Canopy Growth Reports First Quarter Fiscal Year 2025 Financial Results
Focus on profitable revenue generation delivered 67% increase in gross profit year-over-year
Record quarter for Canada Medical Cannabis with Net Revenue increasing 20% year-over-year and 6th consecutive quarter of growth
Extended maturity of senior secured term loan to
Highlights
- Achieved Gross profit of $23MM in Q1 FY2025 representing a 67% increase over the first quarter ended
June 30, 2023 ("Q1 FY2024"), despite a decline in consolidated net revenue. - Delivered consolidated gross margin of 35%, and
Canada cannabis segment gross margin of 32% during Q1 FY2025. - Operating loss from continuing operations was $29MM in Q1 FY2025, a 47% improvement over Q1 FY2024.
- Consolidated Adjusted EBITDA1 loss narrowed to $5MM in Q1 FY2025, a 77% improvement over Q1 FY2024 driven primarily by cost reduction actions already implemented.
- Storz & Bickel net revenue increased 2% in Q1 FY2025 over Q1 FY2024, led by over 100% growth in Storz & Bickel sales in
Germany 2, which offset a sales decline in the non-medical vaporizer channel inAustralia following a regulatory change. - Demonstrated broad-based improvement across key financial metrics in Q1 FY2025 including a 31% reduction in Cost-of-Goods Sold ("COGS") and a 24% reduction in Selling General & Administrative ("SG&A") expenses, in each case, over Q1 FY2024.
- Cash and short-term investments balance of $195MM at
June 30, 2024 as compared to $203MM atMarch 31, 2024 .
"The fundamentals of our business continue to strengthen, and our focus on profitable revenue generation is yielding clear results as we set the stage for growth in the second half of fiscal 2025. With our core businesses delivering adjusted EBITDA profitability and primed for growth, paired with
"Our strategic initiatives have led to notable improvements in Gross Margins and Adjusted EBITDA as well as reduction in SG&A expenses. We are pleased that all of our business units delivered positive Adjusted EBITDA during Q1 Fiscal 2025 and expect to achieve positive Adjusted EBITDA on a consolidated basis in the second half of the fiscal year. We've continued to enhance our financial flexibility through additional actions, including the extension of our term loan, which will enable us to fund strategic growth initiatives."
First Quarter Fiscal 2025 Financial Summary
(in millions of Canadian |
|
Net Revenue |
Gross margin |
Adjusted |
Net loss from |
Adjusted |
Free cash |
Reported |
|
|
35 % |
35 % |
|
|
|
vs. Q1 FY2024 |
|
(13 %) |
1,700 bps |
1,700 bps |
(1,122 %) |
77 % |
49 % |
1 |
Adjusted EBITDA is a non-GAAP measure. See "Non-GAAP Measures" and Schedule 5 for a reconciliation of net loss to Adjusted EBITDA. |
2 |
Based on internal estimates including sales in both B2B and B2C channels; in local currency |
3 |
Adjusted gross margin is a non-GAAP measure, and for Q1 FY2025 excludes $nil of restructuring cost recorded in cost of goods sold (Q1 FY2024 - excludes $nil of restructuring costs recorded in cost of goods sold). See "Non-GAAP Measures" and Schedule 4 for a reconciliation of net revenue to adjusted gross margin. |
4 |
Adjusted EBITDA is a non-GAAP measure. See "Non-GAAP Measures" and Schedule 5 for a reconciliation of net loss to Adjusted EBITDA. |
5 |
Free cash flow is a non-GAAP measure. See "Non-GAAP Measures" and Schedule 6 for a reconciliation of net cash used in operating activities to free cash flow. |
- Net revenue declined by 13% to $66MM in Q1 FY2025 driven mostly by the impact of divested businesses.
- Gross margin increased by 1,700 basis points ("bps") to 35% in Q1 FY2025 driven by improvement in our
Canada cannabis segment, which was primarily due to the realized benefit of our cost savings program, a shift in channel mix to higher margin medical sales and a decline in write-down of excess inventory. - SG&A expenses were $48MM in Q1 FY2025, representing a decrease of 24% over Q1 FY2024 in part due to continued spending discipline across the organization.
- Operating loss from continuing operations was $29MM in Q1 FY2025, representing an improvement of 47% compared to Q1 FY2024. Adjusted EBITDA loss was $5MM, representing a 77% improvement year-over-year, driven by higher gross profit and lower SG&A expenses.
