Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) (“Cronos” or the
“Company”), today announces its 2022 fourth quarter and full-year
business results.
“2022 was a transformative year for Cronos in
which we executed a business realignment, including a cost savings
program, while staying laser focused on continuing to build our
portfolio of borderless products,” said Mike Gorenstein, Chairman,
President and CEO of Cronos. “We exceeded our originally stated
goal by saving $28.7 million in operating expenses in 2022, to
right-size our cost structure to be more adaptable to the changing
landscape we face globally in the cannabis industry. A significant
amount of work went into building the Spinach® brand and creating
the right products for it, which culminated in the brand achieving
the number one market share in the Canadian edibles category in
January 2023. This achievement was validation of our innovation
capabilities and is encouraging as we prepare to further expand our
portfolio of borderless products. Additionally, Peace Naturals®
continues to be a leading medical cannabis brand in Israel,
supported by our robust genetics portfolio, which is a testament to
our capabilities in building iconic brands that resonate with
consumers across the globe. Looking forward to 2023, we are excited
about our product and innovation pipelines across categories and we
look forward to bringing differentiated products to market that
elevate the consumer experience.”
Financial Results
| (in thousands of USD) |
|
Three months endedDecember 31, |
|
Change |
|
Year endedDecember 31, |
|
Change |
| |
|
|
2022 |
|
|
|
2021 |
|
|
$ |
|
% |
|
|
2022 |
|
|
|
2021 |
|
|
$ |
|
% |
| Net revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
$ |
854 |
|
|
$ |
3,106 |
|
|
$ |
(2,252 |
) |
|
(73 |
)% |
|
$ |
5,155 |
|
|
$ |
9,874 |
|
|
$ |
(4,719 |
) |
|
(48 |
)% |
|
Rest of World |
|
|
22,033 |
|
|
|
22,689 |
|
|
|
(656 |
) |
|
(3 |
)% |
|
|
86,749 |
|
|
|
64,561 |
|
|
|
22,188 |
|
|
34 |
% |
| Consolidated net revenue |
|
|
22,887 |
|
|
|
25,795 |
|
|
|
(2,908 |
) |
|
(11 |
)% |
|
|
91,904 |
|
|
|
74,435 |
|
|
|
17,469 |
|
|
23 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cost of sales |
|
|
23,121 |
|
|
|
23,852 |
|
|
|
(731 |
) |
|
(3 |
)% |
|
|
79,935 |
|
|
|
80,008 |
|
|
|
(73 |
) |
|
— |
% |
| Inventory write-down |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
N/A |
|
|
|
— |
|
|
|
11,961 |
|
|
|
(11,961 |
) |
|
(100 |
)% |
| Gross profit |
|
$ |
(234 |
) |
|
$ |
1,943 |
|
|
$ |
(2,177 |
) |
|
(112 |
)% |
|
$ |
11,969 |
|
|
$ |
(17,534 |
) |
|
$ |
29,503 |
|
|
168 |
% |
| Gross margin(i) |
|
|
(1 |
)% |
|
|
8 |
% |
|
|
N/A |
|
|
(9 |
)pp |
|
|
13 |
% |
|
|
(24 |
)% |
|
|
N/A |
|
|
37 |
pp |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income (loss)(ii) |
|
$ |
(78,857 |
) |
|
$ |
(133,892 |
) |
|
$ |
55,035 |
|
|
41 |
% |
|
$ |
(168,734 |
) |
|
$ |
(397,204 |
) |
|
$ |
228,470 |
|
|
58 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted EBITDA(iii) |
|
$ |
(21,212 |
) |
|
$ |
(27,357 |
) |
|
$ |
6,145 |
|
|
22 |
% |
|
$ |
(80,608 |
) |
|
$ |
(160,463 |
) |
|
$ |
79,855 |
|
|
50 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other
Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash and cash
equivalents(iv) |
|
$ |
764,644 |
|
|
$ |
886,973 |
|
|
$ |
(122,329 |
) |
|
(14 |
)% |
|
|
|
|
|
|
|
|
| Short-term
investments(iv) |
|
|
113,077 |
|
|
|
117,684 |
|
|
|
(4,607 |
) |
|
(4 |
)% |
|
|
|
|
|
|
|
|
| Capital expenditures(v) |
|
|
768 |
|
|
|
567 |
|
|
|
201 |
|
|
35 |
% |
|
|
5,032 |
|
|
|
12,262 |
|
|
|
(7,230 |
) |
|
(59 |
)% |
(i) Gross margin is defined as gross profit
divided by net revenue.(ii) Net income (loss) of $(78.9) million in
Q4 2022 improved by $55.0 million from Q4 2021. The improvement
year-over-year was primarily driven by a $122.9 million impairment
loss on long lived assets in Q4 2021 that did not occur in Q4
2022.(iii) See “Non-GAAP Measures” for more information,
including a reconciliation of adjusted earnings (loss) before
interest, taxes, depreciation and amortization (“Adjusted EBITDA”)
to net income (loss).(iv) Dollar amounts are as of the last
day of the period indicated.(v) Capital expenditures represent
component information of investing activities and is defined as the
sum of purchase of property, plant and equipment, and purchase of
intangible assets.
Fourth Quarter 2022
- Net revenue of $22.9 million in Q4
2022 decreased by $2.9 million from Q4 2021. The decrease
year-over-year was primarily driven by lower cannabis flower sales
in the Canadian adult-use market driven largely by adverse
price/mix shift, lower sales in the U.S. segment and the impact of
the weakening Canadian dollar against the U.S. dollar during the
period, partially offset by an increase in net revenue in the
Israeli medical market.
- Gross profit of $(0.2) million in
Q4 2022 declined by $2.2 million from Q4 2021. The decline
year-over-year was primarily driven by reduced gross profit in the
Rest of World (“ROW”) segment, mainly driven by lower cannabis
flower sales in Canada, increased inventory reserves in the U.S.
segment as we transitioned away from beauty products, lower fixed
cost absorption and packaging changes in the ROW segment, partially
offset by increased sales of cannabis flower in Israel, a favorable
mix of cannabis extract products that carry a higher margin profile
than other product categories, and lower cannabis biomass
costs.
- Adjusted EBITDA of $(21.2) million
in Q4 2022 improved by $6.1 million from Q4 2021. The improvement
year-over-year was primarily driven by decreases in general and
administrative expenses, sales and marketing expenses, and research
and development expenses primarily as a result of the Company's
strategic realignment (the “Realignment”).
Full-Year
2022
- Net revenue of $91.9 million in
Full-Year 2022 increased by $17.5 million from Full-Year 2021. The
increase year-over-year was primarily driven by an increase in net
revenue in the ROW segment driven by growth in the Israeli medical
market and higher extract sales in the Canadian adult-use market,
partially offset by a reduction in revenue in the U.S. segment, an
adverse price/mix shift in the cannabis flower category in Canada
and the impact of the weakened Canadian dollar against the U.S.
dollar during the period.
- Gross profit of $12.0 million in
Full-Year 2022 improved by $29.5 million from Full-Year 2021. The
improvement year-over-year was primarily driven by increased
revenue in the ROW segment, mainly driven by a favorable mix of
cannabis extract products in Canada that carry a higher margin
profile than other product categories, higher sales of cannabis
flower in Israel, the absence of inventory write-downs in 2022 and
lower cannabis biomass costs. The increases were partially offset
by increased inventory reserves in the U.S. segment as we
transitioned away from beauty products and lower fixed cost
absorption.
- Adjusted EBITDA of $(80.6) million
in Full-Year 2022 improved by $79.9 million from Full-Year 2021.
The improvement year-over-year was primarily driven by an
improvement in gross profit and decreases in general and
administrative expenses, sales and marketing expenses, and research
and development expenses primarily as a result of the
Realignment.
Business Updates
Strategic and Organizational
Update
In March 2022, following the evaluation of our
global supply chain, we announced the planned exit of our Peace
Naturals Campus. Cronos participates in an industry that is
constantly evolving, so it is important for the Company to stay
agile. To do that, the Company continues transitioning towards a
more flexible footprint, ensuring we have the capabilities to
execute in current and future market opportunities. To that end,
Cronos has decided to maintain select components of its operations
at the Peace Naturals Campus, namely distribution and warehousing,
certain R&D activities and manufacturing of certain of the
Company’s proprietary innovation products.
Following the $28.7 million in operating expense
savings in 2022, we have identified an additional $10 to $20
million we anticipate saving across operating expense categories in
2023, primarily driven by savings in sales and marketing, general
and administrative, and research and development.
Brand and Product Portfolio
In the fourth quarter of 2022 the Spinach® brand
continued to organically expand market share in the edibles
category in Canada. According to Hifyre data, Spinach® edibles held
an approximate 15.9% market share, which expands to approximately
20.9% within the gummy category, during the fourth quarter of 2022.
