HEXO Issues Correction to Press Release Announcing Q4’22 and FY22 Financial Results

Rhea-AI Summary

HEXO Corp. corrected its financial results for the fiscal year ended July 31, 2022, initially released on October 31, 2022. The correction highlighted inaccuracies in the reported "Total net loss and comprehensive loss" for specific periods, while the rest of the data remained unchanged. For Q4 FY22, HEXO reported revenues of $60.23 million, leading to a total net loss of $102.37 million for the year. The correction ensures clarity in HEXO's financial disclosures, maintaining compliance with regulatory standards.

Positive

• Corrected financial figures enhance transparency and compliance.
• Revenue from sales in Q4 FY22 is $60.23 million, indicating potential growth.

Negative

• Total net loss of $102.37 million for FY22 reflects significant financial challenges.
• Reported inaccuracies in financial statements may undermine investor confidence.

This news release constitutes a “designated news release” for the purposes of the Company’s prospectus supplement dated May 2, 2022 to its short form base shelf prospectus dated May 7, 2021 and amended and restated on May 25, 2021.

GATINEAU, Québec, Nov. 01, 2022 (GLOBE NEWSWIRE) -- HEXO Corp. (TSX: HEXO; NASDAQ: HEXO) ("HEXO" or the “Company"), today announced a correction to its press release issued on October 31, 2022 announcing the Company’s financial results for the fiscal year ended July 31, 2022.

In the table of financial results under the heading “Key Financial Results” in the press release, there was an error in the amounts disclosed for the “Total net loss and comprehensive loss” with respect to the three month periods ended April 30, 2022 and July 31, 2021 and for the year ended July 31, 2021. The balance of the information disclosed in the table was correct.

The revised table below is correct and reflects HEXO’s recent income statement for the fourth quarter (“Q4’22”) and fiscal year ended July 31, 2022 ("FY22"), as already disclosed properly in the Company’s management’s discussion and analysis (“MD&A”) and consolidated financial statements (the “FS”) and notes thereto as at and for the year ended July 31, 2022:

Key Financial Results

	For the three months ended							For the years ended
	July 31, 2022		April 30, 2022			July 31, 2021		July 31, 2022		July 31, 2021
	$		$			$		$		$
Revenue from sale of goods	60,227		63,590			53,022		265,418		173,081
Excise taxes	(17,910	)	(18,021		)	(14,365	)	(74,717	)	(49,583		)
Net revenue from sale of goods	42,317		45,569			38,657		190,701		123,498
Ancillary revenue	177		–			103		402		271
Net revenue	42,494		45,569			38,760		191,103		123,769
Cost of goods sold	(83,432	)	(55,179		)	(37,261	)	(282,985	)	(89,594		)
Gross loss before fair value adjustments	(40,938	)	(9,610		)	1,499		(91,882	)	34,175
Fair value adjustments1	5,075		4,335			1,735		16,210		14,623
Gross (loss)/profit	(35,863	)	(5,275		)	3,234		(75,672	)	48,798
Operating expenses	(73,903	)	(127,704		)	(63,116	)	(992,053	)	(134,293		)
Loss from operations	(109,766	)	(132,979		)	(59,882	)	(1,067,725	)	(85,495		)
Other expenses and losses2	3,592		(19,723		)	(9,630	)	(44,696	)	(29,664		)
Loss before tax	(106,174	)	(152,702		)	(69,512	)	(1,112,421	)	(115,159		)
Current and deferred tax recovery	5,787		7,697			397		38,813		397
Other comprehensive income	(1,980	)	(1,658		)	1,156		17,323		1,152
Total net loss and comprehensive loss	(102,367	)	(146,663		)	(67,959	)	(1,056,285	)	(113,610		)
1 Realized fair value amounts on inventory sold and unrealized gain on changes in fair value of biological assets.
2 Net interest expenses and non-operating income (expenses)

The original press release can be found here.

The following press release should be read in conjunction with the MD&A and FS. Additional information about HEXO is available on the Company’s profile on SEDAR at www.sedar.com and EDGAR at www.sec.gov, including the Company’s Annual Information Form for the year ended July 31, 2022 dated October 31, 2022.

About HEXO Corp.
HEXO is an award-winning licensed producer of innovative products for the global cannabis market. HEXO serves the Canadian recreational market with a brand portfolio including HEXO, Redecan, UP Cannabis, Original Stash, 48North, Trail Mix, Bake Sale and Latitude brands, and the medical market in Canada and Israel. The Company also serves the Colorado market through its Powered by HEXO^® strategy and Truss CBD USA, a joint venture with Molson-Coors. With the completion of HEXO's acquisitions of Redecan and 48North, HEXO is a leading cannabis products company in Canada by recreational market share. For more information, please visit hexocorp.com.

For media or investor inquiries please contact:
Hayley Suchanek, Kaiser & Partners
hayley.suchanek@kaiserpartners.com

FAQ

What are HEXO's corrected financial results for FY22?

HEXO reported a total net loss of $102.37 million for FY22, with Q4 revenues at $60.23 million.

What was the reason for HEXO's press release correction on November 1, 2022?

The correction addressed inaccuracies in the reported "Total net loss and comprehensive loss" for the fiscal year ended July 31, 2022.

How does HEXO's Q4 FY22 revenue compare to previous periods?

HEXO's Q4 FY22 revenue of $60.23 million shows an increase from previous periods, reflecting potential growth.

What impact do the corrections have on HEXO's investor outlook?

While the correction improves transparency, the significant net loss reported may still raise concerns among investors.