- Free Cash Flow was an outflow of $56MM in Q1 FY2025, an improvement of 49% compared to Q1 FY2024 driven by business transformation activities executed throughout FY2024 as well as a reduction in interest costs, partially offset by increased capital expenditure. Relative to the fourth quarter ended
March 31, 2024 , higher cash outflow from operations is primarily due to the timing of working capital and certain payments. - The Company continues to proactively improve and strengthen its balance sheet and announced today that it has entered into an amendment to its credit agreement with all of the lenders to its senior secured term loan (the "Term Loan"). This transaction accomplishes:
- Significant deleveraging of up to US$200MM: Principal repayment of US$100MM with an option to pay down an additional US$100MM;
- Repayment of
US$97 .5MM in order to reduce the principal amount outstanding on the Term Loan by US$100MM - Option to pay an additional
US$97 .5MM in order to reduce an additional US$100MM of the principal amount of the Term Loan; - Interest expense savings through a reduction in annual interest of US$14MM for each $100MM principal reduction and total potential interest savings of US$28MM; and
- Maturity date extension of 9-months to
December 18, 2026 with an option to further extend the maturity date toSeptember 18, 2027 , upon completion of the voluntary prepayment above.
Business Highlights
-
Canada cannabis net revenue was $38MM in Q1 FY2025, a decrease of 6% year-over-year, with recordCanada medical cannabis net revenue offset by lower adult-use cannabis net revenues.Canada medical cannabis net revenue increased 20% year-over-year, driven in part by strong demand for high-margin Spectrum Therapeutics products and the broader assortment of products available through the online platform. - In the latter half of Q1 FY2025, our Canadian adult-use cannabis business launched a range of new products into the market across priority categories including 7ACRES Ultra Jack flower, Maitri Strawberry Frappe flower (
Quebec exclusive),Tweed Sugar Free Cola beverage, and the 7ACRES CaféVanilla Delight All -In-One vape. - Higher flower yields resulting from upgrades underway at our
Kincardine facility, increased pre-rolled production capacity, additional third-party suppliers, targeted wholesale pricing actions, and increased distribution secured in Q1 FY2025, are expected to increaseCanada adult-use top line in the coming quarters.
International markets cannabis
- International markets cannabis net revenue in Q1 FY2025 declined 1% as compared to Q1 FY2024, with growth in high-margin
Poland offset by a decline in Australia. International markets cannabis gross margin was 36% in Q1 FY2025, up 200 bps as compared to Q1 FY2024. - Maintained top 4 market share position in the
Germany medical cannabis market6. Strong demand signals in German medical cannabis market post legalization with the number of prescriptions and volume of cannabis prescribed increasing by over 20% nationally6. - The Company is taking steps to increase supply to the German market by augmenting Canadian sourced flower with EU-based supply with a supply agreement signed during the quarter and additional agreements expected to be completed in FY2025.
Storz & Bickel®
- Storz & Bickel net revenue in Q1 FY2025 increased 2% as compared to Q1 FY2024 driven by strong growth in
Germany , contribution from the Venty portable vaporizer, which was launched in the third quarter of FY2024, and strong sales of the Mighty vaporizer. - Following the regulatory changes in the non-medical channel in
Australia , Storz & Bickel vaporizers are the only medically-certified whole flower vaporizers available for sale inAustralia which is expected to drive growth opportunities in the Australian medical channel. - Additional market activities, including the launch of an affiliate program with select retailers in key
U.S. states, are expected to increaseU.S. distribution.
-
Canopy USA, LLC ("Canopy USA ") closed the acquisitions of approximately 75% of the shares ofLemurian, Inc. ("Jetty") and two of three Wana entities, beingWana Wellness, LLC andThe CIMA Group, LLC , with the full acquisition of Wana expected by end of summer, subject to regulatory approval, once the acquisition ofMountain High Products, LLC is complete. -
Wana Brands edibles were launched inConnecticut andNew York State in the three-month period endedJune 30, 2024 .Wana Brands also announced the launch of the first three hemp-derived edibles via its partnership with Happi. Wana's revenue during the first half of calendar year 2024 was impacted by a challenging market dynamic inColorado . - Jetty expanded its solventless vape product offering in
California with the launch ofAll-In-One and Hybrid vapes. Jetty also expanded its offering of products in the state ofNew York with the launch of high-THC infused pre-rolls. Jetty maintained its #1 share of the national solventless vape market7. - The option (the "Acreage Option") to acquire all of the issued and outstanding Fixed Shares of Acreage Holdings Inc. ("Acreage") has been exercised, with
Canopy USA expecting to close its acquisition of Acreage in the first half of calendar year 2025, subject to certain closing conditions. - On
August 6, 2024 , Acreage announced the commencement of non-medical cannabis sales in the state ofOhio at Acreage's The Botanist dispensary locations inAkron ,Canton ,Cleveland ,Wickliffe , andColumbus .
