Company focused on world-class, diversified production
capacity; building the best brands; and driving forward the Company
and sector through integrity and leadership
Company's announced expansion plans in six provinces and six
countries are well funded; Over 2.4 million square feet of indoor
and greenhouse production under development across Canada
Ongoing investment in corporate infrastructure, operations,
marketing and sales functions strengthening company's position in
Canadian regulated recreational and international medical
markets
Operations increasing cannabis supply for sale in all
formats; Inventory being scaled to ensure sufficient near term
supply for expected market demand
Increased asset utilization and best practice sharing across
platforms leading to falling COGs while maintaining GMP-certified
production facilities and high-quality flower and value-add
products with increasing average selling prices
Historic supply MOU signed with the province of New Brunswick
SMITHS FALLS, ON, Nov. 14, 2017 /CNW/ - Canopy Growth Corporation
(TSX: WEED) ("Canopy Growth" or "the Company") today released its
consolidated financial results for the second quarter ended
September 30, 2017. All financial
information in this press release is reported in Canadian dollars,
unless otherwise indicated.
Subsequent to quarter end, Canopy Growth entered into a
strategic relationship with Fortune 500 global beverage leader
Constellation Brands ("Constellation"). As part of the agreement,
an affiliate of Constellation has invested approximately
$245 million in Canopy Growth in
exchange for 9.9% equity in the Company and the parties have agreed
to collaborate on new product development.
Second Quarter 2018 Highlights
- Second quarter revenue was $17.6
million, a 107% increase over the second quarter ended
September 30, 2016 when revenue
totaled $8.5 million, and an 11%
increase over first quarter of fiscal 2018 revenues of $15.9 million. Revenue in the six months ended
September 30, 2017 totaled
$33.4 million, more than double as
compared to $15.5 million in the same
period last year.
- Sold 2,020 kilograms and kilogram equivalents; a 73% increase
over second quarter fiscal 2017, and a 10% increase over first
quarter 2018 when 1,830 kilograms and kilogram equivalents were
sold.
- The weighted average cost per gram1 before shipping
and fulfillment was $1.25 per gram as
compared to $1.27 per gram in the
first quarter of fiscal 2018 and $1.70 per gram in the second quarter of fiscal
2017. The cost per gram also reflects value-add processing for
cannabis oils and sector-exclusive Softgel capsules, both carrying
significantly higher margins than dried flower product. The
weighted average cost per gram to the point of harvest fell to only
$0.72 per gram, the fifth consecutive
quarter when the cost to the point of harvest was less than
$1 per gram and declined from the
previous quarter.
- Year-to-date, the Company has sold 3,850 kilograms and kilogram
equivalents at an average price of $7.98 per gram compared to 2,153 kilograms at an
average price of $7.05 per gram in
the six months ended September 30,
2016.
- The second quarter of fiscal 2018 gross margin2
before the fair value effects of the IFRS accounting for biological
assets and inventory was $10.1
million or 57% of sales, as compared to $5.1 million or 60% of sales in the second
quarter of last year. Excluding the effects of non-cultivating
subsidiaries and other period costs totaling $1.8 million, the gross margin in the second
quarter of fiscal 2018 before the IFRS fair value impacts would
have been $11.9 million or 68% of
sales.
- Adjusted EBITDA3 in the second quarter of fiscal
2018 amounted to a loss of $6.2
million compared to an Adjusted EBITDA loss of $1.9 million in the comparative quarter last
year.
- Net loss in the second quarter of fiscal 2018 of $1.6 million, or $0.01 per basic and diluted share, compared to
net earnings of $5.4 million or
$0.05 per basic and diluted share in
the second quarter of fiscal 2017. Management believes the ongoing
spending on building the Company's significant and diversified
production platform, world-leading brands, unparalleled
international reach, and iconic partnerships, all of which directly
impacted profitability during the current period, is a prudent
long-term investment to strengthen the Company's global leadership
position heading into next year.
- Inventory at September 30, 2017
amounted to $73.8 million and
biological assets amounted to $23.5
million, together totaling $97.3
million. With its store stocked with a sector leading 40
varieties to serve medical patients, the Company has begun to
actively scale inventories to meet expected future market demand,
and to ensure that appropriate inventories exist to meet the needs
of new cannabis retailers in the regulated recreational
market.
- On September 21, 2017, Canopy
Growth announced that it had established a binding strategic
partnership in the Danish market. Spectrum Denmark ApS will be a
joint venture between Canopy Growth and Danish Cannabis ApS which
will serve the needs of Danish medical cannabis patients with
Spectrum's proven products.