Furthermore, five SOURZ by Spinach® gummies ranked in the top-10 of
all Canadian SKUs by market share. As of January 2023, Spinach® was
the number one edible brand in Canada, according to Hifyre
data.
In December 2022, the Company expanded its rare
cannabinoid edible line-up under the Spinach FEELZ™ brand, with the
introduction of a new CBC gummy, Spinach FEELZ™ Mango Lime 1:3 THC
+ CBC. These gummies are the first CBC gummy product in Canada and
the first to feature a 1:3 ratio of THC to CBC.
Cronos revamped its vape portfolio in 2022,
including the addition of 1-gram vapes, new and exciting flavors
based off of well performing flower strains and multiple rare
cannabinoid SKUs, including CBG and CBN. In the fourth quarter,
Spinach® rose to be the number six vape brand, capturing 4.8%
market share according to Hifyre data. This result was led by the
best performing Spinach® product, the Blueberry Dynamite 1-gram
vape.
In the fourth quarter of 2022, Cronos continued
to innovate and improve its pre-roll and flower portfolio under the
Spinach® brand with the launch of new and exciting high potency
strains in Canada. Cronos launched two new strains across various
formats: Kiwi Lime Punch and Green Monster Breath.
In Israel, we continue to execute by growing
brand awareness with PEACE NATURALS®. Cronos is focused on
continuing to bring new and exciting cannabis flower strains
powered by our genetic breeding program to the Israeli medical
market, such as Cocoa Bomba and Miami Sky.
Intellectual Property
Initiatives
In November and December 2022, Cronos achieved
equity milestones for cannabichromenic acid (“CBCA”) and
cannabichromevarinic acid (“CBCVA”), respectively, under its
strategic partnership (the “Ginkgo Strategic Partnership”) with
Ginkgo Bioworks Holdings, Inc. (NYSE:DNA) (“Ginkgo”). The Company
is pleased to have achieved milestones for three rare cannabinoids
through the fermentation process in 2022.
Global Supply Chain
Cronos Growing Company Inc. (“Cronos GrowCo”)
reported to the Company preliminary unaudited net revenue to
licensed producers excluding sales to the Company in the fourth
quarter and full-year 2022 of approximately $2.4 million and $21.0
million, respectively. GrowCo’s performance on cultivation
continues to be strong, hitting north of 30% THC potency on recent
harvests, which is a testament to our joint venture’s complementary
capabilities in cultivation and downstream processing and the
Company’s investment in genetic breeding and tissue culture. The
Company's 50% share of GrowCo’s net income, which is accounted for
under the equity method of accounting, equated to $3.1 million in
2022. Cronos previously provided GrowCo with a credit facility,
which currently has approximately $73.8 million outstanding
following the repayment of principal of $3.1 million by GrowCo as
of December 2022. In addition to principal repayment, Cronos also
received $2.2 million in interest payments from GrowCo in 2022,
which totals approximately $5.2 million in cash payments to Cronos
in 2022.
Appointments
In November 2022, Cronos appointed James Holm as
Chief Financial Officer after nearly two decades of finance and
accounting experience at leading companies across industries. He
most recently served as the Global Vice President of Finance
Transformation at Vertiv, a global provider of critical digital
infrastructure and continuity solutions, where he led the company’s
centralization, standardization and optimization to a Global Shared
Service hub for finance processes. Before joining Vertiv, Mr. Holm
served as Finance Leader, Finance Solutions & Process
Transformation Organization at Worldpay, one of the largest global
payment processors. There he drove financial reporting accuracy,
capabilities and enhancements across the company. Earlier in his
career, he held multiple positions of increasing seniority in the
finance department during his eight-year tenure at Procter and
Gamble.
Rest of World Results
Cronos’ ROW reporting segment includes results
of the Company’s operations for all markets outside of the U.S.
| (in thousands of USD) |
|
Three months endedDecember 31, |
|
Change |
|
Year endedDecember 31, |
|
Change |
| |
|
|
2022 |
|
|
|
2021 |
|
|
$ |
|
% |
|
|
2022 |
|
|
|
2021 |
|
|
$ |
|
% |
|
Cannabis flower |
|
$ |
15,555 |
|
|
$ |
18,857 |
|
|
$ |
(3,302 |
) |
|
(18 |
)% |
|
$ |
63,593 |
|
|
$ |
55,194 |
|
|
$ |
8,399 |
|
|
15 |
% |
|
Cannabis extracts |
|
|
6,325 |
|
|
|
3,787 |
|
|
|
2,538 |
|
|
67 |
% |
|
|
22,522 |
|
|
$ |
8,807 |
|
|
|
13,715 |
|
|
156 |
% |
|
Other |
|
|
153 |
|
|
|
45 |
|
|
|
108 |
|
|
240 |
% |
|
|
634 |
|
|
$ |
560 |
|
|
|
74 |
|
|
13 |
% |
| Net revenue |
|
|
22,033 |
|
|
|
22,689 |
|
|
|
(656 |
) |
|
(3 |
)% |
|
|
86,749 |
|
|
|
64,561 |
|
|
|
22,188 |
|
|
34 |
% |
| |
|
|
|
|
|
|
|
|
| Cost of sales |
|
|
20,773 |
|
|
|
20,287 |
|
|
|
486 |
|
|
2 |
% |
|
|
71,313 |
|
|
|
70,193 |
|
|
|
1,120 |
|
|
2 |
% |
| Inventory write-down |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
N/A |
|
|
|
— |
|
|
|
11,961 |
|
|
|
(11,961 |
) |
|
(100 |
)% |
| Gross profit |
|
$ |
1,260 |
|
|
$ |
2,402 |
|
|
$ |
(1,142 |
) |
|
(48 |
)% |
|
$ |
15,436 |
|
|
$ |
(17,593 |
) |
|
$ |
33,029 |
|
|
188 |
% |
| Gross margin |
|
|
6 |
% |
|
|
11 |
% |
|
N/A |
|
(5 |
)pp |
|
|
18 |
% |
|
|
(27 |
)% |
|
|
N/A |
|
|
45 |
pp |
Fourth Quarter 2022
- Net revenue of $22.0 million in Q4
2022 decreased by $0.7 million from Q4 2021. The decrease
year-over-year was primarily driven by a decrease in cannabis
flower revenue in Canada driven by adverse price/mix shift and the
impact of the weakened Canadian dollar against the U.S. dollar
during the period, partially offset by higher cannabis extract
sales in Canada and cannabis flower sales in Israel.
- Gross profit of $1.3 million in Q4
2022 declined by $1.1 million from Q4 2021. The decline
year-over-year was primarily driven by lower fixed absorption and
packaging changes, partially offset by increased cannabis flower
revenue in Israel, and higher cannabis extract sales in Canada,
which carry a higher gross margin than other product categories,
and lower cannabis biomass costs.
Full-Year 2022
- Net revenue of $86.7 million in
Full-Year 2022 increased by $22.2 million from Full-Year 2021. The
increase year-over-year was primarily driven by growth in cannabis
flower revenue in the Israeli medical market and higher cannabis
extract sales in the Canadian adult-use market, partially offset by
lower cannabis flower sales in Canada driven by an adverse
price/mix shift and the impact of the weakened Canadian dollar
against the U.S. dollar during the period.
- Gross profit of $15.4 million in
Full-Year 2022 improved by $33.0 million from Full-Year 2021. The
improvement year-over-year was primarily driven by increased
cannabis flower revenue in Israel, and higher cannabis extract
sales in Canada, which carry a higher gross margin than other
product categories, the absence of inventory write-downs in 2022
and lower cannabis biomass costs. The improvements were partially
offset by lower fixed cost absorption.
United States Results
Cronos’ U.S. reporting segment includes results of the Company’s
operations for all brands and products in the U.S.
| (in thousands of USD) |
|
Three months endedDecember 31, |
|
Change |
|
Year endedDecember 31, |
|
Change |
| |
|
|
2022 |
|
|
|
2021 |
|
|
$ |
|
% |
|
|
2022 |
|
|
|
2021 |
|
|
$ |
|
% |
|
Net revenue |
|
$ |
854 |
|
|
$ |
3,106 |
|
|
$ |
(2,252 |
) |
|
(73 |
)% |
|
$ |
5,155 |
|
|
$ |
9,874 |
|
|
$ |
(4,719 |
) |
|
(48 |
)% |
| Cost of sales |
|
|
2,348 |
|
|
|
3,565 |
|
|
|
(1,217 |
) |
|
(34 |
)% |
|
|
8,622 |
|
|
|
9,815 |
|
|
|
(1,193 |
) |
|
(12 |
)% |
| Gross profit |
|
$ |
(1,494 |
) |
|
$ |
(459 |
) |
|
$ |
(1,035 |
) |
|
(225 |
)% |
|
$ |
(3,467 |
) |
|
$ |
59 |
|
|
$ |
(3,526 |
) |
|
N/M |
|
| Gross margin |
|
|
(175 |
)% |
|
|
(15 |
)% |
|
|
N/A |
|
|
(160 |
)pp |
|
|
(67 |
)% |
|
|
1 |
% |
|
|
N/A |
|
|
(68 |
)pp |
Fourth Quarter 2022
- Net revenue of $0.9 million in Q4
2022 decreased by $2.3 million from Q4 2021. The decrease
year-over-year was primarily driven by a reduction in sales as a
result of a decrease in promotional spending and SKU
rationalization efforts as the Company implemented the Realignment
with respect to the U.S. segment.
