CALGARY, March 30, 2020 /PRNewswire/ - Sundial Growers
Inc. (Nasdaq: SNDL) ("Sundial" or the "Company") reported its
financial and operating results for the year ended December 31, 2019, as well as provided an update
on its liquidity and strategic initiatives.
"Sundial grew quickly in 2019. We expanded and received
licencing for our state-of-the art operating facilities,
successfully launched four product lines and built a strong
following with our core consumers," said Zach George, Sundial's Chief Executive Officer.
"Despite our successes in 2019, we also faced a number of internal
and external challenges, including operational difficulties, excess
leverage, poor cost controls, a loss of focus on our core value
proposition, regulatory delays, and rapidly evolving industry
conditions. These combined factors led to fourth quarter results
that were below our expectations. As a result, we are making
material changes to our business to position Sundial for improved
performance, while also negotiating with our lenders in an attempt
to restructure our credit facilities. We are in the midst of
an in-depth portfolio review and will assess each business
opportunity and partnership in an objective manner as we evaluate
the economic viability of each initiative. We intend to
update investors on the outcome of this portfolio review along with
our first quarter results."
Credit Facility Restructuring
At December 31, 2019, the Company
was not in compliance with the interest coverage ratio covenant
under its Syndicated Credit Agreement. As a result, as at
December 31, 2019, the full principal
amount of the Syndicated Credit Agreement and the full principal
amount of the Term Debt Facility were classified as current
liabilities on the Company's statement of financial position.
Additionally, based on the Company's most recent financial
projections management is forecasting that it will be in violation
of the Syndicated Credit Agreement financial maintenance covenants
as at March 31, 2020, June 30, 2020 and September 30, 2020.
Subsequent to December 31, 2019,
the Company has obtained a waiver under the Syndicated Credit
Agreement for the December 31, 2019
interest coverage ratio covenant breach and a waiver for the
corresponding breach and other administrative breaches of the Term
Debt Facility. Under the terms of the waivers, the Company has
agreed that on or before April 15,
2020 it will (i) enter into a definitive purchase agreement
related to the sale of Bridge Farm and (ii) enter into term sheets
with each of the respective lenders under the Syndicated Credit
Agreement and Term Debt Facility that set out a financing strategy
for the Company. In addition, the requirement to maintain an
interest reserve cash balance of $10.0
million under the Syndicated Credit Agreement was removed.
The $10.0 million was applied as a
permanent reduction to amounts outstanding under the Syndicated
Credit Agreement on March 30, 2020.
The Term Debt Facility lenders have also agreed to defer a minimum
of $1.2 million of the $2.8 million interest payment due April1, 2020 to
April 20, 2020.
In addition, we anticipate that we will not be in compliance
with the covenants under our Syndicated Credit Agreement (and,
thus, our Term Debt Facility) as of March
31, 2020. Under the terms of our debt documents, we have
until May 15, 2020 to deliver our
financial results for the three months ended March 31, 2020 and associated compliance
certification, and if we do not obtain a waiver of covenant
compliance or similar relief before then, we will be in default
under such agreements. We are in active dialogue with our lenders
and have been able to obtain similar relief in the past; however,
there is no guarantee that we will be able to do so in the
future.
The Company will require additional financing in the near term
and has engaged financial advisors and is in advanced negotiations
with potential capital providers including sources of debt and/or
equity. These negotiations have been negatively impacted by the
effects that the COVID-19 pandemic is having, and is expected to
continue to have, on the overall business environment and financial
markets generally. The Company continues to advance these
initiatives; however, there is no certainty as to their ultimate
completion or the timing thereof.
Cash and cash equivalents, including restricted cash, was
$61.2 million on December 31, 2019. As at February 29, 2020, the Company had cash and cash
equivalents, including restricted cash, of $43.1 million, including the $10.0 million of cash that was subsequently paid
out to lenders under the Syndicated Credit Agreement on
March 30, 2020.
Outlook
Sundial has made significant changes in early 2020 to position
the Company for the next stage of its development. Sundial's
management team is focused on driving long-term profitable growth
and has defined its primary objectives for 2020 as:
- Deliver industry-leading, best-in-class products with a focus
on inhalable products
- Optimize asset utilization and reduce costs
- Improve working capital and overall liquidity
The potential impact of the COVID-19 pandemic on Sundial's
operations, capital markets and the cannabis industry is currently
unclear; however Sundial is fully committed to the health and
safety of its employees and focused on ensuring minimal disruption
to its operations and cash flow.