- On September 11, 2017, the
Company and its wholly-owned subsidiary Spektrum Cannabis GmbH
("Spektrum") announced a supply license agreement with Spain's Alcaliber, S.A. ("Alcaliber"). Per the
supply license agreement, Canopy Growth and Spektrum granted
Alcaliber a licence to use certain strains and seeds to be grown
and cultivated at Alcaliber's facilities for sale worldwide.
- On September 8, 2017, the Company
announced construction of a new 212,000 sq. ft. greenhouse and the
purchase of a neighbouring 450,000 sq. ft. greenhouse in
Niagara-on-the-Lake, Ontario;
which upon completion will expand the total area under glass at
Tweed Farms to over 1 million sq. ft.
- $108.2 million in cash and cash
equivalents at quarter end prior to the infusion of approximately
$245 million from the Constellation
investment that closed on November 2,
2017.
Subsequent to Second Quarter 2018
- On October 11, 2017, Canopy
Growth announced that it had entered into a definitive joint
venture agreement with a greenhouse operator to develop 1.3 million
sq. ft. of greenhouse growing capacity in British Columbia with an option for an
additional 1.7 million sq. ft. greenhouse also in British Columbia.
- On October 25, 2017, the Company
announced that it launched a strategic partnership in the Jamaican
cannabis market as part of its ongoing international expansion.
Grow House JA Limited – to operate as Tweed Limited JA ("Tweed
JA"), will serve the needs of the Jamaican medical cannabis market.
Canopy Growth holds 49 per cent of the share capital of Tweed JA,
which, with conditional license approvals already in place, has
already begun construction of its facility.
"With our objective to win and retain significant future market
share, and backed by the recent $245 million investment from
Constellation, we remain focused on the expansion of our
cultivation capacity, extraction platform and finished branded
products programs" said Bruce
Linton, Chairman & CEO. "The historic cannabis supply
MOU that we signed during the second quarter with the province of
New Brunswick confirmed our
long‑held belief that investment in brands, quality and scale
coupled with investing in the people and communities we believe in
across Canada would leave us well
positioned to serve provincial supply needs. We are hopeful to see
more and more provinces make similar decisions to pursue the most
reliable, varied and high-quality products available in the
sector."
Concluded Linton, "Starting with the twenty-seven provisional
patents that have been filed to date, our research affiliate Canopy
Health Innovations seeks to define the breakthrough cannabis-based
medical therapies that we could commercialize globally. Our
relationship with Constellation and the commitment to work together
to develop and market regulated recreational cannabis-based
beverages, when and where they are federally legal, is a critical
step in our move up the value chain. Perhaps most
importantly, we are strongly aligned in our cultures and our view
that industry has a role to play in defining acceptable business
practices as the cannabis industry exits prohibition. With
investments and capacity offtake agreements in place with quality
domestic production assets and several others in negotiation, our
Canopy Rivers subsidiary is analyzing global investment
opportunities, another reflection of the growing international
scope of our business."
Second Quarter Fiscal 2018 Revenue
Review
Revenue for the second quarter fiscal 2018 was $17.6 million, an 11% increase over the first
quarter fiscal 2018 in which revenue was $15.9 million and an increase of 107% over the
prior year's quarter in which revenue was $8.5 million. In the three months ended
September 30, 2017 and 2016, oils,
including the Company's unique Softgel capsules, accounted for 18%
and 14%, respectively, of the reported revenue for each period. As
inventory begins to ramp-up with the production of the recently
introduced Softgel capsules, the Company anticipates a further
increase in the percentage of sales these products represent.
Revenue in the six months ended September
30, 2017 totaled $33.4 million
more than double as compared to $15.5
million in the same period last year. Revenues in the
six months ended September 30, 2017
already equal 84% of revenue generated in the twelve months ended
March 31, 2017.
Second Quarter Fiscal 2018 Product Sales
Review
During the second quarter of fiscal 2018, Canopy Growth sold
2,020 kilograms and kilogram equivalents at an average price
of $7.99 per gram, up from 1,169
kilograms and kilogram equivalents at an average price of
$7.01 per gram during the prior year
period. The higher average price was due to primarily to the
improved mix of oil products, including oil-based Softgel capsules
introduced late in the first quarter of fiscal 2018.
Year-to-date, the Company has sold 3,850 kilograms and kilogram
equivalents at an average price of $7.98 per gram compared to 2,153 kilograms at an
average price of $7.05 per gram in
the six months ended September 30,
2016.