- Gross profit of $(1.5) million in
Q4 2022 decreased by $1.0 million from Q4 2021. The decrease
year-over-year was primarily due to lower sales volumes and
increased inventory reserves associated with discontinued products
as we transition away from beauty products and focus on adult-use
product formats.
Full-Year 2022
- Net revenue of $5.2 million in
Full-Year 2022 decreased by $4.7 million from Full-Year 2021. The
decrease year-over-year was primarily due to a decrease in
promotional spending and SKU rationalization efforts as the Company
implemented the Realignment with respect to the U.S. segment.
- Gross profit of $(3.5) million in
Full-Year 2022 decreased by $3.5 million from Full-Year 2021. The
decrease year-over-year was primarily due to lower sales volumes
and increased inventory reserves associated with discontinued
products as we transition away from beauty products and focus on
adult-use product formats.
Conference Call
The Company will host a conference call and live
audio webcast on Tuesday, February 28, 2023, at 8:30 a.m. ET to
discuss 2022 Fourth Quarter and Full-Year business results. An
audio replay of the call will be archived on the Company’s website
for replay. Instructions for the live audio webcast are provided on
the Company's website at:
https://ir.thecronosgroup.com/events-presentations.
About Cronos
Cronos is an innovative global cannabinoid
company committed to building disruptive intellectual property by
advancing cannabis research, technology and product development.
With a passion to responsibly elevate the consumer experience,
Cronos is building an iconic brand portfolio. Cronos’ diverse
international brand portfolio includes Spinach®, PEACE NATURALS®
and Lord Jones®. For more information about Cronos and its brands,
please visit: thecronosgroup.com.
Forward-Looking Statements
This press release contains information that
constitutes forward-looking information and forward-looking
statements within the meaning of applicable securities laws and
court decisions (collectively, “Forward-Looking Statements”), which
are based upon our current internal expectations, estimates,
projections, assumptions and beliefs. All information that is not
clearly historical in nature may constitute Forward-Looking
Statements. In some cases, Forward-Looking Statements can be
identified by the use of forward-looking terminology such as
“expect”, “likely”, “may”, “will”, “should”, “intend”,
“anticipate”, “potential”, “proposed”, “estimate” and other similar
words, expressions and phrases, including negative and grammatical
variations thereof, or statements that certain events or conditions
“may” or “will” happen, or by discussion of strategy.
Forward-Looking Statements include estimates, plans, expectations,
opinions, forecasts, projections, targets, guidance or other
statements that are not statements of historical fact.
Forward-Looking Statements include, but are not
limited to, statements with respect to:
- expectations related to the
Realignment and any progress, challenges and effects related
thereto as well as changes in strategy, metrics, investments,
reporting structure, costs, operating expenses, employee turnover
and other changes with respect thereto;
- the timing of the change in the
nature of operations at the Peace Naturals Campus and the expected
costs and benefits from the wind-down of cultivation and certain
production activities at the Peace Naturals Campus;
- our ability to effectively
wind-down cultivation and certain production activities at the
Peace Naturals Campus in an organized fashion and acquire raw
materials from other suppliers, including Cronos Growing Company
Inc. (“Cronos GrowCo”), and the costs and timing associated
therewith;
- expectations regarding the
potential success of, and the costs and benefits associated with,
our joint ventures, strategic alliances and equity investments,
including the strategic partnership (the “Ginkgo Strategic
Partnership”) with Ginkgo Bioworks Holdings, Inc. (“Ginkgo”);
- our ability or plans to identify,
develop, commercialize or expand our technology and research and
development (“R&D”) initiatives in cannabinoids, or the success
thereof;
- expectations regarding revenues,
expenses, gross margins and capital expenditures;
- expectations regarding our future
production and manufacturing strategy and operations, the costs and
timing associated therewith and the receipt of applicable
production and sale licenses;
- the ongoing impact of the
legalization of additional cannabis product types and forms for
adult-use in Canada, including federal, provincial, territorial and
municipal regulations pertaining thereto, the related timing and
impact thereof and our intentions to participate in such
markets;
- the legalization of the use of
cannabis for medical or adult-use in jurisdictions outside of
Canada, the related timing and impact thereof and our intentions to
participate in such markets, if and when such use is
legalized;
- the grant, renewal, withdrawal,
suspension, delay and impact of any license or supplemental license
to conduct activities with cannabis or any amendments thereof;
- our ability to successfully create
and launch brands and further create, launch and scale U.S.
hemp-derived cannabinoid consumer products and cannabis
products;
- the benefits, viability, safety,
efficacy, dosing and social acceptance of cannabis, including CBD
and other cannabinoids;
- laws and regulations and any
amendments thereto applicable to our business and the impact
thereof, including uncertainty regarding the application of United
States (“U.S.”) state and federal law to U.S. hemp (including CBD
and other U.S. hemp-derived cannabinoids) products and the scope of
any regulations by the U.S. Food and Drug Administration (the
“FDA”), the U.S. Drug Enforcement Administration (the “DEA”), the
U.S. Federal Trade Commission (the “FTC”), the U.S. Patent and
Trademark Office (the “PTO”) and any state equivalent regulatory
agencies over U.S. hemp (including CBD and other U.S. hemp-derived
cannabinoids) products;
- the laws and regulations and any
amendments thereto relating to the U.S. hemp industry in the U.S.,
including the promulgation of regulations for the U.S. hemp
industry by the U.S. Department of Agriculture (the “USDA”) and
relevant state regulatory authorities;
- the anticipated benefits and impact
of Altria Group Inc.’s investment in the Company (the “Altria
Investment”), pursuant to a subscription agreement dated December
7, 2018;
- uncertainties as to our ability to
exercise our option (the “PharmaCann Option”) in PharmaCann Inc.
(“PharmaCann”), in the near term or the future, in full or in part,
including the uncertainties as to the status and future development
of federal legalization of cannabis in the U.S. and our ability to
realize the anticipated benefits of the transaction with
PharmaCann;
- expectations regarding the
implementation and effectiveness of key personnel changes;
- expectations regarding acquisitions
and dispositions and the anticipated benefits therefrom;
- our ability to timely and
effectively remediate any material weaknesses in our internal
control over financial reporting;
- expectations of the amount or
frequency of impairment losses, including as a result of the
write-down of intangible assets, including goodwill;
- the uncertainties associated with
the COVID-19 pandemic, including our ability, and the abilities of
our joint ventures and our suppliers and distributors, to
effectively deal with the restrictions, limitations and health
issues presented by the COVID-19 pandemic, the ability to continue
our production, distribution and sale of our products, and demand
for and the use of our products by consumers;
- the impact of the ongoing military
conflict between Russia and Ukraine (and resulting sanctions) on
our business, financial condition and results of operations or cash
flows;
- our compliance with the terms of
the settlement with the SEC (the “SEC Order”) and the settlement
with the Ontario Securities Commission (the “OSC Settlement”),
including complying with any recommendations made by the
independent consultant appointed pursuant to the SEC Order (the
“Consultant”); and
- the impact of the loss of our
ability to rely on private offering exemptions under Regulation D
of the Securities Act of 1933, as amended (the “Securities Act”),
and the loss of our status as a well-known seasoned issuer, each as
a result the SEC Order.
Certain of the Forward-Looking Statements
contained herein concerning the industries in which we conduct our
business are based on estimates prepared by us using data from
publicly available governmental sources, market research, industry
analysis and on assumptions based on data and knowledge of these
industries, which we believe to be reasonable. However, although
generally indicative of relative market positions, market shares
and performance characteristics, such data is inherently imprecise.
The industries in which we conduct our business involve risks and
uncertainties that are subject to change based on various factors,
which are described further below.
