SNDL Reports Second Quarter 2024 Financial and Operational Results
SNDL Inc. (NASDAQ: SNDL) reported its Q2 2024 financial results, highlighting record gross margin and improved profitability. Key points include:
- Net revenue of $228.1 million, down 1.6% year-over-year
- Record gross margin of 25.5%, up from 22.4% in Q2 2023
- Operating loss reduced to $4.8 million, an 84% improvement
- Free cash flow improved by 70% to negative $5.6 million
- $783.6 million in unrestricted cash, marketable securities, and investments
SNDL's Cannabis Retail and Operations segments showed strong growth, offsetting softness in Liquor Retail. The company continues to focus on margin expansion, data licensing, and strategic acquisitions to drive profitable growth.
SNDL Inc. (NASDAQ: SNDL) ha riportato i risultati finanziari del Q2 2024, evidenziando un margine lordo record e una maggiore redditività. I punti chiave includono:
- Fatturato netto di 228,1 milioni di dollari, in calo dell'1,6% rispetto all'anno precedente
- Margine lordo record del 25,5%, in aumento rispetto al 22,4% nel Q2 2023
- Perdita operativa ridotta a 4,8 milioni di dollari, un miglioramento dell'84%
- Flusso di cassa libero migliorato del 70% a -5,6 milioni di dollari
- 783,6 milioni di dollari in contante libero, titoli commerciabili e investimenti
I segmenti Retail e Operazioni di Cannabis di SNDL hanno mostrato una forte crescita, compensando un calo nel Retail di Liquori. L'azienda continua a concentrarsi sull'espansione del margine, sul licensing dei dati e su acquisizioni strategiche per guidare una crescita redditizia.
SNDL Inc. (NASDAQ: SNDL) informó sobre sus resultados financieros del Q2 2024, destacando un margen bruto récord y una mejora en la rentabilidad. Los puntos clave incluyen:
- Ingresos netos de 228,1 millones de dólares, una caída del 1,6% en comparación con el año anterior
- Margen bruto récord del 25,5%, en aumento desde el 22,4% en el Q2 2023
- Pérdida operativa reducida a 4,8 millones de dólares, una mejora del 84%
- Flujo de caja libre mejorado en un 70% a -5,6 millones de dólares
- 783,6 millones de dólares en caja no restringida, valores mobiliarios y inversiones
Los segmentos de Retail y Operaciones de Cannabis de SNDL mostraron un fuerte crecimiento, compensando la debilidad en el Retail de Licores. La empresa continúa enfocándose en la expansión de márgenes, la concesión de licencias de datos y adquisiciones estratégicas para impulsar el crecimiento rentable.
SNDL Inc. (NASDAQ: SNDL)는 Q2 2024 재무 결과를 보고하면서 기록적인 총 마진과 개선된 수익성을 강조했습니다. 주요 사항은 다음과 같습니다:
- 순 매출 2억 2810만 달러, 전년 대비 1.6% 감소
- 기록적인 총 마진 25.5%, 2023년 2분기 22.4%에서 상승
- 운영 손실을 480만 달러로 축소, 84% 개선
- 자율 현금 흐름이 70% 개선되어 -560만 달러
- 7억 8360만 달러의 제한 없는 현금, 시장성있는 증권 및 투자
SNDL의 대마초 소매 및 운영 부문은 강력한 성장을 보여주며 주류 소매의 부진을 상쇄했습니다. 회사는 수익성 성장 촉진을 위해 마진 확장, 데이터 라이센스 및 전략적 인수에 계속 집중하고 있습니다.
SNDL Inc. (NASDAQ: SNDL) a annoncé ses résultats financiers pour le Q2 2024, mettant en avant une marge brute record et une rentabilité améliorée. Les points clés incluent :
- Chiffre d'affaires net de 228,1 millions de dollars, en baisse de 1,6% par rapport à l'année précédente
- Marge brute record de 25,5%, en hausse par rapport à 22,4% au Q2 2023
- Perte d'exploitation réduite à 4,8 millions de dollars, soit une amélioration de 84%
- Flux de trésorerie libre amélioré de 70% à -5,6 millions de dollars
- 783,6 millions de dollars en liquidités non restreintes, valeurs mobilières et investissements
Les segments de vente au détail et d'opérations de cannabis de SNDL ont montré une forte croissance, compensant la faiblesse dans le secteur des spiritueux. L'entreprise continue de se concentrer sur l'expansion des marges, la licence des données et des acquisitions stratégiques pour stimuler une croissance rentable.