Second Quarter Fiscal 2018 Weighted Average
Cost per Gram (Non-GAAP measure)
Canopy Growth's weighted average cost per gram is comprised as
follows:
i)
|
Costs to harvest
(from cloning to harvest) include all of the cash operating costs
including principally growing labour, utilities such as hydro and
water, grow nutrients, rent, and allocated overheads;
|
|
|
ii)
|
Post-harvest costs
consist of cash operating costs related to the production of value
added products including cannabis oils and soft gel capsules.
Post-harvest costs also include cash operating costs associated
with trimming, milling, drying, lab services and testing, and
allocated overheads; and
|
|
|
iii)
|
Shipping and
fulfillment costs consist of cash costs related to expedited
courier delivery to patients, where applicable, and royalties paid
under licensing agreements to product and brand partners including
Leafs By Snoop and DNA Genetics. Shipping and
fulfillment also includes cash operating costs associated with
labour for pre‑packaging and dispensing and order fulfilment and
shipping along with package materials such as bottles, boxes, and
labels and allocated overheads. These costs include
investments that the Company chooses to make to create a vastly
superior customer experience. Management believes that brands and
experiences matter and investing in better shipping options,
packaging worthy of collecting, and brands people seek are key
differentiators in the cannabis market and are an extension of the
priority to company places upon its marketing.
|
Weighted
Average
Cost Per Gram
Information
|
Three Months
Ended
|
|
September 30, 2017
|
June 30, 2017
|
March 31, 2017
|
December 31, 2016
|
September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
Cost per Gram to
Harvest
|
$
|
0.72
|
$
|
0.76
|
$
|
0.86
|
$
|
0.87
|
$
|
0.99
|
Post Harvest Cost per
Gram
|
$
|
0.53
|
$
|
0.51
|
$
|
0.60
|
$
|
0.54
|
$
|
0.71
|
Cost per Gram
before shipping and fulfilment
|
$
|
1.25
|
$
|
1.27
|
$
|
1.46
|
$
|
1.41
|
$
|
1.70
|
Cost per Gram for
Shipping and Fulfilment
|
$
|
1.48
|
$
|
1.50
|
$
|
1.44
|
$
|
1.17
|
$
|
1.01
|
Weighted Average
Cost per Gram
|
$
|
2.73
|
$
|
2.77
|
$
|
2.90
|
$
|
2.58
|
$
|
2.71
|
In the second quarter of fiscal 2018, the weighted average cost
per gram to the point of harvest was $0.72 as compared to $0.99 in the same period last year, representing
a decrease of 27%. The decrease in costs to the point of harvest is
due in part to operating efficiencies from adding twelve additional
grow rooms, representing a 100% increase in flowering space, being
operational in our Smiths Falls,
Ontario location and higher overall plant yields. The
second quarter of fiscal 2018 is the fifth consecutive quarter when
the cost to point of harvest was less than $1 per gram and fell relative to the previous
quarter. These costs are competitive within the industry, and
especially competitive for a product mix including high quality
indoor production as well as greenhouse production, and may see
further optimization as increasing percentages of each facility are
brought online and efficiencies are fully realized.
In the second quarter of fiscal 2018, the weighted average cost
per gram during post-harvest, including cash costs related to the
production of cannabis oils and Softgel capsules, was $0.53 as compared to $0.71 in the second quarter of fiscal 2017,
representing a decrease of 25%. The decrease in post harvest costs
is due in part to gains in the efficiency of oil extraction
resulting from use of a custom built industrial scale CO2 Super
Critical extraction machine that was commissioned at the end of the
first quarter of fiscal 2018, as well as efficiencies gained
through improvements in the Company's trimming and drying
processes.
In the second quarter of fiscal 2018, the weighted average cost
per gram for shipping and fulfillment costs was $1.48 as compared to $1.01 in the same quarter last year. The increase
in shipping and fulfillment costs during the second quarter of
fiscal 2018 was due to higher investment in packaging, delivery and
overall experience excellence.
Second Quarter Fiscal 2018 Gross Margin
Review (Non-GAAP measure)
The second quarter Fiscal 2018 gross margin before the fair
value effects of the IFRS accounting for biological assets and
inventory was $10.1 million or 57% of
sales, as compared to $5.1 million or 60% of sales in the second
quarter of last year. The lower gross margin percentage was due
primarily to the impact of a $0.7
million write down of Hemp-based inventory due to
discontinued product lines and $0.4
million of idle grow operations in the Creemore location while being reset under
Canopy direction. Excluding these effects and the costs associated
with non-cultivating subsidiaries totaling $1.8 million, the gross margin before the fair
value impacts in cost of sales would have been $11.9 million or 68% of sales.