The Forward-Looking Statements contained herein
are based upon certain material assumptions that were applied in
drawing a conclusion or making a forecast or projection, including:
(i) our ability to realize the expected cost-savings, efficiencies
and other benefits of our Realignment and employee turnover related
thereto; (ii) our ability to efficiently and effectively wind-down
our cultivation and certain production activities at the Peace
Naturals Campus, receive the benefits of the change in the nature
of our operations at our Peace Naturals Campus and acquire raw
materials on a timely and cost-effective basis from third parties,
including Cronos GrowCo; (iii) our ability to realize anticipated
benefits, synergies or generate revenue, profits or value from our
acquisitions and strategic investments; (iv) the production and
manufacturing capabilities and output from our facilities and our
joint ventures, strategic alliances and equity investments; (v)
government regulation of our activities and products including, but
not limited to, the areas of cannabis taxation and environmental
protection; (vi) the timely receipt of any required regulatory
authorizations, approvals, consents, permits and/or licenses; (vii)
consumer interest in our products; (viii) competition; (ix)
anticipated and unanticipated costs; (x) our ability to generate
cash flow from operations; (xi) our ability to conduct operations
in a safe, efficient and effective manner; (xii) our ability to
hire and retain qualified staff, and acquire equipment and services
in a timely and cost-efficient manner; (xiii) our ability to
exercise the PharmaCann Option and realize the anticipated benefits
of the transaction with PharmaCann; (xiv) our ability to complete
planned dispositions, and, if completed, obtain our anticipated
sales price; (xv) our ability, and the abilities of our joint
ventures and our suppliers and distributors, to effectively deal
with the restrictions, limitations and health issues presented by
the COVID-19 pandemic and the ability to continue our production,
distribution and sale of our products and customer demand for and
use of our products; (xvi) general economic, financial market,
regulatory and political conditions in which we operate; (xvii)
management’s perceptions of historical trends, current conditions
and expected future developments; and (xviii) other considerations
that management believes to be appropriate in the circumstances.
While our management considers these assumptions to be reasonable
based on information currently available to management, there is no
assurance that such expectations will prove to be correct.
By their nature, Forward-Looking Statements are
subject to inherent risks and uncertainties that may be general or
specific and which give rise to the possibility that expectations,
forecasts, predictions, projections or conclusions will not prove
to be accurate, that assumptions may not be correct and that
objectives, strategic goals and priorities will not be achieved. A
variety of factors, including known and unknown risks, many of
which are beyond our control, could cause actual results to differ
materially from the Forward-Looking Statements in this Annual
Report and other reports we file with, or furnish to, the SEC and
other regulatory agencies and made by our directors, officers,
other employees and other persons authorized to speak on our
behalf. Such factors include, without limitation, that we may not
be able to wind-down cultivation and certain production activities
at the Peace Naturals Campus in a disciplined manner or achieve the
anticipated benefits of the change in the nature of our operations
or be able to access raw materials on a timely and cost-effective
basis from third-parties, including Cronos GrowCo; the risk that
the COVID-19 pandemic and the military conflict between Russia and
Ukraine may disrupt our operations and those of our suppliers and
distribution channels and negatively impact the demand for and use
of our products; the risk that cost savings and any other synergies
from the Altria Investment may not be fully realized or may take
longer to realize than expected; failure to execute key personnel
changes; the risks that our Realignment, the change in the nature
of our operations at the Peace Naturals Campus and our further
leveraging of our strategic partnerships will not result in the
expected cost-savings, efficiencies and other benefits or will
result in greater than anticipated turnover in personnel; levels of
revenues; the lack of consumer demand for our cannabis and U.S.
hemp products; our inability to manage disruptions in credit
markets or changes to our credit ratings; unanticipated future
levels of capital, environmental or maintenance expenditures,
general and administrative and other expenses; growth opportunities
not turning out as expected; the lack of cash flow necessary to
execute our business plan (either within the expected timeframe or
at all); difficulty raising capital; the potential adverse effects
of judicial, regulatory or other proceedings, or threatened
litigation or proceedings, on our business, financial condition,
results of operations and cash flows; volatility in and/or
degradation of general economic, market, industry or business
conditions; compliance with applicable environmental, economic,
health and safety, energy and other policies and regulations and in
particular health concerns with respect to vaping and the use of
cannabis and U.S. hemp products in vaping devices; the unexpected
effects of actions of third parties such as competitors, activist
investors or federal (including U.S. federal), state, provincial,
territorial or local regulatory authorities or self-regulatory
organizations; adverse changes in regulatory requirements in
relation to our business and products; legal or regulatory
obstacles that could prevent us from being able to exercise the
PharmaCann Option and thereby realizing the anticipated benefits of
the transaction with PharmaCann; dilution of our fully-diluted
ownership of PharmaCann and the loss of our rights as a result of
that dilution; a delay in our remediation of material weaknesses in
our internal control over financial reporting and the improvement
of our control environment and our systems, processes and
procedures; and the factors discussed under Part I, Item 1A “Risk
Factors” in our Annual Report on Form 10-K for the year ended
December 31, 2022. Readers are cautioned to consider these and
other factors, uncertainties and potential events carefully and not
to put undue reliance on Forward-Looking Statements.
Forward-Looking Statements are provided for the
purposes of assisting the reader in understanding our financial
performance, financial position and cash flows as of and for
periods ended on certain dates and to present information about
management’s current expectations and plans relating to the future,
and the reader is cautioned not to place undue reliance on these
Forward-Looking Statements because of their inherent uncertainty
and to appreciate the limited purposes for which they are being
used by management. While we believe that the assumptions and
expectations reflected in the Forward-Looking Statements are
reasonable based on information currently available to management,
there is no assurance that such assumptions and expectations will
prove to have been correct. Forward-Looking Statements are made as
of the date they are made and are based on the beliefs, estimates,
expectations and opinions of management on that date. We undertake
no obligation to update or revise any Forward-Looking Statements,
whether as a result of new information, estimates or opinions,
future events or results or otherwise or to explain any material
difference between subsequent actual events and such
Forward-Looking Statements. The Forward-Looking Statements
contained in this press release and other reports we file with, or
furnish to, the SEC and other regulatory agencies and made by our
directors, officers, other employees and other persons authorized
to speak on our behalf are expressly qualified in their entirety by
these cautionary statements.
As used in this press release, “CBD” means
cannabidiol and “U.S. hemp” has the meaning given to the term
“hemp” in the U.S. Agricultural Improvement Act of 2018, including
hemp-derived CBD.
Cronos Group
Inc.Consolidated Balance Sheets(In
thousands of U.S. dollars)
| |
|
As of December 31, 2022 |
|
As of December 31, 2021 |
| Assets |
|
(Audited) |
|
(Audited) |
| Current assets |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
764,644 |
|
|
$ |
886,973 |
|
|
Short-term investments |
|
|
113,077 |
|
|
|
117,684 |
|
|
Accounts receivable, net |
|
|
23,113 |
|
|
|
22,067 |
|
|
Other receivables |
|
|
5,767 |
|
|
|
5,765 |
|
|
Current portion of loans receivable, net |
|
|
8,890 |
|
|
|
5,460 |
|
|
Inventory, net |
|
|
37,559 |
|
|
|
32,802 |
|
|
Prepaids and other current assets |
|
|
7,106 |
|
|
|
8,967 |
|
|
Total current assets |
|
|
960,156 |
|
|
|
1,079,718 |
|
| Equity method investments,
net |
|
|
18,755 |
|
|
|
16,764 |
|
| Other investments |
|
|
70,993 |
|
|
|
118,392 |
|
| Non-current portion of loans
receivable, net |
|
|
72,345 |
|
|
|
80,635 |
|
| Property, plant and equipment,
net |
|
|
60,557 |
|
|
|
74,070 |
|
| Right-of-use assets |
|
|
2,273 |
|
|
|
8,882 |
|
| Goodwill |
|
|
1,033 |
|
|
|
1,098 |
|
| Intangible assets, net |
|
|
26,704 |
|
|
|
18,079 |
|
| Other |
|
|
193 |
|
|
|
100 |
|
| Total
assets |
|
$ |
1,213,009 |
|
|
$ |
1,397,738 |
|
| |
|
|
|
|
|
Liabilities |
|
|
|
|
| Current liabilities |
|
|
|
|
|
Accounts payable |
|
$ |
11,163 |
|
|
$ |
11,113 |
|
|
Income taxes payable |
|
|
32,956 |
|
|
|
105 |
|
|
Accrued liabilities |
|
|
22,268 |
|
|
|
25,636 |
|
|
Current portion of lease obligation |
|
|
1,330 |
|
|
|
2,711 |
|
|
Derivative liabilities |
|
|
15 |
|
|
|
14,375 |
|
|
Current portion due to non-controlling interests |
|
|
384 |
|
|
|
433 |
|
|
Total current liabilities |
|
|
68,116 |
|
|
|
54,373 |
|
| Non-current portion due to
non-controlling interests |
|
|
1,383 |
|
|
|
1,913 |
|
| Non-current portion of lease
obligation |
|
|
2,546 |
|
|
|
7,095 |
|
| Deferred income tax
liability |
|
|
— |
|
|
|
81 |
|
| Total
liabilities |
|
|
72,045 |
|
|
|
63,462 |
|
| |
|
|
|
|
| Shareholders’
equity |
|
|
|
|
|
Share capital |
|
|
611,318 |
|
|
|
595,497 |
|
|
Additional paid-in capital |
|
|
42,682 |
|
|
|
32,465 |
|
|
Retained earnings |
|
|
490,682 |
|
|
|
659,416 |
|
|
Accumulated other comprehensive income (loss) |
|
|
(797 |
) |
|
|
49,865 |
|
|
Total equity attributable to shareholders of Cronos Group |
|
|
1,143,885 |
|
|
|
1,337,243 |
|
|
Non-controlling interests |
|
|
(2,921 |
) |
|
|
(2,967 |
) |
| Total shareholders’
equity |
|
|
1,140,964 |
|
|
|
1,334,276 |
|
| Total liabilities and
shareholders’ equity |
|
$ |
1,213,009 |
|
|
$ |
1,397,738 |
|
Cronos Group
Inc.Consolidated Statements of Net Income (Loss)
and Comprehensive Income (Loss)(In thousands of U.S.
