Synergy targets related to the Valens
acquisition increased to more than $30
million through 2024
CALGARY,
AB, May 15, 2023 /CNW/ - SNDL Inc. (NASDAQ:
SNDL) ("SNDL" or the "Company") reported its
financial and operational results for the first quarter ended
March 31, 2023. All financial
information in this press release is reported in millions of
Canadian dollars unless otherwise indicated. The results for the
first quarter of 2023 include the operating results of The Valens
Company Inc. ("Valens") subsequent to the acquisition on
January 17, 2023, and the results for
the first quarter of 2022 include one day of Alcanna Inc.
("Alcanna") operations subsequent to the acquisition closing
on March 31, 2022.
SNDL has also posted a supplemental investor presentation on its
website, which can be found at https://sndl.com.
FIRST QUARTER 2023 FINANCIAL AND OPERATIONAL
HIGHLIGHTS
- Net revenue for the first quarter of 2023 of $202.5 million, compared to $240.4 million in the fourth quarter of 2022, and
$17.6 million in the first quarter of
2022, representing a 1,050% increase year-over-year. The increase
over the comparative quarter in the prior year is due to the
acquisitions of Alcanna, Valens and Zenabis. The decrease in
revenue in the first quarter of 2023, as compared to the fourth
quarter of 2022, can be attributed to seasonality in the Liquor
Retail segment, as the fourth quarter is traditionally the
strongest and the first quarter is typically the weakest. This was
partially offset by an increase in revenue from the Cannabis
Operations segment due to the partial quarter contribution of
Valens in 2023.
-
- Liquor Retail: Net revenue of $115.9 million for the first quarter of
2023.
- Cannabis Retail: Net revenue of $67.4 million for the first quarter of 2023.
- Cannabis Operations: Net revenue of $19.1 million for the first quarter of 2023.
- Net loss of $36.1 million for the
first quarter of 2023, compared to a $161.6
million net loss in the fourth quarter of 2022, and a
$38.0 million net loss in the first
quarter of 2022. The loss for the first quarter was impacted by the
seasonal downturn in Liquor Retail sales and inventory and asset
impairments of $10 million.
- Adjusted EBITDA of $7.4 million
for the first quarter of 2023, compared to a loss of $7.5 million in the fourth quarter of 2022, and a
loss of $0.7 million from the first
quarter of 2022.
- Gross margin was $32.5 million in
the first quarter of 2023, compared to $43.6
million in the fourth quarter of 2022 and up 856% from the
first quarter of 2022. Seasonality of liquor sales impacted gross
margin for the first quarter of 2023 compared to the prior
sequential quarter.
- Closed the acquisition of Valens in January of 2023. The
combined entities create a low-cost vertically integrated
Canadian company with the capability of potentially generating
over a billion dollars annually in pro forma revenue. Through the
combination of a diverse portfolio of brands, a 197 store
multi-banner cannabis retail network, low-cost biomass sourcing,
premium indoor cultivation and low-cost manufacturing facilities,
SNDL is one of the largest adult-use cannabis manufacturers and
retailers in Canada.
- Since the close of the Valens acquisition, SNDL has achieved
more than $13 million in annual cost
savings and has identified $5 million
in additional annual cost savings to be achieved in 2023, exceeding
management's original $10 million
total target. By 2024, run-rate synergies are expected to exceed
$30 million annually, and proceeds
from asset sales are expected to total $9
million.
- On May 5, 2023, SNDL announced
that the proposed strategic partnership (the "Nova
Restructuring") with its 63% owned subsidiary Nova Cannabis
Inc. ("Nova") was approved by Nova's shareholders. The Nova
Restructuring is designed to create a well-capitalized cannabis
retail platform through a vertical integration model leveraging
SNDL's upstream and midstream capabilities. The Nova Restructuring
is expected to close before the end of June
2023.
- SNDL currently has six credit exposures in the SunStream
portfolio, including two under active negotiations regarding
potential restructuring.
- $793 million of unrestricted
cash, marketable securities and long-term investments, and no
outstanding debt at March 31, 2023,
resulting in a net book value per share of $5.26; and $189.8
million of unrestricted cash at May
12, 2023. SNDL has not raised cash through share offerings
since June 2021.