6 Source: Insight Health Greenline ODV National Database, |
7 Based on BDSA |
First Quarter Fiscal 2025 Revenue Review8
Revenue by Channel
(in millions of Canadian dollars, unaudited) |
|
Q1 FY2025 |
Q1 FY2024 |
Vs. Q1 FY2024 |
|
|
|
|
|
Canadian adult-use cannabis9 |
|
|
|
(22 %) |
|
|
|
|
20 % |
|
|
|
|
(6 %) |
|
|
|
|
|
International markets cannabis11 |
|
|
|
(1 %) |
Storz & Bickel |
|
|
|
2 % |
This Works |
|
$- |
|
(100 %) |
Other |
|
$- |
|
(100 %) |
|
|
|
|
|
Net revenue |
|
|
|
(13 %) |
The Q1 FY2025 and Q1 FY2024 financial results presented in this press release have been prepared in accordance with
8 In Q1 FY2025, we are reporting our financial results for the following four reportable segments: (i) |
9 For Q1 FY2025, amount is net of excise taxes of |
10 For Q1 FY2025, amount is net of excise taxes of |
11 For Q1 FY2025, amount reflects other revenue adjustments of $nil (Q1 FY2024 - |
Webcast and Conference Call Information
The Company will host a conference call and audio webcast with
Webcast Information
A live audio webcast will be available at: https://app.webinar.net/Lm5q6QW1Apv
Replay Information
A replay will be accessible by webcast until
Non-GAAP Measures
Adjusted EBITDA is a non-GAAP measure used by management that is not defined by
Free cash flow is a non-GAAP measure used by management that is not defined by
Adjusted gross margin and adjusted gross margin percentage are non-GAAP measures used by management that are not defined by
About
Through an unwavering commitment to our consumers,
Beyond its world-class products,
For more information visit www.canopygrowth.com.
Notice Regarding Forward Looking Statements
This press release contains "forward-looking statements" within the meaning of applicable securities laws, which involve certain known and unknown risks and uncertainties. To the extent any forward-looking statements in this news release constitutes "financial outlooks" within the meaning of applicable Canadian securities laws, the reader is cautioned that this information may not be appropriate for any other purpose and the reader should not place undue reliance on such financial outlooks. Forward-looking statements predict or describe our future operations, business plans, business and investment strategies and the performance of our investments. These forward-looking statements are generally identified by their use of such terms and phrases as "intend," "goal," "strategy," "estimate," "expect," "project," "projections," "forecasts," "plans," "seeks," "anticipates," "potential," "proposed," "will," "should," "could," "would," "may," "likely," "designed to," "foreseeable future," "believe," "scheduled" and other similar expressions. Our actual results or outcomes may differ materially from those anticipated. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made.
Forward-looking statements include, but are not limited to, statements with respect to:
- laws and regulations and any amendments thereto applicable to our business and the impact thereof, including uncertainty regarding the application of
U.S. state and federal law to hemp (including cannabidiol ("CBD")) products and the scope of any regulations by theU.S. Food and Drug Administration , theU.S. Drug Enforcement Administration , theU.S. Federal Trade Commission , theU.S. Patent and Trademark Office , theU.S. Department of Agriculture and any state equivalent regulatory agencies over hemp (including CBD) products; - expectations regarding the amount or frequency of impairment losses, including as a result of the write-down of intangible assets, including goodwill;
- our ability to refinance debt as and when required on terms favorable to us and comply with covenants contained in our debt facilities and debt instruments;
- the impacts of the Company's strategy to accelerate entry into the
U.S. cannabis market through the creation ofCanopy USA , including the costs and benefits associated with the amendments made to theCanopy USA structure to facilitate the deconsolidation of the financial results ofCanopy USA within the Company's financial statements; - expectations for
Canopy USA to capitalize on the opportunity for growth inthe United States cannabis sector and the anticipated benefits of such strategy; - the timing and outcome of the floating share arrangement, whereby, subject to the terms and conditions of a Floating Share Arrangement Agreement (the "Floating Share Arrangement Agreement"),