dollars, except share and per share amounts)
| |
|
Year ended December 31, |
|
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2020 |
|
| Net revenue, before
excise taxes |
|
$ |
114,456 |
|
|
$ |
89,486 |
|
|
$ |
54,353 |
|
|
Excise taxes |
|
|
(22,552 |
) |
|
|
(15,051 |
) |
|
|
(7,634 |
) |
| Net
revenue |
|
|
91,904 |
|
|
|
74,435 |
|
|
|
46,719 |
|
|
Cost of sales |
|
|
79,935 |
|
|
|
80,008 |
|
|
|
46,497 |
|
|
Inventory write-down |
|
|
— |
|
|
|
11,961 |
|
|
|
26,055 |
|
| Gross
profit |
|
|
11,969 |
|
|
|
(17,534 |
) |
|
|
(25,833 |
) |
| Operating
expenses |
|
|
|
|
|
|
|
Sales and marketing |
|
|
22,282 |
|
|
|
44,937 |
|
|
|
34,386 |
|
|
Research and development |
|
|
13,381 |
|
|
|
23,331 |
|
|
|
20,366 |
|
|
General and administrative |
|
|
71,178 |
|
|
|
96,482 |
|
|
|
80,569 |
|
|
Restructuring costs |
|
|
5,333 |
|
|
|
— |
|
|
|
— |
|
|
Share-based compensation |
|
|
15,115 |
|
|
|
10,151 |
|
|
|
15,361 |
|
|
Depreciation and amortization |
|
|
6,025 |
|
|
|
4,484 |
|
|
|
2,872 |
|
|
Impairment loss on goodwill and indefinite-lived intangible
assets |
|
|
— |
|
|
|
236,056 |
|
|
|
40,000 |
|
|
Impairment loss on long-lived assets |
|
|
3,493 |
|
|
|
127,619 |
|
|
|
0 |
|
|
Total operating expenses |
|
|
136,807 |
|
|
|
543,060 |
|
|
|
193,554 |
|
| Operating loss |
|
|
(124,838 |
) |
|
|
(560,594 |
) |
|
|
(219,387 |
) |
| Other income
(expense) |
|
|
|
|
|
|
|
Interest income, net |
|
|
22,537 |
|
|
|
9,071 |
|
|
|
18,415 |
|
|
Gain on revaluation of derivative liabilities |
|
|
14,060 |
|
|
|
151,360 |
|
|
|
129,254 |
|
|
Share of income (loss) from equity method investments |
|
|
3,114 |
|
|
|
(6,313 |
) |
|
|
(4,510 |
) |
|
Gain (loss) on revaluation of financial instruments |
|
|
14,739 |
|
|
|
8,611 |
|
|
|
(9 |
) |
|
Impairment loss on other investments |
|
|
(61,392 |
) |
|
|
— |
|
|
|
— |
|
|
Foreign currency transaction loss |
|
|
(2,286 |
) |
|
|
— |
|
|
|
— |
|
|
Gain on disposal of other investments |
|
|
— |
|
|
|
— |
|
|
|
4,789 |
|
|
Other, net |
|
|
(493 |
) |
|
|
730 |
|
|
|
(1,825 |
) |
|
Total other income (expense) |
|
|
(9,721 |
) |
|
|
163,459 |
|
|
|
146,114 |
|
| Loss before income taxes |
|
|
(134,559 |
) |
|
|
(397,135 |
) |
|
|
(73,273 |
) |
| Income tax expense
(benefit) |
|
|
34,175 |
|
|
|
(431 |
) |
|
|
1,347 |
|
| Loss from continuing
operations |
|
|
(168,734 |
) |
|
|
(396,704 |
) |
|
|
(74,620 |
) |
|
Loss from discontinued operations |
|
|
— |
|
|
|
(500 |
) |
|
|
(650 |
) |
|
Net loss |
|
|
(168,734 |
) |
|
|
(397,204 |
) |
|
|
(75,270 |
) |
| Net loss attributable to
non-controlling interest |
|
|
— |
|
|
|
(1,097 |
) |
|
|
(2,133 |
) |
|
Net loss attributable to Cronos Group |
|
$ |
(168,734 |
) |
|
$ |
(396,107 |
) |
|
$ |
(73,137 |
) |
| |
|
|
|
|
|
|
| Comprehensive income
(loss) |
|
|
|
|
|
|
|
Net loss |
|
$ |
(168,734 |
) |
|
$ |
(397,204 |
) |
|
$ |
(75,270 |
) |
|
Foreign exchange gain (loss) on translation |
|
|
(50,616 |
) |
|
|
8,192 |
|
|
|
14,951 |
|
| Comprehensive loss |
|
|
(219,350 |
) |
|
|
(389,012 |
) |
|
|
(60,319 |
) |
|
Comprehensive income (loss) attributable to non-controlling
interests |
|
|
46 |
|
|
|
229 |
|
|
|
(2,343 |
) |
| Comprehensive loss
attributable to Cronos Group |
|
$ |
(219,396 |
) |
|
$ |
(389,241 |
) |
|
$ |
(57,976 |
) |
| Net loss from
continuing operations per share |
|
|
|
|
|
|
|
Basic |
|
$ |
(0.45 |
) |
|
$ |
(1.07 |
) |
|
$ |
(0.21 |
) |
|
Diluted |
|
$ |
(0.45 |
) |
|
$ |
(1.07 |
) |
|
$ |
(0.21 |
) |
| Weighted average
number of outstanding shares |
|
|
|
|
|
|
|
Basic |
|
|
376,961,797 |
|
|
|
370,390,965 |
|
|
|
351,576,848 |
|
|
Diluted |
|
|
376,961,797 |
|
|
|
370,390,965 |
|
|
|
351,576,848 |
|
| |
|
Three months ended December 31, |
|
|
|
|
2022 |
|
|
|
2021 |
|
| Net revenue, before
excise taxes |
|
$ |
29,912 |
|
|
$ |
31,394 |
|
|
Excise taxes |
|
|
(7,025 |
) |
|
|
(5,599 |
) |
| Net
revenue |
|
|
22,887 |
|
|
|
25,795 |
|
|
Cost of sales |
|
|
23,121 |
|
|
|
23,852 |
|
|
Inventory write-down |
|
|
— |
|
|
|
— |
|
| Gross
profit |
|
|
(234 |
) |
|
|
1,943 |
|
| Operating
expenses |
|
|
|
|
|
Sales and marketing |
|
|
5,765 |
|
|
|
10,653 |
|
|
Research and development |
|
|
2,471 |
|
|
|
6,557 |
|
|
General and administrative |
|
|
14,638 |
|
|
|
19,613 |
|
|
Restructuring costs |
|
|
455 |
|
|
|
— |
|
|
Share-based compensation |
|
|
4,548 |
|
|
|
2,420 |
|
|
Depreciation and amortization |
|
|
1,608 |
|
|
|
1,455 |
|
|
Impairment loss on goodwill and indefinite-lived intangible
assets |
|
|
— |
|
|
|
1,000 |
|
|
Impairment loss on long-lived assets |
|
|
— |
|
|
|
122,880 |
|
|
Total operating expenses |
|
|
29,485 |
|
|
|
164,578 |
|
| Operating loss |
|
|
(29,719 |
) |
|
|
(162,635 |
) |
| Other income
(expense) |
|
|
|
|
|
Interest income, net |
|
|
9,507 |
|
|
|
2,385 |
|
|
Gain (loss) on revaluation of derivative liabilities |
|
|
(144 |
) |
|
|
20,070 |
|
|
Share of loss from equity method investments |
|
|
(964 |
) |
|
|
(2,141 |
) |
|
Gain (loss) on revaluation of financial instruments |
|
|
(4,466 |
) |
|
|
8,463 |
|
|
Impairment loss on other investments |
|
|
(21,182 |
) |
|
|
— |
|
|
Foreign currency transaction gain |
|
|
51 |
|
|
|
— |
|
|
Other, net |
|
|
63 |
|
|
|
(306 |
) |
|
Total other income (expense) |
|
|
(17,135 |
) |
|
|
28,471 |
|
| Loss before income taxes |
|
|
(46,854 |
) |
|
|
(134,164 |
) |
| Income tax expense
(benefit) |
|
|
32,003 |
|
|
|
(272 |
) |
| Loss from continuing
operations |
|
|
(78,857 |
) |
|
|
(133,892 |
) |
|
Loss from discontinued operations |
|
|
— |
|
|
|
— |
|
|
Net loss |
|
|
(78,857 |
) |
|
|
(133,892 |
) |
| Net income (loss) attributable
to non-controlling interest |
|
|
27 |
|
|
|
(255 |
) |
|
Net loss attributable to Cronos Group |