In the six-month period ended September
30, 2017, gross margin before the effects of the IFRS fair
value accounting for biological assets and inventory was
$19.1 million or 57% of revenue,
compared to $9.3 million or 60% of
revenue in same period last year.
Second Quarter Fiscal 2018 Operating Expense
Review
Management believes the ongoing investment in building the
Company's significant and diversified production platform,
world-leading brands, unparalleled international reach, and iconic
partnerships, all of which directly impacted profitability during
the current period, is a prudent long-term investment to strengthen
the Company's global leadership position heading into next
year.
Sales and marketing expenses in the second quarter fiscal 2018
were $7.6 million, or 43% of revenue. These costs
include staffing and resourcing the marketing and sales functions
needed in the coming regulated recreational and international
markets, costs associated with the Company's medical outreach
program, and the growing customer care center which interfaces
directly with the Company's expanding base of customers. Since
September 30, 2016, the number of
registered customers has grown from over 24,000 to over 63,000 at
September 30, 2017. In comparison,
sales and marketing expenses were $2.8 million or 33 % of revenue in the
same period last year.
Year-to-date, sales and marketing expenses were $14.0 million or 42% of revenue. In comparison,
during the six months ended September 30,
2016, sales and marketing expenses were $5.1 million or 33% of revenue.
General and Administrative ("G&A") expenses in the second
quarter fiscal 2018 were $8.4
million, or 48% of revenue. These costs include higher
audit, legal and professional services fees of $2.2 million related to investments in governance
and supporting business development, and higher charges such as
credit card payment processing fees of $0.4
million due to increased sales activity. G&A expenses
during the quarter also included necessary use of consultants and
advisory services while expanding and commercializing the Company's
operations, facility costs, and compliance costs associated with
meeting Health Canada requirements, as well as other public company
related expenses. In comparison, G&A expenses were
$4.0 million, or 47% of revenue, in
the three months ended September 30,
2016.
Year-to-date, G&A expenses were $15.9
million or 48% of revenue, compared to $6.9 million or 44% of revenue, in the same
period last year. These costs include higher audit, legal and
professional services fees of $3.5
million related to investments in governance and supporting
business development, and higher finance charges such as credit
card payment processing fees of $0.7
million due to increased sales activity.
Second Quarter Fiscal 2018 Adjusted EBITDA
Review (Non-GAAP measure)
Adjusted EBITDA in the second quarter fiscal 2018 amounted to a
loss of $6.2 million compared to a
loss of $1.9 million in the same
period last year.
In the six-months ended September 30,
2017, the Company's Adjusted EBITDA amounted to a loss of
$11.3 million compared to a loss of
$3.2 million in the prior year
period.
Second Quarter Fiscal 2018 Earnings
Review
Net loss in the second quarter of fiscal 2018 amounted to
$1.6 million, or $0.01 per basic and diluted share, including the
net non-cash fair value effects of the IFRS accounting for
biological assets and inventory which combined to a gain of
$18.7 million. In the comparative
period last year, the net income of $5.4
million, or $0.05 per basic
and diluted share including net non-cash effects of the IFRS
accounting for biological assets and inventory which combined to a
net gain of $10.7 million.
Year-to-date, net loss amounted to $10.8
million or $0.07 per basic and
diluted share, including a net non-cash effects of the IFRS
accounting for biological assets and inventory which combined to a
gain of $29.3 million. In the
comparative period last year, the net income of $1.5 million, or $0.01 per basic and diluted share included net
non‑cash effects of the IFRS accounting for biological assets and
inventory which combined to a net gain of $10.0 million.
Second Quarter Fiscal 2018 Balance Sheet
Review
At September 30, 2017, the
Company's cash and cash equivalents totaled $108.2 million, representing an increase of
$6.4 million from March 31, 2017. The increase is
attributable to combined net proceeds from the $25 million private placement common share
issuance in July 2017, Canopy River's
first quarter private placement of approximately $36 million and the exercise of options and
warrants mostly offset by cash used to fund operations of
$22.9 million and investments in
facility enhancements totaling $25.5
million. The Company's cash and cash equivalents includes
cash held by Canopy Rivers amounting to $46.5 million at September
30, 2017.
Inventory at September 30, 2017
amounted to $73.8 million
(March 31, 2017 - $46.0 million) and biological assets amounted to
$23.5 million (March 31, 2017 - $14.7
million), together totaling $97.3
million (March 31, 2017 -
$60.7 million). Inventories are being
scaled to ensure sufficient supply for expected market demand. With
its store stocked with a sector leading 40 varieties to serve
medical patients, the Company has begun to actively scale
inventories to meet expected future market demand, and to ensure
that appropriate inventories exist to meet the needs of new
cannabis retailers in the regulated recreational market.