Deliver industry-leading, best-in-class products with a focus
on inhalable products
The majority of the Company's harvests are now testing above 18%
THC with several harvests testing well above 20%, proving that its
"craft-at-scale" modular growing approach is working.
Furthermore, the Company has seen the following improvements in
its market results:
- Top Leaf ranking amongst the highest pricing tiers
across Canadian retail markets
- Entire vape cartridge inventory of 19,200 cartridges sold on
first day of Alberta vape
sales
- 100% of vape inventory from first production run in December
sold out
- In Ontario, Sundial
Cannabis' Lemon Riot is a top 10 selling vape SKU and the
fourth highest selling 510 vape cartridge, while Top Leaf's
Strawberry Cream is the second best-selling vape SKU within the
"best" category
The recent Alberta Gaming, Liquor and Cannabis approval
permitting cannabis vape sales in Alberta is expected to drive further
growth.
Sundial launched a total of 105 SKUs in the adult-use market in
the first quarter of 2020 to date, representing a 72% increase
versus the fourth quarter of 2019. New launches represent 74
flower SKU's and 31 vape SKU's under the Top Leaf,
Sundial Cannabis, Palmetto and Grasslands
brands. The Company plans to launch additional products in 2020 in
Canada under its existing brand
portfolio based on market conditions, customer feedback and data
analytics. These are expected to include multiple tailored
offerings of strains and product formats. While the Company's
product portfolio is expected to include edibles, sublingual oils
and topical cannabis products, Sundial's focus will be on premium
inhalable products, including flower, pre-rolls and vape
cartridges. The Company is currently scaling production of multiple
new strains to commercial quantities and introducing new strains
that will be marketed and sold under its brand portfolio.
Although Sundial's primary sales growth is targeted to branded
sales, the Company continues to enter into agreements to supply
other licensed producers in Canada
as part of its unbranded sales strategy. The Company has recently
executed a wholesale agreement with one of the top five licensed
Canadian producers, representing estimated net revenue of
$9.3 million to be realized in the
first half of 2020.
Optimize asset utilization and reduce costs
Following legalization, there was a shortfall in supply in the
Canadian adult-use cannabis market leading to increased prices,
increases in out-of-stock products and the consumers opting to buy
cannabis on the illicit market. Sundial and other licensed
producers responded by increasing capacity; however, in the fourth
quarter of 2019, the increase in production combined with slower
than expected retail store growth resulted in over-supply in the
Canadian adult-use market. As a result, the Company and other
licensed producers experienced pricing pressure and lower margins.
The Company's primary near term strategy is to optimize the use of
its production capacity to match demand for its cannabis
products.
In 2020, the Company commenced and continues to implement
several streamlining and efficiency initiatives to align its cost
structure and labor force costs with current market conditions.
These initiatives include enhancement of facility workflows and
processes, realignment of product lines and product formats to
areas of stronger demand, workforce optimization and a heightened
discipline in cost management. The efficiency improvements and cost
saving initiatives are expected to result in annualized cost
savings of approximately $10 to
$15 million for fiscal 2020.
In light of current market conditions, the Company has
temporarily suspended construction of its Merritt facility in British Columbia and is evaluating all options
to maximize the value of its entire asset base. In March 2020, the Company sold its Kamloops, British Columbia, property for
$2.1 million. Sundial plans to limit
capital expenditures to essential expenditures required to complete
its Olds facility subject to
available capital resources and liquidity. Furthermore, the Company
is currently conducting a strategic review of Bridge Farm,
including, but not limited to, a sale of all of its assets.
Improve working capital and overall liquidity
The Company has retained financial advisors to assist in
evaluating its available financial alternatives and engaged with
its lenders to obtain amendments and further relief from the
covenants in its indebtedness. The Company's financing options
include, without limitation:
- Amending or waiving the covenants or other provisions of its
debt
- Deferring scheduled repayments on its credit facilities
- Raising new capital in private or public debt and/or equity
markets
- Taking other actions to address its balance sheet either
through a structured process or through mutual agreement with
creditors.
