The Company reports increased revenue
year-over-year and record profit margin
CALGARY,
AB, May 9, 2024 /CNW/ - SNDL Inc. (NASDAQ:
SNDL) ("SNDL" or the "Company") reported its
financial and operational results for the first quarter ended
March 31, 2024. All financial
information in this press release is reported in millions of
Canadian dollars unless otherwise indicated.
SNDL has also posted a supplemental investor presentation on its
website, found at https://sndl.com.
The Company will hold a conference call and webcast
presentation at 10:30 a.m. EDT
(8:30 a.m. MDT) on Thursday, May 9, 2024. The conference call
details can be found below.
FIRST QUARTER 2024 FINANCIAL AND OPERATIONAL
HIGHLIGHTS
- Net revenue for the first quarter of 2024 was $197.8 million, compared to $191.0 million in the first quarter of 2023, an
increase of 4%. This increase is driven by the Cannabis Retail and
Cannabis Operations segments, as the Liquor Retail segment reported
flat net revenue. The decrease in net revenue in the quarter, as
compared to net revenue of $248.5
million in the fourth quarter of 2023, is attributed to
seasonality in the Liquor and Cannabis Retail segments, as the
fourth quarter is traditionally the strongest retail period, and
the first quarter is impacted by decreased consumer spend.
- Achieved a gross profit of $50.4
million, representing a record gross margin of 25% of sales
in the first quarter of 2024, up from 17% in the first quarter of
2023. The 55% improvement in gross profit year over year highlights
the success of the Company's data sales program, as well as the
supply chain productivity initiatives, including optimized
procurement and cultivation consolidation following the closure of
the Olds, Alberta cultivation
facility in October 2023, which
significantly enhanced operational efficiencies and reduced
costs.
- Cash flow was negative $6.1
million in the first quarter of 2024, compared to negative
$66.3 million in the first quarter of
2023, a 91% improvement. SNDL is encouraged by this result, as
it is achieved in the context of business seasonality that lowers
the sales in both Liquor and Cannabis Retail segments during the
first quarter.
- Free cash flow in the first quarter of 2024 was negative
$6.4 million, compared to negative
$60.1 million in the first quarter of
2023, an 89% improvement year-over-year underpinned by
profitability and working capital management improvements.
- Operating loss was $4.4 million
for the first quarter of 2024, compared to a loss of $32.2 million in the first quarter of 2023, an
86% improvement primarily driven by margin expansion.
- The first quarter of 2024 yielded solid results, and a step
change in profitability despite seasonality impacts. There are
several additional highlights during the quarter that, coupled with
a strong pipeline of future initiatives, position SNDL on a
strong path to continue driving sustainable profitable growth:
- Opened a new Spiritleaf store in the coveted resort
community of Whistler, British
Columbia, and added a new Wine and Beyond store in
Airdrie, one of the
fastest-growing communities in Alberta.
- Continued expansion of the proprietary data licensing in
Cannabis Retail and initiated the program in the Liquor Retail
segment.
- Created opportunity for Cannabis Retail growth into
British Columbia through the Dutch
Love transaction.
- Dynamic 29% revenue growth of SNDL's Liquor Retail segment
private labels.
- Continued productivity initiatives in the Cannabis Operations
segment, notably the strategic closure of the Olds, Alberta facility, coupled with a ramp-up
in cultivation at the Atholville, New Brunswick facility to ensure stable and
increasing supply for retail, B2B and international partners as
demand grows.
- The Company had $783.2 million of
unrestricted cash, marketable securities and investments and no
outstanding debt, with $189.0 million
of unrestricted cash as at March 31,
2024. SNDL has not raised cash through share offerings since
June 2021.
"The SNDL team has delivered a solid first quarter result,
exemplified by a record gross margin of 25% and the
undeniable improvement in the profitability of all of our
operating segments over multiple years," said Zach George, Chief Executive Officer of SNDL.
