CALGARY,
AB, May 16, 2022 /PRNewswire/ - Sundial
Growers Inc. (NASDAQ: SNDL) ("Sundial" or the "Company") reported
its financial and operational results for the first quarter ended
March 31, 2022. All financial
information in this press release is reported in millions of
Canadian dollars unless otherwise indicated.
The Company will hold a conference call and webcast at
10:30 a.m. EDT (8:30 a.m. MDT) on Tuesday,
May 17, 2022. Please see the dial-in details within the
release and additional details on Sundial's website at
www.sndlgroup.com.
This press release is intended to be read in conjunction with
the Company's Financial Statements and Notes for the period and the
accompanying Management's Discussion and Analysis ("MD&A").
These reports are available under the Company's profile on SEDAR at
www.sedar.com and on EDGAR at www.sec.gov/edgar.shtml.
Sundial has also posted a supplemental investor presentation on
its website which can be found at
https://sndlgroup.com/investors.
FIRST QUARTER 2022 FINANCIAL AND OPERATIONAL
HIGHLIGHTS
- Acquired Alcanna Inc. ("Alcanna") on March 31, 2022, creating the largest private
sector cannabis and liquor retail network in Canada.
- Net revenue for the first quarter of 2022 of $17.6 million, including one day of revenue on
the acquisition of Alcanna, an increase of 78% over the first
quarter of 2021.
-
- Cannabis Cultivation and Production: Net revenue of
$8.8 million for the first quarter of
2022.
- Cannabis Retail: Net revenue of $7.5 million for the first quarter of 2022
(including $0.7 million for one day
of revenue from Nova Cannabis Inc. ("Nova") acquired as part
of the Alcanna acquisition).
- Liquor Retail: One-day revenue contribution of
$1.3 million from the Alcanna
acquisition.
- Alcanna's revenues for the period from January 1, 2022 to March
30, 2022 (prior to the date it was acquired by Sundial were
$162.5 million, with gross margin of
approximately $36.3 million, which,
subject to certain acquisition-related and other adjustments, would
have been consolidated with Sundial's results for this period had
the acquisition occurred on January 1,
2022.
- Gross margin increased to $3.4
million for the first quarter of 2022 compared to a loss of
$3.5 million in the first quarter of
2021, a 199% increase.
- Net loss was improved to $38.0
million for the first quarter of 2022 compared to a
$134.4 million net loss in the first
quarter of 2021, an improvement of 72%.
- Adjusted EBITDA loss of $0.7
million for the first quarter of 2022, compared to Adjusted
EBITDA of $3.3 million in the first
quarter of 2021, largely driven by central bank interest rate
changes and fair value adjustments related to the SunStream joint
venture.
- $1.0 billion of cash, marketable
securities, and long-term investments and no outstanding debt at
March 31, 2022; $361 million of unrestricted cash at May 13, 2022.
"The first quarter of 2022 was both transformational and
transitional for Sundial," said Zach
George, Chief Executive Officer. "We are now Canada's largest private sector distributor of
both liquor and cannabis with 354 retail locations and have quickly
benefitted from collaboration with our new legacy Alcanna
colleagues. Sundial's regulated products platform provides unique
insights into evolving consumer preferences and value propositions.
We continue to strengthen and transform our business while
benefitting from vertical integration across our segments under a
shared services model. In less than two months, we have been able
to increase branded product distribution by shipping products to
Value Buds stores and have started to realize synergies against an
integration plan that will be a focus for the balance of the year.
Through cost structure improvements in our cannabis operations, we
have created a more balanced and diverse product mix that focuses
on higher-margin, higher-quality cannabis. In addition, the current
rising interest rate environment has led us to make non-cash
accounting adjustments to our largely fixed-rate SunStream
portfolio, resulting in muted adjusted EBITDA contribution for the
quarter."