Sundial is also considering other ways of monetizing its assets
to increase liquidity, including selling limited quantities of
inventory at or below cost and entering into long-term supply
agreements with other licensed producers.
As the legal cannabis market continues to evolve, Sundial has
positioned its operations to adapt quickly. The Company's
craft-at-scale cultivation and modular growing approach allow for
flexibility, while providing the high-quality products its
customers have come to expect. Sundial believes the underlying
fundamental drivers for long-term, sustainable growth in the
cannabis industry remain strong.
As part of supporting these objectives, Sundial is undertaking a
disciplined review of its portfolio of initiatives. Sundial will
evaluate all assets, product lines and potential opportunities to
ensure they fit with Sundial's strategic direction and are expected
to create value for shareholders.
FINANCIAL HIGHLIGHTS
|
Three months
ended
December 31
|
Three months
ended
September 30
|
Year ended
December 31
|
Ten months
ended
December 31
|
($000s, except as
indicated)
|
2019
|
2019
|
2019
|
2018
|
Financial
|
|
|
|
|
Gross
revenue
|
23,069
|
34,181
|
79,225
|
—
|
Net
revenue
|
21,550
|
33,512
|
75,860
|
—
|
Gross margin before
fair value adjustments
|
1,437
|
8,690
|
19,713
|
—
|
Loss from
operations
|
(124,978)
|
(12,435)
|
(159,221)
|
(27,695)
|
Net loss
|
(145,086)
|
(97,491)
|
(271,629)
|
(56,526)
|
Per common share,
basic and diluted
|
($1.36)
|
($1.06)
|
($3.17)
|
($0.82)
|
Adjusted EBITDA
(1)
|
(19,733)
|
(7,897)
|
(33,609)
|
(17,562)
|
|
|
|
|
|
Cash
Flows
|
|
|
|
|
Cash flow used in
operations
|
(55,881)
|
(28,389)
|
(112,736)
|
(25,757)
|
Cash flow used in
investing
|
(32,471)
|
(129,524)
|
(213,144)
|
(66,039)
|
Cash flow from (used
in) financing
|
(8,567)
|
262,906
|
358,267
|
98,239
|
|
|
|
|
|
Balance
Sheet
|
|
|
|
|
Cash and cash
equivalents
|
45,337
|
141,805
|
45,337
|
14,121
|
Biological
assets
|
14,309
|
14,539
|
14,309
|
876
|
Inventory
|
59,942
|
28,420
|
59,942
|
1,234
|
Property, plant and
equipment
|
281,984
|
254,097
|
281,984
|
88,491
|
Total
assets
|
510,036
|
632,057
|
510,036
|
110,200
|
|
|
|
|
|
Operational -
Cannabis
|
|
|
|
|
Kilograms
harvested
|
10,897
|
11,668
|
34,012
|
337
|
Kilogram equivalents
sold
|
4,285
|
7,944
|
17,293
|
—
|
Average gross selling
price per gram (2)
|
|
|
|
|
Branded
flower
|
$6.15
|
$6.34
|
$6.31
|
$0.00
|
Unbranded
flower
|
$3.15
|
$4.03
|
$3.89
|
$0.00
|
Average net selling
price per gram (3)
|
|
|
|
|
Branded
flower
|
$4.54
|
$4.89
|
$4.66
|
$0.00
|
Unbranded
flower
|
$3.15
|
$4.03
|
$3.89
|
$0.00
|
|
|
|
|
|
Financial -
Cannabis
|
|
|
|
|
Gross
revenue
|
16,262
|
28,690
|
66,927
|
—
|
Net
revenue
|
14,743
|
28,021
|
63,562
|
—
|
Sales to
provincial boards (4)
|
6,327
|
2,921
|
13,386
|
—
|
Sales of
medical cannabis
|
9
|
7
|
24
|
—
|
Sales to
licensed producers (5)
|
9,926
|
25,762
|
53,517
|
—
|
Gross margin before
fair value adjustments
|
(516)
|
7,771
|
16,841
|
—
|
(1)
|
These are non-IFRS
measures. Please refer to the "Non-IFRS Measures" sections
below.
|
(2)
|
Gross selling price
per gram net of marketing fees, salvage fees and early payment
discounts with respect to sales under Sundial's supply
agreements.