"We are well positioned to further expand our
retail network and product distribution in Canada where we
expect further consolidation and attrition. Building on the
momentum of our Canadian operations, the recent completion of
Nasdaq's review of our SunStream USA structure creates an opportunity for SNDL
to close on U.S. assets currently under
restructuring, positioning us to become a leading global
cannabis company. We intend to complete a
rigorous strategic planning exercise in June of 2024 and
are focused on a material
reduction in corporate expenses to drive further
improvements into the back half of the year. SNDL remains steadfast
in its commitment to driving long-term, stabilized profitability.
Following our first-ever two quarters of positive free cash flow in
2023, we are targeting the generation
of positive free cash flow for the aggregate 2024 calendar
year."
FIRST QUARTER 2024 KEY FINANCIAL METRICS
OPERATING
SEGMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($000s)
|
Liquor
Retail
|
|
Cannabis
Retail
|
|
Cannabis
Operations
|
|
Investments
|
|
Corporate
|
|
Total
|
|
Three months ended
March 31, 2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
116,054
|
|
|
71,306
|
|
|
22,395
|
|
|
—
|
|
|
(12,005)
|
|
|
197,750
|
|
Gross profit
|
|
28,806
|
|
|
18,359
|
|
|
3,235
|
|
|
—
|
|
|
—
|
|
|
50,400
|
|
Operating income
(loss)
|
|
2,180
|
|
|
(1,042)
|
|
|
891
|
|
|
13,079
|
|
|
(19,485)
|
|
|
(4,377)
|
|
Adjusted operating
income (loss) (1)
|
|
2,180
|
|
|
(1,042)
|
|
|
1,146
|
|
|
13,079
|
|
|
(19,829)
|
|
|
(4,466)
|
|
Three months ended
March 31, 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
115,911
|
|
|
67,408
|
|
|
19,133
|
|
|
—
|
|
|
(11,407)
|
|
|
191,045
|
|
Gross profit
|
|
26,267
|
|
|
15,819
|
|
|
(9,545)
|
|
|
—
|
|
|
—
|
|
|
32,541
|
|
Operating income
(loss)
|
|
(1,950)
|
|
|
(78)
|
|
|
(18,832)
|
|
|
8,737
|
|
|
(20,081)
|
|
|
(32,204)
|
|
Adjusted operating
income (loss) (1)
|
|
(1,950)
|
|
|
(78)
|
|
|
(17,936)
|
|
|
8,737
|
|
|
(18,634)
|
|
|
(29,861)
|
|
(1)
|
Adjusted operating
income (loss) is a specified financial measure that does not have a
standardized meaning prescribed by IFRS and therefore may not be
comparable to similar measures reported by other companies. See
"Non-IFRS Measures – Adjusted operating income (loss)"
below.
|
FIRST QUARTER 2024 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 171 locations,
predominantly in Alberta, under its three retail banners:
"Wine and Beyond", "Liquor Depot", and "Ace
Liquor".
- Net revenue for Liquor Retail sales for the three banners
combined was $116.1 million in the
first quarter of 2024, stable compared to $115.9 million for the same period in the year
prior.
- Same-store sales for stores open in the first quarter of 2023
and 2024 have remained stable year-over-year. Same-store sales
refer to the revenue generated by the Company's existing retail
liquor locations, which operated during the current and comparative
periods.
- Gross profit for Liquor Retail was $28.8
million, or 25% of sales, in the first quarter of 2024,
compared to $26.3 million, or 23% of
sales, in the first quarter of 2023, representing a 10% increase
year-over-year. The Company achieved record gross margin for its
Liquor Retail segment in March 2024,
with margins reaching 25.3%. This improvement was mainly driven by
procurement productivity and product mix management
initiatives.
- Operating income for Liquor Retail was $2.2 million in the first quarter of 2024,
compared to negative $2.0 million in
the first quarter of 2023, a 212% improvement.
- SNDL started to monetize its proprietary data licensing program
for Liquor Retail in the first quarter of 2024, helping to further
enhance the segment's profit margins with no associated cost of
sales.
- Private label sales, a substantial driver of margin accretive
profitable growth, increased by 28.9% compared to the first quarter
of 2023, and private label sales as a percent of total sales
increased from 11.4% in the fourth quarter of 2023 to 12.6% in the
first quarter of 2024. This increase is driven by further additions
to the private label offerings, particularly within the value
segment. The Company plans to extend its private label line-up with
wine varietals sourced from distinguished regions and
notable winemakers, all priced attractively, which is expected
to contribute to further enhance SNDL's consumer value proposition,
further distinguishing its Liquor Retail banners.
