CALGARY,
AB, Aug. 12, 2022 /CNW/ - SNDL Inc. (NASDAQ:
SNDL) ("SNDL" or the "Company") reported its financial and
operational results for the second quarter ended June 30, 2022. All financial information in this
press release is reported in millions of Canadian dollars unless
otherwise indicated. All results for the second quarter of 2021
exclude the subsequent acquisitions of Inner Spirit Holdings
("Spiritleaf") and Alcanna Inc. ("Alcanna"), which closed on
July 20, 2021, and March 31, 2022, respectively.
The Company will hold a conference call and webcast at
8:30 a.m. EDT (6:30 a.m. MDT) on Monday,
August 15, 2022. Please see the dial-in details within
the release and additional information about SNDL's website at
www.sndl.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 EDGAR at www.sec.gov/edgar.shtml.
SNDL has also posted a supplemental investor presentation on its
website.
SNDL REBRAND
Following its Annual and Special Meeting of Shareholders on
July 25, 2022, Sundial Growers Inc.
changed its legal name to SNDL Inc. In light of the evolution of
SNDL's business over the past two years, management feels that this
change more appropriately reflects the operating model and strategy
of the Company.
Commenting on the rebrand, Zach
George, SNDL's Chief Executive Officer, said: "The rapid and
material changes to our business over the last two years have led
to our original "Sundial Growers" identity becoming less relevant.
We believe that the new SNDL brand better reflects our corporate
activities and the undeniable impact that retail investor support
has had on our survival and ability to build Canada's largest private sector distribution
platform for liquor and cannabis. We continue to focus on
delighting consumers with curated experiences and a robust
selection of quality product offerings. SNDL embodies our path to
the creation of a platform committed to excellence in the regulated
products space."
SNDL has launched a new website that can be visited at
www.sndl.com, along with a rebrand video
at https://sndl.com/Overview/Videos/.
SECOND QUARTER 2022 FINANCIAL AND OPERATIONAL
HIGHLIGHTS
- Record net revenue for the second quarter of 2022 of
$223.7 million, compared to
$9.2 million in the second quarter of
2021, representing a 2,344% increase.
-
- Liquor Retail: Net revenue of $148.6 million for the second quarter of
2022.
- Cannabis Retail: Net revenue of $63.5 million for the second quarter of
2022.
- Cannabis Cultivation and Production: Net revenue of
$11.6 million for the second quarter
of 2022.
- SNDL's second quarter of 2022 gross margin grew to $43.1 million, a record since its inception, up
1,627% from its second quarter of 2021 loss of $2.8 million.
- Net loss of $74.0 million for the
second quarter of 2022, compared to a $52.3
million net loss in the second quarter of 2021, a 41%
increase.
- Adjusted EBITDA loss of $25.9
million for the second quarter of 2022, including an
adjusted EBITDA loss of $35.5 million
from the Investments segment, compared to Adjusted EBITDA loss of
$0.2 million in the second quarter of
2021. The change was significantly impacted by fair value
adjustments from the SunStream joint venture in the second quarter
of 2022.
- For the six months ended June 30,
2022, the Company purchased and cancelled 0.5 million common
shares at a weighted average price of $3.86 (US$2.98) per
common share for a total cost of $2.0
million.
- $900 million of cash, marketable
securities, and long-term investments and no outstanding debt at
June 30, 2022; $334.9 million of unrestricted cash at
August 11, 2022.
"The SNDL team's dedication and perseverance have enabled us to
make significant progress on our journey to becoming Canada's largest private sector distributor of
both liquor and cannabis," said Zach
George, Chief Executive Officer of SNDL. "We believe our
unique asset base and balance sheet strength represent competitive
advantages that we are determined to leverage for the benefit of
our stakeholders. We are seeing market share gains through our
retail network and this quarter our cannabis operations generated
positive adjusted EBITDA for the first time in the Company's
history. We continue to strengthen and transform our business while
benefitting from vertical integration across our business segments
under a shared services model with integration work expected to
impact results over the next two quarters. Despite our encouraging
results, we know there is still room for improvement, and we remain
humbled by the opportunity before us. SNDL represents an
opportunity for investors to gain exposure to North American
regulated products in a manner that does not exist with any other
public company today. We will continue to prioritize free cash flow
generation with a focus on strengthening our distribution platform
and using our credit portfolios to turn industry headwinds into
long-term opportunities."