|
(3)
|
Average net selling
price per gram net of excise tax.
|
(4)
|
Includes sales of
branded flower, vapes and accessories.
|
(5)
|
Includes sales of
unbranded flower, extracted oil and trim.
|
Fourth quarter and full year 2019 consolidated financial and
operational highlights
- Harvested 10,897 kilograms of cannabis in the fourth quarter of
2019 compared to 11,668 kilograms of cannabis in the previous
quarter. The decrease in kilograms harvested was due to newer
strains having slightly lower yields per square foot. For the year
ended December 31, 2019, the Company
harvested 34,012 kilograms of cannabis compared to 337 kilograms
for the ten months ended December 31,
2018. All production was from Sundial's Olds facility where Pod 1 contributed harvests
for the entire year, while the first harvest from Pod 2 was in
April 2019 and the first harvest from
Pod 3 was in May 2019.
- Additional Health Canada licences received at the Company's
Olds facility bring the total
rooms available for revenue generation to 114, representing over
400,000 sq. ft of licensed cultivation space with annual production
capacity of 85 million grams. These new licences enable the Company
to increase branded sales to provincial boards by leveraging the
processing capabilities of both its Olds and Rocky
View facilities. The Company also commenced extraction
operations at its Olds facility in
the first quarter of 2020.
- Expanded operations from cultivating one strain in January 2019 to successfully cultivating over 21
strains today (several of which are unique and proprietary to
Sundial)
- Launched a portfolio of cannabis brands leveraging data and
insights to meet the diverse needs and wants of cannabis consumers
– Top Leaf (Premium), Sundial Cannabis (Premium
Core), Palmetto (Core) and Grasslands (Value).
- Sold 4,285 kilogram equivalents of cannabis in the fourth
quarter of 2019 down 3,659 kilogram equivalents from 7,944 kilogram
equivalents sold in the previous quarter. The decrease in kilogram
equivalents sold was due to lower bulk flower sales to other
licensed producers as a result of lower demand in the Canadian
adult-use market, partially offset by sales of branded products to
provincial boards, which doubled in comparison to the prior
quarter. Total sales for the 2019 fiscal year were 17,293 kilogram
equivalents of cannabis.
- Gross revenue for the three months ended December 31, 2019 was $23.1 million (includes $16.3 million of cannabis sales) compared to
$34.2 million (includes $28.7 million of cannabis sales) for the three
months ended September 30, 2019.
While Sundial's cannabis sales to provincial boards increased over
the prior quarter, the decrease in gross revenue is attributed to
lower unbranded sales to other licensed producers. Gross revenue
for the year ended December 31, 2019
was $79.2 million which included
$66.9 million of cannabis sales.
- Average gross selling price per gram of branded flower of
$6.15 per gram in the fourth quarter
of 2019 was relatively flat compared to $6.34 per gram in the prior quarter, as contract
prices with provincial boards remained steady. Average gross
selling prices for unbranded flower in the fourth quarter decreased
22% to $3.15 from $4.03 in the previous quarter due to competitive
pressures in wholesale market as a result of industry-wide
increased inventory levels. For the year ended December 31, 2019, average gross selling price
per gram of branded flower was $6.31
per gram and $3.89 per gram for
unbranded flower.
- Cost of sales for the three months ended December 31, 2019 was $20.1 million (includes $15.3 million related to cannabis sales) and
gross margin before fair value adjustments was $1.4 million (negative gross margin of
$0.5 million related to cannabis
sales), compared to $24.8 million
($20.3 million related to cannabis
sales) and $8.7 million ($7.8 million related to cannabis sales),
respectively, for the three months ended September 30, 2019. Cost of sales decreased from
the prior quarter as a result of the decrease in revenue, but was
also impacted by costs related to replacing product-in-kind and a
provision for inventory obsolescence. Cost of sales for the year
ended December 31, 2019 was
$56.1 million which included
$46.7 million related to cannabis
sales.