SNDL Inc. (NASDAQ: SNDL) hat die Finanz Ergebnisse für das Q2 2024 berichtet und dabei einen rekordverdächtigen Bruttomargin und verbesserte Rentabilität hervorgehoben. Wichtige Punkte umfassen:
- Nettoeinnahmen von 228,1 Millionen Dollar, ein Rückgang von 1,6% im Jahresvergleich
- Rekord-Bruttomargin von 25,5%, ein Anstieg von 22,4% im Q2 2023
- Operativer Verlust auf 4,8 Millionen Dollar reduziert, eine Verbesserung um 84%
- Freier Cashflow um 70% verbessert auf -5,6 Millionen Dollar
- 783,6 Millionen Dollar in ungebundenem Bargeld, veräußerten Wertpapieren und Investitionen
Die Cannabis-Einzelhandels- und Betriebssegmente von SNDL zeigten ein starkes Wachstum, das die Schwäche im Spirituosen-Einzelhandel ausglich. Das Unternehmen konzentriert sich weiterhin auf Margenexpansion, Datenlizenzierung und strategische Akquisitionen, um profitables Wachstum voranzutreiben.
- Record gross margin of 25.5%, up from 22.4% in Q2 2023
- Operating loss reduced by 84% to $4.8 million
- Free cash flow improved by 70% to negative $5.6 million
- Strong growth in Cannabis Retail and Operations segments
- Expansion of data licensing program, increasing revenue to $4.2 million in Q2
- Acquisition of Delta 9's principal indebtedness for $28.1 million
- $783.6 million in unrestricted cash, marketable securities, and investments with no outstanding debt
- Net revenue decreased by 1.6% year-over-year to $228.1 million
- Liquor Retail segment experienced market softness with a 7.3% reduction in net revenue
- Same-store sales for Liquor Retail decreased by 8.4%
- Overall negative cash flow of $6.0 million in Q2 2024
SNDL's Q2 2024 results demonstrate significant progress towards profitability, despite some challenges. The company reported a record gross margin of
Key financial highlights include:
- Net revenue of
$228.1 million , down1.6% year-over-year but up15.4% quarter-over-quarter - Gross profit of
$58.2 million , a12% improvement year-over-year - Operating loss reduced to
$4.8 million , an84% improvement from Q2 2023 - Free cash flow improved by
70% to negative$5.6 million
The company's strong liquidity position, with
The diversified business model, spanning Liquor Retail, Cannabis Retail, Cannabis Operations and Investments, provides multiple revenue streams and potential synergies. The improvement in the Cannabis Operations segment is particularly noteworthy, with a
Overall, while SNDL is making progress, it's important for investors to monitor the company's path to sustained profitability and positive free cash flow in the coming quarters.
SNDL's Q2 2024 results reveal interesting trends in the Canadian cannabis and liquor markets. In the Liquor Retail segment, we see a
The Cannabis Retail segment shows more robust growth, with a
SNDL's data licensing programs in both Liquor and Cannabis Retail are proving to be valuable assets. The Cannabis Retail data program generated
The company's expansion into British Columbia with the Value Buds brand and its continued store openings indicate a focus on market share growth. However, the challenging liquor retail environment suggests that SNDL may need to continue innovating to drive traffic and sales in this segment.
The Cannabis Operations segment's
Overall, SNDL's results reflect a company adapting to evolving market conditions, with a clear focus on operational efficiency and strategic growth initiatives.
From a legal perspective, SNDL's Q2 2024 results highlight several important developments. The company's expansion into new markets, such as British Columbia with the Value Buds brand, underscores the need for careful navigation of provincial regulations governing cannabis retail.
The pursuit of EU-GMP certification for the Atholville facility is a significant move towards international expansion. This certification is important for entering highly regulated European markets and demonstrates SNDL's commitment to meeting stringent quality and safety standards.
The SunStream USA Group's progress in acquiring equity positions in U.S. cannabis assets, following Nasdaq's review, is a notable development. This structure allows SNDL to indirectly participate in the U.S. cannabis market while complying with federal laws and Nasdaq listing rules. However, investors should be aware that this arrangement could be subject to regulatory scrutiny and potential changes in U.S. cannabis laws.
SNDL's monitoring of potential U.S. reclassification of marijuana from Schedule I to Schedule III is prudent. While this change wouldn't directly affect SNDL's Canadian operations, it could have significant implications for its U.S. investments through SunStream.