Commenting on the current market environment, Mr. George added
"While our shares have outperformed global and Canadian cannabis
indices on a year-to-date and a one-year basis through May 13, we are focused on sustainable absolute
returns and committed to the relentless pursuit of shareholder
value creation. Sundial's debt-free balance sheet and ample cash
reserves place us in an enviable position as we witness a reckoning
taking hold in the Canadian cannabis market. Continued aggressive
cash consumption by our peers, reduced access to capital, and
waning investor risk appetite is likely to accelerate sector
rationalization as the industry slowly moves towards the formation
of an oligopoly."
FIRST QUARTER 2022 KEY FINANCIAL METRICS
OPERATING
SEGMENTS
|
|
---------Cannabis---------
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($000s)
|
|
Cultivation
and
Production
|
|
|
Retail
|
|
|
Liquor
Retail
|
|
|
Investment
|
|
|
Corporate
|
|
|
Total
|
|
As at March 31,
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
153,612
|
|
|
|
254,514
|
|
|
|
582,808
|
|
|
|
982,306
|
|
|
|
23,032
|
|
|
|
1,996,272
|
|
Three months ended
March 31, 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Net revenue
|
|
|
8,775
|
|
|
|
7,512
|
|
|
|
1,310
|
|
|
|
—
|
|
|
|
—
|
|
|
|
17,597
|
|
Gross margin
|
|
|
(158)
|
|
|
|
3,293
|
|
|
|
284
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,419
|
|
Interest and fee
revenue
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,861
|
|
|
|
—
|
|
|
|
3,861
|
|
Loss on marketable
securities
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(17,710)
|
|
|
|
—
|
|
|
|
(17,710)
|
|
Share of profit of
equity-accounted investees
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,091
|
|
|
|
—
|
|
|
|
4,091
|
|
Depreciation and
amortization
|
|
|
68
|
|
|
|
595
|
|
|
|
—
|
|
|
|
—
|
|
|
|
76
|
|
|
|
739
|
|
Earnings (loss) before
tax
|
|
|
(9,190)
|
|
|
|
131
|
|
|
|
(73)
|
|
|
|
(9,758)
|
|
|
|
(19,150)
|
|
|
|
(38,040)
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|
|
|
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|
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|
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|
|
|
|
|
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As at December 31,
2021
|
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|
|
|
|
|
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|
|
|
|
|
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|
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Total assets
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147,887
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|
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153,624
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—
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1,093,596
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|
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29,155
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1,424,262
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|
Three months ended
March 31, 2021
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|
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|
|
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|
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|
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Net revenue
|
|
|
9,891
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
9,891
|
|
Gross margin
|
|
|
(3,452)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
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|
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|
—
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|
|
|
(3,452)
|
|
Interest and fee
revenue
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,849
|
|
|
|
—
|
|
|
|
2,849
|
|
Gain on marketable
securities
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
12,900
|
|
|
|
—
|
|
|
|
12,900
|
|
Share of profit of
equity-accounted investees
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Depreciation and
amortization
|
|
|
954
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
104
|
|
|
|
1,058
|
|
Earnings (loss) before
tax
|
|
|
(9,172)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
14,300
|
|
|
|
(139,573)
|
|
|
|
(134,445)
|
|
FIRST QUARTER 2022 RESULTS
Sundial is comprised of four segments: Cannabis Cultivation and
Production, Cannabis Retail, Liquor Retail, and Investments.
CANNABIS CULTIVATION AND PRODUCTION
Sundial remains focused and committed to its cultivation and
processing activities, including continuous improvement of its
product offerings for customers while focusing on cost optimization
and the most competitive and profitable strains and brands.
- Cost of sales per gram sold for the three months ended
March 31, 2022 was $2.69 compared to $2.87 for the three months ended March 31, 2021. The decrease of $0.18 per gram sold reflects reductions in per
gram costs across all branded product formats due to operational
efficiencies, despite increases in cost of power and wages.
- Gross margin for the first quarter of 2022 was negative
$0.2 million compared to negative
$3.5 million for the three months
ended March 31, 2021. The gross
margin improvement demonstrates Sundial's progress in implementing
supply chain excellence to drive discipline around cost
optimization, despite intense price compression and lower
revenue.