- Net loss for the three months ended December 31, 2019 was $145.1 million compared to $97.5 million in the previous quarter. The
increase was primarily due to the impact of a non-cash impairment
charge of $100.3 million related to
the goodwill recorded upon the acquisition of Bridge Farm, as well
as a decrease in net revenue, increases in cost of sales, royalties
on Top Leaf products, and increased provisions for expected
credit losses. The increase in net loss was partially offset by
lower transaction and financing related costs. Net loss for the
year increased to $271.6 million from
$56.5 million for the ten months
ended December 31, 2018 due to the
impact of the goodwill impairment charge related to Bridge Farm, as
well as increases in general and administrative expense, sales and
marketing expense, research and development expense, share-based
compensation expense, transaction costs, finance costs and a loss
on financial obligation. The increase in net loss was partially
offset by a higher gross margin and nil pre-production expenses due
to the fact that the Company commenced commercial production in the
first quarter of 2019.
- Adjusted EBITDA was a loss of $19.7
million for the three months ended December 31, 2019 compared to a loss of
$7.9 million for the three months
ended September 30, 2019. The
increased loss was due to a decrease in net revenue, increases in
cost of sales, general and administrative expenses and sales and
marketing expenses, and for other reasons noted above. Adjusted
EBITDA for the year ended December 31,
2019 was a loss of $33.6
million compared to a loss of $17.6
million for the ten months ended December 31, 2018. The increase in loss was
driven by the factors noted above, partially offset by an increase
in net revenue due to the Company commencing sales of adult-use
cannabis in 2019 and nil pre-production expenses due to the fact
that the Company commenced commercial production in the first
quarter of 2019.
- The Company incurred capital expenditures of $25.8 million in the fourth quarter of 2019
compared to $48.3 million in the
prior quarter. Capital expenditures in the fourth quarter related
to the Olds facility (Pod 4, Pod 5
and the extraction and processing facility – approximately
$13.5 million), Merritt facility (approximately $5.4 million) and Clay Lake Phase 2
(approximately $5.2 million). Capital
expenditures in the prior quarter related to the Olds facility (Pod 4, Pod 5 and the extraction
and processing facility – approximately $27.7 million) and Clay Lake Phase 2
(approximately $20.7 million). The
Company incurred capital expenditures of $138.1 million in 2019 compared to $76.3 million during the 2018 fiscal period.
Capital expenditures consisted of $98.8
million on continued construction and development of the
Olds facility, $9.9 million on the Merritt facility and post-acquisition
expenditures of $27.9 million at
Bridge Farm, primarily dedicated to Clay Lake Phase 2
facility.
Non-IFRS Measures
Certain financial measures in this
news release, including adjusted EBITDA, working capital and gross
margin before fair value adjustments are non-IFRS measures. These
terms are not defined by IFRS and, therefore, may not be comparable
to similar measures provided by other companies. These non-IFRS
financial measures should not be considered in isolation or as an
alternative for measures of performance prepared in accordance with
IFRS.
Adjusted EBITDA
Adjusted EBITDA is a non-IFRS measure
which the Company uses to evaluate its operating performance.
Adjusted EBITDA provides information to investors, analysts and
others to aid in understanding and evaluating the Company's
operating results in a similar manner as its management team.
Adjusted EBITDA is defined as net income (loss) before finance
costs, depreciation and amortization, accretion expense, income tax
recovery and excluding change in fair value of biological assets,
change in fair value realized through inventory, unrealized foreign
exchange gains or losses, share-based compensation expense, asset
impairment, gain or loss on disposal of property, plant and
equipment and certain one-time non-operating expenses, as
determined by management.
The following tables reconcile Adjusted EBITDA to net loss for
the periods noted.