- The Company opened its 13th Wine and Beyond location
in Airdrie, Alberta, to further
build on the success of the experiential, destination approach of
the banner.
As of May 9, 2024, the Ace Liquor
store count is 138, the Liquor Depot store count is 20, and the
Wine and Beyond store count is 13.
Cannabis Retail
With its 63% ownership interest in Nova Cannabis Inc.
("Nova"), SNDL is Canada's largest private-sector cannabis
retailer by number of stores, operating 188 locations under its
four retail banners: "Value Buds", "Spiritleaf",
"Superette", and "Firesale Cannabis". The Company's
Cannabis Retail strategy is based on several pillars, including the
quality of its store locations, its range of products, 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.
- Net revenue for Cannabis Retail in the first quarter of 2024
was $71.3 million, compared to
$67.4 million in the first quarter of
2023. The 6% increase year-over-year was driven by productivity
improvements and new stores opened through December 2023.
- Same-store sales increased 2.1% for stores operating in the
first quarters of 2023 and 2024. Same-store sales refer to the
revenue generated by the Company's existing retail cannabis
locations, which operated during the current and comparative
periods.
- Gross profit for Cannabis Retail was $18.4 million, or 26% of sales, in the first
quarter of 2024, compared to $15.8
million, or 24% of sales, in the first quarter of 2023, a
17% increase year-over-year. The increase showcases the Company's
efforts in continued margin expansion initiatives, including growth
of its data program, in-store productivity programs, and the
continued development of private label offerings.
- Operating income for the Cannabis Retail was negative
$1.0 million in the first quarter of
2024, compared to negative $78,000 in
the first quarter of 2023.
- SNDL's proprietary data licensing program generated revenue of
$3.5 million for the first quarter of
2024, an increase of 139% or $2.0
million from the same period in the year prior.
- The Company expanded its Spiritleaf footprint into the
coveted community of Whistler, British
Columbia in February
2024.
- Subsequent to quarter end, SNDL began the expansion of its
Cannabis Retail segment in British
Columbia through the Dutch Love transaction, paving the way
for the launch of the first Value Buds branded stores in the
region. This move enhances the Company's presence and demonstrates
the strength of its M&A strategy.
As of May 9, 2024, the Spiritleaf
store count was 84 (20 corporate stores and 64 franchise stores),
the Superette store count was 4 corporate stores, the Firesale
store count was 1 corporate store, and the Value Buds store count
was 99 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 and plans to
continue evolving toward a cost-effective cultivation and
manufacturing operation, the Cannabis Operations segment is a key
enabler of SNDL's vertical integration strategy. Cannabis
Operations include the operations of The Valens Company Inc.
("Valens") for the period of January
18, 2023, to December 31,
2023.
- Net revenue for Cannabis Operations for the first quarter of
2024 was $22.4 million, up 17% from
$19.1 million in the first quarter of
2023, as a result of increasing provincial board and B2B
distribution and a continued focus on consumer innovation, quality
and operational efficiencies. Provincial board revenue represented
$14.5 million in revenue for the
quarter, while wholesale revenue increased 138% to $7.5 million for the quarter.
- Record gross profit for the segment in the first quarter of
2024 of $3.2 million, an increase of
$12.7 million, from negative
$9.5 million in the first quarter of
2023. The 134% improvement in gross profit is largely attributable
to several productivity initiatives, including the strategic
decision to close the Olds,
Alberta facility.
- The Company has begun a strategic ramp-up in cultivation
production at its Atholville, New
Brunswick facility to ensure stable and consistent supply
for both its retail B2B and international partners as demand
increases.
- Operating income for the segment improved 104% for the period,
to $0.9 million, compared to negative
$18.9 million in the first quarter of
2023. The substantial increase in operating income results from
margin expansion and operational efficiencies.
- Following SNDL's inaugural international export contract
with IM Cannabis Corp ("IMC") in Israel, the Company is pursuing EU-GMP
certification at its Atholville
facility to expand its international export footprint further and
increase B2B opportunities within emerging global markets such as
the UK and Germany.