SECOND QUARTER 2022 KEY FINANCIAL METRICS
OPERATING
SEGMENTS
|
|
|
|
|
|
---------Cannabis---------
|
|
|
|
|
|
|
|
|
|
|
($000s)
|
|
Liquor
Retail
|
|
|
Retail
|
|
|
Cultivation
and
Production
|
|
Investments
|
|
Corporate
|
|
|
Total
|
As at June 30,
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
573,428
|
|
|
|
257,663
|
|
|
|
148,678
|
|
|
882,165
|
|
|
19,406
|
|
|
|
1,881,340
|
Three months ended
June 30, 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
|
148,637
|
|
|
|
63,494
|
|
|
|
11,564
|
|
|
—
|
|
|
—
|
|
|
|
223,695
|
Gross margin
|
|
|
33,528
|
|
|
|
13,897
|
|
|
|
(4,346)
|
|
|
—
|
|
|
—
|
|
|
|
43,079
|
Interest and fee
revenue
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
2,577
|
|
|
—
|
|
|
|
2,577
|
Loss on marketable
securities
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
(35,073)
|
|
|
—
|
|
|
|
(35,073)
|
Share of loss of
equity-accounted investees
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
(37,978)
|
|
|
—
|
|
|
|
(37,978)
|
Depreciation and
amortization
|
|
|
5,315
|
|
|
|
3,370
|
|
|
|
—
|
|
|
—
|
|
|
115
|
|
|
|
8,800
|
Earnings (loss) before
tax
|
|
|
7,244
|
|
|
|
217
|
|
|
|
(7,963)
|
|
|
(92,278)
|
|
|
17,016
|
|
|
|
(75,764)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at
December 31, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
—
|
|
|
|
153,624
|
|
|
|
147,887
|
|
|
1,093,596
|
|
|
29,155
|
|
|
|
1,424,262
|
Three months ended
June 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
|
—
|
|
|
|
—
|
|
|
|
9,151
|
|
|
—
|
|
|
—
|
|
|
|
9,151
|
Gross margin
|
|
|
—
|
|
|
|
—
|
|
|
|
(2,821)
|
|
|
—
|
|
|
—
|
|
|
|
(2,821)
|
Interest and fee
revenue
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
3,344
|
|
|
—
|
|
|
|
3,344
|
Gain on marketable
securities
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
2,362
|
|
|
—
|
|
|
|
2,362
|
Share of profit of
equity-accounted investees
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
3,724
|
|
|
—
|
|
|
|
3,724
|
Depreciation and
amortization
|
|
|
—
|
|
|
|
—
|
|
|
|
828
|
|
|
—
|
|
|
103
|
|
|
|
931
|
Earnings (loss) before
tax
|
|
|
—
|
|
|
|
—
|
|
|
|
(75,451)
|
|
|
9,051
|
|
|
14,113
|
|
|
|
(52,287)
|
SECOND QUARTER 2022
RESULTS
SNDL's business is operated and reported in four segments:
Liquor Retail, Cannabis Retail, Cannabis Production and
Cultivation, and Investments.
Liquor Retail
As a result of the Alcanna acquisition, SNDL is
now Canada's largest private sector liquor retailer,
operating 170 locations, predominantly in Alberta, under
its three retail banners: "Wine and Beyond", "Liquor Depot" and
"Ace Liquor". The Liquor Retail segment's stable and growing cash
flow profile and best-in-class retail operations expertise have
accelerated SNDL's retail growth and vertical integration strategy.
The second quarter of 2022 is SNDL's first full quarter of
reporting liquor retail revenue following the completion of the
acquisition.
- Gross revenue for Liquor Retail sales for the three banners
combined was $148.6 million for the
second quarter of 2022.
- Gross margin in the Liquor Retail segment was $33.5 million, or 22.6% of sales. Despite
fluctuations in sales due to market conditions and retail
competition, the Company has stabilized its margin through a
pricing and mix strategy in the second quarter of 2022. While
customer count is down by 5% year-to-date, largely due to a return
to on-premises consumption in a post COVID-19 environment, the
average basket size is up 2%. The Company sees larger basket sizes
at their Wine & Beyond locations, where consumers come for the
experiential, destination shopping approach to liquor retail.
- SNDL's liquor banners' market share in Alberta was 17.6% in the second quarter of
2022, with Wine & Beyond representing 2.9% with only 11 stores,
showcasing the continued and increasing popularity of the banner.