|
Year ended
December 31, 2019
|
|
($000s)
|
Cannabis
|
|
Ornamental
Flowers
|
|
Corporate
|
|
Consolidated
|
|
Net loss
|
|
(111,598)
|
|
|
(122,952)
|
|
|
(37,079)
|
|
|
(271,629)
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance
costs
|
|
27,781
|
|
|
417
|
|
|
—
|
|
|
28,198
|
|
Loss on financial
obligation
|
|
60,308
|
|
|
—
|
|
|
—
|
|
|
60,308
|
|
Depreciation and
amortization
|
|
595
|
|
|
3,482
|
|
|
—
|
|
|
4,077
|
|
Income tax
recovery
|
|
(3,609)
|
|
|
(1,017)
|
|
|
—
|
|
|
(4,626)
|
|
Change in fair value
of biological assets
|
|
(30,340)
|
|
|
(386)
|
|
|
—
|
|
|
(30,726)
|
|
Change in fair value
of biological assets realized through inventory sold
|
|
10,685
|
|
|
—
|
|
|
—
|
|
|
10,685
|
|
Unrealized foreign
exchange (gain) loss
|
|
671
|
|
|
(1,779)
|
|
|
—
|
|
|
(1,108)
|
|
Share-based
compensation
|
|
15,809
|
|
|
—
|
|
|
23,715
|
|
|
39,524
|
|
Goodwill
impairment
|
|
—
|
|
|
100,305
|
|
|
—
|
|
|
100,305
|
|
Asset
impairment
|
|
162
|
|
|
—
|
|
|
—
|
|
|
162
|
|
Loss on disposition of
PP&E
|
|
(8)
|
|
|
(13)
|
|
|
—
|
|
|
(21)
|
|
Cost of sales non-cash
component (1)
|
|
2,693
|
|
|
—
|
|
|
—
|
|
|
2,693
|
|
Loss on contingent
consideration
|
|
—
|
|
|
18,645
|
|
|
—
|
|
|
18,645
|
|
Gain on
investment
|
|
—
|
|
|
(165)
|
|
|
—
|
|
|
(165)
|
|
Transaction costs
(2)
|
|
—
|
|
|
—
|
|
|
10,069
|
|
|
10,069
|
|
Adjusted
EBITDA
|
|
(26,851)
|
|
|
(3,463)
|
|
|
(3,295)
|
|
|
(33,609)
|
|
(1)
|
Cost of sales
non-cash component is comprised of depreciation expense.
|
(2)
|
Transaction costs are non-recurring costs related to Sundial's
initial public offering and the acquisition of Bridge
Farm.
|
|
Ten months
ended
December 31,
2018
|
($000s)
|
Consolidated
(1)
|
Net loss
|
|
(56,526)
|
Adjustments
|
|
|
Finance
costs
|
|
1,797
|
Loss on financial
obligation
|
|
27,017
|
Depreciation and
amortization
|
|
920
|
Change in fair value
of biological assets
|
|
1,280
|
Share-based
compensation
|
|
7,410
|
Asset
impairment
|
|
523
|
Loss on disposition of
PP&E
|
|
17
|
Adjusted
EBITDA
|
|
(17,562)
|
(1)
|
For the
ten months ended December 31, 2018, there was only one
segment.
|
|
Three months ended
December 31, 2019
|
($000s)
|
Cannabis
|
|
Ornamental
Flowers
|
|
Corporate
|
|
Consolidated
|
Net loss
|
|
(25,532)
|
|
|
(114,592)
|
|
|
(4,962)
|
|
|
(145,086)
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
Finance
costs
|
|
5,687
|
|
|
(190)
|
|
|
—
|
|
|
5,497
|
Loss on financial
obligation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Depreciation and
amortization
|
|
184
|
|
|
2,347
|
|
|
—
|
|
|
2,531
|
Income tax
recovery
|
|
—
|
|
|
(505)
|
|
|
—
|
|
|
(505)
|
Change in fair value
of biological assets
|
|
(5,799)
|
|
|
(205)
|
|
|
—
|
|
|
(6,004)
|
Change in fair value
of biological assets realized through inventory sold
|
|
3,121
|
|
|
—
|
|
|
—
|
|
|
3,121
|
Unrealized foreign
exchange (gain) loss
|
|
478
|
|
|
(1,779)
|
|
|
—
|
|
|
(1,301)
|
Share-based
compensation
|
|
3,152
|
|
|
—
|
|
|
1,820
|
|
|
4,972
|
Goodwill
impairment
|
|
—
|
|
|
100,305
|
|
|
—
|
|
|
100,305
|
Loss on disposition of
PP&E
|
|
(12)
|
|
|
—
|
|
|
—
|
|
|
(12)
|
Cost of sales non-cash
component (1)
|
|
1,621
|
|
|
—
|
|
|
—
|
|
|
1,621
|
Loss on contingent
consideration
|
|
—
|
|
|
12,810
|
|
|
—
|
|
|
12,810
|
Transaction costs
(2)
|
|
—
|
|
|
—
|
|
|
2,318
|
|
|
2,318
|
Adjusted
EBITDA
|
|
(17,100)
|
|
|
(1,809)
|
|
|
(824)
|
|
|
(19,733)
|
(1)
|
Cost of sales
non-cash component is comprised of depreciation expense.