- Subsequent to quarter end, the Company secured approximately
350 additional distribution points within prominent national
cannabis retail chains, helping to further drive market share and
revenue in future quarters.
Investments
- As at March 31, 2024, the Company
has deployed capital to a portfolio of cannabis-related investments
with a carrying value of $594.2
million, including $560.3
million to SunStream Bancorp Inc.
("SunStream").
- In the first quarter of 2024, the investment portfolio
generated positive operating income of $13.1
million compared to $8.7
million in the quarter of the prior year.
- SunStream is a joint venture sponsored by SNDL. During 2023,
SunStream directed the formation of the SunStream USA group of companies ("SunStream
USA Group") in connection with
the restructuring of certain loans provided by SunStream. SunStream
USA Group is anticipated to be a
U.S. platform with one or more independent third-party investors,
which will be independently managed and governed.
- On May 2, 2024, SNDL
announced that SunStream USA Group
would proceed with acquiring equity positions in U.S. cannabis
assets following the completion of its review by Nasdaq, which
confirmed that the proposed structure meets all applicable laws and
Nasdaq listing rules.
- At the end of the first quarter of 2024, the credit portfolio
controlled by SunStream comprised five investments: Jushi
Holdings Inc., SKYMINT Brands ("Skymint"), Ascend Wellness
Holdings, Surterra Holdings, Inc. d/b/a Parallel
("Parallel"), and Columbia Care Inc.
- The previously announced transactions to acquire certain
operations and assets of Parallel and Skymint are anticipated
to close in 2024 and are subject to certain conditions and
regulatory approvals.
- SNDL is optimistic about the proposed regulatory reforms in
Germany, Florida, and the recent decision by the U.S.
federal government to reclassify cannabis. On April 30, 2024, the U.S. Justice Department,
through the U.S. Drug Enforcement Administration, announced that it
would move to reclassify marijuana from a Schedule I drug to a
Schedule III drug, subject to a formal rulemaking process.
Though this decision will not legalize cannabis at a federal
level in the United States, it is
expected to facilitate various research and permit certain tax
deductions for U.S. cannabis businesses. This decision does not
directly affect SNDL's operations, which are located solely in
Canada, though it is expected to
have a favourable effect on the SunStream joint venture investments
in the United States. SNDL is
closely following the developments of this decision and how it may
create opportunities for the Company.
Equity Position
- $783.2 million of unrestricted
cash, marketable securities and investments, including investments
in equity-accounted investees, and no outstanding debt at
March 31, 2024, resulting in a net
book value of $1.2
billion.
- On November 13, 2023, the Company
announced that its board of directors had approved a renewal of the
share repurchase program upon its expiry on November 20, 2023. The Company's share repurchase
program continues to be available to lower the outstanding share
float. SNDL will continue to assess opportunities to utilize
the program to the extent that management believes it is in the
best interest of SNDL's shareholders. For the three months ended
March 31, 2024, the Company did not
purchase common shares for cancellation.
This press release is intended to be read in conjunction with
the Company's condensed consolidated interim financial statements
and the notes thereto for the three months ended March 31, 2024, and the accompanying Management's
Discussion and Analysis. These documents are available under the
Company's profile on SEDAR+ at www.sedarplus.ca and EDGAR at
www.sec.gov/edgar.shtml.
CONFERENCE CALL
The Company will hold a conference call and webcast
presentation at 10:30 a.m. EDT
(8:30 a.m. MDT) on Thursday, May 9, 2024.