- Cultivation consistency continues to improve in 2022 with
Sundial's highest ever average weighted potency results achieved in
the first quarter of 2022 at 23.9% THC representing a 1.5% increase
from the previous quarter. Further, Sundial's average weighted
yield per square foot broke a new Company record in March 2022, with an average weighted yield of 64
grams per square foot.
- Through its enhanced portfolio initiative, Sundial remains
focused on the premium inhalables segment. The Company has made
material improvements in its cultivation and innovation pipeline,
which is contributing to an enhanced product portfolio nationally.
In the first quarter of 2022, Sundial's priority SKU distribution
increased nationally by 1,389 points as measured by internal
Customer Relationship Management reporting. Further, the company
continues to partner effectively with provincial boards and secured
159 new inhalable product listings nationally year to date. This
innovation success rate represents a 92% strike rate against the
Company's plan despite provinces and retailers scrutinizing and
rationalizing SKUs.
- Sundial has terminated the Service and Sale Agreement between
Sundial and Sun 8 Holdings Inc. for a total consideration of
approximately $3.1 million in cash
and $2.9 million in Sundial shares.
As part of this transaction, Sundial has acquired the royalty
rights to own the intellectual property of Top Leaf, which
eliminates the royalty fee Sundial was paying to Sun 8.
REVENUE FROM CULTIVATION AND PRODUCTION
Gross revenue
from branded cannabis products was $9.7
million for the first quarter of 2022, an increase of 8%
compared to the first quarter of 2021. The increase in branded
sales as part of the company's product mix reflects the progress
and commitment to executing its retail vertical integration
strategy across Western Canada and
Ontario. Total gross revenue from the cultivation and product
of cannabis was $11.3 million for the
first quarter of 2022, a decrease of 3% compared to the first
quarter of 2021. The decline in gross revenue was driven by a 42%
decrease in wholesale sales to other Licensed Producers in the
first quarter of 2022 versus the first quarter of 2021.
NET SELLING PRICE
Average net selling price per gram
was $2.60 in the first quarter of
2022, an increase of 5%, compared to $2.48 per gram in the first quarter of 2021. The
increase was due to higher prices for provincial board sales.
Provincial board prices have increased due to the shift of the mix
of Sundial offerings from value products to core products as well
as lower price discounts and concessions compared to the prior
period.
REVENUE BY FORMATS
In the first quarter of 2022 gross
revenue from Sundial's formats was:
|
|
Three months
ended
March 31
|
|
($000s)
|
|
2022
|
|
|
2021
|
|
Revenue from dried
flower
|
|
|
8,853
|
|
|
|
9,716
|
|
Revenue from
vapes
|
|
|
531
|
|
|
|
1,413
|
|
Revenue from
oil
|
|
|
27
|
|
|
|
181
|
|
Revenue from edibles
and concentrates
|
|
|
1,536
|
|
|
|
438
|
|
Revenue from
services
|
|
|
358
|
|
|
|
—
|
|
Gross
revenue
|
|
|
11,305
|
|
|
|
11,748
|
|
CANNABIS RETAIL
The Company's expanded retail network creates an opportunity to
own the relationship with cannabis consumers and showcase both
Sundial's branded products and the best offerings from other
Canadian licensed producers.
- Effective March 31, 2022, Sundial
appointed Marcie Kiziak as its
President, Cannabis Retail.
- Gross margin for retail operations for the first quarter of
2022, was $3.3 million dollars.
- As of May 13, 2022, the
Spiritleaf store count is 103 (20 corporate stores and 83
franchised stores) and the Nova store count is 80 stores.
- Sundial continued to see brand share increase for its house
brands sold in Spiritleaf locations through the first quarter and
we continue to see product penetration momentum in the second
quarter of 2022. Value Buds stores began carrying Sundial brand
products immediately following the Alcanna acquisition.
REVENUE FROM CANNABIS RETAIL
Gross revenue from the
cannabis retail segment for the three months ended March 31,
2022 was $7.5 million, including
$0.7 million representing one day of
sales for Nova.