SNDL is exploring opportunities to expand the Wine & Beyond
store footprint in Alberta,
British Columbia, and Saskatchewan.
- Moving forward, the Company will seek to optimize profitability
and cash flow for the Liquor Retail segment by focusing on cost
discipline, margin accretive products, monetizing intellectual
property, and leveraging its retail footprint to develop an
e-commerce platform.
- As of August 11, 2022, the Ace
Liquor store count is 138, the Liquor Depot store count is 20 and
the Wine and Beyond store count is 12.
Cannabis Retail
With the acquisition of our interest in Nova Cannabis Inc.
("Nova") through the Alcanna acquisition, SNDL's expanded
retail network has significantly increased the Company's retail
market share and its exposure to a broader consumer base. It also
provides direct access to more comprehensive customer data, and the
Company expects revenue increases from the continued integration of
its distribution channels. Cannabis retail operating results
include 100% of Nova's results as a majority owned subsidiary.
- Gross revenue from the Cannabis Retail segment for the second
quarter of 2022 was $63.5 million,
compared to $7.5 million in the first
quarter of 2022, a 746% increase. Value Buds sales were the
material driver of the increase with $56.3
million of revenue during the second quarter of 2022.
- Gross margin of $13.9 million, or
21.9% of sales, increased from $3.3
million, compared to Q1 2022 primarily due to Value Buds'
pricing strategy.
- In the second quarter of 2022, Value Buds and Spiritleaf's
combined market share represents 9.8% in the privatized provincial
markets, solidifying SNDL's position as a leading national
multi-banner cannabis retail operator.
- The Company successfully launched its first private label
program with Spiritleaf Selects in Alberta, Saskatchewan, Manitoba, and Ontario in 3.5 gram dried flower and 3 x 0.5
gram pre-roll formats.
- As of August 11, 2022, the
Spiritleaf store count is 103 (20 corporate stores and 83
franchised stores) and the Value Buds store count is 82.
Cannabis Cultivation and Production
SNDL remains committed to its cultivation and processing
activities, including continuous improvement of its product
offerings while focusing on cost optimization and the most
competitive and profitable strains and brands.
- Gross revenue from the Cannabis Cultivation and Production
segment for the second quarter of 2022 was $15.4 million, compared to $11.3 million in the first quarter of 2022, a 36%
sequential improvement and a 21% year-over-year improvement.
- Net loss for the segment during the second quarter of 2022 was
$8.0 million, compared to a
$75.4 million loss in the second
quarter of 2021
- Adjusted EBITDA was $3.4 million,
in the second quarter of 2022, compared to negative $11.0 million in the same period of 2021. This
represents SNDL's first positive Adjusted EBITDA quarter in the
Cannabis Cultivation and Production segment. The significant
improvement in Adjusted EBITDA can be attributed to higher sales
volumes, improved margin on an adjusted basis, reductions to
SMG&A, and greater discipline over inventory management driving
a reduction in price discounts for provincial board sales during
the first half of 2022.
- Average price per gram sold for the second quarter of 2022 was
$3.18, compared to $1.69 for the second quarter of 2021. The
increase of $1.49 per gram sold
reflects an improved margin strategy as the Company has shifted its
mix and increased its price per gram in select provinces through a
disciplined revenue management initiative.
- Cost of sales per gram sold for the second quarter of 2022 was
$2.64, compared to $1.76 for the second quarter of 2021. The
increase of $0.88 per gram sold
reflects the Company's move away from business-to-business bulk
flower transactions that made up a larger portion of its sales mix
in the second quarter of 2021.
- Gross margin results for the second quarter of 2022 was
negative $4.3 million, compared to
negative $2.8 million for the three
months ended June 30, 2021. The gross
margin results include a $3.9 million
inventory impairment and fair value changes in the accounting for
inventory and biological assets.
- Cultivation consistency also hit records in the second quarter
of 2022 with the highest monthly weighted average potency in SNDL's
history for June 2022 with 25.1% THC.
The prior record month was May 2022,
with 24.3% THC. SNDL's weighted average yield per square foot
continues to increase with an average weighted yield of 57 grams
per square foot.
- SNDL is tailoring its product innovation strategy based on
increased use of data analytics and access to a broader consumer
base. SNDL will be launching several new large-pack formats in an
effort to monetize bulk inventory. The Company expects margin
growth to be impacted in the short term as it brings these products
to market primarily through its owned retail network.
