Development of regulated legal cannabis markets in
Canada and abroad just beginning
in areas of consumer products, distribution, research and vertical
integration
With launch of "Amazon-like" Tweed Main Street
online store and significant investment in fulfillment, shipping
and transactional IT system capabilities, Company is readying to
lead online order/direct delivery backbone of Canadian cannabis
market in 2018 and beyond
Consumers will demand access to wide variety of branded,
consistent cannabis-based consumer packaged goods; systems of
medical insurance coverage require medicinal defined products with
clinically proven efficacy
Company's expansion into developing medical cannabis markets
abroad, under the Spectrum brand, to accelerate; Canopy-Health
Innovations and Company to drive development and commercialization
of cannabis-based medical therapies targeting large global
markets
Platform expansion for volume and brands driven by Company
and Canopy Rivers
SMITHS FALLS, ON, June 27, 2017 /CNW/ - Canopy Growth
Corporation (TSX: WEED) ("Canopy Growth" or "the Company") today
released its financial results for the fourth quarter and fiscal
year 2017, the period ended March 31,
2017. All financial information in this press release is
reported in Canadian dollars, unless otherwise indicated.
Consolidated financial results include the accounts of the
Company, its wholly‑owned, Licensed Producer ("LP") subsidiaries
Tweed Inc. ("Tweed"), Tweed Farms Inc. ("Tweed Farms"), and
Bedrocan Canada Inc. ("Bedrocan Canada") for the three and twelve
months ended March 31, 2017, its wholly-owned subsidiary
Mettrum Health Corp. ("Mettrum") for the two months ended
March 31, 2017 and its investments in
affiliates.
Fiscal Year 2017 Highlights
- Revenue of $39.9 million; an
increase of 214% over fiscal year 2016 revenues of $12.7 million
- Sold 5,139 kilograms and kilogram equivalents; a 203% increase
over fiscal year 2016
- Harvested 10,837 kilograms compared to 6,029 kilograms in
fiscal year 2016, representing an 80% increase
- Adjusted Product Contribution1 in the fiscal year
2017 was $25.2 million or 63% of
revenue. In the comparative period last year, the Adjusted Product
Contribution was $8.1 million or 64%
of revenue
- Adjusted EBITDA2 amounted to a loss of $17.0 million compared to an Adjusted EBITDA loss
of $14.1 million in fiscal year
2016
- Acquired Mettrum; adding multiple ACMPR licenses, the sector's
second largest patient base and the Spectrum colour‑based
cannabis strain categorization system
- Initiated international expansion with investments in
Australia, Brazil and Germany; Company subsidiaries exported
medicinal cannabis to Germany and
Brazil
- $101.8 million in cash and cash
equivalents at year end
Fourth Quarter Fiscal 2017 Highlights
- Revenue of $14.7 million; a 50%
increase over third quarter fiscal year 2017 and a 191% increase
over the prior year's quarter
- Average sales price per gram was $8.03 as compared to $7.36 in the third quarter of fiscal year 2017
and $7.16 in the prior year's
quarter
- Sold 1,740 kilograms and kilogram equivalents; a 40% and 149%
increase over the third quarter fiscal year 2017 and prior year's
quarter, respectively
- Adjusted Product Contribution1 was $9.6 million or 66% of revenue as compared to an
Adjusted Product Contribution of $3.2
million and 63% of revenue in the same quarter of last year,
and 68% for the third quarter of fiscal 2017
- Sales and Marketing and G&A expenses continued the trend of
decreasing as a percentage of sales
- Adjusted EBITDA2 amounted to a loss of $5.3 million compared to an Adjusted EBITDA loss
of $4.4 million in the prior year's
quarter
Subsequent to Fiscal Year 2017
- Launched Tweed Main Street, a sector first, single online
marketplace that enables registered patients to purchase medicinal
cannabis from multiple producers across numerous brands
- Announced Tweed's curated CraftGrow line, which will
bring high‑quality cannabis grown by a diverse set of producers to
Tweed Main Street customers
- Launched the sale of encapsulated cannabis oil softgels
on June 19, 2017
- Announced the commitment of $20
million in funding for new subsidiary, Canopy Rivers
Corporation and subsequent closing of an offering that raised
aggregate gross proceeds of $36.2
million
- Unveiled international medical brand, Spectrum Cannabis, that
will serve as the Company's physician and patient-facing identity
in strictly medical markets outside North
America
- Indoor production facility in Smiths
Falls and greenhouse in Niagara-on-the-Lake received Good
Manufacturing Practice ("GMP") certifications
- Six additional grow rooms licensed at Smiths Falls, Ontario Facility, increasing
flowering space by 33%; industrial cannabis oil extraction system
now operational, system capable of producing as much oil in
approximately one month as the Company has produced since
extraction activities commenced in November
2015
- Expansion at Bowmanville,
Ontario facility completed and licensed, adding 200% more
capacity
"Continued investment and the execution of unique, market driven
business strategies have firmly positioned Canopy to address the
legal adult recreational market that is set to open in Canada in 2018 and expand into federally-legal
markets around the world," said Bruce
Linton, Chairman & CEO.