At September 30, 2017, the Company
held 12,064 kilograms of dry cannabis and 2,683 L of cannabis oils,
ranging from concentrated resins, or refined oil, to finished oil.
Included in the dry cannabis quantities was 1,679 kilograms
available for sale in the Company's online stores and
3,355 kilograms in process of finishing or awaiting approval
for sale and 7,030 kilograms of extract-grade cannabis held for
conversion to saleable oils and capsules.
The Unaudited Condensed Interim Consolidated Financial
Statements and Management's Discussion and Analysis documents for
the three months ended September 30,
2017 have been filed with SEDAR and are available on
www.sedar.com. The basis of financial reporting in the Unaudited
Condensed Interim Consolidated Financial Statements and
Management's Discussion and Analysis documents is in thousands of
Canadian dollars, unless otherwise indicated.
Note 1: The Weighted Average Cost Per Gram is a non-GAAP
financial measure that does not have any standardized meaning
prescribed by IFRS and may not be comparable to similar measures
presented by other companies. The definition of this term can be
found in the Management's Discussion & Analysis under Weighted
Average Cost Per Gram (Non-GAAP measure), a copy of which has been
filed today on www.sedar.com.
Note 2: The Gross margin before the fair value effects of
the IFRS accounting for biological assets and inventory is a
non-GAAP financial measure that does not have any standardized
meaning prescribed by IFRS and may not be comparable to similar
measures presented by other companies. The definition of this
term can be found in the Management's Discussion & Analysis
under GROSS MARGIN (Non-GAAP measure), a copy of which has been
filed today on www.sedar.com.
Note 3: The Adjusted EBITDA is a non-GAAP financial
measure that does not have any standardized meaning prescribed by
IFRS and may not be comparable to similar measures presented by
other companies. The Adjusted EBITDA is reconciled and explained in
the Management's Discussion & Analysis under "Adjusted EBITDA
(Non-GAAP Measure)", a copy of which has been filed today
on www.sedar.com.
Webcast and Conference Call Information
Canopy Growth will host a conference call and audio webcast with
Bruce Linton, CEO and Tim Saunders, CFO at 8:30
AM Eastern Time today.
Webcast Information
A live audio webcast will be available at:
http://event.on24.com/r.htm?e=1533808&s=1&k=B7D2C24B3AB2588D21AC8934F19F8520
Calling Information
Toll Free Dial-In Number: 1-888-231-8191
International Dial-In Number (647) 427-7450
Conference ID: 7498308
Replay Information
A replay of the call will be accessible by telephone until
11:59 PM ET on
February 13, 2018.
Toll Free Dial-in Number: 1-855-859-2056
Replay Password: 7498308
About Canopy Growth Corporation
Canopy Growth is a
world-leading diversified cannabis company, offering distinct
brands and curated cannabis varieties in dried, oil and capsule
forms. Through its wholly‑owned subsidiaries, Canopy Growth
operates numerous state-of-the-art production facilities with over
half a million square feet of GMP-certified indoor and greenhouse
production capacity, all to an unparalleled level of quality
assurance procedures and testing. Canopy Growth has established
partnerships with leading sector names in Canada and abroad, with interests and
operations spanning four continents. For more information visit
www.canopygrowth.com.
Notice Regarding Forward Looking Statements
This news
release contains forward-looking statements. Often, but not always,
forward-looking statements can be identified by the use of words
such as "plans", "expects" or "does not expect", "is expected",
"estimates", "intends", "anticipates" or "does not anticipate", or
"believes", or variations of such words and phrases or state that
certain actions, events or results "may", "could", "would", "might"
or "will" be taken, occur or be achieved. Forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or
achievements of Canopy Growth Corporation and its subsidiaries to
be materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements. Examples of such statements include future operational
and production capacity, the impact of enhanced infrastructure and
production capabilities, and forecasted available product
selection. The forward-looking statements included in this
news release are made as of the date of this news release and
Canopy Growth Corporation does not undertake an obligation to
publicly update such forward-looking statements to reflect new
information, subsequent events or otherwise unless required by
applicable securities legislation. Neither the TSX Exchange nor its
Regulation Services Provider (as that term is defined in policies
of the TSX Exchange) accepts responsibility for the adequacy or
accuracy of this release.