Canopy USA is expected to acquire all of the issued and outstanding Class D subordinate voting shares (the "Floating Shares") of Acreage by way of a court-approved plan on arrangement under the Business Corporations Act (British Columbia ) (the "Floating Share Arrangement") in exchange for 0.045 of a Company common share for each Floating Share held, the anticipated benefits of the Floating Share Arrangement, the anticipated timing and occurrence of the acquisition of the Class E subordinate voting shares (the "Fixed Shares") of Acreage pursuant to the exercise of the Acreage Option, the anticipated timing and occurrence of the acquisition of the Floating Shares byCanopy USA , the satisfaction or waiver of the closing conditions set out in the Floating Share Arrangement Agreement and the arrangement agreement datedApril 18, 2019 , as amended onMay 15, 2019 ,September 23, 2020 andNovember 17, 2020 (the "Existing Acreage Arrangement Agreement"), including receipt of all regulatory approvals; - the anticipated timing and occurrence of the acquisition of
Mountain High Products, LLC ; - the acquisition of additional Class A shares of
Canopy USA in connection with the investment inCanopy USA by the Huneeus 2017Irrevocable Trust (the "Trust") in the aggregate amount of up toUS$20 million (the "Trust Transaction"), including any warrants ofCanopy USA issued to the Trust in accordance with the share purchase agreement entered into by the Trust andCanopy USA ; - the anticipated extension to the maturity date of the Term Loan and the timing and occurrence of any prepayments of the Term Loan in connection with the amendment to the credit agreement;
- expectations regarding the potential success of, and the costs and benefits associated with, our acquisitions, strategic alliances, equity investments and dispositions;
- the grant, renewal and impact of any license or supplemental license to conduct activities with cannabis or any amendments thereof;
- our international activities, including required regulatory approvals and licensing, anticipated costs and timing, and expected impact;
- our ability to successfully create and launch brands and further create, launch and scale cannabis-based products and hemp-derived consumer products in jurisdictions where such products are legal and that we currently operate in;
- the benefits, viability, safety, efficacy, dosing and social acceptance of cannabis, including CBD and other cannabinoids;
- our ability to maintain effective internal control over financial reporting;
- our ability to continue as a going concern;
- expectations regarding the use of proceeds of equity financings;
- the legalization of the use of cannabis for medical or adult-use in jurisdictions outside of
Canada , the related timing and impact thereof and our intentions to participate in such markets, if and when such use is legalized; - our ability to execute on our strategy and the anticipated benefits of such strategy;
- the ongoing impact of the legalization of additional cannabis product types and forms for adult-use in
Canada , including federal, provincial, territorial and municipal regulations pertaining thereto, the related timing and impact thereof and our intentions to participate in such markets; - the ongoing impact of developing provincial, state, territorial and municipal regulations pertaining to the sale and distribution of cannabis, the related timing and impact thereof, as well as the restrictions on federally regulated cannabis producers participating in certain retail markets and our intentions to participate in such markets to the extent permissible;
- the timing and nature of legislative changes in the
U.S. regarding the regulation of cannabis including tetrahydrocannabinol; - the future performance of our business and operations;
- our competitive advantages and business strategies;
- the competitive conditions of the industry;
- the expected growth in the number of customers using our products;
- our ability or plans to identify, develop, commercialize or expand our technology and research and development initiatives in cannabinoids, or the success thereof;
- expectations regarding revenues, expenses and anticipated cash needs;
- expectations regarding cash flow, liquidity and sources of funding;
- expectations regarding capital expenditures;
- the expansion of our production and manufacturing, the costs and timing associated therewith and the receipt of applicable production and sale licenses;
- expectations with respect to our growing, production and supply chain capacities;
- expectations regarding the resolution of litigation and other legal and regulatory proceedings, reviews and investigations;
- expectations with respect to future production costs;
- expectations with respect to future sales and distribution channels and networks;
- the expected methods to be used to distribute and sell our products;
- our future product offerings;
- the anticipated future gross margins of our operations;
- accounting standards and estimates;
- expectations regarding our distribution network;
- expectations regarding the costs and benefits associated with our contracts and agreements with third parties, including under our third-party supply and manufacturing agreements;
- our ability to comply with the listing requirements of the
Nasdaq Stock Market LLC and theToronto Stock Exchange ; and - expectations on price changes in cannabis markets.