Added Linton, "With a patient base that has more than doubled
over the past year, to over 58,000, we have scaled up operations in
all areas, including cultivation capacity, information technology,
quality assurance, fulfillment and customer care. The
development of Tweed Main Street, our new online store, which
brings the products of our many leading brands under one roof,
delivers a shopping experience that consumers frankly expect.
Investment in partnerships and product development have
delivered a variety of products to our customers, including most
recently softgels, produced under GMP conditions. Developing
the playbook that has secured our lead in the Canadian market has
been a warm up exercise for the opportunity that lies ahead.
Our expansion into developing medical cannabis markets, with
established products and procedures under the Spectrum brand, has
begun in Germany and Chile."
"We will continue to invest in our business, to bring more
capacity and more permitted products to more customers in more
markets, all with a view to increasing market share and maximizing
shareholder return in the long term. We strongly believe that
continuing to invest in our industry leadership position,
strategically trading off short-term profitability for long term
value, is the right decision for shareholders, patients and our
communities," concluded Linton.
Fourth Quarter and Fiscal Year 2017 Revenue
Review
Revenue for the fourth quarter fiscal 2017 was $14.7 million, a 50% increase over the third
quarter fiscal 2017 in which revenue was $9.8 million and an increase of 191% over the
prior year period in which revenue was $5.0
million.
Revenue in the fiscal year 2017 totaled $39.9 million, an increase of 214% over fiscal
year 2016 when revenue was $12.7
million.
Fourth Quarter and Fiscal Year 2017 Product Sales
Review
During the fourth quarter fiscal 2017, Canopy Growth sold
1,740 kilograms and kilogram equivalents at an average price
of $8.03 per gram, up from 700
kilograms and kilogram equivalents at an average price of
$7.16 per gram during the prior year
period.
During the fiscal year 2017, the Company has sold 5,139
kilograms and kilogram equivalents at an average price of
$7.40 per gram compared to
1,696 kilograms and kilogram equivalents at an average price
of $7.34 per gram in the same period
last year.
Fourth Quarter and Fiscal Year 2017 Gross Margin
Review
The IFRS reported gross margin was $1.4
million, or 10% of revenue, for the three month period ended
March 31, 2017. In the
comparative period ended March 31,
2016, the IFRS gross margin was $2.7
million or 53% of revenue.
During the fourth quarter of fiscal 2017, management developed a
plan to sell Sun‑Grown inventory at a reduced price commencing in
the first quarter of fiscal 2018 which resulted in an expense to
revalue the Tweed Farms "Sun-Grown" inventory which was recognized
in the fourth quarter of fiscal 2017. The fourth quarter
gross margin was primarily impacted by taking into account the new
pricing introduced subsequent to year-end for Tweed Farms Sun‑Grown
strains, which are sold, in many cases, at a discount to similar
strains sold under the Tweed brand.
The IFRS gross margin was $37.6
million, or 94% of revenue, for the twelve month period
ended March 31, 2017. In the
comparative period ended March 31,
2016, the gross margin on the same basis was $19.0 million or 150% of revenue. Gross margin
includes the unrealized gains on changes in fair value of
biological assets.
Fourth Quarter and Fiscal Year 2017 Adjusted
Product Contribution Review
The Company's "Adjusted Product Contribution"1 is a
Non-GAAP metric used by management which adjusts the reported gross
margin by excluding the fair value measurements as required by IFRS
and measures the cost of sales for the grams actually sold in the
period. Management believes this measure provides useful
information as it reflects the gross margin based on the Company's
weighted average cost per gram from seed to sale against the grams
sold.