WEBCAST ACCESS
To access the live webcast of the call, please visit the
following link:
https://services.choruscall.ca/links/sndl2024q1.html
REPLAY
A telephone replay will be available for one month. To access
the replay, dial:
Canada/USA Toll Free: 1-855-669-9658 or International
Toll: +1-604-674-8052
When prompted, enter Replay Access Code: 0888 #
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, indoor cultivation, product innovation, low-cost
manufacturing facilities, and a cannabis brand portfolio that
includes Top Leaf, Contraband, Palmetto, Bon Jak, Versus, Value
Buds, and Vacay. SNDL's investment portfolio seeks to deploy
strategic capital through direct and indirect investments and
partnerships throughout the North American cannabis industry. For
more information on SNDL, please go
to https://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, the Company's ability to achieve improved profitability,
growth and efficiencies across all segments, or its goal of
sustainable, positive gross margin and positive free cash flow,
revenue generation from the Liquor Retail proprietary data
licensing program, expansion of product offerings (including the
expected expansion of the Company's wine private label), the impact
of productivity initiatives within the Cannabis Operations segment
and owned retail locations, the expansion and additional cost
savings at the Atholville
facility, performance of the Company's investments, including
through the SunStream joint venture and SunStream USA Group, implementation of the proposed
SunStream USA Group investment
structure, the timing and closing of the transactions with Parallel
and Skymint, and any other potential forms of shareholder value
creation. Forward-looking statements are frequently characterized
by words such as "aim", "anticipate", "assume", "believe",
"contemplate", "continue", "could", "due", "estimate", "expect",
"goal", "intend", "may", "objective", "plan", "predict",
"potential", "positioned", "pioneer", "seek", "should", "target",
"will", "would", and other similar expressions that are predictions
of or indicate future events and future trends, or the negative of
these terms or other comparable terminology. These forward-looking
statements are based on current expectations, estimates, forecasts
and projections about the Company's business and the industry in
which it operates and management's beliefs and assumptions and are
not guarantees of future performance or development and involve
known and unknown risks, uncertainties and other factors that are
in some cases beyond its control. 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 "Risk Factors" in
the Company's Annual Information Form dated March 20, 2024, and the risk factors included in
our other public disclosure documents 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.
Condensed Consolidated Interim Statement of Loss and
Comprehensive Loss
(Unaudited – expressed in thousands of
Canadian dollars, except per share amounts)
.
|
|
Three months
ended
March 31
|
|
|
|
2024
|
|
|
2023
|
|
Net
revenue
|
|
|
197,750
|
|
|
|
191,045
|
|
Cost of
sales
|
|
|
147,350
|
|
|
|
158,504
|
|
Gross
profit
|
|
|
50,400
|
|
|
|
32,541
|
|
|
|
|
|
|
|
|
|
|
Investment income
(loss)
|
|
|
4,036
|
|
|
|
(958)
|
|
Share of profit of
equity-accounted investees
|
|
|
9,148
|
|
|
|
9,516
|
|
|
|
|
|
|
|
|
|
|
General and
administrative
|
|
|
44,695
|
|
|
|
48,573
|
|
Sales and
marketing
|
|
|
2,598
|
|
|
|
3,386
|
|
Research and
development
|
|
|
37
|
|
|
|
140
|
|
Depreciation and
amortization
|
|
|
14,143
|
|
|
|
16,468
|
|
Share-based
