HEXO Corp provides preliminary fourth quarter 2019 revenue results and withdraws fiscal year 2020 outlook
October 10 2019 - 6:30AM
HEXO Corp (“HEXO” or the “Company”) (TSX: HEXO; NYSE: HEXO) is
providing preliminary revenue for its fiscal fourth quarter and
year ended July 31, 2019 and is also withdrawing its previously
issued financial outlook for fiscal 2020.
Based on preliminary financial information and
subject to year-end closing adjustments, HEXO expects net revenue
for the fourth quarter to be approximately $14.5 million to $16.5
million and net revenue for the year to be approximately $46.5
million to $48.5 million.
“Fourth quarter revenue is below our expectation
and guidance, primarily due to lower than expected product sell
through,” commented Sebastien St-Louis, CEO and co-founder of HEXO
Corp. “While we are disappointed with these results, we are making
significant changes to our sales and operations strategy to drive
future results. Over the past quarter, we began re-configuring our
operations to focus on high-selling strains and initiated a new
sales strategy that we believe will meaningfully improve
performance. We plan to discuss these in more detail on our
upcoming earnings call.”
Slower than expected store rollouts, a delay in
government approval for cannabis derivative products and early
signs of pricing pressure are being felt nationally. The delay in
retail store openings in our major markets has meant that the
access to a majority of the target customers has been
limited. Additionally, regulatory uncertainty across the
pan-Canadian system and jurisdictional decisions to limit the
availability and types of cannabis derivative products have
contributed to an increased level of unpredictability. As a result,
HEXO is withdrawing its previously issued financial outlook for
fiscal year 2020.
“Withdrawing our outlook for fiscal year 2020
has been a difficult decision,” added St-Louis. “However, given the
uncertainties in the marketplace, we have determined that it is the
appropriate course of action. We are also placing a greater focus
on profitability. We are evaluating our plans and operations to see
where we can be even more efficient. We are at our best when we are
highly focused on our strategic priorities, always with a view to
drive long-term value for shareholders. Growing low-cost, quality
cannabis and developing innovative products is our priority and we
are renewing our commitment to do so.”
The Company plans to release its complete
financial results for the year ended July 31, 2019 on Thursday,
October 24, 2019, before markets open, as well as host a webcast
for investors and analysts at 8:30 a.m. EDT that same day.
Webcast DetailsDate: October
24, 2019Time: 8:30 a.m. EDTWebcast:
https://event.on24.com/wcc/r/2112048/C13DC676CE53A5FD2CEB4095D0FF4A3A
Replay information: A replay of the call will be accessible by
telephone until 11:59 a.m. EDT on November 7, 2019. Toll Free
Dial-In Number: 1-888-390-0541. Replay Password: 531469# For
previous quarterly results and recent press releases, see
hexocorp.com.
About HEXO Corp HEXO Corp is an
award-winning consumer packaged goods cannabis company that creates
and distributes innovative products to serve the global
cannabis market. Through its hub and spoke business strategy, HEXO
Corp is partnering with Fortune 500 companies, bringing its brand
value, cannabinoid isolation technology, licensed infrastructure
and regulatory expertise to established companies, leveraging their
distribution networks and capacity. As one of the largest licensed
cannabis companies in Canada, HEXO Corp operates
with 2.4 million sq. ft of facilities in Ontario and
Quebec. The Company is also expanding
internationally and has a foothold in Greece to establish a
Eurozone processing, production and distribution centre. The
Company serves the Canadian adult-use markets under its HEXO
Cannabis and Up Cannabis brands, and the medical
market under HEXO medical cannabis. For more information
please visit hexocorp.com.
Forward-Looking Statements This press
release contains forward-looking information and forward-looking
statements within the meaning of applicable securities laws
(“forward-looking statements”). Forward-looking statements are
based on certain expectations and assumptions and are subject to
known and unknown risks and uncertainties and other factors that
could cause actual events, results, performance and achievements to
differ materially from those anticipated in these forward-looking
statements. Forward-looking statements should
not be read as guarantees of future performance or results. A more
complete discussion of the risks and uncertainties facing the
Company appears in the Company’s Annual Information Form and other
continuous disclosure filings, which are available on SEDAR
at www.sedar.com and
EDGAR
at www.sec.gov. Readers
are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this press release.
The Company disclaims any intention or obligation, except to the
extent required by law, to update or revise any forward-looking
statements as a result of new information or future
events, or for any other reason.
Investor Relations: Jennifer Smith
1-866-438-8429 invest@HEXO.com
www.hexocorp.com
Media Relations: Caroline Milliard
(819) 317-0526 media@hexo.com
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