- SNDL has received its international export permit and is on
track to dispatch its first shipment to Israel in the third quarter of 2022. While
SNDL continues to focus on the Canadian market, the Company is also
looking at additional opportunities to increase revenue for its
Cannabis Cultivation and Production segment.
- The Company has expanded its national footprint to all 10
provinces by introducing SNDL's branded products to Newfoundland and Labrador
Investments
- Revenue from the Investments segment for the second quarter of
2022 was a loss of $35.1 million,
compared to $2.4 million in the
second quarter of 2021. The decrease was primarily due to
accounting fair value adjustments reflecting an increase in the
assumed risk-free rate and the deterioration in overall cannabis
credit market conditions.
- As of the end of the second quarter of 2022, the Company had
deployed capital on several cannabis-related investments totaling
$689 million, including $490 million to the SunStream Bancorp Inc. joint
venture ("SunStream"). For the second quarter of 2022, the
investment portfolio generated interest and fee revenue of
$2.6 million ($3.3 million in the second quarter of 2021),
share of the profit of equity-accounted investees generated from
investments by SunStream of negative $38.0
million ($3.7 million in the
second quarter of 2021), and an investment loss of $35.1 million (gain of $2.4 million in the second 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.
|
|
Three months
ended
June 30
|
|
Six months
ended
June 30
|
|
($000s)
|
|
2022
|
2021
|
|
2022
|
|
2021
|
|
Interest and fee
revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest revenue from
investments at amortized cost
|
|
|
818
|
|
328
|
|
|
1,813
|
|
|
441
|
|
Interest and fee
revenue from investments at Fair Value Through Profit or
Loss
|
|
|
543
|
|
2,100
|
|
|
2,659
|
|
|
4,282
|
|
Interest revenue from
cash
|
|
|
1,216
|
|
916
|
|
|
1,966
|
|
|
1,470
|
|
|
|
|
2,577
|
|
3,344
|
|
|
6,438
|
|
|
6,193
|
|
Investment
revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized
gains
|
|
|
265
|
|
4,211
|
|
|
389
|
|
|
12,230
|
|
Unrealized (losses)
gains
|
|
|
(35,338)
|
|
(1,849)
|
|
|
(53,172)
|
|
|
3,032
|
|
|
|
|
(35,073)
|
|
2,362
|
|
|
(52,783)
|
|
|
15,262
|
|
Revenue from direct
investments
|
|
|
(32,496)
|
|
5,706
|
|
|
(46,345)
|
|
|
21,455
|
|
Share of profit (loss)
of equity-accounted investees
|
|
|
(37,978)
|
|
3,724
|
|
|
(33,887)
|
|
|
3,724
|
|
Total investment
activities
|
|
|
(70,474)
|
|
9,430
|
|
|
(80,232)
|
|
|
25,179
|
|
Consolidated Financial Results
General and Administrative Expenses
General and administrative expenses for the three months ended
June 30, 2022 were $40.3 million, compared to $10.1 million for the three months ended
June 30, 2021. The increase of $30.2 million was mainly due to increases in
salaries and wages and office and general expenses from the Alcanna
and Inner Spirit acquisitions.
Net Loss
Net loss for the three months ended June 30, 2022 was
$74.0 million, compared to a net loss
of $52.3 million for the three
months ended June 30, 2021. The increased loss of $21.7 million was largely due to investment
losses of $37.4 million, share of
loss of equity-accounted investees of $41.7
million, higher general and administrative expenses of
$30.2 million, depreciation and
amortization of $7.9 million and
finance costs of $26.5 million,
partially offset by an increase in gross margin of $45.8 million, lower asset impairment of
$58.2 million, lower transaction
costs of $8.7 million and a positive
change in fair value of derivative warrant liabilities of
$3.8 million.
Adjusted EBITDA
Adjusted EBITDA was a loss of $25.9 million for the three months ended
June 30, 2022, compared to a loss of $0.2 million for the three months ended
June 30, 2021, driven primarily by the Sunstream equity pickup
of a $38M loss.
The increased Adjusted EBITDA loss was primarily due to a
decrease in share of profit of equity-accounted investees, an
increase in general and administrative expenses due to the
inclusion of Alcanna and Spiritleaf and a decrease in realized gain
on marketable securities. The decrease was partially offset by an
increase in gross margin including Alcanna and Spiritleaf.