The Adjusted Product Contribution in the fourth quarter of
fiscal 2017 was $9.6 million, or 66%
of revenue compared to $3.2 million,
or 63% of revenue in the comparison period last year. For fiscal
2017, the Adjusted Product Contribution was $25.2 million, or 63% of revenue compared to
$8.1 million or 64% of revenue in the
prior year period.
Fourth Quarter and Fiscal Year 2017 Operating Expense
Review
Sales and marketing expenses in the fourth quarter fiscal 2017
were $4.1 million, or 28% of revenue, including two
months of Mettrum operations amounting to an increase of
$1.0 million, non-cash share-based
compensation of $0.1 million related
to previously issued escrowed shares, and higher patient assistance
payments of $0.5 million. In
comparison, sales and marketing expenses were $2.4 million or 48% of revenue in the same
period last year.
Sales and marketing expenses in the fiscal year 2017 were
$13.0 million or 32% of revenue
compared to sales and marketing expenses of $5.7 million or 45% of revenue in the prior year
period. Sales and marketing expenses in the fiscal year 2017
include two months of Mettrum operations amounting to an increase
of $1.0 million, a full year of
Bedrocan Canada operations, whereas the comparative period included
only six months of operation, amounting to an increase of
$0.8 million, non-cash, share‑based
compensation of $1.3 million related
to previously issued escrowed shares and $1.8 million in higher patient assistance
payments directly attributed to patient growth. Also included are
higher staff levels, costs associated with the Company's medical
outreach program, branding programs and the expanding client care
center.
General and Administrative ("G&A") expenses in the fourth
quarter fiscal 2017 and 2016 were $5.9
million and $2.6 million,
respectively. G&A expenses, as a percentage of revenue,
continued a downward trend, decreasing from 51% in the fourth
quarter fiscal 2016 to 40% of revenue in the fourth quarter fiscal
2017. These costs include two months of Mettrum operations
amounting to an increase of $1.7
million and higher employee compensation related expenses
due to increased staff levels. G&A expenses during the quarter
also included extensive use of consultants and advisory services
while expanding and commercializing the Company's operations,
facility costs, compliance costs associated with meeting Health
Canada requirements, as well as other public company related
expenses including related professional fees.
G&A expenses in the fiscal year 2017 were $16.9 million or 42% or revenue. In comparison,
G&A expenses were $8.2 million or
64% of revenue, in the same period last year. The increase in
G&A expenses over the year ended March
31, 2017 reflects the Company's growth and building of
commercial capacity and capability. These costs include two months
of Mettrum operations, amounting to an increase of $1.7 million, a full year of Bedrocan Canada
operations, amounting to an increase of $1.3
million over the prior year period, and higher finance
charges such as credit card payment processing fees of $0.6 million. G&A expenses during the year
ended March 31, 2017 also included
higher employee compensation related expenses due to increased
staff levels and extensive use of consultants, legal and advisory
services in acquisition-related activities and in expanding and
commercializing the Company's operations and facility costs at
Tweed, Tweed Farms and Bedrocan Canada. In addition, compliance
costs associated with meeting Health Canada requirements, as well
as other public company related expenses including related
professional fees were included.
Acquisition-related expenses for the three-month period ended
March 31, 2017 and 2016 were
$5.4 million and $nil, respectively.
Acquisition-related expenses in the three month period ended
March 31, 2017 included $4.6 million related to the acquisition of
Mettrum. The Acquisition-related expenses in the fourth quarter of
fiscal 2017 increased due to the significance of the Mettrum
acquisition and due diligence on potential acquisitions completed
during the period and resulting increased level of legal,
accounting and strategic business consulting services required to
evaluate and complete the transactions.
Acquisition-related expenses for the year ended March 31, 2017 and 2016 were $7.4 million and $1.2
million respectively. Acquisition-related expenses in fiscal
2017 included $5.2 million related to
the acquisition of Mettrum, $0.6
million related to M&A advisory services and
$0.4 million related to the
acquisition of MedCann GmbH Pharma and Nutraceuticals (since
renamed Spektrum Cannabis GmbH). Acquisition-related expenses
incurred in fiscal 2016 included $1.1
million related to the acquisition of Bedrocan Canada. The
higher acquisition-related expenses in fiscal 2017 were due to
higher number of acquisitions completed during fiscal 2017 and
higher legal, accounting and strategic business consulting services
required to complete the transactions. The Company may acquire
additional strategic assets in the future as it pursues its
business strategy. As such, the Company may incur related
acquisition expenses, including legal, accounting and strategic
business consulting service related fees, in the future.