"We are pleased to report progress towards key milestones in all
of our operative segments against the backdrop of expected
seasonally moderate sales in our retail networks," said
Zach George, Chief Executive Officer
of SNDL. "The integration of Valens is proceeding with pace, and we
are actively identifying new revenue streams and cost reduction
opportunities. The first quarter was impacted by a number of
one-time items including $13.5
million to replenish liquor inventory following the seasonal
holiday draw in the fourth quarter of 2022, $2.7 million in severance and restructuring
costs, and $17.5 million to stabilize
Valens and bring overdue accounts payable up to date. We expect
additional restructuring charges to impact the second quarter and
the results of our team's hard work to become clear in late 2023.
We are focused on improving all aspects of our business with the
objective of generating strong free cash flow. The relocation of
all cannabis processing activities to our Kelowna complex will drive improved capacity
utilization, and we are aggressively reducing our exposure to
higher-cost cultivation as we seek low-cost producer status in all
relevant product categories. In our retail segments, we are carving
a path to higher margins and are excited about the recent launch of
our data service programs and the potential for improved consumer
engagement through new e-commerce and loyalty capabilities. We look
forward to updating investors on our intended dividend of Nova
shares, and events related to our SunStream portfolio in the coming
weeks. 2023 is shaping up to be another transformational year for
our company."
FIRST QUARTER 2023 KEY FINANCIAL METRICS
OPERATING
SEGMENTS
|
|
|
|
|
|
|
|
|
($000s)
|
|
|
Liquor
Retail
|
Cannabis
Retail
|
Cannabis
Operations
|
Investments
|
Corporate
|
Total
|
As at March 31,
2023
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
327,072
|
202,921
|
333,439
|
734,934
|
19,380
|
1,617,746
|
Three months ended
March 31, 2023
|
|
|
|
|
|
Net revenue
|
|
|
115,911
|
67,408
|
19,133
|
—
|
—
|
202,452
|
Gross margin
|
|
|
26,267
|
15,819
|
(9,545)
|
—
|
—
|
32,541
|
Interest and fee
revenue
|
|
|
—
|
—
|
—
|
4,211
|
—
|
4,211
|
Investment (loss)
income
|
|
|
—
|
—
|
(283)
|
(4,886)
|
—
|
(5,169)
|
Share of profit of
equity-accounted
investees
|
|
|
—
|
—
|
—
|
9,516
|
—
|
9,516
|
Depreciation and
amortization
|
|
|
10,346
|
3,690
|
1,146
|
—
|
1,286
|
16,468
|
Income (loss) before
income tax
|
|
|
(2,963)
|
(744)
|
(19,120)
|
5,370
|
(17,321)
|
(34,778)
|
|
|
|
|
|
|
|
|
|
As at December 31,
2022
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
351,338
|
200,393
|
163,130
|
825,151
|
19,338
|
1,559,350
|
Three months ended
March 31, 2022
|
|
|
|
|
|
Net revenue
|
|
|
1,310
|
7,512
|
8,775
|
—
|
—
|
17,597
|
Gross margin
|
|
|
284
|
3,293
|
(158)
|
—
|
—
|
3,419
|
Interest and fee
revenue
|
|
|
—
|
—
|
—
|
3,861
|
—
|
3,861
|
Investment
loss
|
|
|
—
|
—
|
—
|
(17,710)
|
—
|
(17,710)
|
Share of profit of
equity-accounted
investees
|
|
|
—
|
—
|
—
|
4,091
|
—
|
4,091
|
Depreciation and
amortization
|
|
|
—
|
595
|
9
|
—
|
135
|
739
|
Income (loss) before
income tax
|
|
|
(73)
|
(280)
|
(2,964)
|
(9,695)
|
(25,028)
|
(38,040)
|
FIRST QUARTER 2023 RESULTS
SNDL's business is operated and reported in four segments:
Liquor Retail, Cannabis Retail, Cannabis Operations and
Investments.
Liquor Retail
SNDL is 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".
- Gross revenue for Liquor Retail sales for the three banners
combined was $115.9 million for the
first quarter of 2023, a decrease of 27% compared to the fourth
quarter of 2022. The first quarter of 2022 had results from only
one day subsequent to the Alcanna acquisition.
- Gross margin in the Liquor Retail segment was $26.3 million, or 23% of sales in the first
quarter of 2023, compared to $36.9
million, or 23% of sales, in the fourth quarter of 2022.