SYSTEM-WIDE RETAIL SALES
System-wide retail
sales1 at were $34.6
million for the first quarter of 2022 compared to
$41.4 million in the fourth quarter
of 2021. System-wide retail sales represent the aggregate revenue
earned by franchised Spiritleaf retail cannabis stores and
corporate-owned Spiritleaf retail cannabis stores and do not
represent revenues that accrue to the Company. The Company receives
all revenues from corporate-owned Spiritleaf retail cannabis
stores, and royalties and advertising fees in respect of the
franchised Spiritleaf retail cannabis store revenue.
The Nova retail stores results are comprised of one day of
operations following the acquisition on March 31, 2022, and were as follows:
- Gross revenue was $0.7
million.
- Gross margin was $0.2
million.
_________________________
|
1
System-wide retail sales is a specified financial measure. For more
details, see the "Specified Financial Measures" section
below.
|
While Sundial does not account for the results of the Nova retail
stores prior to the acquisition date, the results for the period
from January 1, 2022 to March 31, 2022 were as follows:
- Gross revenue of $49.8
million.
- Gross margin of $9.4 million, or
18.8% of sales.
- In the first quarter of 2022, Nova opened six new Value Buds
locations with 12 further store openings planned for the remainder
of 2022.
LIQUOR RETAIL (ALCANNA)
With the Alcanna acquisition
on March 31, 2022, Sundial is now
Canada's leading regulated
products platform. Sundial has commenced and will continue the
post-acquisition integration work throughout the remainder of
2022.
The retail liquor segment results are comprised of one day of
operations following the acquisition on March 31, 2022 and are as follows:
- Gross revenue was $1.3
million.
- Gross margin was $0.3
million.
While Sundial does not account for the results of the liquor
retail segment prior to the acquisition date, the results of
Alcanna's retail locations for the period from January 1, 2022 to March
31, 2022 were as follows:
- Gross revenue for liquor retail sales for the Ace Liquor, Wine
and Beyond, and Liquor Depot banners was $114.7 million.
- Gross margin was $27.3 million,
or 24.1% of sales.
- In the first quarter of 2022, one Ace Liquor and four Wine
& Beyond locations were opened in Alberta.
INVESTMENTS
- As of the end of the first quarter of 2022, the Company had
deployed capital on several cannabis-related investments totaling
$650 million, including $453 million to the SunStream Bancorp Inc. joint
venture ("SunStream"). For the first quarter of 2022, the
investment portfolio generated interest and fee revenue of
$3.9 million ($2.8 million in the first quarter of 2021), share
of the profit of equity-accounted investees generated from
investments by SunStream of $4.1
million (nil in the first quarter of 2021), and an
investment loss of $17.7 million
(gain of $12.9 million in the first
quarter of 2021) on marketable securities, which includes
unrealized losses on publicly disclosed strategic investments in
Village Farms International, Inc. and The Valens Company Inc.
- The investments in SunStream are accounted for at an estimate
of their fair value prepared by independent valuators, reflecting
current credit market conditions and underlying uncertainty. The
impact of changes to interest rates during the quarter on the
portfolio was approximately $6.6
million. Actual returns from investments may differ
materially from the impact of accounting fair value adjustments. To
date no credit losses have been realized in the SunStream
portfolio.
REVENUE FROM INVESTMENTS
Revenue from investments in
the first quarter of 2022 was negative $17.7
million, including unrealized losses on marketable
securities of $17.8 million, due to
fluctuations in share prices from our strategic equity portfolio of
Canadian cannabis-related investments.