Fourth Quarter and Fiscal Year 2017 Adjusted
EBITDA
The Company's "Adjusted EBITDA"2 is a Non-GAAP metric
used by management which is Income (loss) from operations, as
reported, before interest, tax, and adjusted for removing other
non-cash items, including the stock based compensation expense,
depreciation, and the non-cash effects of accounting for biological
assets and inventories, and further adjusted to remove acquisition
related costs. Management believes Adjusted EBITDA is a useful
financial metric to assess its operating performance on a cash
basis before the impact of non-cash items and acquisition
activities.
Adjusted EBITDA in the fourth quarter fiscal 2017 amounted to a
loss of $5.3 million compared to an
Adjusted EBITDA loss of $4.4 million
in the same period last year. In the year ended March 31, 2017, the Company's Adjusted EBITDA
amounted to a loss of $17.0 million compared to an Adjusted EBITDA
loss of $14.1 million in the
twelve-months ended March 31, 2016.
Fourth Quarter and Fiscal Year 2017 Earnings
Review
Net loss in the fourth quarter fiscal 2017 was $21.1 million or $0.14 per basic and diluted share compared to a
net loss of $5.1 million or
$0.05 per basic and diluted share in
the comparative period last year, inclusive of the IFRS accounting
for biological assets. In the fiscal year ended March 31, 2017, the Company recorded net loss of
$16.7 million or $0.14 per basic and diluted share, compared to
net loss of $3.5 million or
$0.05 per basic and diluted share in
the comparative period last year. Reported net loss was
inclusive of the IFRS accounting for biological assets.
Fiscal Year 2017 Balance Sheet
Review
At March 31, 2017, the Company's
cash and cash equivalents totaled $101.8
million, representing an increase of $86.4 million from March
31, 2016, principally due to cash received from the bought
deal financings that closed on, April 15, 2016, August 24, 2016 and December 22, 2016, a private placement that
closed on March 22, 2017, and options
exercised, combined totaling $129.3
million, net of share issue costs, which also includes
$1.0 million of share issue
costs associated with the Mettrum acquisition. The increase also
included $3.5 million in mortgage
proceeds received in the second quarter and $12.3 million in net cash acquired at closing of
the Mettrum acquisition, offset by capital expansion totaling
$29.4 million and to fund the cash
applied to operating activities of $27.1
million.
Inventory at March 31, 2017
amounted to $46.0 million
(March 31, 2016 - $22.2 million) and biological assets amounted to
$13.6 million (March 31, 2016 - $5.3
million), together totaling $59.6
million (March 31, 2016 -
$27.5 million). At March 31, 2017, the Company held 8,360 kilograms
of dry cannabis and 3,049 L of cannabis oils. Included in the dry
cannabis quantities was 377 kilograms available for sale in the
Company's online stores, 3,173 kilograms in process of finishing or
awaiting approval for sale and 4,810 kilograms held for
extraction. Dry cannabis inventory held for extraction is expected
to be rapidly converted to oils and capsules when the new AES
industrial capacity extraction equipment is fully commissioned and
now that capsules have been approved for sale by Health Canada.
The audited Consolidated Financial Statements and Management's
Discussion and Analysis documents for the three and twelve months
ended March 31, 2017 have been filed with SEDAR and are
available on www.sedar.com. The basis of financial reporting in the
Audited Consolidated Financial Statements and Management's
Discussion and Analysis documents is in thousands of Canadian
dollars, unless otherwise indicated.
Note 1: The Adjusted Product Contribution is a non-GAAP
financial measure that does not have any standardized meaning
prescribed by IFRS and may not be comparable to similar measures
presented by other companies. The Adjusted Product Contribution is
reconciled and explained in Management's Discussion & Analysis
under "Adjusted Product Contribution (Non-GAAP Measure)", a copy of
which has been filed today on www.sedar.com.
Note 2: The Adjusted EBITDA is a non-GAAP financial
measure that does not have any standardized meaning prescribed by
IFRS and may not be comparable to similar measures presented by
other companies. The Adjusted EBITDA is reconciled and explained in
Management's Discussion & Analysis under "Adjusted EBITDA
(Non-GAAP Measure)", a copy of which has been filed today
on www.sedar.com.
Webcast and Conference Call Information
Canopy Growth will host a conference call and audio webcast with
Bruce Linton, CEO and Tim Saunders, CFO at 8:30
AM Eastern Time today.