Certain of the forward-looking statements contained herein concerning the industries in which we conduct our business are based on estimates prepared by us using data from publicly available governmental sources, market research, industry analysis and on assumptions based on data and knowledge of these industries, which we believe to be reasonable. However, although generally indicative of relative market positions, market shares and performance characteristics, such data is inherently imprecise. The industries in which we conduct our business involve risks and uncertainties that are subject to change based on various factors, which are described further below.
The forward-looking statements contained herein are based upon certain material assumptions , including: (i) management's perceptions of historical trends, current conditions and expected future developments; (ii) our ability to generate cash flow from operations; (iii) general economic, financial market, regulatory and political conditions in which we operate; (iv) the production and manufacturing capabilities and output from our facilities, strategic alliances and equity investments; (v) consumer interest in our products; (vi) competition; (vii) anticipated and unanticipated costs; (viii) government regulation of our activities and products including but not limited to the areas of taxation and environmental protection; (ix) the timely receipt of any required regulatory authorizations, approvals, consents, permits and/or licenses; * our ability to obtain qualified staff, equipment and services in a timely and cost-efficient manner; (xi) our ability to conduct operations in a safe, efficient and effective manner; (xii) our ability to realize anticipated benefits, synergies or generate revenue, profits or value from our recent acquisitions into our existing operations; and (xiii) other considerations that management believes to be appropriate in the circumstances. While our management considers these assumptions to be reasonable based on information currently available to management, there is no assurance that such expectations will prove to be correct. Financial outlooks, as with forward-looking statements generally, are, without limitation, based on the assumptions and subject to various risks as set out herein. Our actual financial position and results of operations may differ materially from management's current expectations.
By their nature, forward-looking statements are subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. A variety of factors, including known and unknown risks, many of which are beyond our control, could cause actual results to differ materially from the forward-looking statements in this press release and other reports we file with, or furnish to, the
Forward-looking statements are provided for the purposes of assisting the reader in understanding our financial performance, financial position and cash flows as of and for periods ended on certain dates and to present information about management's current expectations and plans relating to the future, and the reader is cautioned that the forward-looking statements may not be appropriate for any other purpose. While we believe that the assumptions and expectations reflected in the forward-looking statements are reasonable based on information currently available to management, there is no assurance that such assumptions and expectations will prove to have been correct. Forward-looking statements are made as of the date they are made and are based on the beliefs, estimates, expectations and opinions of management on that date. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, estimates or opinions, future events or results or otherwise or to explain any material difference between subsequent actual events and such forward-looking statements, except as required by law. The forward-looking statements contained in this press release and other reports we file with, or furnish to, the