compensation
|
|
|
4,843
|
|
|
|
2,209
|
|
Restructuring
(recovery) costs
|
|
|
(89)
|
|
|
|
1,536
|
|
Asset
impairment
|
|
|
1,656
|
|
|
|
807
|
|
Loss on disposition of
assets
|
|
|
78
|
|
|
|
184
|
|
Operating income
(loss)
|
|
|
(4,377)
|
|
|
|
(32,204)
|
|
|
|
|
|
|
|
|
|
|
Other income
(expenses)
|
|
|
(3,272)
|
|
|
|
(2,574)
|
|
Loss before income
tax
|
|
|
(7,649)
|
|
|
|
(34,778)
|
|
Income tax
recovery
|
|
|
2,997
|
|
|
|
—
|
|
Net loss from
continuing operations
|
|
|
(4,652)
|
|
|
|
(34,778)
|
|
Net loss from
discontinued operations
|
|
|
—
|
|
|
|
(1,365)
|
|
Net
loss
|
|
|
(4,652)
|
|
|
|
(36,143)
|
|
|
|
|
|
|
|
|
|
|
Equity-accounted
investees - share of other comprehensive income (loss)
|
|
|
10,034
|
|
|
|
(385)
|
|
Gain on translation of
foreign operations
|
|
|
—
|
|
|
|
5
|
|
Comprehensive income
(loss)
|
|
|
5,382
|
|
|
|
(36,523)
|
|
|
|
|
|
|
|
|
|
|
Net loss from
continuing operations attributable to:
|
|
|
|
|
|
|
|
|
Owners of the
Company
|
|
|
(2,554)
|
|
|
|
(34,203)
|
|
Non-controlling
interest
|
|
|
(2,098)
|
|
|
|
(575)
|
|
|
|
|
(4,652)
|
|
|
|
(34,778)
|
|
Net loss
attributable to:
|
|
|
|
|
|
|
|
|
Owners of the
Company
|
|
|
(2,554)
|
|
|
|
(35,568)
|
|
Non-controlling
interest
|
|
|
(2,098)
|
|
|
|
(575)
|
|
|
|
|
(4,652)
|
|
|
|
(36,143)
|
|
Comprehensive income
(loss) attributable to:
|
|
|
|
|
|
|
|
|
Owners of the
Company
|
|
|
7,480
|
|
|
|
(35,948)
|
|
Non-controlling
interest
|
|
|
(2,098)
|
|
|
|
(575)
|
|
Condensed Consolidated Interim Statement of Financial
Position
(Unaudited – expressed in thousands of Canadian
dollars)
As at
|
March 31,
2024
|
|
December 31,
2023
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
188,954
|
|
|
195,041
|
|
Restricted
cash
|
|
20,122
|
|
|
19,891
|
|
Marketable
securities
|
|
170
|
|
|
225
|
|
Accounts
receivable
|
|
20,522
|
|
|
27,059
|
|
Biological
assets
|
|
772
|
|
|
429
|
|
Inventory
|
|
134,786
|
|
|
129,060
|
|
Prepaid expenses and
deposits
|
|
15,478
|
|
|
22,464
|
|
Investments
|
|
13,034
|
|
|
3,400
|
|
Assets held for
sale
|
|
25,233
|
|
|
6,375
|
|
Net investment in
subleases
|
|
2,818
|
|
|
2,970
|
|
|
|
421,889
|
|
|
406,914
|
|
Non-current
assets
|
|
|
|
|
|
|
Long-term deposits and
receivables
|
|
7,344
|
|
|
4,837
|
|
Right of use
assets
|
|
122,100
|
|
|
129,679
|
|
Property, plant and
equipment
|
|
129,895
|
|
|
152,916
|
|
Net investment in
subleases
|
|
17,287
|
|
|
18,396
|
|
Intangible
assets
|
|
72,595
|
|
|
73,149
|
|
Investments
|
|
20,663
|
|
|
29,660
|
|
Equity-accounted
investees
|
|
560,342
|
|
|
538,331
|
|
Goodwill
|
|
119,282
|
|
|
119,282
|
|
Total
assets
|
|
1,471,397
|
|
|
1,473,164
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
61,360
|
|
|
68,210
|
|
Lease
liabilities
|
|
32,975
|
|
|
30,537
|
|
Derivative
warrants
|
|
5,700
|
|
|
4,400
|
|
|
|
100,035
|
|
|
103,147
|
|
Non-current
liabilities
|
|
|
|
|
|
|
Lease
liabilities
|
|
128,816
|
|
|
136,492
|
|
Other
liabilities
|
|
5,918
|
|
|
4,185
|
|
Total
liabilities
|
|
234,769
|
|
|
243,824
|
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
|
Share
capital
|
|
2,377,163
|
|
|
2,375,950
|
|
Warrants
|
|
667
|
|
|
2,260
|
|
Contributed
surplus
|
|
75,233
|
|
|
73,014
|
|
Contingent
consideration
|
|
2,279
|
|
|
2,279
|
|
Accumulated
deficit
|
|
(1,263,405)
|
|
|
(1,260,851)
|
|
Accumulated other
comprehensive income
|
|
29,451
|
|
|
19,417
|
|
Total shareholders'
equity
|
|
1,221,388
|
|
|
1,212,069
|
|
Non-controlling
interest
|
|
15,240
|
|
|
17,271
|
|
Total liabilities
and shareholders' equity
|
|
1,471,397
|
|
|
1,473,164
|
|
Condensed Consolidated Interim Statement of Cash