Webcast Information
A live audio webcast will be available at:
http://event.on24.com/r.htm?e=1429857&s=1&k=C6562574595771C03BC10CF011775CCA
Calling Information
Toll Free Dial-In Number: 1-888-231-8191
International Dial-In Number (647) 427-7450
Conference ID: 24922372
Replay Information
A replay of the call will be accessible by telephone until
11:59 PM ET on July 27,
2017.
Toll Free Dial-in Number: 1-855-859-2056
Replay Password: 24922372
About Canopy Growth Corporation
Canopy Growth is a
world-leading diversified cannabis company, offering distinct
brands and curated cannabis varieties in dried, oil and capsule
forms. Through its wholly‑owned subsidiaries, Canopy Growth
operates numerous state-of-the-art production facilities with over
half a million square feet of GMP-certified indoor and greenhouse
production capacity, all to an unparalleled level of quality
assurance procedures and testing. Canopy Growth has established
partnerships with leading sector names in Canada and abroad, with interests and
operations spanning four continents. The Company is proudly
dedicated to educating healthcare practitioners, providing
consistent access to high quality cannabis products, conducting
robust clinical research, and furthering the public's understanding
of cannabis. For more information visit www.canopygrowth.com.
Notice Regarding Forward Looking Statements
This news
release contains forward-looking statements. Often, but not always,
forward-looking statements can be identified by the use of words
such as "plans", "expects" or "does not expect", "is expected",
"estimates", "intends", "anticipates" or "does not anticipate", or
"believes", or variations of such words and phrases or state that
certain actions, events or results "may", "could", "would", "might"
or "will" be taken, occur or be achieved. Forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or
achievements of Canopy Growth Corporation and its subsidiaries to
be materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements. Examples of such statements include future operational
and production capacity, the impact of enhanced infrastructure and
production capabilities, and forecasted available product
selection. The forward-looking statements included in this
news release are made as of the date of this news release and
Canopy Growth Corporation does not undertake an obligation to
publicly update such forward-looking statements to reflect new
information, subsequent events or otherwise unless required by
applicable securities legislation. Neither the TSX Exchange nor its
Regulation Services Provider (as that term is defined in policies
of the TSX Exchange) accepts responsibility for the adequacy or
accuracy of this release.
CANOPY GROWTH
CORPORATION
|
CONSOLIDATED
STATEMENTS OF FINANCIAL POSITION
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
March 31,
|
(Expressed in CDN
$000's)
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
101,800
|
$
|
15,397
|
|
Restricted short-term
investments
|
|
|
550
|
|
-
|
|
Amounts
receivable
|
|
|
5,815
|
|
1,486
|
|
Biological
assets
|
|
|
13,643
|
|
5,321
|
|
Inventory
|
|
|
45,981
|
|
22,153
|
|
Prepaid expenses and
other assets
|
|
|
3,735
|
|
489
|
|
|
|
171,524
|
|
44,846
|
|
|
|
|
|
|
Assets classified as
held for sale
|
|
|
6,180
|
|
-
|
|
|
|
177,704
|
|
44,846
|
|
|
|
|
|
|
Property, plant and
equipment
|