|
|
Three months
ended
March 31
|
|
($000s)
|
|
2022
|
|
|
2021
|
|
Interest and fee
revenue
|
|
|
|
|
|
|
|
|
Interest revenue from investments at amortized
cost
|
|
|
995
|
|
|
|
113
|
|
Interest and fee revenue from investments at Fair Value
Through Profit or Loss
|
|
|
2,116
|
|
|
|
2,182
|
|
Interest revenue from cash
|
|
|
750
|
|
|
|
554
|
|
|
|
|
3,861
|
|
|
|
2,849
|
|
Investment
revenue
|
|
|
|
|
|
|
|
|
Realized gains
|
|
|
124
|
|
|
|
8,019
|
|
Unrealized (losses) gains
|
|
|
(17,834)
|
|
|
|
4,881
|
|
|
|
|
(17,710)
|
|
|
|
12,900
|
|
Revenue from direct
investments
|
|
|
(13,849)
|
|
|
|
15,749
|
|
Share of profit of
equity-accounted investees
|
|
|
4,091
|
|
|
|
—
|
|
Total investment
activities
|
|
|
(9,758)
|
|
|
|
15,749
|
|
CONSOLIDATED FINANCIAL RESULTS
GENERAL AND ADMINISTRATIVE EXPENSES
General and
administrative expenses for the three months ended March 31,
2022 were $10.7 million
compared to $7.1 million for the
three months ended March 31, 2021. The increase of
$3.6 million was mainly due to
increases in salaries and wages, office and general and
professional fees. The increases in salaries and wages and office
and general expenses were due to the acquisition of Inner Spirit
Holdings in July 2021. The increase
in professional fees was largely due to an increase in accounting
services fees relating to the completion of the Company's 2021
year-end audit.
NET LOSS
The $96.4
million improvement in net loss is primarily due to the
higher net revenue of $7.7 million,
share of profit from SunStream of $4.1
million and change in fair value of derivative warrant
liabilities of $121.6 million,
partially offset by investment losses of $30.6 million and higher general and
administrative expenses of $3.6
million.
ADJUSTED EBITDA
Adjusted EBITDA was a loss of $0.7
million for the three months ended March 31, 2022
compared to positive Adjusted EBITDA of $3.3
million for the three months ended March 31, 2021. The
decrease was due to the following:
- An increase in cost of sales, due to the inclusion of cannabis
retail cost of sales; and
- A decrease in realized gains on marketable securities.
The decrease was partially offset by:
- An increase in net revenue, primarily as a result of the
inclusion of cannabis retail revenue; and
- Share of profit from the SunStream joint venture.
LIQUIDITY POSITION
- Book value of net assets at March 31,
2022, was USD$1.3 billion or
USD$0.53 per share
- As at March 31, 2022, and
May 13, 2022, the Company had an
unrestricted cash balance of $423
million and $361 million,
respectively, and total common shares outstanding of 2.4 billion at
March 31, 2022 and May 13, 2022.
SHARE REPURCHASE PROGRAM
- Sundial's insider trading blackout period expires on
May 18, 2022. Management views the
repurchase of shares as an accretive use of capital given the
current trading price of Sundial's shares and management's view of
the Company's liquidity, assets, and operations. In addition to the
previously announced Share Repurchase Program, the Company recently
sought approval from the Alberta
and Ontario Securities Commissions to sell Sundial put options to
enhance this program. No shares have been repurchased or put
options sold by Sundial under the Share Repurchase Program to date
due to the previously disclosed blackout.
STRATEGIC AND ORGANIZATIONAL UPDATE
Sundial remains focused on building long-term shareholder value
through vertical integration, accretive deployment of cash
resources, expansion of its retail distribution network,
further streamlining of the Company's operating structure, and
enhanced offerings of high-quality brands.
ACCESS TO UNIQUE INSIGHTS
- Across a broader retail value chain, Sundial's retail footprint
is expected to help facilitate customer relationships and help
capture additional economies of scale.
- By gaining insight into thousands of daily shopper transactions
at over 354 retail stores, Sundial intends to optimize offerings,
pricing, and promotions in both liquor and cannabis locations to
better serve customers.
IMPROVED SUPPLY AND DEMAND PLANNING
- The vertical integration of Sundial is also designed to provide
economies of scale and greater synergies with a shared services
model, providing the company with the ability to better align its
demand and supply plans and operate more cohesively.
- In addition to implementing more rigorous supply and demand
planning processes, the company's extensive industry footprint may
positively impact relations with regulators, suppliers, and
distributors.