Flows
(Unaudited –expressed in thousands of Canadian
dollars)
|
|
Three months
ended
March 31
|
|
|
|
2024
|
|
|
2023
|
|
Cash provided by
(used in):
|
|
|
|
|
|
|
|
|
Operating
activities
|
|
|
|
|
|
|
|
|
Net loss for the
period
|
|
|
(4,652)
|
|
|
|
(36,143)
|
|
Adjustments
for:
|
|
|
|
|
|
|
|
|
Income tax
recovery
|
|
|
(2,997)
|
|
|
|
—
|
|
Interest and fee
income
|
|
|
(4,091)
|
|
|
|
(4,211)
|
|
Change in fair value
of biological assets
|
|
|
(232)
|
|
|
|
3,535
|
|
Share-based
compensation
|
|
|
4,843
|
|
|
|
2,209
|
|
Depreciation and
amortization
|
|
|
14,570
|
|
|
|
18,259
|
|
Loss on disposition of
assets
|
|
|
78
|
|
|
|
184
|
|
Inventory impairment
and obsolescence
|
|
|
1,913
|
|
|
|
9,177
|
|
Finance costs,
net
|
|
|
1,625
|
|
|
|
5,173
|
|
Change in estimate of
fair value of derivative warrants
|
|
|
1,300
|
|
|
|
(4,802)
|
|
Unrealized foreign
exchange loss
|
|
|
104
|
|
|
|
48
|
|
Transaction
costs
|
|
|
164
|
|
|
|
—
|
|
Asset
impairment
|
|
|
1,656
|
|
|
|
807
|
|
Share of (profit) of
equity-accounted investees
|
|
|
(9,148)
|
|
|
|
(9,516)
|
|
Realized loss on
settlement of marketable securities
|
|
|
—
|
|
|
|
43,804
|
|
Unrealized (gain) loss
on marketable securities
|
|
|
55
|
|
|
|
(38,635)
|
|
Proceeds from
settlement of marketable securities
|
|
|
—
|
|
|
|
26
|
|
Interest
received
|
|
|
3,172
|
|
|
|
3,703
|
|
Change in non-cash
working capital
|
|
|
(5,059)
|
|
|
|
(42,562)
|
|
Net cash used in
operating activities from continuing operations
|
|
|
3,301
|
|
|
|
(48,944)
|
|
Net cash provided by
operating activities from discontinued operations
|
|
|
—
|
|
|
|
147
|
|
Net cash used in
operating activities
|
|
|
3,301
|
|
|
|
(48,797)
|
|
Investing
activities
|
|
|
|
|
|
|
|
|
Additions to property,
plant and equipment
|
|
|
(2,410)
|
|
|
|
(1,394)
|
|
Additions to
intangible assets
|
|
|
—
|
|
|
|
(17)
|
|
Changes to
investments
|
|
|
133
|
|
|
|
(827)
|
|
Changes to
equity-accounted investees
|
|
|
168
|
|
|
|
(7,546)
|
|
Proceeds from disposal
of property, plant and equipment
|
|
|
(62)
|
|
|
|
82
|
|
Acquisitions, net of
cash acquired
|
|
|
—
|
|
|
|
3,695
|
|
Change in non-cash
working capital
|
|
|
495
|
|
|
|
(459)
|
|
Net cash used in
investing activities from continuing operations
|
|
|
(1,676)
|
|
|
|
(6,466)
|
|
Net cash used in
investing activities from discontinued operations
|
|
|
—
|
|
|
|
—
|
|
Net cash used in
investing activities
|
|
|
(1,676)
|
|
|
|
(6,466)
|
|
Financing
activities
|
|
|
|
|
|
|
|
|
Change in restricted
cash
|
|
|
(231)
|
|
|
|
(42)
|
|
Payments on lease
liabilities, net
|
|
|
(7,516)
|
|
|
|
(9,491)
|
|
Repurchase of common
shares, net of costs
|
|
|
—
|
|
|
|
(1,536)
|
|
Change in non-cash
working capital
|
|
|
35
|
|
|
|
(1)
|
|
Net cash used in
financing activities from continuing operations
|
|
|
(7,712)
|
|
|
|
(11,070)
|
|
Net cash used in
financing activities from discontinued operations
|
|
|
—
|
|
|
|
—
|
|
Net cash used in
financing activities
|
|
|
(7,712)
|
|
|
|
(11,070)
|
|
Effect of exchange rate
changes on cash held in foreign currency
|
|
|
—
|
|
|
|
—
|
|
Change in cash and cash
equivalents
|
|
|
(6,087)
|
|
|
|
(66,333)
|
|
Cash and cash
equivalents, beginning of period
|
|
|
195,041
|
|
|
|
279,586
|
|
Cash and cash
equivalents, end of period
|
|
|
188,954
|
|
|
|
213,253
|
|
NON-IFRS 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 reported 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 OPERATING INCOME (LOSS)
Adjusted operating income (loss) is a non-IFRS financial measure
which the Company uses to evaluate its operating performance.