The company's involvement in restructuring and acquiring assets from companies like Parallel and Skymint highlights the complex legal landscape of the cannabis industry. These transactions often involve navigating bankruptcy laws, regulatory approvals and potential litigation.
Overall, SNDL's legal strategy appears focused on compliance, strategic expansion and positioning itself for potential regulatory changes in key markets. However, the company must remain vigilant in managing legal risks associated with its diverse operations and investments in this rapidly evolving industry.
The Company reports record Gross Margin and material improvements in profitability and Free Cash Flow year-over-year
SNDL has also posted a supplemental investor presentation on its website, found at https://sndl.com.
The Company will hold a conference call and webcast presentation at 10:00 a.m. EDT (8:00 a.m. MDT) on Friday, August 2, 2024. The conference call details can be found below.
SECOND QUARTER 2024 FINANCIAL AND OPERATIONAL HIGHLIGHTS
- Net revenue for the second quarter of 2024 was
, compared to$228.1 million in the second quarter of 2023, a decrease of$231.9 million 1.6% . This decrease was driven by market softness in the Liquor Retail segment, while both Cannabis Retail and Cannabis Operations segments posted strong growth. This represents an increase of15.4% in net revenue quarter on quarter, as compared to net revenue of in the first quarter of 2024, mainly attributed to business seasonality.$197.8 million - Achieved a gross profit of
, representing a record gross margin of$58.2 million 25.5% of sales in the second quarter of 2024, up from22.4% in the second quarter of 2023. The12% improvement in gross profit year over year, or15.4% improvement quarter on quarter, highlights the continuous success of the Company's margin improvement initiatives, including the data sales programs, mix optimization and supply chain productivity initiatives. - Cash flow was negative
in the second quarter of 2024, compared to negative$6.0 million in the second quarter of 2023, a$27.8 million 78% improvement driven by the increase in profitability and smaller working capital build up. - Free cash flow in the second quarter of 2024 was negative
, compared to negative$5.6 million in the second quarter of 2023, a$18.5 million 70% improvement driven by profitability and working capital management improvements. - Operating loss was
for the second quarter of 2024, compared to a loss of$4.8 million in the second quarter of 2023, an$29.6 million 84% improvement primarily driven by margin expansion and lower Selling, General, and Administrative expenses. - Second quarter results reflect dynamic growth in our Cannabis businesses, confirming the increased profitability we reported in the first quarter of 2024, despite softness in Liquor sales. The following highlights are recent examples of initiatives driving SNDL towards sustained profitable growth:
- Acquired 4 Dutch Love stores and launched the Value Buds brand in
British Columbia by rebranding 3 of these stores. - Continued the expansion of proprietary data licensing in both Cannabis and Liquor Retail, increasing data sales from
in the first quarter of 2024 to$3.8 million in the second quarter.$4.2 million - Increased SNDL's Liquor Retail segment private label revenue by
17% year-to-date, reaching11.8% share of revenue. - Completed the acquisition of the principal indebtedness of Delta 9 for a purchase price of
in early July, becoming its senior secured creditor with a first priority security interest in all assets of Delta 9 and certain of its subsidiaries.$28.1 million - Entered into a stalking horse purchase agreement for Indiva Limited's business and assets.
- Delivered the first international export contract of 2024, with the shipment of bulk flower to
Israel .