|
(2)
|
Transaction costs are non-recurring costs related to the IPO and
the acquisition of Bridge Farm.
|
|
Three months
ended
December 31,
2018
|
($000s)
|
Consolidated
(1)
|
Net loss
|
|
(35,951)
|
Adjustments
|
|
|
Finance
costs
|
|
572
|
Loss on financial
obligation
|
|
21,485
|
Depreciation and
amortization
|
|
539
|
Change in fair value
of biological assets
|
|
1,345
|
Share-based
compensation
|
|
2,423
|
Asset
impairment
|
|
522
|
Loss on disposition of
PP&E
|
|
17
|
Adjusted
EBITDA
|
|
(9,048)
|
(1)
|
For the three months ended December 31, 2018, there was only one
segment.
|
Conference call
The Company will hold its conference call on March 31, 2020 at 10:30
a.m. EDT (8:30am MDT).
Callers may access the conference call via the following phone
numbers:
Canada/USA Toll Free: 1-800-319-4610
International Toll: +1-604-638-5340
UK Toll Free: 0808-101-2791
Callers should dial in 5-10 minutes prior to the scheduled start
time.
Webcast
To access the live conference call webcast, please visit the
following link:
http://services.choruscall.ca/links/sundialgrowers20200331.html
A replay will be available for three months following the
conference call.
About Sundial Growers Inc.
Sundial is a public company with Common Shares traded on Nasdaq
under the symbol "SNDL". Sundial is a licensed producer that crafts
cannabis using state-of-the-art indoor facilities. Our
'craft-at-scale' modular growing approach, award-winning genetics
and experienced master growers set us apart.
Our Canadian operations cultivate small-batch cannabis using an
individualized "room" approach, with 470,000 square feet of total
space. In the United Kingdom, we
grow traceable plants, including hemp, ornamental flowers and
edible herbs within 1.75 million square feet of environmentally
friendly facilities.
Sundial's brand portfolio includes Top Leaf, Sundial
Cannabis, Palmetto and Grasslands. Our
consumer-packaged goods experience enables us to not just grow
quality cannabis, but also to create exceptional consumer and
customer experiences.
We are proudly Albertan, headquartered in Calgary, AB, with operations in Olds, AB, and Rocky View County, AB.
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
cost-cutting initiatives, the cost savings expected to be achieved,
the Company's ability to obtain new financing and covenant relief,
operational goals, demand for the Company's products, the Company's
ability to achieve profitability, the Company's ability to complete
a transaction with respect to Bridge Farm on acceptable terms or at
all, the development of the legal cannabis market, future
financings and the maintenance of production levels. In particular,
any failure or delay in obtaining new financing and covenant relief
would have a material adverse effect on our liquidity and impair
our ability to operate as a going concern. In such a case,
the Company would look to delay investments or capital expenditures
and evaluate potential asset sales, but it could be forced to
curtail operations or seek relief under bankruptcy or insolvency
laws. In addition, depending on the development of the
cannabis market and the Company's ability to capture any growth
opportunities, future liquidity issues may continue to arise, which
could have a material adverse effect on our business, results of
operations and financial condition. Forward-looking statements are
frequently characterized by words such as "plan", "continue",
"expect", "project", "intend", "believe", "anticipate", "estimate",
"likely", "outlook", "forecast", "may", "will", "potential",
"proposed" and other similar words, or statements that certain
events or conditions "may" or "will" occur. These statements are
only predictions. Various assumptions were used in drawing the
conclusions or making the projections contained in the
forward-looking statements throughout this news release.
Forward-looking statements are based on the opinions and estimates
of management at the date the statements are made,
and are subject to a variety of risks and uncertainties and
other factors that could cause actual events or results to differ
materially from those projected in the forward-looking statements.
Please see "Item 3D Risk Factors" in the Company's Annual Report on
Form 20-F, which was filed with the Securities and Exchange
Commission on March 30, 2020, for a
discussion of the material risk factors that could cause actual
results to differ materially from the forward-looking information.
The Company is under no obligation, and expressly disclaims any
intention or obligation, to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as expressly required by applicable
law.
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SOURCE Sundial Growers Inc.