Schedule 1
|
||||||||
|
||||||||
|
|
|
|
|
|
|
||
ASSETS |
|
|||||||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
192,156 |
|
|
$ |
170,300 |
|
Short-term investments |
|
|
2,766 |
|
|
|
33,161 |
|
Restricted short-term investments |
|
|
7,691 |
|
|
|
7,310 |
|
Amounts receivable, net |
|
|
50,889 |
|
|
|
51,847 |
|
Inventory |
|
|
84,518 |
|
|
|
77,292 |
|
Assets of discontinued operations |
|
|
- |
|
|
|
8,038 |
|
Prepaid expenses and other assets |
|
|
19,773 |
|
|
|
23,232 |
|
Total current assets |
|
|
357,793 |
|
|
|
371,180 |
|
Equity method investments |
|
|
150,669 |
|
|
|
- |
|
Other financial assets |
|
|
297,865 |
|
|
|
437,629 |
|
Property, plant and equipment |
|
|
315,022 |
|
|
|
320,103 |
|
Intangible assets |
|
|
98,956 |
|
|
|
104,053 |
|
|
|
|
43,368 |
|
|
|
43,239 |
|
Other assets |
|
|
22,555 |
|
|
|
24,126 |
|
Total assets |
|
$ |
1,286,228 |
|
|
$ |
1,300,330 |
|
|
|
|
|
|
|
|
||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|||||||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
25,488 |
|
|
$ |
28,673 |
|
Other accrued expenses and liabilities |
|
|
51,293 |
|
|
|
54,039 |
|
Current portion of long-term debt |
|
|
2,457 |
|
|
|
103,935 |
|
Other liabilities |
|
|
87,361 |
|
|
|
48,068 |
|
Total current liabilities |
|
|
166,599 |
|
|
|
234,715 |
|
Long-term debt |
|
|
558,489 |
|
|
|
493,294 |
|
Other liabilities |
|
|
28,217 |
|
|
|
71,814 |
|
Total liabilities |
|
|
753,305 |
|
|
|
799,823 |
|
Commitments and contingencies |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Share capital |
|
|
8,393,936 |
|
|
|
8,244,301 |
|
Additional paid-in capital |
|
|
2,617,703 |
|
|
|
2,602,148 |
|
Accumulated other comprehensive loss |
|
|
(21,548) |
|
|
|
(16,051) |
|
Deficit |
|
|
(10,457,168) |
|
|
|
(10,330,030) |
|
|
|
|
532,923 |
|
|
|
500,368 |
|
Noncontrolling interests |
|
|
- |
|
|
|
139 |
|
Total shareholders' equity |
|
|
532,923 |
|
|
|
500,507 |
|
Total liabilities and shareholders' equity |
|
$ |
1,286,228 |
|
|
$ |
1,300,330 |
|
Schedule 2
|
|
|||||||
|
|
|
|
|
|
|
||
|
|
Three months ended |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Revenue |
|
$ |
75,783 |
|
|
$ |
88,644 |
|
Excise taxes |
|
|
9,571 |
|
|
|
12,386 |
|
Net revenue |
|
|
66,212 |
|
|
|
76,258 |
|
Cost of goods sold |
|
|
43,181 |
|
|
|
62,496 |
|
Gross margin |
|
|
23,031 |
|
|
|
13,762 |
|
Operating expenses |
|
|
|
|
|
|
||
Selling, general and administrative expenses |
|
|
47,968 |
|
|
|
62,763 |
|
Share-based compensation |
|
|
4,151 |
|
|
|
3,717 |
|
Loss on asset impairment and restructuring |
|
|
20 |
|
|
|
1,934 |
|
Total operating expenses |
|
|
52,139 |
|
|
|
68,414 |
|
Operating loss from continuing operations |
|
|
(29,108) |
|
|
|
(54,652) |
|
Other income (expense), net |
|
|
(93,889) |
|
|
|
46,101 |
|
Loss from continuing operations before income taxes |
|
|
(122,997) |
|
|
|
(8,551) |
|
Income tax expense |
|
|
(6,194) |
|
|
|
(2,018) |
|
Net loss from continuing operations |
|
|
(129,191) |
|
|
|
(10,569) |
|
Discontinued operations, net of income tax |
|
|
2,053 |
|
|
|
(31,292) |
|
Net loss |
|
|
(127,138) |
|
|
|
(41,861) |
|
Discontinued operations attributable to noncontrolling interests |
|
|
- |
|
|
|
(3,740) |
|
Net loss attributable to |
|
$ |
(127,138) |
|
|
$ |
(38,121) |
|
|
|
|
|
|
|
|
||
Basic and diluted loss per share1 |
|
|
|
|
|
|
||
Continuing operations |
|
$ |
(1.63) |
|
|
$ |
(0.19) |
|
Discontinued operations |
|
|
0.03 |
|
|
|
(0.50) |
|
Basic and diluted loss per share |
|
$ |
(1.60) |
|
|
$ |
(0.69) |
|
Basic and diluted weighted average common shares |