Through strategic planning and effective execution, the Company
actively managed its margin during the first quarter by strongly
emphasizing its preferred label program. As a result, preferred
label sales make up 10% of total sales in the first quarter of
2023. Preferred label sales were $11.2
million in the first quarter of 2023, compared to
$14.0 million in the fourth quarter
of 2022. Preferred label margin continues to be incrementally
higher than the Company's baseline margin, and the current
preferred label margin is $3.2
million, or 29% of sales. The Company is seeing the
continued benefits of this strategy subsequent to quarter end, with
the margin on all products reaching 24% in April of 2023.
- SNDL's liquor banners' market share in Alberta was approximately 18% in the first
quarter of 2023, with Wine and Beyond representing approximately 3%
from only 11 stores in the province, showcasing the continued
success of the banner. Sales at the Wine and Beyond in Kelowna, British Columbia continue to increase
year-over-year, further validating the banner's expansion strategy
into new markets.
- SNDL successfully obtained two liquor retail licenses in
Regina and Saskatoon through the Saskatchewan Liquor and
Gaming Authority auction. The Company will leverage these licenses
to further expand its premium liquor banner, Wine and Beyond, into
the final stage of the liquor retail transition to the private
sector in Saskatchewan.
- As of May 12, 2023, 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 its ownership interest in Nova, SNDL is Canada's largest private sector cannabis
retailer, operating 197 locations under its four retail banners:
Value Buds, Spiritleaf, Superette and Firesale Cannabis. SNDL's
Cannabis Retail strategy is based on several factors, including the
quality of its store locations, the range of products it offers,
and the unique experiences it provides customers. Using data and
insights from a large volume of monthly transactions enables SNDL
to leverage technology and analytics to inform and improve its
retail strategy.
- Gross revenue from the Cannabis Retail segment for the first
quarter of 2023 was $67.4 million,
compared to $68.4 million in the
fourth quarter of 2022, showing a modest seasonal dip, and up from
$7.5 million in the first quarter of
2022. The Nova acquisition and Value Buds sales were the material
driver of the increase relative to the first quarter of 2022, with
$60.2 million of revenue during the
first quarter of 2023.
- Gross margin of $15.8 million, or
23% of sales, consistent with the fourth quarter of 2022 gross
margin. The increase in gross margin compared to the first quarter
of 2022 was primarily due to the acquisition of Nova and the
addition of new Value Buds locations during those 12 months,
combined with a more aggressive pricing strategy.
- In the first quarter of 2023, SNDL took proactive steps to
optimize its proprietary data licensing program for the Cannabis
Retail segment, aiming to create mutually beneficial results for
its retail operations and licensed producer partners. The Company
is optimistic that the optimized data licensing program will
support the growth of the segment and create additional margin
accretive opportunities. By leveraging the volume of Nova's retail
locations and the Company's access to high-quality analytics, it
expects to deliver successful outcomes for its partners and drive
top-line growth.
- In the first quarter of 2023, Value Buds, Spiritleaf, and
Superette's combined market share represents approximately 9.6% in
the privatized provincial markets, solidifying SNDL's position as a
leading national multi-banner cannabis retail operator in an
increasingly competitive market.
- The Company partnered with Nova for Value Buds' private label
products, and sales of Value Buds products represented
approximately 8.1% of total 28-gram sales and 36.3% of 14-gram
sales in Alberta Value Buds stores for the period ended
March 31, 2023. Private label margins
are approximately 5% higher than margins on comparable competitor
products.
- On May 5, 2023, SNDL's proposed
strategic partnership with Nova was approved by Nova shareholders
to create a well-capitalized cannabis retail platform through a
vertical integration model leveraging SNDL's upstream and midstream
capabilities.
- In February 2023, SNDL announced
the acquisition of five Superette stores in Ontario.
- The Company entered into an agreement with Lightbox Enterprises
Ltd. ("Lightbox") to acquire four cannabis retail stores operating
under the Dutch Love Cannabis banner ("Dutch Love"). The
transaction is anticipated to close by the end of June 2023.
- As of May 12, 2023, the
Spiritleaf store count is 99 (22 corporate stores and 77 franchise
stores), the Superette store count is five corporate stores, the
Firesale store count is two corporate stores, and the Value Buds
store count is 92 corporate stores.
