good shape there.
Thank you.
The next question comes from Andrew <unk> with Stifel. Please go ahead.
Yeah.
Hi, good evening, Thanks for taking my questions and congrats on the on the cash generation.
I would like to continue the theme on that please.
So you talked about a little bit on the tax payment here, but wondering about.
Other working capital items like your inventory.
Last quarter, you did achieve a record breaking number in this quarter you beat it.
Last quarter you had.
But working capital drag and a tax payment.
So just wondering if you can parse out how did you how did you achieve this this impressive cash flow number are there any markets.
To call out here.
We're maybe outside contributors or or was this more broad based.
Just wondering if you can bring.
Break that out.
How do you achieve that impressive number.
Yeah.
Sure I can take that this is Matt So I think when you're talking about cash cash flow in the first three months of the year and yes, we would.
Definitely.
Please.
<unk>, there and I think a lot of it is really coming from a number of factors, where we didn't see our inventory.
Ballooned in the first quarter, so we maintain.
Alignment in the sand on inventory that we feel good about the balance sheet. Our accounts receivable also toeing the line there.
And at the same time, we're not inflating artificially inflated obviously, our accounts payable our crew expenses to achieve that so I think a lot of it really just comes down to good disciplined actions that we're taking to control the finances of the business and its nothing.
One action.
The compilation of all the actions, we've taken a daily basis to achieve those results.
Yeah, I would just jump in I totally agree with what Matt said and Andrew you asked a good question I think.
Sitting where I'm at its not one thing this has been part of our ethos, we've been thinking about the cash managing the business as if it's our own because I think about.
We talked about Kashi Sherwood or Anthony preach to the team to spend treasury like it's your own it's part of how we operate so we don't have a lot of slippage of cash.
Fortunately the first quarter as Matt said, the last question, which is totally true is theres no taxpayer, we pay our taxes on time in full when they're due so the second quarter were up two payments so that will bounce. It out the same thing happened last year, just look at our quarterly cash flow same deal there, but in terms of managing to cash as an industry. That's tough for four to six quarters in a row, we've been talking about that hit those with our team.
Publicly and so we're sitting with 188, we'd like our situation, we like the visibility we have.
And we need to continue to do it but there is not some big revelation of what we're doing is more of an ethos and culture to mentality and we like it and we want to continue with that sort of head down execute build the cash can be opportunistic mentality.
I appreciate it I'll get back in the queue.
The next question comes from Aaron Grey with Alliance Global Partners. Please go ahead.
Hi, good evening and thank you for the question.
So part of Cali has been a vertical that he has been a key theme. So wanting some color in terms of how comfortable you feel today, we stand in terms of in house brands being sold in your stores is there still a lever can be pulled there to increase that for some price inflation and also do you believe we might start to see more of a CPG growth in terms of third party stores I know in terms of the.
Wholesale it's been around the low sixes now for the past.
Four quarters now so how long we might see some more growth on that wholesale side or if we still keep the let's keep it in house dining Felicia on the vertical <unk>. Thanks.
Hey, Erin Anthony here, Great question, So I'll start holistically with the business and they give a little bit more detail.
When you do mouth so.
Burton County for the quarter not materially different from Q4.
Do we have any more.
Opportunity there within the business certainly.
The way we look at it again it just comes down to a market to market kind of assessment that we make.
But there is definitely we have got some we have some dry powder there.
If we need it.
I'll also say that you know on that on the CPG side look we're working hard to continue to introduce brands that can really stand on their own two feet and sell on any shelf, where do they be ours or someone else's and so we've been talks about the show dog and some of the other things that we're doing behind the scenes.
That's the hard work that we're putting in now they hopefully will pay big rewards for shareholders into the future, but we're certainly focused on continuing to kind of drive.
Third party CPG distribution, we're going to continue to do that and then obviously at the same time, we're looking to optimize our our business on a market to market basis with <unk> is one of the levers that we use to effectively do that.
All right great. Thanks for the color.
The next question comes from Todd Cohen with <unk> capital. Please go ahead.
Hey, Thanks for taking the questions a band I'm curious to get your thoughts on the M&A landscape as things sit today, obviously, that's an area where you've been very methodical in the past and it's paid off but are you starting to see any actionable opportunities out there given the distress. That's emerging and then may be seeing somewhere to put that cash pile.
Work.
Okay.
Yeah. Thanks for the question.
So like I said before.
We're out there we're listening we're talking but we're really focused on our own business and how to drive the highest returns for what we are doing so I wouldn't look for massive transformational M&A. We know the difficulties of integration what's associated with that so the bar remains very very high we have a lot of opportunity within our business to spend our capital your capital for shareholder money into the business.
First is to buy somebody elses problems theoretical EBITDA and non existent cash flow because there arent businesses that have that were talking to everybody. So as you guys and there's just so much noise in hair problems all over the place of where we like our spot listening we're talking trying to help where we can but.