- Acquired 4 Dutch Love stores and launched the Value Buds brand in
- The Company had
of unrestricted cash, marketable securities and investments and no outstanding debt, with$783.6 million of unrestricted cash as of June 30, 2024. SNDL has not raised cash through share offerings since June 2021.$182.9 million
"The second quarter of 2024 confirms our progress and path to profitability, including an all-time record gross margin of
SECOND QUARTER 2024 KEY FINANCIAL METRICS
OPERATING SEGMENTS | ||||||||||||||||||
( | Liquor Retail | Cannabis Retail | Cannabis Operations | Investments | Corporate | Total | ||||||||||||
Three months ended June 30, 2024 | ||||||||||||||||||
Net revenue | 140,560 | 76,069 | 24,976 | — | (13,478) | 228,127 | ||||||||||||
Gross profit | 35,713 | 19,268 | 3,183 | — | — | 58,164 | ||||||||||||
Operating income (loss) | 8,481 | 3,902 | (1,916) | 8,456 | (23,757) | (4,834) | ||||||||||||
Adjusted operating income (loss) (1) | 8,481 | 3,902 | (1,916) | 8,456 | (23,536) | (4,613) | ||||||||||||
Three months ended June 30, 2023 | ||||||||||||||||||
Net revenue | 151,690 | 71,881 | 20,940 | — | (12,595) | 231,916 | ||||||||||||
Gross profit | 35,360 | 17,780 | (1,207) | — | — | 51,933 | ||||||||||||
Operating income (loss) | 8,207 | 2,335 | (14,206) | (1,660) | (24,242) | (29,566) | ||||||||||||
Adjusted operating income (loss) (1) | 8,207 | 2,335 | (12,924) | (1,660) | (21,482) | (25,524) |
(1) | Adjusted operating income (loss) is a specified financial measure that does not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures reported by other companies. See "Non-IFRS Measures – Adjusted operating income (loss)" below. |
SECOND QUARTER 2024 RESULTS
SNDL's business is operated and reported in four segments: Liquor Retail, Cannabis Retail, Cannabis Operations and Investments.
Liquor Retail
SNDL is
- Net revenue for Liquor Retail sales was
in the second quarter of 2024, compared to$140.6 million for the same period in the year prior. The$151.7 million 7.3% reduction year-over-year was driven by the shift of Easter timing, as well as overall market slow-down in customer traffic. - Same-store sales decreased by
8.4% for stores operating in the second quarters of 2023 and 2024. Same-store sales refer to the revenue generated by the Company's existing retail liquor locations, which operated during the current and comparative periods. - Gross profit for Liquor Retail was
, or$35.7 million 25.4% of sales, in the second quarter of 2024, compared to , or$35.4 million 23.3% of sales, in the second quarter of 2023. The Company achieved record gross margin for its Liquor Retail segment in May 2024, with margins reaching25.5% . This improvement was largely driven by productivity in procurement and pricing optimization initiatives. - Operating income for Liquor Retail was
in the second quarter of 2024, compared to$8.5 million in the second quarter of 2023, a$8.2 million 3.7% improvement despite lower traffic. - SNDL's proprietary data licensing program for Liquor Retail which launched in the first quarter of 2024, saw a
35% increase compared to the prior quarter. - Private label sales, a substantial driver of margin accretive profitable growth, increased by
10.1% compared to the second quarter of 2023, and private label sales as a percent of total sales increased from10.1% in the second quarter of 2023 to11.1% in the same quarter of 2024. This increase is driven by further additions to the private label offerings, particularly new launches within our beer category, which has seen a16.3% increase in sales in quarter 2 of 2024 compared to the same period last year. - The Company opened its 13th Wine and Beyond location in
Airdrie, Alberta just before Easter this year, to further build on the success of the experiential, destination approach of the banner.
As of August 1, 2024, the Ace Liquor store count was 135, the Liquor Depot store count was 20, and the Wine and Beyond store count was 13.
Cannabis Retail
With its
- Net revenue for Cannabis Retail in the second quarter of 2024 was
, compared to$76.1 million in the second quarter of 2023. The$71.9 million 5.8% increase year-over-year was driven by productivity improvements and new stores opened throughout the year. - Same-store sales increased
2.4% for stores operating in the second quarters of 2023 and 2024, an improvement from the2.1% same-store sales growth rate in the first quarter. Same-store sales refer to the revenue generated by the Company's existing retail cannabis locations, which operated during the current and comparative periods. - Gross profit for Cannabis Retail was
, or$19.3 million 25.3% of sales, in the second quarter of 2024, compared to , or$17.8 million 24.7% of sales, in the second quarter of 2023, an8.4% increase year-over-year. The increase showcases the Company's efforts in continued margin expansion initiatives, including growth of its data program, in-store productivity programs, and the continued development of private label offerings. - Operating income for Cannabis Retail was
in the second quarter of 2024, compared to$3.9 million in the second quarter of 2023, an increase of$2.3 million 67.1% year-over-year. - SNDL's proprietary data licensing program generated revenue of
for the second quarter of 2024, an increase of$3.8 million 46.2% or from the same period in the year prior.$1.2 million - In June and early July, SNDL launched the Value Buds brand in
British Columbia with the rebranding of 3 stores acquired through the Dutch Love transaction. - Subsequent to quarter end, the Company opened 2 new stores under the Value Buds banner, one in
Alberta and the other inOntario .