- The Company's access to a large customer base provides it with
a strong foundation for e-commerce and direct-to-consumer
strategies that are expected to increase revenue.
- Additionally, Sundial expects to continue to assess profitable
opportunities such as private label offerings and to develop
targeted merchandising strategies for its entire retail
portfolio.
MANAGEMENT TEAM
With the acquisition of Alcanna,
Sundial has gained significant retail experience and expertise. The
Company's Board of Directors has appointed the following
management team:
- Zach George – Chief Executive
Officer
- Jim Keough – Chief Financial
Officer
- David Gordey – Chief
Administrative Officer
- Andrew Stordeur – President and
Chief Operating Officer
- Marcie Kiziak – President,
Cannabis Retail
- Tank Vander – President, Liquor Division
- Matthew Hewson – General Counsel
and SVP, Legal and Regulatory Affairs
- Robbie Madan – Chief Information
and Digital Officer
SPECIFIED FINANCIAL MEASURES
Certain specified
financial measures in this news release, including adjusted EBITDA
and system-wide retail sales, 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 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 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 to its management team.
Adjusted EBITDA is defined as net income (loss) from continuing
operations 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, unrealized
gains or losses on marketable securities, change in fair value of
derivative warrants, 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.
($000s except percentages)
|
Q1 2022
|
|
Q4 2021
|
|
% Change
|
|
Q1 2021
|
|
% Change
|
|
Net
loss
|
|
(38,040)
|
|
|
(54,761)
|
|
|
31
|
%
|
|
(134,445)
|
|
|
72
|
%
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance costs
|
|
(61)
|
|
|
3,530
|
|
|
102
|
%
|
|
51
|
|
|
220
|
%
|
Change in estimate of fair value of derivative
warrants
|
|
8,300
|
|
|
(8,200)
|
|
|
201
|
%
|
|
129,944
|
|
|
-94
|
%
|
Loss on cancellation of contracts
|
|
—
|
|
|
5,116
|
|
|
-100
|
%
|
|
—
|
|
|
0
|
%
|
Depreciation and amortization
|
|
739
|
|
|
352
|
|
|
110
|
%
|
|
1,058
|
|
|
-30
|
%
|
Income tax recovery
|
|
—
|
|
|
7,787
|
|
|
-100
|
%
|
|
—
|
|
|
0
|
%
|
Change in fair value of biological assets
|
|
(3,690)
|
|
|
(2,158)
|
|
|
-71
|
%
|
|
94
|
|
|
4026
|
%
|
Change in fair value realized through inventory
|
|
1,561
|
|
|
1,756
|
|
|
-11
|
%
|
|
50
|
|
|
3022
|
%
|
Unrealized foreign exchange (gain) loss
|
|
16
|
|
|
(1)
|
|
|
1700
|
%
|
|
1,905
|
|
|
-99
|
%
|
Unrealized loss on marketable securities
|
|
17,834
|
|
|
43,750
|
|
|
-59
|
%
|
|
(4,881)
|
|
|
465
|
%
|
Share-based compensation
|
|
4,204
|
|
|
2,443
|
|
|
72
|
%
|
|
3,456
|
|
|
22
|
%
|
Loss on disposition of PP&E
|
|
—
|
|
|
(374)
|
|
|
-100
|
%
|
|
117
|
|
|
-100
|
%
|
Cost of sales non-cash component (1)
|
|
—
|
|
|
772
|
|
|
-100
|
%
|
|
826
|
|
|
-100
|
%
|
Inventory obsolescence
|
|
1,981
|
|
|
9,702
|
|
|
-80
|
%
|
|
1,754
|
|
|
13
|
%
|
Restructuring costs
|
|
—
|
|
|
874
|
|
|
-100
|
%
|
|
—
|
|
|
0
|
%
|
Transaction costs (2)
|
|
6,481
|
|
|
7,837
|
|
|
-17
|
%
|
|
3,648
|
|
|
78
|
%
|
Government subsidies
|
|
—
|
|
|
—
|
|
|
0
|
%
|
|
(2,180)
|
|
|
-100
|
%
|
Other expenses
|
|
—
|
|
|
—
|
|
|
0
|
%
|
|
1,930
|
|
|
-100
|
%
|
Adjusted EBITDA
|
|
(675)
|
|
|
18,425
|
|
|
104
|
%
|
|
3,327
|
|
|
120
|
%
|
|
|
(1) Cost of sales
non-cash component is comprised of depreciation expense
|
|
(2) Transaction costs
relate to financing and investing activities related to
acquisitions
|
|
SYSTEM-WIDE RETAIL SALES
System-wide retail sales is a
non-IFRS measure which the Company uses to evaluate the performance
of its retail operations. System-wide retail sales represent the
aggregate revenue earned by both franchised and corporate-owned
retail cannabis stores and do not represent solely the retail
segment's revenue. The Company only receives royalties, advertising
and franchise fees in respect of franchised Spiritleaf retail
cannabis store revenue. The system-wide retail sales measure is
useful to management in evaluating brand scale and market
penetration and is used by management to assess the financial and
operating performance of the Company and the strength of the
Company's market position relative to its competitors.