It's not so attractive out there.
So how to measure the returns of what we do whereas like I said investments in the business, which is why you see our capex, we're putting our money where our mouth is by investing in the business and we hope we can produce those returns that should benefit all the shareholders. So on a run rate of whatever the EBITDA is today, where we can take it into the future. We think that growth is here in the business.
All of that.
Right.
The table is just.
Spending equity spending the cash versus the alternatives, we have given the multiple given what's out there and the lack of anything really positive available for sale or even existence.
It makes us love, what we're doing makes us just continuing to preach to the team head down and execute let's go execute into this next level. These middle innings of growth of cannabis in the U S. Because we've got a really good formula.
The next question comes from Scott Fortune with Roth Capital. Please go ahead.
Yes, good afternoon, thanks for the questions.
As we've seen kind of normalization play out here.
Ben can you walk us through that.
Last couple of quarters with the sequential down growth here and how much of that.
No versus kind of the industry challenges.
With your current footprint do you expect kind of seasonal peak.
And how much.
Or eliminated due to pricing or what are they telling you that you've indicated in the market and then just on top of that can you provide some wider kind of new adult use market and the runway. There you know we can do you can indicate and likely Minnesota and Merrill Lynch turning on here pretty quickly.
Yeah, Hey, Scott, it's Ben I'll be I'll tell you.
The first question was around topline right, what's going to happen I mean, yes. It did grow at more seasonal seasonal or industry challenges and how do you look at it.
Playing out as we can.
Usually it sounds like Q2.
Yeah, I think it's a combo of things I would say, we expect Q2 to be in the flat zone. So we have a lot of confidence in the back half of the year, We've got new store openings, we got Maryland adult use starting on July one, which as Anthony mentioned in his prepared remarks, it's something we've been getting ready for for a while and we have facility expansions coming on really at the very tail.
End of the year that should impact first quarter 'twenty four so all of that puts us in a position with the new stores in Maryland to see growth in the back half of the year that somebody yesterday, Matt was talking about before but yeah. There is seasonal we have seen it over time and you just have to look at which markets, we're in and what's happening.
So I understand that again the business is really bottom up as the sum of the parts versus a top down macro call and Thats why the bottom up we're able to put chips on the table for where that future growth is coming.
And with that can you provide a little color on New Jersey, Connecticut and the.
That will be coming on how you're viewing it from a bottoms up.
Sure, Yes, Scott I'll take that look I'd say that are progressing nicely.
<unk>.
These are markets that went live in the last call. It 12 to 18 months.
Continue to see nice economics, we haven't seen it.
Any real deterioration.
<unk> function up is really already happened, we do have a couple of stores in Connecticut that we have not converted over to adult use we've got one in new Jersey, as well, but still.
100% medical so we have some kind of embedded growth once we can figure those out but generally they are performing according to plan and you know like I said, a step function up on the top line was really already felt and so now it's just continuing to optimize each of the markets themselves.
Appreciate the color. Thanks.
The next question comes from Lenny when Havas with <unk>. Please go ahead.
Alright, so what percentage of the industry wide pricing weakness that we're experiencing right now do you think it's coming from the value segment, taking on more share versus just overall industry oversupply.
And then where do you guys stand in terms of.
The value segment as a percentage of revenues.
And where are you in terms of I guess, a rollout across all your markets for our premier value brands.
Sure So the Sunday I'll take that.
Couple of pieces to that puzzle.
Great first question.
That's very that's very difficult to measure right.
A couple of things happening.
Within that yes, we have seen a trade down.
However, we have seen.
Compression really.
Within all facets of the of the value curve. So how much is really the consumer trading down versus other portions and other factors really tough to say.
Look this is something we saw earlier.
<unk> as quickly as we could do it.
Obviously, you continue to make additional investments into the good rain and shine brands that Ben mentioned in his prepared remarks, we're seeing nice progress. According to the data that we all look at.
And we're continuing to introduce products not only at the at our rhythm a dog Walker brands, but also at the gains Shine and good Green brand because we think this is here to stay so as the market segmentation really kind of settles, which is which is something that we anticipated in the middle middle lending to this industry, that's probably just going to continue to happen.
So I mean, it's just premature to really guess is the value factor how much of that is really impacting the overall compression that we're seeing.
It's difficult to say, but what we're doing is we're making investments into all facets of the value chain. So that we're kind of well prepared to take an optimized business today, but also take advantage of the time when perhaps the consumers looking to trade up trade down.
Yeah.
Okay, and just I guess as a unrelated follow up.
I think we've got the bulk of the store openings in the second half of the year. If you can just give a little bit of color.
And in terms of.
The quarterly rollout there.
Yeah. So.
We've got approximately 15, new stores opening we've already opened two this quarter. We've got a few more that should turn on and then really the balance call. It you know.