As of August 1, 2024, the Spiritleaf store count was 82 (20 corporate stores and 62 franchise stores), the Superette store count was 4 corporate stores, the Firesale store count was 1 corporate store, and the Value Buds store count was 100 corporate stores.
Cannabis Operations
SNDL has a diverse brand portfolio from value to premium, emphasizing premium inhalable formats and a full suite of 2.0 products. With enhanced procurement capabilities and plans to continue evolving toward a cost-effective cultivation and manufacturing operation, the Cannabis Operations segment is a key enabler of SNDL's vertical integration strategy. Cannabis Operations include the operations of The Valens Company Inc. as of January 18, 2023.
- Net revenue for Cannabis Operations for the second quarter of 2024 was
, up$25.0 million 19% from in the second quarter of 2023, mainly as a result of increasing provincial board and Business-to-Business distribution and a continued focus on consumer innovation, quality and operational efficiencies.$20.9 million - Gross profit for the segment in the second quarter of 2024 of
, an increase of$3.2 million , from negative$4.4 million in the second quarter of 2023. The$1.2 million 367% improvement in gross profit is largely attributable to several productivity initiatives, including the strategic decision to close theOlds, Alberta facility. - The Company continued ramping-up cultivation production at its
Atholville, New Brunswick facility, to ensure stable and consistent supply for both its retail Business-to-Business and international partners as demand increases. - Operating income for the second quarter of 2024 improved by
over the same period in the prior year, going from negative$12.3 million to negative$14.2 million . The substantial increase in operating income results from margin expansion, reduced overhead spending, and operational efficiencies.$1.9 million - Following SNDL's inaugural international export contract with IM Cannabis Corp in
Israel , the Company is pursuing EU-GMP certification at itsAtholville facility to expand its international export footprint further and increase B2B opportunities within emerging global markets such as theUK andGermany .
Investments
- As of June 30, 2024, the Company has deployed capital to a portfolio of cannabis-related investments with a carrying value of
, including$600.5 million to SunStream Bancorp Inc. ("SunStream").$571.2 million - In the second quarter of 2024, the investment portfolio generated positive operating income of
compared to a loss of$8.5 million in the same quarter of the prior year.$1.7 million - SunStream is a joint venture sponsored by SNDL. During 2023, SunStream directed the formation of the SunStream
USA group of companies ("SunStreamUSA Group") in connection with the restructuring of certain loans provided by SunStream. SunStreamUSA Group is anticipated to be aU.S. platform with one or more independent third-party investors, which will be independently managed and governed. - On May 2, 2024, SNDL announced that SunStream
USA Group would proceed with acquiring equity positions inU.S. cannabis assets following the completion of its review by Nasdaq, which confirmed that the proposed structure meets all applicable laws and Nasdaq listing rules. - At the end of the second quarter of 2024, the credit portfolio controlled by SunStream comprised five investments: Jushi Holdings Inc., SKYMINT Brands ("Skymint"), Ascend Wellness Holdings, Surterra Holdings, Inc. d/b/a Parallel ("Parallel"), and Columbia Care Inc.
- Earlier in July 2024, Ascend Wellness Holdings repaid approximately
80% of their outstanding loan balance with SunStream, amounting toUS . On July 31st, 2024, Jushi Holdings Inc. repaid their full outstanding balance of$12 million with SunStream. Both repayments occurred several months ahead of the maturity date, increasing SNDL's cash liquidity and enabling the deployment of additional capital to support our growth agenda.$53 million - The previously announced transactions to acquire certain operations and assets of Parallel and Skymint are anticipated to close in 2024 and are subject to certain conditions and regulatory approvals.
- SNDL continues to monitor local and international regulatory changes, including the potential US reclassification of marijuana from a Schedule I drug to Schedule III drug under the
U.S. Controlled Substances Act. This decision does not directly affect SNDL's operations, which are located solely inCanada , though it is expected to have a favourable effect on the SunStream joint venture investments inthe United States .
Equity Position
of unrestricted cash, marketable securities and investments, including investments in equity-accounted investees, and no outstanding debt at June 30, 2024, resulting in a net book value of$783.6 million .$1.2 billion - On November 13, 2023, the Company announced that its board of directors had approved a renewal of the share repurchase program upon its expiry on November 20, 2023. The Company's share repurchase program continues to be available to lower the outstanding share float. SNDL will continue to assess opportunities to utilize the program to the extent that management believes it is in the best interest of SNDL's shareholders. For the three months ended June 30, 2024, the Company did not purchase common shares for cancellation.