Cannabis Operations
SNDL has a diverse brand portfolio from value to premium,
emphasizing premium inhalable formats and a full suite of 2.0
products. With enhanced procurement capabilities, premium
cultivation facilities and the newly acquired Kelowna and Bolton manufacturing facilities, the Cannabis
Operations segment is a key enabler of SNDL's vertical integration
strategy.
- Gross revenue from the Cannabis Operations segment for the
first quarter of 2023 was $29.6
million, a 58% increase compared to the fourth quarter of
2022 and a 162% increase compared to the first quarter of
2022.
- Gross Margin was negative $9.5
million including a $9.2
million inventory impairment provision, compared to negative
$9.0 million in the fourth quarter of
2022 and negative $0.2 million in the
first quarter of 2022. The current quarter's inventory impairment
is a direct consequence of the ongoing refocusing and
reorganization of the segment with the Valens expansion.
- Following the Valens acquisition, SNDL announced changes to its
operations through a rightsizing of cannabis cultivation in
Olds, Alberta, to focus the
facility on premium products and brands and to better address
market saturation, oversupply and efficiency. The Company's ongoing
focus on high-quality cannabis cultivation operations and its
low-cost biomass procurement capabilities enhance SNDL's ability to
offer a wide range of customized, innovative products to meet
customer demand and current market conditions.
- Effective May 1, SNDL has
successfully transitioned all midstream production operations to
the Company's facility in Kelowna,
including processing, labelling and excising activities. By
reducing reliance on high-cost cannabis production and centralizing
operations, the Company expects to increase efficiency and manage
cash flow more effectively.
- As part of SNDL's commitment to effectively address market
demand, the Company is in the process of rationalizing its SKU
portfolio. By focusing on high-margin products and continuing to
drive innovation, the Company expects to see better margins for the
Cannabis Operations segment in the upcoming quarters. This approach
is designed to allow the Company to optimize its resources and
achieve its long-term goals while maintaining a competitive edge in
the market.
- In the first quarter of 2023, SNDL has realized an increase in
its business-to-business ("B2B") revenue and has established
partnerships with most of the major Canadian licensed producers.
SNDL is actively exploring opportunities for international export
business and is committed to identifying new SKUs to meet the
unique demands of its global partners. The Company is investing in
process improvements and testing capabilities to ensure it can meet
the rigorous standards of its international partners.
Investments
- As of the end of the first quarter of 2023, the Company had
deployed capital on a portfolio of cannabis-related investments
with a carrying value of $579.9
million, including $535.9
million through the SunStream Bancorp Inc. joint venture
("SunStream").
- For the first quarter of 2023, the investment portfolio
generated interest and fee revenue of $4.2
million, share of profit of equity-accounted investees
generated from investments by SunStream of $9.5 million, and an investment loss of
$5.2 million, on marketable
securities, which includes unrealized losses on its publicly
disclosed strategic investment in Village Farms International,
Inc.
- SunStream's credit portfolio currently consists of six
investments: Jushi Holdings, SKYMINT Brands, Ascend Wellness
Holdings, Parallel, Inc., Columbia Care Inc. and AFC Gamma,
Inc.
- The Company continues to explore the potential monetization or
equitization of some of its US senior credits. The Company is
proactively pursuing opportunities to enhance its assets and
generate higher earnings through strategic initiatives, recognizing
their significant potential to create value.
|
Three months
ended
March 31
|
($000s)
|
2023
|
2022
|
Interest and fee
revenue
|
|
|
Interest revenue from
investments at amortized cost
|
1,006
|
995
|
Interest and fee
revenue from investments at Fair Value Through Profit or
Loss
|
624
|
2,116
|
Interest revenue from
cash
|
2,581
|
750
|
|
4,211
|
3,861
|
Investment revenue
(loss)
|
|
|
Realized (losses)
gains
|
(43,804)
|
124
|
Unrealized gains
(losses)
|
38,635
|
(17,834)
|
|
(5,169)
|
(17,710)
|
Revenue from direct
investments
|
(958)
|
(13,849)
|
Share of profit (loss)
of equity-accounted investees
|
9,516
|
4,091
|
Total investment
activities
|
8,558
|
(9,758)
|
Consolidated Financial Results
- General and administrative expenses for the three months ended
March 31, 2023, were $48.6 million compared to $10.7 million for the three months ended
March 31, 2022. The increase of
$37.9 million was mainly due to
increases in salaries and wages, office and general expenses,
professional fees and merchant processing fees as a result of the
Valens and Alcanna acquisitions.