|
|
96,270
|
|
44,984
|
Intangible
assets
|
|
|
162,263
|
|
31,861
|
Goodwill
|
|
|
241,371
|
|
20,866
|
Other
assets
|
|
|
-
|
|
804
|
|
|
$
|
677,608
|
$
|
143,361
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
$
|
15,386
|
$
|
6,107
|
|
Deferred
revenue
|
|
|
588
|
|
533
|
|
Current portion of
long-term debt
|
|
|
1,691
|
|
553
|
|
|
|
17,665
|
|
7,193
|
|
|
|
|
|
|
|
Acquisition
consideration related liabilities
|
|
|
-
|
|
1,258
|
|
Long-term
debt
|
|
|
8,639
|
|
3,469
|
|
Deferred tax
liability
|
|
|
35,798
|
|
7,413
|
|
Other long-term
liabilities
|
|
|
766
|
|
243
|
|
|
|
62,868
|
|
19,576
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
|
Share
capital
|
|
|
621,541
|
|
131,080
|
|
Share-based
reserve
|
|
|
23,415
|
|
5,804
|
|
Warrants
|
|
|
-
|
|
676
|
|
Accumulated other
comprehensive loss
|
|
|
198
|
|
-
|
|
Deficit
|
|
|
(30,382)
|
|
(13,775)
|
Equity attributable
to Canopy Growth Corporation
|
|
|
614,772
|
|
123,785
|
|
|
|
|
|
|
|
Non-controlling
interest
|
|
|
(32)
|
|
-
|
Total
equity
|
|
|
614,740
|
|
123,785
|
|
|
$
|
677,608
|
$
|
143,361
|
CANOPY GROWTH
CORPORATION
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
FOR THE THREE
MONTHS AND YEARS ENDED MARCH 31, 2017 AND 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
Year ended
|
|
|
March
31,
|
|
March 31,
|
|
|
March
31,
|
|
March 31,
|
(Expressed in CDN
$000's except share amounts)
|
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
14,661
|
$
|
5,042
|
|
$
|
39,895
|
$
|
12,699
|
Unrealized gain on
changes in fair value of biological assets
|
|
(19,160)
|
|
(12,037)
|
|
|
(60,061)
|
|
(38,805)
|
Inventory expensed to
cost of sales
|
|
14,966
|
|
4,842
|
|
|
39,577
|
|
12,796
|
Other cost of
sales
|
|
17,438
|
|
9,549
|
|
|
22,747
|
|
19,722
|
Cost of sales
(recovery to cost of sales), net of the
|
|
|
|
|
|
|
|
|
|
|
unrealized gain on
changes in fair value of biological assets
|
|
13,244
|
|
2,354
|
|
|
2,263
|
|
(6,287)
|
Gross
margin
|
|
1,417
|
|
2,688
|
|
|
37,632
|
|
18,986
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
|
4,110
|
|
2,401
|
|
|
12,960
|
|
5,653
|
Research and
development
|
|
(535)
|
|
281
|
|
|
810
|
|
721
|
General and
administration
|
|
5,934
|
|
2,558
|
|
|
16,858
|
|
8,177
|
Acquisition-related
costs
|
|
5,394
|
|
-
|
|
|
7,369
|
|
1,155
|
Share of loss in
equity investments
|
|
-
|
|
276
|
|
|
50
|
|
276
|
Share-based
compensation expense
|
|
4,701
|
|
1,003
|
|
|
8,046
|
|
3,497
|
Share-based
compensation expense related to
acquisition milestones
|
|
690
|
|
-
|
|
|
690
|
|
-
|
Share-based
compensation expense related to
Tweed Farms acquisition
|
|
-
|
|
387
|
|
|
-
|
|
-
|
Depreciation and
amortization
|
|
3,121
|
|
781
|
|
|
6,064
|
|
2,256
|
|
|
23,415
|
|
7,687
|
|
|
52,847
|
|
21,735
|
Loss from
operations
|
|
(21,998)
|
|
(4,999)
|
|
|
(15,215)
|
|
(2,749)
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
204
|
|
(29)
|
|
|
(66)
|
|
(140)
|
Other expense,
net
|
|
(585)
|
|
-
|
|
|
(585)
|
|
-
|
(Increase)/decrease
in fair value of acquisition consideration
|
|
|
|
|
|
|
|
|
|
|
related
liabilities
|
|
-
|
|
260
|
|
|
(1,193)
|
|
(481)
|
|
|
(381)
|
|
231
|
|
|
(1,844)
|
|
(621)
|
Net loss before
income taxes
|
|
(22,379)
|
|
(4,768)
|
|
|
(17,059)
|
|
(3,370)
|
|
|
|
|
|
|
|
|
|
|
Income tax recovery
(expense)
|
|
1,264
|
|
(354)
|
|
|
401
|
|
(126)
|
Net loss after income