This press release is intended to be read in conjunction with the Company's condensed consolidated interim financial statements and the notes thereto for the three and six months ended June 30, 2024, and the accompanying Management's Discussion and Analysis. These documents are available under the Company's profile on SEDAR+ at www.sedarplus.ca and EDGAR at www.sec.gov/edgar.shtml.
CONFERENCE CALL
The Company will hold a conference call and webcast presentation at 10:00 a.m. EDT (8:00 a.m. MDT) on Friday, August 2, 2024.
WEBCAST ACCESS
To access the live webcast of the call, please visit the following link:
https://edge.media-server.com/mmc/p/7jsrnxfd
REPLAY
A replay of the webcast will be available at https://sndl.com/financials/quarterly-results/default.aspx
ABOUT SNDL INC.
SNDL is a public company whose shares are traded on the Nasdaq under the symbol "SNDL." SNDL is the largest private-sector liquor and cannabis retailer in
Forward-Looking Information Cautionary Statement
This news release includes statements containing certain "forward-looking information" within the meaning of applicable securities law ("forward-looking statements"), including, but not limited to, statements regarding the Company's operational goals, the Company's margin improvement initiatives, the Company's ability to achieve long-term, sustainable profitability, growth and efficiencies, the Company's long-term strategic plan, expectations with respect to the restructuring project, the benefits of the Company's Investment Segment portfolio, expectations with respect to sharing information with investors, the Company's approach to its Wine and Beyond banner, the Company's retail strategy, expectations with respect to the Company's Cannabis Operations segment, the Company's vertical integration strategy, expectations with respect to the Company's pursuant of EU-GMP certification, expectations with respect to the ability of the Company's to expand its international export footprint, the Company's proprietary data licensing program, expansion of product offerings (including the expected expansion of the Company's private labels), performance of the Company's investments, including through the SunStream joint venture and SunStream
Condensed Consolidated Interim Statement of Loss and Comprehensive Loss
(Unaudited – expressed in thousands of Canadian dollars, except per share amounts)
Three months ended June 30 | ||||||||
2024 | 2023 | |||||||
Net revenue | 228,127 | 231,916 | ||||||
Cost of sales | 169,963 | 179,983 | ||||||
Gross profit | 58,164 | 51,933 | ||||||
Investment income (loss) | 3,204 | (599) | ||||||
Share of profit of equity-accounted investees | 5,252 | (936) | ||||||
General and administrative | 48,036 | 52,727 | ||||||
Sales and marketing | 3,439 | 4,104 | ||||||
Research and development | 109 | 20 | ||||||
Depreciation and amortization | 13,519 | 13,443 | ||||||
Share-based compensation | 4,883 | 3,893 | ||||||
Restructuring (recovery) costs | 221 | 4,042 | ||||||
Asset impairment | 919 | 1,658 | ||||||
Loss on disposition of assets | 328 | 77 | ||||||
Operating income (loss) | (4,834) | (29,566) | ||||||
Other income (expenses) | (1,417) | (422) | ||||||
Loss before income tax | (6,251) | (29,988) | ||||||
Income tax recovery | 1,284 | — | ||||||
Net loss from continuing operations | (4,967) | (29,988) | ||||||
Net loss from discontinued operations | — | (3,170) | ||||||
Net loss | (4,967) | (33,158) | ||||||
Equity-accounted investees - share of other comprehensive income (loss) | 4,300 | (11,621) | ||||||
Gain on translation of foreign operations | — | (5) | ||||||
Comprehensive income (loss) | (667) | (44,784) | ||||||
Net loss from continuing operations attributable to: | ||||||||
Owners of the Company | (5,772) | (29,350) | ||||||
Non-controlling interest | 805 | (638) | ||||||
(4,967) | (29,988) | |||||||
Net loss attributable to: | ||||||||
Owners of the Company | (5,772) | (32,520) | ||||||
Non-controlling interest | 805 | (638) | ||||||
(4,967) | (33,158) | |||||||
Comprehensive income (loss) attributable to: | ||||||||
Owners of the Company | (1,472) | (44,146) | ||||||
Non-controlling interest | 805 | (638) |
Condensed Consolidated Interim Statement of Financial Position