|
$ |
(78,884 |
) |
|
$ |
(133,637 |
) |
| |
|
|
|
|
| Comprehensive income
(loss) |
|
|
|
|
|
Net loss |
|
$ |
(78,857 |
) |
|
$ |
(133,892 |
) |
|
Foreign exchange gain on translation |
|
|
18,140 |
|
|
|
1,256 |
|
|
Comprehensive income |
|
|
(60,717 |
) |
|
|
(132,636 |
) |
|
Comprehensive income (loss) attributable to non-controlling
interests |
|
|
(16 |
) |
|
|
62 |
|
| Comprehensive loss
attributable to Cronos Group |
|
$ |
(60,701 |
) |
|
$ |
(132,698 |
) |
| Net loss from
continuing operations per share |
|
|
|
|
|
Basic |
|
$ |
(0.21 |
) |
|
$ |
(0.36 |
) |
|
Diluted |
|
$ |
(0.21 |
) |
|
$ |
(0.36 |
) |
| Weighted average
number of outstanding shares |
|
|
|
|
|
Basic |
|
|
378,626,176 |
|
|
|
374,227,930 |
|
|
Diluted |
|
|
378,626,176 |
|
|
|
374,227,930 |
|
Cronos Group Inc.Consolidated
Statements of Cash Flows(In thousands of U.S. dollars)
| |
|
Year ended December 31, |
|
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2020 |
|
| Operating
activities |
|
|
|
|
|
|
| Net loss |
|
$ |
(168,734 |
) |
|
$ |
(397,204 |
) |
|
$ |
(75,270 |
) |
| Adjustments to reconcile net
loss to net cash used in operating activities: |
|
|
|
|
|
|
|
Share-based compensation |
|
|
15,115 |
|
|
|
10,151 |
|
|
|
15,361 |
|
|
Depreciation and amortization |
|
|
13,122 |
|
|
|
15,402 |
|
|
|
7,045 |
|
|
Impairment loss on goodwill and indefinite-lived intangible
assets |
|
|
— |
|
|
|
236,056 |
|
|
|
40,000 |
|
|
Impairment loss on long-lived assets |
|
|
3,493 |
|
|
|
127,619 |
|
|
|
— |
|
|
Impairment loss on other investments |
|
|
61,392 |
|
|
|
— |
|
|
|
— |
|
|
(Income) loss from investments |
|
|
(17,853 |
) |
|
|
(1,974 |
) |
|
|
4,510 |
|
|
Gain on revaluation of derivative liabilities |
|
|
(14,060 |
) |
|
|
(151,360 |
) |
|
|
(129,254 |
) |
|
Changes in expected credit losses on long-term financial
assets |
|
|
(662 |
) |
|
|
12,202 |
|
|
|
2,437 |
|
|
Gain on disposal of investments |
|
|
— |
|
|
|
— |
|
|
|
(4,789 |
) |
|
Non-cash sales and marketing |
|
|
341 |
|
|
|
1,383 |
|
|
|
2,863 |
|
|
Foreign currency transaction loss |
|
|
2,286 |
|
|
|
— |
|
|
|
— |
|
|
Other non-cash operating activities, net |
|
|
(4,051 |
) |
|
|
(3,886 |
) |
|
|
(123 |
) |
| Changes in operating assets
and liabilities: |
|
|
|
|
|
|
|
Accounts receivable, net |
|
|
(2,711 |
) |
|
|
(13,163 |
) |
|
|
(4,724 |
) |
|
Other receivables |
|
|
(833 |
) |
|
|
3,838 |
|
|
|
(5,300 |
) |
|
Prepaids and other current assets |
|
|
996 |
|
|
|
3,102 |
|
|
|
— |
|
|
Inventory, net |
|
|
(7,217 |
) |
|
|
11,565 |
|
|
|
(735 |
) |
|
Accounts payable |
|
|
(863 |
) |
|
|
(1,597 |
) |
|
|
(2,784 |
) |
|
Income taxes payable |
|
|
34,212 |
|
|
|
(776 |
) |
|
|
839 |
|
|
Accrued liabilities |
|
|
(2,921 |
) |
|
|
(4,974 |
) |
|
|
5,053 |
|
|
Net cash used in operating activities |
|
|
(88,948 |
) |
|
|
(153,616 |
) |
|
|
(144,871 |
) |
| |
|
|
|
|
|
|
| Investing
activities |
|
|
|
|
|
|
|
Proceeds from short-term investments |
|
|
268,870 |
|
|
|
215,303 |
|
|
|
296,730 |
|
|
Purchase of short-term investments |
|
|
(271,378 |
) |
|
|
(119,610 |
) |
|
|
(201,326 |
) |
|
Purchase of investments |
|
|
— |
|
|
|
(110,392 |
) |
|
|
— |
|
|
Dividend proceeds |
|
|
384 |
|
|
|
— |
|
|
|
— |
|
|
Repayments (advances) on loan receivables |
|
|
5,246 |
|
|
|
(4,967 |
) |
|
|
(44,652 |
) |
|
Purchase of property, plant and equipment, net of disposals |
|
|
(3,451 |
) |
|
|
(11,144 |
) |
|
|
(31,412 |
) |
|
Purchase of intangible assets, net of disposals |
|
|
(1,581 |
) |
|
|
(1,118 |
) |
|
|
(3,979 |
) |
|
Other investing activities |
|
|
68 |
|
|
|
3,030 |
|
|
|
4,789 |
|
|
Net cash provided by (used in) investing activities |
|
|
(1,842 |
) |
|
|
(28,898 |
) |
|
|
20,150 |
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
Year ended December 31, |
| |
|
|
2022 |
|
|
|
2021 |
|
|
|
2020 |
|
| Financing
activities |
|
|
|
|
|
|
|
Advance to non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
(1,019 |
) |
|
Withholding taxes paid on equity awards |
|
|
(2,829 |
) |
|
|
(13,458 |
) |
|
|
(2,148 |
) |
|
Other financing activities, net |
|
|
(68 |
) |
|
|
16 |
|
|
|
116 |
|
|
Net cash used in financing activities |
|
|
(2,897 |
) |
|
|
(13,442 |
) |
|
|
(3,051 |
) |
| Effect of foreign currency
translation on cash and cash equivalents |
|
|
(28,642 |
) |
|
|
4,906 |
|
|
|
6,102 |
|
| Net change in cash and cash
equivalents |
|
|
(122,329 |
) |
|
|
(191,050 |
) |
|
|
(121,670 |
) |
| Cash and cash equivalents,
beginning of period |
|
|
886,973 |
|
|
|
1,078,023 |
|
|
|
1,199,693 |
|
|
Cash and cash equivalents, end of period |
|
$ |
764,644 |
|
|
$ |
886,973 |
|
|
$ |
1,078,023 |
|
| |
|
|
|
|
|
|
| Supplementary cash
flow information: |
|
|
|
|
|
|
|
Interest received |
|
|
15,548 |
|
|
|
8,988 |
|
|
|
18,105 |
|
|
Taxes paid |
|
|
177 |
|
|
|
892 |
|
|
|
— |
|
Non-GAAP Measures
Cronos reports its financial results in
accordance with Generally Accepted Accounting Principles in the
United States (“U.S. GAAP”). This press release refers to measures
not recognized under U.S. GAAP (“non-GAAP measures”). These
non-GAAP measures do not have a standardized meaning prescribed by
U.S. GAAP and are therefore unlikely to be comparable to similar
measures presented by other companies. Rather, these non-GAAP
measures are provided as a supplement to corresponding U.S. GAAP
measures to provide additional information regarding the results of
operations from management’s perspective. Accordingly, non-GAAP
measures should not be considered a substitute for, or superior to,
the financial information prepared and presented in accordance with
U.S. GAAP. All non-GAAP measures presented in this press release
are reconciled to their closest reported U.S. GAAP measure.