CANOPY GROWTH
CORPORATION
|
|
|
|
|
CONDENSED INTERIM
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
|
UNAUDITED
|
September
30,
|
March 31,
|
(Expressed in CDN
$000's)
|
2017
|
2017
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
108,211
|
$
|
101,800
|
|
Restricted short-term
investments
|
|
668
|
|
550
|
|
Amounts
receivable
|
|
6,782
|
|
5,815
|
|
Biological
assets
|
|
23,496
|
|
14,725
|
|
Inventory
|
|
73,766
|
|
45,981
|
|
Prepaid expenses and
other assets
|
|
5,319
|
|
3,735
|
|
|
218,242
|
|
172,606
|
|
|
|
|
|
Assets classified as
held for sale
|
|
-
|
|
6,180
|
|
|
218,242
|
|
178,786
|
|
|
|
|
|
Property, plant and
equipment
|
|
123,200
|
|
96,270
|
Investments in
associates
|
|
5,830
|
|
-
|
Other financial
assets
|
|
20,846
|
|
24,030
|
Intangible
assets
|
|
156,244
|
|
162,263
|
Goodwill
|
|
274,326
|
|
241,371
|
|
|
|
|
|
|
$
|
798,688
|
$
|
702,720
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
16,401
|
$
|
15,386
|
|
Deferred
revenue
|
|
894
|
|
588
|
|
Current portion of
long-term debt
|
|
1,617
|
|
1,691
|
|
Other
liabilities
|
|
1,871
|
|
-
|
|
|
20,783
|
|
17,665
|
|
|
|
|
|
|
Long-term
debt
|
|
7,959
|
|
8,639
|
|
Deferred tax
liability
|
|
37,663
|
|
35,924
|
|
Other long-term
liabilities
|
|
710
|
|
766
|
|
|
|
|
|
|
|
67,115
|
|
62,994
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
Share
capital
|
|
684,152
|
|
621,541
|
|
Other
reserves
|
|
32,224
|
|
23,415
|
|
Accumulated other
comprehensive loss
|
|
9,108
|
|
16,098
|
|
Deficit
|
|
(31,688)
|
|
(21,296)
|
|
|
|
|
|
Equity attributable
to Canopy Growth Corporation
|
|
693,796
|
|
639,758
|
|
|
|
|
|
|
Non-controlling
interests
|
|
37,777
|
|
(32)
|
|
|
|
|
|
Total
equity
|
|
731,573
|
|
639,726
|
|
|
|
|
|
|
$
|
798,688
|
$
|
702,720
|
CANOPY GROWTH
CORPORATION
|
|
|
|
|
|
|
|
|
CONDENSED INTERIM
CONSOLIDATED STATEMENTS OF OPERATIONS
|
FOR THE THREE AND
SIX MONTHS ENDED SEPTEMBER 30, 2017 AND 2016
|
|
Three months
ended
|
Six months
ended
|
UNAUDITED
|
September 30,
|
September 30,
|
September 30,
|
September 30,
|
(Expressed in CDN $000's except share amounts)
|
2017
|
2016
|
2017
|
2016
|
|
|
|
|
|
(As
restated)
|
|
|
Revenue
|
$
|
17,569
|
$
|
8,498
|
$
|
33,442
|
$
|
15,482
|
|
|
|
|
|
|
|
|
|
Inventory production
costs expensed to cost of
sales
|
|
7,487
|
|
3,400
|
|
14,335
|
|
6,179
|
|
|
|
|
|
|
|
|
|
Gross margin before
the undernoted
|
|
10,082
|
|
5,098
|
|
19,107
|
|
9,303
|
|
|
|
|
|
|
|
|
|
Fair value changes in
biological assets included in
inventory sold and other inventory
charges
|
|
11,647
|
|
3,474
|
|
22,647
|
|
7,349
|
Unrealized gain on
changes in fair value of biological assets
|
|
(30,315)
|
|
(14,203)
|
|
(51,985)
|
|
(17,318)
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
|
28,750
|
|
15,827
|
|
48,445
|
|
19,272
|
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
|
7,638
|
|
2,810
|
|
14,043
|
|
5,070
|
Research and
development
|
|
494
|
|
503
|
|
627
|
|
906
|
General and
administration
|
|
8,393
|
|
4,031
|
|
15,886
|
|
6,881
|
Acquisition-related
costs
|
|
865
|
|
592
|
|
1,701
|
|
592
|
Share of loss in
equity investments
|
|
170
|
|
(170)
|
|
170
|
|
50
|