|
|
79,243,020 |
|
|
|
55,045,936 |
|
1 Prior year share and per share amounts have been retrospectively adjusted to reflect the Share Consolidation, which became effective on |
Schedule 3
|
|
|||||||
|
|
|
|
|
|
|
||
|
|
Three months ended |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net loss |
|
$ |
(127,138) |
|
|
$ |
(41,861) |
|
Gain (loss) from discontinued operations, net of income tax |
|
|
2,053 |
|
|
|
(31,292) |
|
Net loss from continuing operations |
|
|
(129,191) |
|
|
|
(10,569) |
|
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
||
Depreciation of property, plant and equipment |
|
|
5,682 |
|
|
|
10,689 |
|
Amortization of intangible assets |
|
|
5,348 |
|
|
|
6,422 |
|
Share-based compensation |
|
|
4,151 |
|
|
|
3,717 |
|
Loss on asset impairment and restructuring |
|
|
86 |
|
|
|
10,582 |
|
Income tax expense |
|
|
6,194 |
|
|
|
2,018 |
|
Non-cash fair value adjustments and charges related to |
|
|
79,793 |
|
|
|
(68,455) |
|
Change in operating assets and liabilities, net of effects from |
|
|
|
|
|
|
||
Amounts receivable |
|
|
668 |
|
|
|
(20,410) |
|
Inventory |
|
|
(7,008) |
|
|
|
2,237 |
|
Prepaid expenses and other assets |
|
|
(185) |
|
|
|
404 |
|
Accounts payable and accrued liabilities |
|
|
(5,911) |
|
|
|
(18,015) |
|
Other, including non-cash foreign currency |
|
|
(11,407) |
|
|
|
(24,839) |
|
Net cash used in operating activities - continuing operations |
|
|
(51,780) |
|
|
|
(106,219) |
|
Net cash used in operating activities - discontinued operations |
|
|
- |
|
|
|
(42,452) |
|
Net cash used in operating activities |
|
|
(51,780) |
|
|
|
(148,671) |
|
Cash flows from investing activities: |
|
|
|
|
|
|
||
Purchases of and deposits on property, plant and equipment |
|
|
(3,920) |
|
|
|
(1,946) |
|
Purchases of intangible assets |
|
|
(14) |
|
|
|
(304) |
|
Proceeds on sale of property, plant and equipment |
|
|
4,926 |
|
|
|
83,143 |
|
Redemption of short-term investments |
|
|
30,022 |
|
|
|
72,153 |
|
Net cash outflow on sale or deconsolidation of subsidiaries |
|
|
(6,968) |
|
|
|
- |
|
Net cash inflow on loan receivable |
|
|
28,103 |
|
|
|
367 |
|
Investment in other financial assets |
|
|
(95,335) |
|
|
|
(472) |
|
Other investing activities |
|
|
- |
|
|
|
(10,556) |
|
Net cash (used in) provided by investing activities - continuing operations |
|
|
(43,186) |
|
|
|
142,385 |
|
Net cash provided by investing activities - discontinued operations |
|
|
10,157 |
|
|
|
189 |
|
Net cash (used in) provided by investing activities |
|
|
(33,029) |
|
|
|
142,574 |
|
Cash flows from financing activities: |
|
|
|
|
|
|
||
Proceeds from issuance of common shares and warrants |
|
|
53,854 |
|
|
|
- |
|
Issuance of long-term debt and convertible debentures |
|
|
68,255 |
|
|
|
- |
|
Repayment of long-term debt |
|
|
(11,836) |
|
|
|
(118,277) |
|
Other financing activities |
|
|
(4,498) |
|
|
|
(14,833) |
|
Net cash provided by (used in) financing activities |
|
|
105,775 |
|
|
|
(133,110) |
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
890 |
|
|
|
(4,534) |
|
Net increase (decrease) in cash and cash equivalents |
|
|
21,856 |
|
|
|
(143,741) |
|
Cash and cash equivalents, beginning of period1 |
|
|
170,300 |
|
|
|
677,007 |
|
Cash and cash equivalents, end of period2 |
|
$ |
192,156 |
|
|
$ |
533,266 |
|
1 Includes cash of our discontinued operations of $nil and |
|
|||||||
2 Includes cash of our discontinued operations of $nil and |
|
Schedule 4
Adjusted Gross Margin1 Reconciliation (Non-GAAP Measure) |
|
|||||||
|
|
Three months ended |
|
|||||
(in thousands of Canadian dollars except where indicated; unaudited) |
|
2024 |
|
|
2023 |
|
||
Net revenue |
|
$ |
66,212 |
|
|
$ |
76,258 |
|
|
|
|
|
|
|
|
||
Gross margin, as reported |
|
|
23,031 |