taxes
|
$
|
(21,115)
|
$
|
(5,122)
|
|
$
|
(16,658)
|
$
|
(3,496)
|
|
|
|
|
|
|
|
|
|
|
Net loss
attributable to:
|
|
|
|
|
|
|
|
|
|
|
Canopy Growth
Corporation
|
$
|
(21,080)
|
$
|
(5,122)
|
|
$
|
(16,607)
|
$
|
(3,496)
|
|
Non-controlling
interest
|
|
(35)
|
|
-
|
|
|
(51)
|
|
-
|
|
$
|
(21,115)
|
$
|
(5,122)
|
|
$
|
(16,658)
|
$
|
(3,496)
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share, basic and diluted
|
|
|
|
|
|
|
|
|
|
|
Net loss per
share:
|
$
|
(0.14)
|
$
|
(0.05)
|
|
$
|
(0.14)
|
$
|
(0.05)
|
|
Weighted average
number of outstanding common shares:
|
|
147,060,478
|
|
98,529,186
|
|
|
118,989,713
|
|
77,023,935
|
CANOPY GROWTH
CORPORATION
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
FOR THE THREE
MONTHS AND YEARS ENDED MARCH 31, 2017 AND 2016
|
|
|
|
|
|
|
|
Three months
ended
|
|
Year ended
|
|
|
March
31,
|
|
March 31,
|
|
March
31,
|
|
March 31,
|
(Expressed in CDN
$000's)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net inflow (outflow)
of cash related to the following activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
|
|
|
|
|
|
|
|
|
|
Net loss after income
taxes
|
$
|
(21,115)
|
$
|
(5,122)
|
$
|
(16,658)
|
$
|
(3,496)
|
|
Items not affecting
cash:
|
|
|
|
|
|
|
|
|
|
|
Depreciation of
property, plant and equipment
|
|
1,425
|
|
745
|
|
4,146
|
|
2,079
|
|
|
Amortization of
intangible assets
|
|
1,696
|
|
36
|
|
1,918
|
|
177
|
|
|
Share of loss in
equity investments
|
|
-
|
|
276
|
|
50
|
|
276
|
|
|
Unrealized gain on
change in fair value of biological assets
|
|
(19,160)
|
|
(12,037)
|
|
(60,061)
|
|
(38,805)
|
|
|
Net changes in
inventory and biological assets
|
|
22,154
|
|
10,007
|
|
34,761
|
|
20,063
|
|
|
Contingent
consideration provision
|
|
(527)
|
|
-
|
|
-
|
|
-
|
|
|
Share-based
compensation
|
|
5,696
|
|
1,571
|
|
10,043
|
|
3,678
|
|
|
Non-cash acquisition
costs
|
|
1,333
|
|
-
|
|
1,333
|
|
-
|
|
|
Issuance of shares
per LBC agreement
|
|
-
|
|
350
|
|
-
|
|
350
|
|
|
Loss on disposal of
property, plant and equipment
|
|
443
|
|
-
|
|
661
|
|
-
|
|
|
Income tax (recovery)
expense
|
|
(1,264)
|
|
356
|
|
(401)
|
|
126
|
|
|
Increase/(decrease)
in fair value of acquisition consideration related
liabilities
|
|
-
|
|
(260)
|
|
1,193
|
|
481
|
|
Changes in non-cash
operating working capital items
|
|
(6,386)
|
|
2,817
|
|
(4,078)
|
|
1,544
|
Net cash used in
operating activities
|
|
(15,705)
|
|
(1,262)
|
|
(27,093)
|
|
(13,527)
|
|
|
|
|
|
|
|
|
|
Investing
|
|
|
|
|
|
|
|
|
|
Purchases of
property, plant and equipment and assets in process
|
|
(12,691)
|
|
(3,144)
|
|
(29,391)
|
|
(12,196)
|
|
Purchases of
intangible assets and intangibles in process
|
|
(141)
|
|
|
|
(141)
|
|
|
|
Net cash inflow on
acquisition of subsidiaries
|
|
11,976
|
|
-
|
|
11,193
|
|
1,054
|
|
Proceeds on disposals
of property and equipment
|
|
-
|
|
-
|
|
37
|
|
-
|
|
(Purchases) proceeds
of restricted investment
|
|
(300)
|
|
50
|
|
(300)
|
|
(236)
|
Net cash used in
investing activities
|
|
(1,156)
|
|
(3,094)
|
|
(18,602)
|
|
(11,378)
|
|
|
|
|
|
|
|
|
|
Financing
|
|
|
|
|
|
|
|
|
|
Proceeds from
issuance of common shares
|
|
24,250
|
|
-
|
|
130,276
|
|
14,376
|
|
Proceeds from
exercise of stock options
|
|
3,504
|
|
77
|
|
6,961
|
|
319
|
|
Proceeds from
exercise of warrants
|
|
-
|
|
285
|
|
126
|
|
7,703
|
|
Payment of share
issue costs
|
|
(1,246)
|
|
(375)
|
|
(8,066)