Adjusted operating income (loss) provides information to investors,
analysts, and others to aid in understanding and evaluating the
Company's operating results in a similar manner to its management
team. The Company defines adjusted operating income (loss) as
operating income (loss) less restructuring costs (recovery),
goodwill and intangible asset impairments and asset impairments
triggered by restructuring activities.
The following tables reconcile adjusted operating income (loss)
to operating income (loss) for the periods noted.
($000s)
|
Liquor
Retail
|
|
Cannabis
Retail
|
|
Cannabis
Operations
|
|
Investments
|
|
Corporate
|
|
Total
|
|
Three months ended
March 31, 2024
|
|
Operating income
(loss)
|
|
2,180
|
|
|
(1,042)
|
|
|
891
|
|
|
13,079
|
|
|
(19,485)
|
|
|
(4,377)
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring costs
(recovery)
|
|
—
|
|
|
—
|
|
|
255
|
|
|
—
|
|
|
(344)
|
|
|
(89)
|
|
Adjusted operating
income (loss)
|
|
2,180
|
|
|
(1,042)
|
|
|
1,146
|
|
|
13,079
|
|
|
(19,829)
|
|
|
(4,466)
|
|
($000s)
|
Liquor
Retail
|
|
Cannabis
Retail
|
|
Cannabis
Operations
|
|
Investments
|
|
Corporate
|
|
Total
|
|
Three months ended
March 31, 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
(1,950)
|
|
|
(78)
|
|
|
(18,832)
|
|
|
8,737
|
|
|
(20,081)
|
|
|
(32,204)
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
costs
|
|
—
|
|
|
—
|
|
|
89
|
|
|
—
|
|
|
1,447
|
|
|
1,536
|
|
Intangible asset
impairments
|
|
—
|
|
|
—
|
|
|
807
|
|
|
—
|
|
|
—
|
|
|
807
|
|
Adjusted operating
income (loss)
|
|
(1,950)
|
|
|
(78)
|
|
|
(17,936)
|
|
|
8,737
|
|
|
(18,634)
|
|
|
(29,861)
|
|
FREE CASH FLOW
Free cash flow is a non-IFRS financial measure which the Company
uses to evaluate its financial performance. Free cash flow provides
information which management believes to be useful to investors,
analysts and others in understanding and evaluating the Company's
ability to generate positive cash flows as it removes cash used for
non-operational items. The Company defines free cash flow as the
total change in cash and cash equivalents less cash used for common
share repurchases, dividends (if any), changes to debt instruments,
changes to long-term investments, net cash used for acquisitions
plus cash provided by dispositions (if any).
The following table reconciles free cash flow to change in cash
and cash equivalents for the periods noted.
|
Three months
ended
March 31
|
|
($000s)
|
2024
|
|
2023
|
|
Change in cash and cash
equivalents
|
|
(6,087)
|
|
|
(66,333)
|
|
Adjustments:
|
|
|
|
|
|
|
Repurchase of common
shares
|
|
—
|
|
|
1,536
|
|
Changes to long-term
investments
|
|
(301)
|
|
|
8,373
|
|
Acquisitions, net of
cash acquired
|
|
—
|
|
|
(3,695)
|
|
Free cash
flow
|
|
(6,388)
|
|
|
(60,119)
|
|
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SOURCE SNDL Inc.