Liquidity Position
- Effective July 25, 2022, the
Company's common shares were consolidated on a one share for each
ten shares outstanding basis pursuant to shareholder approval at
the Company's annual and special meeting of shareholders.
- As at June 30, 2022, and
August 11, 2022, the Company had an
unrestricted cash balance of $363
million and $334.9 million,
respectively, and a total of 238 million post-consolidation shares
outstanding as at August 11,
2022.
- For the six months ended June 30,
2022, the Company purchased and cancelled 0.5 million common
shares at a weighted average price of $3.86 (US$2.98) per
common share for a total cost of $2.0
million. SNDL has $98 million
remaining under its current buyback program allowing the Company to
repurchase from time to time at prevailing market prices, enabling
SNDL to opportunistically return value to shareholders. The share
repurchase program expires on November 19,
2022.
STRATEGIC AND ORGANIZATIONAL UPDATE
SNDL remains focused on building long-term shareholder value
through vertical integration, the accretive deployment of cash
resources, the expansion of its retail distribution network, the
further streamlining of the Company's operating structure, and the
enhanced offering of high-quality brands.
Alcanna Integration
Update
- Through the acquisition of Alcanna, SNDL's retail footprint is
expected to facilitate customer relationships and capture
additional economies of scale.
- By gaining insight into thousands of daily shopper transactions
at over 350 retail stores, SNDL has begun to optimize offerings,
pricing, and promotions in both liquor and cannabis locations to
better serve customers.
- Additionally, SNDL expects to continue accessing profitable
opportunities and will launch a Value Buds private label flower
product. SNDL will continue to develop various offerings and
targeted merchandising strategies for its entire retail
portfolio.
- Since the closing of the Alcanna transaction, the Company is on
target to deliver $6.4 million in
cost synergies. These synergies are due to consolidation in key
areas such as retail operations, integrated supply and demand
planning, and corporate expenses.
SPECIFIED FINANCIAL MEASURES
Certain specified financial measures in this news release are
non-IFRS measures. These terms are not defined by IFRS and,
therefore, may not be comparable to similar measures 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 manner similar 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. The Company presents both
consolidated or total Adjusted EBITDA and Adjusted EBITDA by
operating segment.
OPERATING
SEGMENTS
|
|
|
|
---------Cannabis---------
|
|
|
|
|
|
|
($000s)
|
Liquor
Retail
|
|
Retail
|
Cultivation
and
Production
|
Investment
|
Corporate
|
Total
|
Three months ended
June 30, 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
(loss)
|
|
7,244
|
|
|
217
|
|
(7,963)
|
|
(90,487)
|
|
17,016
|
|
(73,973)
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance
costs
|
|
2,874
|
|
|
1,070
|
|
195
|
|
22,305
|
|
61
|
|
26,505
|
Change in estimate of
fair value of derivative warrants
|
|
—
|
|
|
(56)
|
|
—
|
|
—
|
|
(23,600)
|
|
(23,656)
|
Loss on cancellation
of contracts
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Depreciation and
amortization
|
|
5,315
|
|
|
3,370
|
|
—
|
|
—
|
|
115
|
|
8,800
|
Income tax
recovery
|
|
—
|
|
|
—
|
|
—
|
|
(1,791)
|
|
—
|
|
(1,791)
|
Change in fair value
of biological assets
|
|
—
|
|
|
—
|
|
388
|
|
—
|
|
—
|
|
388
|
Change in fair value
realized through inventory
|
|
—
|
|
|
—
|
|
2,066
|
|
—
|
|
—
|
|
2,066
|
Unrealized foreign
exchange (gain) loss
|
|
9
|
|
|
—
|
|
10
|
|
—
|
|
—
|
|
19
|
Unrealized (gain) loss
on marketable securities
|
|
—
|
|
|
—
|
|
—
|
|
35,338
|
|
—
|
|
35,338
|
Share-based
compensation
|
|
—
|
|
|
(180)
|
|
—
|
|
—
|
|
618
|
|
438
|
Asset
impairment
|
|
—
|
|
|
—
|
|
1,850
|
|
—
|
|
—
|
|
1,850
|
Loss (gain) on
disposition of PP&E
|
|
35
|
|
|
15
|
|
(452)
|
|
—
|
|
—
|
|
(402)
|
Cost of sales non-cash
component (1)
|
|
—
|
|
|
—
|
|