(Unaudited – expressed in thousands of Canadian dollars)
As at | June 30, 2024 | December 31, 2023 | ||||
Assets | ||||||
Current assets | ||||||
Cash and cash equivalents | 182,934 | 195,041 | ||||
Restricted cash | 19,972 | 19,891 | ||||
Marketable securities | 156 | 225 | ||||
Accounts receivable | 22,361 | 27,059 | ||||
Biological assets | 868 | 429 | ||||
Inventory | 132,912 | 129,060 | ||||
Prepaid expenses and deposits | 19,303 | 22,464 | ||||
Investments | 28,514 | 3,400 | ||||
Assets held for sale | 19,051 | 6,375 | ||||
Net investment in subleases | 2,819 | 2,970 | ||||
428,890 | 406,914 | |||||
Non-current assets | ||||||
Long-term deposits and receivables | 6,232 | 4,837 | ||||
Right of use assets | 119,473 | 129,679 | ||||
Property, plant and equipment | 132,362 | 152,916 | ||||
Net investment in subleases | 16,572 | 18,396 | ||||
Intangible assets | 73,961 | 73,149 | ||||
Investments | 835 | 29,660 | ||||
Equity-accounted investees | 571,178 | 538,331 | ||||
Goodwill | 124,552 | 119,282 | ||||
Total assets | 1,474,055 | 1,473,164 | ||||
Liabilities | ||||||
Current liabilities | ||||||
Accounts payable and accrued liabilities | 62,389 | 68,210 | ||||
Lease liabilities | 32,618 | 30,537 | ||||
Derivative warrants | 3,900 | 4,400 | ||||
98,907 | 103,147 | |||||
Non-current liabilities | ||||||
Lease liabilities | 124,994 | 136,492 | ||||
Other liabilities | 6,236 | 4,185 | ||||
Total liabilities | 230,137 | 243,824 | ||||
Shareholders' equity | ||||||
Share capital | 2,380,753 | 2,375,950 | ||||
Warrants | 667 | 2,260 | ||||
Contributed surplus | 79,568 | 73,014 | ||||
Contingent consideration | 2,279 | 2,279 | ||||
Accumulated deficit | (1,269,177) | (1,260,851) | ||||
Accumulated other comprehensive income | 33,751 | 19,417 | ||||
Total shareholders' equity | 1,227,841 | 1,212,069 | ||||
Non-controlling interest | 16,077 | 17,271 | ||||
Total liabilities and shareholders' equity | 1,474,055 | 1,473,164 |
Condensed Consolidated Interim Statement of Cash Flows
(Unaudited – expressed in thousands of Canadian dollars)
Three months ended June 30 | ||||||||
2024 | 2023 | |||||||
Cash provided by (used in): | ||||||||
Operating activities | ||||||||
Net loss for the period | (4,967) | (33,158) | ||||||
Adjustments for: | ||||||||
Income tax recovery | (1,284) | — | ||||||
Interest and fee income | (3,218) | (3,421) | ||||||
Change in fair value of biological assets | (336) | 1,413 | ||||||
Share-based compensation | 4,883 | 3,893 | ||||||
Depreciation and amortization | 14,139 | 14,674 | ||||||
Loss on disposition of assets | 328 | 77 | ||||||
Inventory impairment and obsolescence | 1,069 | 4,291 | ||||||
Finance costs, net | 2,157 | 2,458 | ||||||
Change in estimate of fair value of derivative warrants | (1,800) | (2,240) | ||||||
Unrealized foreign exchange loss | 51 | (72) | ||||||
Asset impairment | 919 | 1,658 | ||||||
Share of (profit) of equity-accounted investees | (5,252) | 936 | ||||||
Realized loss on settlement of marketable securities | — | 48,988 | ||||||
Unrealized (gain) loss on marketable securities | 14 | (44,968) | ||||||
Proceeds from settlement of marketable securities | — | 3,437 | ||||||
Interest received | 2,649 | 3,217 | ||||||
Change in non-cash working capital | (4,650) | (14,193) | ||||||
Net cash provided by (used in) operating activities from continuing operations | 4,702 | (13,010) | ||||||
Net cash provided by operating activities from discontinued operations | — | 4,167 | ||||||
Net cash provided by (used in) operating activities | 4,702 | (8,843) | ||||||
Investing activities | ||||||||
Additions to property, plant and equipment | (1,190) | (1,247) | ||||||
Additions to intangible assets | — | (39) | ||||||
Changes to investments | 1,235 | 125 | ||||||
Changes to equity-accounted investees | — | (9,443) | ||||||
Proceeds from disposal of property, plant and equipment | 188 | 55 | ||||||
Acquisitions, net of cash acquired | (1,654) | — | ||||||
Change in non-cash working capital | 75 | 1,586 | ||||||
Net cash used in investing activities from continuing operations | (1,346) | (8,963) | ||||||
Net cash used in investing activities from discontinued operations | — | — | ||||||
Net cash used in investing activities | (1,346) | (8,963) | ||||||