Reconciliations of historical adjusted financial measures to
corresponding U.S. GAAP measures are provided below.
Adjusted EBITDA
Management reviews Adjusted EBITDA, a non-GAAP
measure which excludes non-cash items and items that do not reflect
management’s assessment of ongoing business performance of our
operating segments. Management defines Adjusted EBITDA as net
income (loss) before interest, tax expense (benefit), depreciation
and amortization adjusted for: share of income (loss) from equity
method investments; impairment loss on goodwill and intangible
assets; impairment loss on long-lived assets; (gain) loss on
revaluation of derivative liabilities; (gain) loss on revaluation
of financial instruments; transaction costs related to strategic
projects; impairment loss on other investments; foreign currency
transaction loss; other, net; loss from discontinued operations;
restructuring costs; share-based compensation; and financial
statement review costs and reserves related to the restatements of
the Company's 2019 and 2021 interim financial statements (the
“Restatements”), including the costs related to the settlement of
the SEC's and the OSC's investigations of the Restatements and
legal costs defending shareholder class action complaints brought
against the Company as a result of the 2019 restatement.
Management believes that Adjusted EBITDA
provides the most useful insight into underlying business trends
and results and provides a more meaningful comparison of
period-over-period results. Management uses Adjusted EBITDA for
planning, forecasting and evaluating business and financial
performance, including allocating resources and evaluating results
relative to employee compensation targets.
The following tables set forth a reconciliation
of Net income (loss) as determined in accordance with U.S. GAAP to
Adjusted EBITDA for the periods indicated:
| (in thousands of U.S.
dollars) |
|
Year ended
December 31,2022 |
| |
|
United States |
|
Rest of World |
|
Corporate |
|
Total |
|
Net loss |
|
$ |
(84,194 |
) |
|
$ |
(54,129 |
) |
|
$ |
(30,411 |
) |
|
$ |
(168,734 |
) |
|
Interest income, net |
|
|
(4,518 |
) |
|
|
(18,019 |
) |
|
|
— |
|
|
|
(22,537 |
) |
|
Income tax expense |
|
|
— |
|
|
|
34,175 |
|
|
|
— |
|
|
|
34,175 |
|
|
Depreciation and amortization |
|
|
1,485 |
|
|
|
11,637 |
|
|
|
— |
|
|
|
13,122 |
|
|
EBITDA |
|
|
(87,227 |
) |
|
|
(26,336 |
) |
|
|
(30,411 |
) |
|
|
(143,974 |
) |
|
Share of income from equity method investments |
|
|
— |
|
|
|
(3,114 |
) |
|
|
— |
|
|
|
(3,114 |
) |
|
Impairment loss on long-lived assets(ii) |
|
|
— |
|
|
|
3,493 |
|
|
|
— |
|
|
|
3,493 |
|
|
Gain on revaluation of derivative liabilities(iii) |
|
|
— |
|
|
|
(14,060 |
) |
|
|
— |
|
|
|
(14,060 |
) |
|
Gain on revaluation of financial instruments(iv) |
|
|
— |
|
|
|
(14,739 |
) |
|
|
— |
|
|
|
(14,739 |
) |
|
Impairment loss on other investment(vi) |
|
|
61,392 |
|
|
|
— |
|
|
|
— |
|
|
|
61,392 |
|
|
Foreign currency transaction loss |
|
|
— |
|
|
|
2,286 |
|
|
|
— |
|
|
|
2,286 |
|
|
Other, net(vii) |
|
|
169 |
|
|
|
324 |
|
|
|
— |
|
|
|
493 |
|
|
Restructuring costs(ix) |
|
|
1,788 |
|
|
|
3,545 |
|
|
|
— |
|
|
|
5,333 |
|
|
Share-based compensation(x) |
|
|
3,744 |
|
|
|
11,371 |
|
|
|
— |
|
|
|
15,115 |
|
|
Financial statement review costs(xi) |
|
|
— |
|
|
|
— |
|
|
|
7,167 |
|
|
|
7,167 |
|
| Adjusted EBITDA |
|
$ |
(20,134 |
) |
|
$ |
(37,230 |
) |
|
$ |
(23,244 |
) |
|
$ |
(80,608 |
) |
| (in thousands of U.S.
dollars) |
|
Year ended December 31, 2021 |
| |
|
United States |
|
Rest of World |
|
Corporate |
|
Total |
|
Net loss |
|
$ |
(283,883 |
) |
|
$ |
(81,811 |
) |
|
$ |
(31,510 |
) |
|
$ |
(397,204 |
) |
|
Interest income, net |
|
|
(40 |
) |
|
|
(9,031 |
) |
|
|
— |
|
|
|
(9,071 |
) |
|
Income tax expense |
|
|
(89 |
) |
|
|
(342 |
) |
|
|
— |
|
|
|
(431 |
) |
|
Depreciation and amortization |
|
|
917 |
|
|
|
14,485 |
|
|
|
— |
|
|
|
15,402 |
|
|
EBITDA |
|
|
(283,095 |
) |
|
|
(76,699 |
) |
|
|
(31,510 |
) |
|
|
(391,304 |
) |
|
Share of loss from equity method investments |
|
|
— |
|
|
|
6,313 |
|
|
|
— |
|
|
|
6,313 |
|
|
Impairment loss on goodwill and indefinite-lived intangible
assets(i) |
|
|
236,019 |
|
|
|
37 |
|
|
|
— |
|
|
|
236,056 |
|
|
Impairment loss on long-lived assets(ii) |
|
|
2,955 |
|
|
|
124,664 |
|
|
|
— |
|
|
|
127,619 |
|
|
Gain on revaluation of derivative liabilities(iii) |
|
|
— |
|
|
|
(151,360 |
) |
|
|
— |
|
|
|
(151,360 |
) |
|
Gain on revaluation of financial instruments(iv) |
|
|
— |
|
|
|
(8,611 |
) |
|
|
— |
|
|
|
(8,611 |
) |
|
Transaction costs(v) |
|
|
— |
|
|
|
— |
|
|
|
3,801 |
|
|
|
3,801 |
|
|
Other, net(vii) |
|
|
3 |
|
|
|
(733 |
) |
|
|
— |
|
|
|
(730 |
) |
|
Loss from discontinued operations(viii) |
|
|
— |
|
|
|
500 |
|
|
|
— |
|
|
|
500 |
|
|
Share-based compensation(x) |
|
|
3,401 |
|
|
|
6,750 |
|
|
|
— |
|
|
|
10,151 |
|
|
Financial statement review costs(xi) |
|
|
— |
|
|
|
— |
|
|
|
7,102 |
|
|
|
7,102 |
|
| Adjusted EBITDA |
|
$ |
(40,717 |
) |
|
$ |
(99,139 |
) |
|
$ |
(20,607 |
) |
|
$ |
(160,463 |
) |
| (in thousands of U.S.
dollars) |
|
Three months ended
December 31,2022 |
| |
|
United States |
|
Rest of World |
|
Corporate |
|
Total |
|
Net loss |
|
$ |
(24,257 |
) |
|
$ |
(50,201 |
) |
|
$ |
(4,399 |
) |
|
$ |
(78,857 |
) |
|
Interest income, net |
|
|
(2,645 |
) |
|
|
(6,862 |
) |
|
|
— |
|
|
|
(9,507 |
) |
|
Income tax expense |
|
|
— |
|
|
|
32,003 |
|
|
|
— |
|
|
|
32,003 |
|
|
Depreciation and amortization |
|
|
270 |
|
|
|
2,353 |
|
|
|
— |
|
|
|
2,623 |
|
|
EBITDA |
|
|
(26,632 |
) |
|
|
(22,707 |
) |
|
|
(4,399 |
) |
|
|
(53,738 |
) |
|
Share of loss from equity method investments |
|
|
— |
|
|
|
964 |
|
|
|
— |
|
|
|
964 |
|
|
Loss on revaluation of derivative liabilities(iii) |
|
|
— |
|
|
|
144 |
|
|
|
— |
|
|
|
144 |
|
|
Loss on revaluation of financial instruments(iv) |
|
|
— |
|
|
|
4,466 |
|
|
|
— |
|
|
|
4,466 |
|
|
Impairment loss on other investment(vi) |
|
|
21,182 |
|
|
|
— |
|
|
|
— |
|
|
|
21,182 |
|
|
Foreign currency transaction gain |
|
|
— |
|
|
|
(51 |
) |
|
|
— |
|
|
|
(51 |
) |
|
Other, net(vii) |
|
|
10 |
|
|
|
(73 |
) |
|
|
— |
|
|
|
(63 |
) |
|
Restructuring costs(ix) |
|
|
306 |
|
|
|
149 |
|
|
|
— |
|
|
|
455 |
|
|
Share-based compensation(x) |
|
|
827 |
|
|
|
3,721 |
|
|
|
— |
|
|
|
4,548 |
|
|
Financial statement review costs(xi) |
|
|
— |
|
|
|
— |
|
|
|
881 |
|
|
|
881 |
|
| Adjusted EBITDA |
|
$ |
(4,307 |
) |
|
$ |
(13,387 |
) |
|
$ |
(3,518 |
) |
|
$ |
(21,212 |
) |
| (in thousands of U.S.