3,440
|
|
—
|
|
—
|
|
3,440
|
Inventory impairment
and obsolescence
|
|
—
|
|
|
—
|
|
3,871
|
|
—
|
|
—
|
|
3,871
|
Restructuring
costs
|
|
—
|
|
|
—
|
|
—
|
|
(882)
|
|
—
|
|
(882)
|
Transaction costs
(2)
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
(7,938)
|
|
(7,938)
|
Government
subsidies
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Other
expenses
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Adjusted
EBITDA
|
|
15,477
|
|
|
4,436
|
|
3,405
|
|
(35,517)
|
|
(13,728)
|
|
(25,927)
|
(1) Cost of sales
non-cash component is comprised of depreciation expense
(2) Transaction costs relate to financing activities
|
OPERATING
SEGMENTS
|
|
|
|
---------Cannabis---------
|
|
|
|
|
|
|
|
($000s)
|
Liquor
Retail(3)
|
|
Retail(3)
|
|
Cultivation
and
Production
|
Investments
|
|
Corporate
|
Total
|
Three months ended
June 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
(loss)
|
|
—
|
|
|
—
|
|
|
(75,451)
|
|
9,051
|
|
|
14,113
|
|
(52,287)
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance
costs
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
40
|
|
40
|
Change in estimate of
fair value of derivative warrants
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
(19,810)
|
|
(19,810)
|
Loss on cancellation
of contracts
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
Depreciation and
amortization
|
|
—
|
|
|
—
|
|
|
828
|
|
—
|
|
|
103
|
|
931
|
Income tax
recovery
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
Change in fair value
of biological assets
|
|
—
|
|
|
—
|
|
|
331
|
|
—
|
|
|
—
|
|
331
|
Change in fair value
realized through inventory
|
|
—
|
|
|
—
|
|
|
456
|
|
—
|
|
|
—
|
|
456
|
Unrealized foreign
exchange (gain) loss
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
104
|
|
104
|
Unrealized (gain) loss
on marketable securities
|
|
—
|
|
|
—
|
|
|
—
|
|
1,849
|
|
|
—
|
|
1,849
|
Share-based
compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
4,539
|
|
4,539
|
Asset
impairment
|
|
—
|
|
|
—
|
|
|
60,000
|
|
—
|
|
|
—
|
|
60,000
|
Loss (gain) on
disposition of PP&E
|
|
—
|
|
|
—
|
|
|
22
|
|
—
|
|
|
—
|
|
22
|
Cost of sales non-cash
component
|
|
—
|
|
|
—
|
|
|
1,162
|
|
—
|
|
|
—
|
|
1,162
|
Inventory impairment
and obsolescence
|
|
—
|
|
|
—
|
|
|
1,651
|
|
—
|
|
|
—
|
|
1,651
|
Restructuring
costs
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
Transaction costs
(2)
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
805
|
|
805
|
Government
subsidies
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
Other
expenses
|
|
—
|
|
|
—
|
|
|
2
|
|
—
|
|
|
—
|
|
2
|
Adjusted
EBITDA
|
|
—
|
|
|
—
|
|
|
(10,999)
|
|
10,900
|
|
|
(106
|
|
(205)
|
(1) Cost of sales
non-cash component is comprised of depreciation expense
(2) Transaction costs relate to financing activities
(3) Segments were created subsequent to June 30, 2021
|
CONFERENCE CALL
The Company will hold a conference call and webcast at
8:30 a.m. EDT (6:30 a.m. MDT) on Monday,
August 15, 2022.
WEBCAST ACCESS
To access the live webcast of the call,
please visit the following link:
https://services.choruscall.ca/links/sndl2022q2.html
REPLAY
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: 9296 #
The webcast archive will be available for three months via the link
provided above.
ABOUT SNDL INC.
SNDL is a public company whose shares are traded on Nasdaq under
the symbol "SNDL."
SNDL is the largest private sector liquor and cannabis retailer
in Canada with retail banners that
include Ace Liquor, Wine and Beyond, Liquor Depot, Value Buds, and
Spiritleaf. SNDL is a licensed cannabis producer that uses
state-of-the-art indoor facilities to supply wholesale and retail
customers under a cannabis brand portfolio that includes Top Leaf,
Sundial Cannabis, Palmetto, Spiritleaf Selects, and Grasslands.
SNDL's investment portfolio seeks to deploy strategic capital
through direct and indirect investments and partnerships throughout
the global cannabis industry.
For more information on SNDL, please go
to www.sndl.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 SNDL Inc.