Financing activities | ||||||||
Change in restricted cash | 150 | (76) | ||||||
Payments on lease liabilities, net | (9,706) | (10,116) | ||||||
Proceeds from common shares, net of costs | (57) | — | ||||||
Issuance of common shares by subsidiaries | 174 | — | ||||||
Change in non-cash working capital | 63 | 200 | ||||||
Net cash used in financing activities from continuing operations | (9,376) | (9,992) | ||||||
Net cash used in financing activities from discontinued operations | — | — | ||||||
Net cash used in financing activities | (9,376) | (9,992) | ||||||
Change in cash and cash equivalents | (6,020) | (27,798) | ||||||
Cash and cash equivalents, beginning of period | 188,954 | 213,253 | ||||||
Cash and cash equivalents, end of period | 182,934 | 185,455 |
NON-IFRS MEASURES
Certain specified financial measures in this news release are non-IFRS measures. These terms are not defined by IFRS and, therefore, may not be comparable to similar measures reported by other companies. These non-IFRS financial measures should not be considered in isolation or as an alternative for or superior to measures of performance prepared in accordance with IFRS. These measures are presented and described in order to provide shareholders and potential investors with additional measures in understanding the Company's operating results in the same manner as the management team.
ADJUSTED OPERATING INCOME (LOSS)
Adjusted operating income (loss) is a non-IFRS financial measure which the Company uses to evaluate its operating performance. Adjusted operating income (loss) provides information to investors, analysts, and others to aid in understanding and evaluating the Company's operating results in a similar manner to its management team. The Company defines adjusted operating income (loss) as operating income (loss) less restructuring costs (recovery), goodwill and intangible asset impairments and asset impairments triggered by restructuring activities.
The following tables reconcile adjusted operating income (loss) to operating income (loss) for the periods noted.
( | Liquor Retail | Cannabis Retail | Cannabis Operations | Investments | Corporate | Total | ||||||||||||
Three months ended June 30, 2024 | ||||||||||||||||||
Operating income (loss) | 8,481 | 3,902 | (1,916) | 8,456 | (23,757) | (4,834) | ||||||||||||
Adjustments: | ||||||||||||||||||
Restructuring costs (recovery) | — | — | — | — | 221 | 221 | ||||||||||||
Adjusted operating income (loss) | 8,481 | 3,902 | (1,916) | 8,456 | (23,536) | (4,613) |
( | Liquor Retail | Cannabis Retail | Cannabis Operations | Investments | Corporate | Total | ||||||||||||
Three months ended June 30, 2023 | ||||||||||||||||||
Operating income (loss) | 8,207 | 2,335 | (14,206) | (1,660) | (24,242) | (29,566) | ||||||||||||
Adjustments: | ||||||||||||||||||
Restructuring costs | — | — | 1,282 | — | 2,760 | 4,042 | ||||||||||||
Adjusted operating income (loss) | 8,207 | 2,335 | (12,924) | (1,660) | (21,482) | (25,524) |
FREE CASH FLOW
Free cash flow is a non-IFRS financial measure which the Company uses to evaluate its financial performance. Free cash flow provides information which management believes to be useful to investors, analysts and others in understanding and evaluating the Company's ability to generate positive cash flows as it removes cash used for non-operational items. The Company defines free cash flow as the total change in cash and cash equivalents less cash used for common share repurchases, dividends (if any), changes to debt instruments, changes to long-term investments, net cash used for acquisitions plus cash provided by dispositions (if any).
The following table reconciles free cash flow to change in cash and cash equivalents for the periods noted.
Three months ended June 30 | ||||||
( | 2024 | 2023 | ||||
Change in cash and cash equivalents | (6,020) | (27,798) | ||||
Adjustments: | ||||||
Repurchase of common shares | — | — | ||||
Changes to long-term investments | (1,235) | 9,318 | ||||
Acquisitions, net of cash acquired | 1,654 | — | ||||
Free cash flow | (5,601) | (18,480) |
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SOURCE SNDL Inc.
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