Share-based
compensation expense
|
|
5,862
|
|
960
|
|
8,743
|
|
1,848
|
Share-based
compensation expense related to
acquisition milestones
|
|
1,184
|
|
-
|
|
2,314
|
|
-
|
Depreciation and
amortization
|
|
5,291
|
|
984
|
|
10,348
|
|
1,895
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
29,897
|
|
9,710
|
|
53,832
|
|
17,242
|
|
|
|
|
|
|
|
|
|
(Loss) income from
operations
|
|
(1,147)
|
|
6,117
|
|
(5,387)
|
|
2,030
|
|
|
|
|
|
|
|
|
|
Interest income
(expense)
|
|
135
|
|
(42)
|
|
154
|
|
(89)
|
Other expense,
net
|
|
(40)
|
|
-
|
|
(160)
|
|
-
|
Fair value changes on
financial assets
|
|
146
|
|
-
|
|
(3,354)
|
|
-
|
Increase in fair
value of acquisition consideration
related liabilities
|
|
-
|
|
(286)
|
|
-
|
|
(298)
|
|
|
|
|
|
|
|
|
|
Other income
(expenses)
|
|
241
|
|
(328)
|
|
(3,360)
|
|
(387)
|
|
|
|
|
|
|
|
|
|
Net (loss) income
before income taxes
|
|
(906)
|
|
5,789
|
|
(8,747)
|
|
1,643
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
(707)
|
|
(359)
|
|
(2,040)
|
|
(162)
|
|
|
|
|
|
|
|
|
|
Net (loss) income
after income taxes
|
$
|
(1,613)
|
$
|
5,430
|
$
|
(10,787)
|
$
|
1,481
|
|
|
|
|
|
|
|
|
|
Net (loss) income
attributable to:
|
|
|
|
|
|
|
|
|
|
Canopy Growth
Corporation
|
$
|
(1,338)
|
$
|
5,430
|
$
|
(10,392)
|
$
|
1,481
|
|
Non-controlling
interests
|
|
(275)
|
|
-
|
|
(395)
|
|
-
|
|
$
|
(1,613)
|
$
|
5,430
|
$
|
(10,787)
|
$
|
1,481
|
|
|
|
|
|
|
|
|
|
Earnings per
share, basic
|
|
|
|
|
|
|
|
|
|
Net (loss) income per
share:
|
$
|
(0.01)
|
$
|
0.05
|
$
|
(0.07)
|
$
|
0.01
|
|
Weighted average
number of outstanding common
shares:
|
|
167,226,218
|
|
108,872,770
|
|
165,550,073
|
|
106,248,781
|
|
|
|
|
|
|
|
|
|
Earnings per
share, diluted
|
|
|
|
|
|
|
|
|
|
Net (loss) income per
share:
|
$
|
(0.01)
|
$
|
0.05
|
$
|
(0.07)
|
$
|
0.01
|
|
Weighted average
number of outstanding common
shares:
|
|
167,226,218
|
|
112,254,363
|
|
165,550,073
|
|
108,879,226
|
CANOPY GROWTH
CORPORATION
|
|
|
|
|
CONDENSED INTERIM
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
FOR THE SIX MONTHS
ENDED SEPTEMBER 30, 2017 AND 2016
|
|
|
UNAUDITED
|
September 30,
|
September
30,
|
(Expressed in CDN
$000's)
|
2017
|
2016
|
|
(As
restated)
|
|
|
Net inflow (outflow)
of cash related to the following activities:
|
|
|
|
|
|
|
|
|
|
|
Operating
|
|
|
|
|
|
|
Net loss after income
taxes
|
$
|
(10,787)
|
$
|
1,481
|
|
|
Items not affecting
cash:
|
|
|
|
|
|
|
|
Depreciation of
property, plant and equipment
|
|
4,036
|
|
1,747
|
|
|
|
Amortization of
intangible assets
|
|
6,312
|
|
148
|
|
|
|
Share of loss in
equity investments
|
|
170
|
|
50
|
|
|
|
Fair value changes in
biological assets included in inventory sold
|
|
(51,985)
|
|
(17,318)
|
|
|
|
Unrealized gain on
changes in fair value of biological assets
|
|
22,647
|
|
7,349
|
|
|
|
Share-based
compensation
|
|
11,234
|
|
2,232
|
|
|
|
Loss on disposal of
property, plant and equipment
|
|
168
|
|
-
|
|
|
|
Fair value changes on
financial assets
|
|
3,354
|
|
-
|
|
|
|
Income tax
expense
|
|
2,040
|
|
162
|
|
|
|
Increase in fair
value of acquisition consideration related liabilities
|
|
-
|
|
298
|
|
|
Changes in non-cash