|
|
(1,642)
|
|
Issuance of long-term
debt
|
|
-
|
|
47
|
|
3,500
|
|
-
|
|
Increase in capital
lease obligations
|
|
-
|
|
-
|
|
260
|
|
-
|
|
Repayment of
long-term debt
|
|
(351)
|
|
-
|
|
(959)
|
|
(1,900)
|
Net cash provided
by financing activities
|
|
26,157
|
|
34
|
|
132,098
|
|
18,856
|
|
|
|
|
|
|
|
|
|
Net cash inflow
(outflow)
|
|
9,296
|
|
(4,322)
|
|
86,403
|
|
(6,049)
|
Cash and cash
equivalents, beginning of year
|
|
92,504
|
|
19,719
|
|
15,397
|
|
21,446
|
Cash and cash
equivalents, end of year
|
$
|
101,800
|
$
|
15,397
|
$
|
101,800
|
$
|
15,397
|
CANOPY GROWTH
CORPORATION
|
Unaudited Non-GAAP
Measure
|
Three Months
Ended
|
|
Year
Ended
|
(In CDN$000's,
except gram amounts)
|
March 31,
2017
|
March 31,
2016
|
|
March 31,
2017
|
March 31,
2016
|
|
|
|
|
|
|
|
|
|
|
Adjusted Product
Contribution1
|
|
|
|
|
|
|
|
|
|
Weighed average
cost per gram
|
$
|
2.90
|
$
|
2.69
|
|
$
|
2.86
|
$
|
2.69
|
Grams sold in the
period
|
|
1,740,463
|
|
700,395
|
|
|
5,139,266
|
|
1,696,440
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
14,661
|
$
|
5,042
|
|
$
|
39,895
|
$
|
12,699
|
|
Adjusted cost of
sales
|
|
(5,049)
|
|
(1,884)
|
|
|
(14,701)
|
|
(4,563)
|
Adjusted Product
Contribution
|
$
|
9,612
|
$
|
3,158
|
|
$
|
25,194
|
$
|
8,136
|
Adjusted Product
Contribution percentage of revenue
|
|
66%
|
|
63%
|
|
|
63%
|
|
64%
|
|
|
|
|
|
|
|
|
|
|
As compared to the
Gross Margin per IFRS:
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
$
|
1,417
|
$
|
2,688
|
|
$
|
37,632
|
$
|
18,986
|
|
Gross margin
percentage of revenue
|
|
10%
|
|
53%
|
|
|
94%
|
|
150%
|
|
|
|
|
|
|
|
|
|
|
Notes:
|
|
|
|
|
|
|
|
|
|
|
1 - The Adjusted
Product Contribution removes the fair value measurements required
under IFRS and recognizes the cost of sales based on the
weighted average cost per gram to produce and applied to the grams
sold in the period.
|
CANOPY GROWTH
CORPORATION
|
|
|
|
|
|
|
|
|
|
Unaudited Non-GAAP
Measure
|
Three Months
Ended
|
|
Year
Ended
|
(In
CDN$000's)
|
March 31,
2017
|
March 31, 2016
|
|
March 31, 2017
|
March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
Unaudited Adjusted
EBITDA2Reconciliation
|
|
|
|
|
|
|
|
|
|
Loss from
operations - as reported
|
$
|
(21,998)
|
$
|
(4,999)
|
|
$
|
(15,215)
|
$
|
(2,749)
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation expense
|
|
5,696
|
|
1,571
|
|
|
10,043
|
|
3,678
|
Acquisition
Costs
|
|
5,394
|
|
-
|
|
|
7,369
|
|
1,155
|
Contingent
consideration provision
|
|
(527)
|
|
-
|
|
|
-
|
|
-
|
Share of loss in
equity investments
|
|
-
|
|
276
|
|
|
50
|
|
276
|
Depreciation and
amortization
|
|
3,121
|
|
781
|
|
|
6,064
|
|
2,256
|
|
|
13,684
|
|
2,628
|
|
|
23,526
|
|
7,365
|
IFRS non-cash
accounting related to biological assets and inventory
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain on
changes in fair value of biological assets
|
|
(19,160)
|
|
(12,037)
|
|
|
(60,061)
|
|
(38,805)
|
|
Net changes in
biological assets and inventory
|
|
22,154
|
|
10,007
|
|
|
34,761
|
|
20,063
|
|
|
2,994
|
|
(2,030)
|
|
|
(25,300)
|
|
(18,742)
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
(5,320)
|
$
|
(4,401)
|
|
$
|
(16,989)
|
$
|
(14,126)
|
|
|
|
|
|
|
|
|
|
|
2 - Adjusted
EBITDA is Earnings Before Interest, Tax, and Depreciation and other
non-cash items, and as adjusted for acquisition related
items.
|
SOURCE Canopy Growth Corporation