|
|
Three months
ended
March 31
|
|
($000s)
|
|
2022
|
|
|
2021
|
|
Gross
revenue
|
|
|
7,512
|
|
|
|
—
|
|
Less:
|
|
|
|
|
|
|
|
|
Franchise revenue
|
|
|
(2,050)
|
|
|
|
—
|
|
Other revenue
|
|
|
(23)
|
|
|
|
—
|
|
Add:
|
|
|
|
|
|
|
|
|
Franchise store sales
|
|
|
29,165
|
|
|
|
—
|
|
System-wide retail
sales
|
|
|
34,604
|
|
|
|
—
|
|
CONFERENCE CALL
Sundial will host a conference call
and webcast at 10:30 a.m. EDT (8:30 a.m.
MDT) on Tuesday, May 17,
2022.
WEBCAST ACCESS
To access the live webcast of the call, please visit the following
link:
https://services.choruscall.ca/links/sundialgrowers2022q1.html
REPLAY
The webcast archive will be available for three months via the link
provided above.
A telephone replay will be available for one month. To access the
replay dial:
Canada/USA Toll Free: 1-800-319-6413 or International
Toll: +1-604-638-9010
When prompted, enter Replay Access Code: 8957#
ABOUT SUNDIAL GROWERS INC.
Sundial is a public company
whose shares are traded on Nasdaq under the symbol "SNDL." Its
business is reported and analyzed under four segments: Cannabis
Production and Cultivation, Cannabis Retail, Liquor Retail, and
Investments.
As a licensed producer that crafts small-batch cannabis using
state-of-the-art indoor facilities, Sundial's 'craft-at-scale'
modular growing approach, award-winning genetics, and experienced
growers set us apart. Sundial's brand portfolio includes Top Leaf,
Sundial Cannabis, Palmetto, Spiritleaf Selects and Grasslands.
Sundial has acquired Alcanna and is now the largest private sector
cannabis and liquor retailer in Canada as the Company retail banners now
include Spiritleaf, Value Buds, Ace Liquor, Liquor Depot, and Wine
& Beyond.
Sundial's investment portfolio seeks to deploy strategic capital
through direct and indirect investments and partnerships throughout
the global cannabis industry.
For more information on Sundial, please go to
www.sndlgroup.com.
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,
demand for the Company's products, the Company's ability to achieve
profitability or its goal of sustainable, positive gross margin and
positive free cash flow, the development of the legal cannabis
industry, performance of the Company's investments, including
through the SunStream joint venture, any potential forms of
shareholder value creation, the maintenance of production
levels and maintenance or improvement in harvest THC levels
(including during the COVID-19 pandemic), the expansion of product
offerings, brand and market share and retail networks, and the
integration and realization of expected benefits of the acquisition
of Alcanna. 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 3.D.—Risk Factors" in
the Company's annual report on Form 20-F, filed with the Securities
and Exchange Commission ("SEC") on April 28,
2022, and the risk factors included in our other SEC filings
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.