- Net loss from continuing operations for the three months ended
March 31, 2023, was $34.8 million compared to $38.0 million for the three months ended
March 31, 2022. The decrease in net
loss from continuing operations of $3.2
million was largely due to an increase in gross margin
($29.2 million), lower investment
losses ($12.5 million), increased
share of profit of equity-accounted investees ($5.4 million), lower transaction costs
($4.4 million) and change in fair
value of derivative warrants ($13.1
million), partially offset by higher general and
administrative expenses ($37.9
million), depreciation and amortization ($15.7 million) and finance costs ($5.2 million).
Liquidity Position
- As at March 31, 2023, and
May 12, 2023, the Company had
unrestricted cash balances of $213.3
million and $189.8 million,
respectively, and a total of 260 million shares outstanding as at
May 12, 2023.
- During the first quarter of 2023, a total of $48.9 million cash was used in operating
activities, which included $13.5
million to replenish liquor inventory following the seasonal
holiday draw in the fourth quarter of 2022, $2.7 million in severance and restructuring
costs, and $17.5 million to stabilize
Valens' cash position and bring overdue accounts payable up to
date. This included addressing unpaid liabilities, such as
$4.9 million in excise tax, which had
accumulated prior to the acquisition date. The lower gross profit
from the liquor segment in the first quarter also contributed to
the use of cash during the quarter.
- The Company's share repurchase program continues to be
available to lower the outstanding share float and increase the
earnings per share for shareholders. However, due to an ongoing
blackout period, the Company has been unable to repurchase shares
in recent months. As SNDL comes out of the blackout period, it will
assess opportunities to utilize the program to the extent that
management believes SNDL's shares are undervalued. For the three
months ended March 31, 2023, the
Company purchased and cancelled 0.5 million common shares at a
weighted average price of $2.78
(US$2.04) per common share for a
total cost of $1.5 million. SNDL's
management team is committed to creating value for its shareholders
and will continue to assess opportunities to repurchase shares in
the future.
STRATEGIC AND ORGANIZATIONAL UPDATE
SNDL 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 within both the Cannabis
Operations and Cannabis Retail segments.
Integration Initiatives
The Company is pleased to report that the integration
initiatives and cost synergies are progressing well, with more than
$13 million in annual cost savings
made in just five months since the Valens acquisition. SNDL has
also identified over $5 million in additional annual cost
savings that are expected to be realized in 2023. These initiatives
place the Company on track to surpass its original $10 million cost savings target. Most of the cost
savings have been realized through SG&A and public company
costs, while the remainder will be achieved through supply chain
consolidation and COGS. By 2024, run-rate synergies are expected to
exceed $30 million annually, and
proceeds from assets sales are expected to total $9 million.
The management team expects these cost savings will positively
impact operating expenses and drive margin expansion in the third
and fourth quarters of 2023. SNDL remains committed to its
integration initiatives and will continue to update shareholders on
its progress.
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 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 changes in fair value of biological assets,
changes in fair value realized through inventory, unrealized
foreign exchange gains or losses, unrealized gains or losses on
marketable securities, realized gains or losses on investments
resulting from business combinations, changes 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, total Adjusted EBITDA and Adjusted EBITDA by
operating segment.