|
|
|
13,762 |
|
Adjusted gross margin1 |
|
$ |
23,031 |
|
|
$ |
13,762 |
|
|
|
|
|
|
|
|
||
Adjusted gross margin percentage1 |
|
|
35 |
% |
|
|
18 |
% |
1 Adjusted gross margin and adjusted gross margin percentage are non-GAAP measures. See "Non-GAAP Measures". |
|
Schedule 5
Adjusted EBITDA 1 Reconciliation (Non-GAAP Measure) |
|
|
|
|
|
|
||
|
|
Three months ended |
|
|||||
(in thousands of Canadian dollars, unaudited) |
|
2024 |
|
|
2023 |
|
||
Net loss from continuing operations |
|
$ |
(129,191) |
|
|
$ |
(10,569) |
|
Income tax expense |
|
|
6,194 |
|
|
|
2,018 |
|
Other (income) expense, net |
|
|
93,889 |
|
|
|
(46,101) |
|
Share-based compensation |
|
|
4,151 |
|
|
|
3,717 |
|
Acquisition, divestiture, and other costs |
|
|
8,627 |
|
|
|
8,904 |
|
Depreciation and amortization2 |
|
|
11,030 |
|
|
|
17,111 |
|
Loss on asset impairment and restructuring |
|
|
20 |
|
|
|
1,934 |
|
Adjusted EBITDA1 |
|
$ |
(5,280) |
|
|
$ |
(22,986) |
|
1Adjusted EBITDA is a non-GAAP measure. See "Non-GAAP Measures". |
|
|||||||
2 From Consolidated Statements of Cash Flows. |
|
|
|
|
|
|
Schedule 6
Free Cash Flow1 Reconciliation (Non-GAAP Measure) |
|
|
|
|
|
|
||
|
|
Three months ended |
|
|||||
(in thousands of Canadian dollars, unaudited) |
|
2024 |
|
|
2023 |
|
||
Net cash used in operating activities - continuing operations |
|
|
(51,780) |
|
|
|
(106,219) |
|
Purchases of and deposits on property, plant and equipment |
|
|
(3,920) |
|
|
|
(1,946) |
|
Free cash flow - continuing operations1 |
|
|
(55,700) |
|
|
|
(108,165) |
|
1Free cash flow is a non-GAAP measure. See "Non-GAAP Measures". |
|
Schedule 7
Segmented Gross Margin and Segmented Adjusted Gross Margin1 Reconciliation (Non-GAAP Measure) |
|
|||||||
|
|
Three months ended |
|
|||||
(in thousands of Canadian dollars except where indicated; unaudited) |
2024 |
|
|
2023 |
|
|||
|
|
|
|
|
|
|
||
Net revenue |
|
$ |
37,678 |
|
|
$ |
39,893 |
|
Gross margin, as reported |
|
|
12,094 |
|
|
|
(268) |
|
Gross margin percentage, as reported |
|
|
32 |
% |
|
|
(1) |
% |
. |
|
|
|
|
|
|
||
Adjusted gross margin1 |
|
$ |
12,094 |
|
|
$ |
(268) |
|
Adjusted gross margin percentage1 |
|
|
32 |
% |
|
|
(1) |
% |
|
|
|
|
|
|
|
||
International markets cannabis segment |
|
|
|
|
|
|
||
Revenue |
|
$ |
10,082 |
|
|
$ |
10,162 |
|
Gross margin, as reported |
|
|
3,625 |
|
|
|
3,481 |
|
Gross margin percentage, as reported |
|
|
36 |
% |
|
|
34 |
% |
. |
|
|
|
|
|
|
||
Adjusted gross margin1 |
|
$ |
3,625 |
|
|
$ |
3,481 |
|
Adjusted gross margin percentage1 |
|
|
36 |
% |
|
|
34 |
% |
|
|
|
|
|
|
|
||
Storz & Bickel segment |
|
|
|
|
|
|
||
Revenue |
|
$ |
18,452 |
|
|
$ |
18,073 |
|
Gross margin, as reported |
|
|
7,312 |
|
|
|
7,707 |
|
Gross margin percentage, as reported |
|
|
40 |
% |
|
|
43 |
% |
|
|
|
|
|
|
|
||
Adjusted gross margin1 |
|
$ |
7,312 |
|
|
$ |
7,707 |
|
Adjusted gross margin percentage1 |
|
|
40 |
% |
|
|
43 |
% |
|
|
|
|
|
|
|
||
This Works segment |
|
|
|
|
|
|
||
Revenue |
|
$ |
- |
|
|
$ |
6,017 |
|
Gross margin, as reported |
|
|
- |
|
|
|
2,895 |
|
Gross margin percentage, as reported |
|
|
0 |
% |
|
|
48 |
% |
. |
|
|
|
|
|
|
||
Adjusted gross margin1 |
|
$ |
- |
|
|
$ |
2,895 |
|
Adjusted gross margin percentage1 |
|
|
0 |
% |
|
|
48 |
% |
|
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Revenue |
|
$ |
- |
|
|
$ |
2,113 |
|
Gross margin, as reported |
|
|
- |
|
|
|
(53) |
|
Gross margin percentage, as reported |
|
|
0 |
% |
|
|
(3) |
% |
|
|
|
|
|
|
|
||
Adjusted gross margin1 |
|
$ |
- |
|
|
$ |
(53) |
|
Adjusted gross margin percentage1 |
|
|
0 |
% |
|
|
(3) |
% |
1 Adjusted gross margin and adjusted gross margin percentage are non-GAAP measures. See "Non-GAAP Measures". |
|
|||||||
|
|
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