Anywhere from from eight.
10 ish in the second half of the year, it's hard to guess right now exactly Q3 versus Q4. These are these.
These projects are.
At various stages of build out their.
They are generally.
Well, well spaced out kind of equally spaced effectively.
And just kind of happened by design, we're not by design, but just kind of naturally.
So from here on out we think we've got call. It 12 to 13 additional stores that you opened up.
Through the end of the year.
Great I'll turn it back.
As a reminder, we would ask for a limit of one question per person.
The next question comes from Matt Bottomley with Canaccord. Please go ahead.
Good evening, everyone. Thanks for taking the questions here I just wanted to go back to free cash flow. It's obviously a question a lot of analysts are getting on the inbounds, just given where valuations are and perceive sort of access to capital anytime in the near term so.
If you look at any individual quarter it can get <unk>.
Convoluted with different things that don't necessarily relate period over period, but if you if you take the $75 million that you did.
Given that Theres no tax payments, there and then compare it to Q2, where theres two tax payments it seems like.
You got about $150 million of cash flow, which is similar what you did last year is kind of where it looks like everything's falling assuming a flat environment and I'm not trying to put that assessment.
But just assuming that everything is flat can you talk to the sort of $150 million of operating cash flows in relation to your PP&E spend last year, which I think was about $180 million and then where you perceive interest payments our cash interest payments over the next 12 months to be just in relation to those three dynamics, which I know people are often asking about.
Yeah sure. Thanks, Matt Good question.
So yes, the capex, there's a lot to that so we were.
Where the Capex is this year, we spent about 60, so far in the first quarter, a little more than that we're comfortable with where we're putting that capital that capital is funded with cash on the balance sheet and as you nicely articulated cash flow from operations after tax after interest.
The I N T of EBITDA, a cost real cash.
So we expect about another 100 for the rest of the year and capex into the business in the projects that we've talked about.
They're finishing those off and we do not think 'twenty four it looks like 23, just as 'twenty through less in 'twenty, two it's coming off on those big ones. So what do we do with that cap that free cash flow that you articulated to get out of basically like you said a flat environment of 300 is we wanted capex. We have that funded we have that well done two we're thinking about the debt.
We have a low level of debt, but it's something we're talking about thinking about we have 258, 7% due on April 25, and then we look at what other things we can do with the cash whether it's M&A on our own equity certainly looking at things in this environment that could be exciting as we look at our medium and long term lens in the best interest of shareholders. So it's a fortunate spot that we're in with that kind of powder to <unk>.
Given the balance sheet, we have and the cash it produces but it's important that people understand the tax rate, which you obviously do and then interest because interest is real cash is out the window. So we like the situation produces cash we have the projects well funded fully funded on the balance sheet today. The business produces cash and then puts us in a position to wait for a few good things or if.
Good ideas to come along which we're excited about.
Got it appreciate that and just as a follow up but maybe just.
If we can maybe in context of last year, if you're able to to tell us what the actual 280 E payments, where he was at around $150 million, that's kind of where you are market I'm just not sure. If that's been said in the past.
Total tax about last year in matching the honest here was about 120 plus of cash taxes uncle Sam's Anthony has talked about our largest financial partner Torii is responsible for a big portion of that we've been hesitant to give exact guidance given celebrate depreciation and all the capital in all kinds of deduction things, but a significant portion of that would have been saved in cash.
We invest in the business buyback stock M&A anything you name it a two way to eat it takes away a lot of our cash we think about 120 last year total taxes got it.
Thanks, so much.
Sure.
The next question comes from Andrew <unk> with Stifel. Please go ahead.
Alright, Thanks for taking my my follow up question then.
I wanted to continue that line from the last question.
You know as your Capex seems to be coming down substantially in 2024, you mentioned thinking about that.
I'm wondering specifically about share buybacks. If you have any any thoughts about that given where stocks are now in.
Where they might go.
Is there any point in particular that you would see this as very attractive.
I mean, the short answer your last question is yes of course prices can get to it we wont be ready to play offense, if that were to happen.
But the business at about 300 with what we said 300 of EBITDA 120th taxes. Our total cash interest mask question last is under $20 million about <unk> 18, a year annual which leaves cash available. So once we cover the capex once we understand the debt.
Certainly out there thinking about it.
Everything's on the table, if it makes sense and we're watching what's going on out there, but we're not in this in a short term game the stock issue a press release or something like that we're thinking about long term owners of an enterprise and if we can certainly add more of the enterprise. It was a good use of company capital that we were covered in the other places it's on the table.
So we're evaluating everything.
This concludes our question answer session.
I'd like to turn the conference back over to Ben Cooper for any closing remarks.
Thanks, everybody for dialing in great questions and look forward to giving you update on the second quarter in a few months. Thank you.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
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