OPERATING
SEGMENTS
|
|
|
|
|
|
($000s)
|
Liquor
Retail
|
Cannabis
Retail
|
Cannabis
Operations
|
Investments
|
Corporate
|
Total
|
Three months ended
March 31, 2023
|
|
|
|
|
|
|
Net earnings
(loss)
|
(2,963)
|
(744)
|
(19,120)
|
5,370
|
(17,321)
|
(34,778)
|
Adjustments
|
|
|
|
|
|
|
Finance
costs
|
1,011
|
666
|
129
|
3,367
|
—
|
5,173
|
Change in estimate of
fair value of derivative
warrants
|
—
|
(2)
|
—
|
—
|
(4,800)
|
(4,802)
|
Depreciation and
amortization
|
10,346
|
3,690
|
1,146
|
—
|
1,286
|
16,468
|
Change in fair value of
biological assets
|
—
|
—
|
3,535
|
—
|
—
|
3,535
|
Change in fair value
realized through inventory
|
—
|
—
|
(950)
|
—
|
—
|
(950)
|
Unrealized foreign
exchange (gain) loss
|
—
|
—
|
48
|
—
|
—
|
48
|
Unrealized (gain) loss
on marketable
securities
|
—
|
—
|
283
|
(38,918)
|
—
|
(38,635)
|
Realized loss on
marketable securities
resulting from business combinations
|
—
|
—
|
—
|
43,699
|
—
|
43,699
|
Share-based
compensation
|
—
|
(11)
|
—
|
—
|
2,220
|
2,209
|
Asset
impairment
|
—
|
—
|
807
|
—
|
—
|
807
|
Loss (gain) on
disposition of PP&E
|
14
|
25
|
145
|
—
|
—
|
184
|
Cost of sales non-cash
component (1)
|
—
|
—
|
1,704
|
—
|
—
|
1,704
|
Inventory impairment
(recovery) and
obsolescence
|
—
|
—
|
9,177
|
—
|
—
|
9,177
|
Restructuring
costs
|
—
|
—
|
89
|
—
|
1,447
|
1,536
|
Transaction
costs
|
—
|
—
|
—
|
—
|
2,040
|
2,040
|
Adjusted
EBITDA
|
8,408
|
3,624
|
(3,007)
|
13,518
|
(15,128)
|
7,415
|
(1) Cost of sales
non-cash component is comprised of depreciation expense
|
OPERATING
SEGMENTS
|
|
|
|
|
|
($000s)
|
Liquor
Retail
|
Cannabis
Retail
|
Cannabis
Operations
|
Investments
|
Corporate
|
Total
|
Three months ended
March 31, 2022
|
|
|
|
|
|
|
Net earnings
(loss)
|
(73)
|
(280)
|
(2,964)
|
(9,695)
|
(25,028)
|
(38,040)
|
Adjustments
|
|
|
|
|
|
|
Finance
costs
|
—
|
—
|
—
|
—
|
(61)
|
(61)
|
Change in estimate of
fair value of derivative
warrants
|
—
|
—
|
—
|
—
|
8,300
|
8,300
|
Depreciation and
amortization
|
—
|
595
|
9
|
—
|
135
|
739
|
Change in fair value of
biological assets
|
—
|
—
|
(3,690)
|
—
|
—
|
(3,690)
|
Change in fair value
realized through inventory
|
—
|
—
|
1,561
|
—
|
—
|
1,561
|
Unrealized foreign
exchange (gain) loss
|
—
|
—
|
16
|
—
|
—
|
16
|
Unrealized (gain) loss
on marketable
securities
|
—
|
—
|
—
|
17,834
|
—
|
17,834
|
Share-based
compensation
|
—
|
—
|
—
|
—
|
4,204
|
4,204
|
Inventory impairment
(recovery) and
obsolescence
|
—
|
—
|
1,981
|
—
|
—
|
1,981
|
Transaction
costs
|
—
|
—
|
—
|
—
|
6,481
|
6,481
|
Adjusted
EBITDA
|
(73)
|
315
|
(3,087)
|
8,139
|
(5,969)
|
(675)
|
(1) Cost of sales
non-cash component is comprised of depreciation expense
|
This press release is intended to be read in conjunction with
the Company's Financial Statements and Notes for the period ended
March 31, 2023, 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.
CONFERENCE CALL
The Company will hold a conference call and webcast at
1 p.m. EST (11
a.m. MST) on Monday, May 15,
2023.
WEBCAST ACCESS
To access the live webcast of the call, please visit the
following link:
https://services.choruscall.ca/links/sndl2023q1.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: 0166#
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 the 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,
Spiritleaf, and Firesale Cannabis. SNDL is a licensed cannabis
producer and one of the largest vertically integrated cannabis
companies in Canada specializing
in low-cost biomass sourcing, premium indoor cultivation, product
innovation, low-cost manufacturing facilities, and a cannabis
brand portfolio that includes Top Leaf, Contraband, Citizen Stash,
Sundial Cannabis, Palmetto, Bon Jak, Spiritleaf Selects, Versus
Cannabis, Value Buds, Vacay, Grasslands and Superette. 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 ability to realize expected cost
savings and the expansion of product offerings, brand and market
share and retail networks, and the closing, integration and
realization of expected benefits of, as applicable, the acquisition
of The Valens Company, Zenabis and Superette. 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 24, 2023, 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.