operating working capital items
|
|
(10,083)
|
|
(5,093)
|
Net cash used in
operating activities
|
|
(22,894)
|
|
(8,944)
|
|
|
|
|
|
|
Investing
|
|
|
|
|
|
|
Purchases of
property, plant and equipment and assets in process
|
|
(25,526)
|
|
(8,728)
|
|
|
Purchases of
intangible assets and intangibles in process
|
|
(282)
|
|
-
|
|
|
Proceeds on disposals
of property and equipment
|
|
75
|
|
-
|
|
|
Purchases of
restricted investments
|
|
(118)
|
|
-
|
|
|
Proceeds on assets
classified as held for sale
|
|
7,000
|
|
-
|
|
|
Investment in
AusCann
|
|
(1,214)
|
|
-
|
|
|
Investment in Canopy
Health Innovations
|
|
(4,000)
|
|
-
|
|
|
Investment in
Vapium
|
|
(960)
|
|
-
|
|
|
Indirect investments
through Canopy Rivers
|
|
(8,475)
|
|
-
|
|
|
Net cash outflow on
acquisition of subsidiaries
|
|
(359)
|
|
-
|
Net cash used in
investing activities
|
|
(33,859)
|
|
(8,728)
|
|
|
|
|
|
|
Financing
|
|
|
|
|
|
|
Proceeds from
issuance of shares in subsidiary, net of share issue costs of $1,425
|
|
35,135
|
|
-
|
|
|
Proceeds from
issuance of common shares, net of
share issue costs of $98
|
|
25,000
|
|
46,009
|
|
|
Proceeds from
exercise of stock options
|
|
3,435
|
|
1,128
|
|
|
Proceeds from
exercise of warrants
|
|
527
|
|
126
|
|
|
Issuance of long-term
debt
|
|
-
|
|
3,500
|
|
|
Payment of share
issue costs
|
|
(179)
|
|
(3,030)
|
|
|
Increase in capital
lease obligations
|
|
-
|
|
260
|
|
|
Repayment of
long-term debt
|
|
(754)
|
|
(339)
|
Net cash provided
by financing activities
|
|
63,164
|
|
47,654
|
|
|
|
|
|
Net cash
inflow
|
|
6,411
|
|
29,982
|
Cash and cash
equivalents, beginning of year
|
|
101,800
|
|
15,397
|
Cash and cash
equivalents, end of period
|
$
|
108,211
|
$
|
45,379
|
CANOPY GROWTH
CORPORATION
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA1 Unaudited Non-GAAP Measure
|
Three Months
Ended
|
Six Months
Ended
|
(In
CDN$000's)
|
September 30,
2017
|
September 30,
2016
|
September 30,
2017
|
September 30,
2016
|
|
|
|
|
|
(As
restated)
|
|
|
Unaudited Adjusted
EBITDA1 Reconciliation
|
|
|
|
|
|
|
|
|
Loss from
operations - as reported
|
$
|
(1,147)
|
$
|
6,117
|
$
|
(5,387)
|
$
|
2,030
|
|
|
|
|
|
|
|
|
|
IFRS non-cash
accounting related to biological assets and
inventory
|
Fair value changes in
biological assets included in
inventory sold and other inventory charges
|
|
11,647
|
|
3,474
|
|
22,647
|
|
7,349
|
Unrealized gain on
changes in fair value of biological assets
|
|
(30,315)
|
|
(14,203)
|
|
(51,985)
|
|
(17,318)
|
|
|
(18,668)
|
|
(10,729)
|
|
(29,338)
|
|
(9,969)
|
|
|
|
|
|
|
|
|
|
Share-based
compensation expense (per statement of cash flows)
|
|
7,276
|
|
1,257
|
|
11,234
|
|
2,232
|
Acquisition
Costs
|
|
865
|
|
592
|
|
1,701
|
|
592
|
Share of loss in
equity investments
|
|
170
|
|
(170)
|
|
170
|
|
50
|
Depreciation and
amortization
|
|
5,291
|
|
984
|
|
10,348
|
|
1,895
|
|
|
13,602
|
|
2,663
|
|
23,453
|
|
4,769
|
Adjusted
EBITDA
|
$
|
(6,213)
|
$
|
(1,949)
|
$
|
(11,272)
|
$
|
(3,170)
|
|
|
|
|
|
|
|
|
|
1 - Adjusted
EBITDA is Earnings Before Interest, Tax, and Depreciation and other
non-cash items, and as adjusted for acquisition related
items.
|
SOURCE Canopy Growth Corporation