dollars) |
|
Three months ended December 31, 2021 |
| |
|
United States |
|
Rest of World |
|
Corporate |
|
Total |
|
Net loss |
|
$ |
(10,445 |
) |
|
$ |
(116,489 |
) |
|
$ |
(6,958 |
) |
|
$ |
(133,892 |
) |
|
Interest income, net |
|
|
(13 |
) |
|
|
(2,372 |
) |
|
|
— |
|
|
|
(2,385 |
) |
|
Income tax expense |
|
|
(89 |
) |
|
|
(183 |
) |
|
|
— |
|
|
|
(272 |
) |
|
Depreciation and amortization |
|
|
381 |
|
|
|
6,110 |
|
|
|
— |
|
|
|
6,491 |
|
|
EBITDA |
|
|
(10,166 |
) |
|
|
(112,934 |
) |
|
|
(6,958 |
) |
|
|
(130,058 |
) |
|
Share of loss from equity method investments |
|
|
— |
|
|
|
2,141 |
|
|
|
— |
|
|
|
2,141 |
|
|
Impairment loss on goodwill and indefinite-lived intangible
assets(i) |
|
|
1,000 |
|
|
|
— |
|
|
|
— |
|
|
|
1,000 |
|
|
Impairment loss on long-lived assets(ii) |
|
|
— |
|
|
|
122,880 |
|
|
|
— |
|
|
|
122,880 |
|
|
Gain on revaluation of derivative liabilities(iii) |
|
|
— |
|
|
|
(20,070 |
) |
|
|
— |
|
|
|
(20,070 |
) |
|
Gain on revaluation of financial instruments(iv) |
|
|
— |
|
|
|
(8,463 |
) |
|
|
— |
|
|
|
(8,463 |
) |
|
Other, net(vii) |
|
|
3 |
|
|
|
303 |
|
|
|
— |
|
|
|
306 |
|
|
Share-based compensation(x) |
|
|
867 |
|
|
|
1,553 |
|
|
|
— |
|
|
|
2,420 |
|
|
Financial statement review costs(xi) |
|
|
— |
|
|
|
— |
|
|
|
2,487 |
|
|
|
2,487 |
|
| Adjusted EBITDA |
|
$ |
(8,296 |
) |
|
$ |
(14,590 |
) |
|
$ |
(4,471 |
) |
|
$ |
(27,357 |
) |
(i) For the three months and year ended
December 31, 2021, impairment loss on goodwill and indefinite-lived
intangible assets relates to impairment on goodwill and intangible
assets related to our U.S. segment and impairment on an
indefinite-lived trademark related to the ROW segment.(ii) For
the year ended December 31, 2022, impairment loss on
long-lived assets related to the Company’s decision to seek a
sublease for leased office space in Toronto, Ontario, Canada during
the first quarter of 2022. For the three months ended
December 31, 2021, impairment loss on long-lived assets
relates impairment to an impairment on property, plant and
equipment in the U.S. segment. For the three months ended December
31, 2021, impairment loss on long-lived assets relates to
impairment charges on property, plant and equipment and
definite-lived intangible assets in the Canadian asset group,
impairment charges for the differences between the consideration
paid to Ginkgo for the achievement of two equity milestones in
connection with the Ginkgo Collaboration Agreement and the fair
values of the exclusive licenses for CBGA and for CBGVA. For the
year ended December 31, 2021, impairment loss on long-lived assets
relates to the aforementioned impairment charges related to the
Canadian asset group and impairments on the two Ginkgo equity
milestones as well as impairment on leased premises in the U.S.
segment.(iii) For the three months and years ended December
31, 2022 and 2021, (gain) loss on revaluation of derivative
liabilities represents the fair value changes on the derivative
liabilities.(iv) For the three months and year ended
December 31, 2022, (gain) loss on revaluation of financial
instruments related primarily to the Company’s equity securities in
Vitura. For the three months and year ended December 31, 2021,
gain on revaluation of financial instruments related primarily to
revaluations of financial liabilities resulting from the Company’s
deferred share units.(v) For the year ended December 31,
2021, transaction costs represent legal, financial and other
advisory fees and expenses incurred in connection with various
strategic investments. These costs are included in general and
administrative expenses on the condensed consolidated statements of
net income (loss) and comprehensive income (loss).(vi) For the
three months and year ended December 31, 2022, impairment loss on
other investments related to the PharmaCann Option for the
difference between its fair value and carrying
amount.(vii) For the year ended December 31, 2022, other, net
primarily related to $646 loss on disposal of assets and $390 of
dividends declared by Vitura on the Company’s 55,176,065 ordinary
shares in the capital of Vitura. For the three months and year
ended December 31, 2021, other, net is primarily related to (gain)
loss on reclassification of held-for-sale assets and (gain) loss on
disposal of assets.(viii) For the year ended December 31,
2021, loss from discontinued operations relates to the
discontinuance of Original B.C. Ltd.(ix) For the three months
and year ended December 31, 2022, restructuring costs related to
the employee-related severance costs and other restructuring costs
associated with the Realignment, change in the nature of operations
at the Peace Naturals Campus.(x) For the three months and
years ended December 31, 2022 and 2021, share-based
compensation related to the vesting expenses of share-based
compensation awarded to employees under the Company’s share-based
award plans.(xi) For the three months and years ended
December 31, 2022 and 2021, financial statement review costs
include costs related to the restatements of the Company’s 2019
interim financial statements and second quarter 2021 interim
financial statements, costs related to the Company’s responses to
requests for information from various regulatory authorities
relating to such restatements, the costs related to the Settlement
Order and Settlement Agreement and legal costs defending
shareholder class action complaints brought against the Company as
a result of the 2021 and 2019 restatements.
Constant Currency
To supplement the consolidated financial
statements presented in accordance with U.S. GAAP, we have
presented constant currency adjusted financial measures for net
revenues, gross profit, gross profit margin, operating expenses,
net income (loss) and adjusted EBITDA for the three months and
years ended December 31, 2022 as well as cash and cash equivalents
and short-term investment balances as of December 31, 2022 compared
to December 31, 2021, which are considered non-GAAP financial
measures. We present constant currency information to provide a
framework for assessing how our underlying operations performed
excluding the effect of foreign currency rate fluctuations. To
present this information, current and comparative prior period
income statement results in currencies other than U.S. dollars are
converted into U.S. dollars using the average exchange rates from
the three-month and annual comparative periods in 2021 rather than
the actual average exchange rates in effect during the respective
current periods; constant currency current and prior comparative
balance sheet information is translated at the prior year-end spot
rate rather than the current period spot rate. All growth
comparisons relate to the corresponding period in 2021. We have
provided this non-GAAP financial information to aid investors in
better understanding the performance of our segments. The non-GAAP
financial measures presented in this press release should not be
considered as a substitute for, or superior to, the measures of
financial performance prepared in accordance with U.S. GAAP.
The table below sets forth certain measures of
consolidated results from continuing operations on a constant
currency basis for the three months and years ended
December 31, 2022 compared to the three months and years ended
December 31, 2021 as well as cash and cash equivalents and
short-term investments as of December 31, 2022 and December
31, 2021, both on an as-reported and constant currency basis (in
thousands):
| |
|
As Reported |
|
As Adjusted for Constant Currency |
| |
|
Three months ended December 31, |
|
As Reported Change |
|
Three months ended December 31, |
|
Constant Currency Change |
| |
|
|
2022 |
|
|
|
2021 |
|
|
$ |
|
% |
|
|
2022 |
|
|
$ |
|
% |
|
Net revenue |
|
$ |
22,887 |
|
|
$ |
25,795 |
|
|
$ |
(2,908 |
) |
|
(11 |
)% |
|
$ |
24,811 |
|
|
$ |
(984 |
) |
|
(4 |
)% |
| Gross profit |
|
|
(234 |
) |
|
|
1,943 |
|
|
|
(2,177 |
) |
|
(112 |
)% |
|
|
96 |
|
|
|
(1,847 |
) |
|
(95 |
)% |
| Gross margin |
|
|
(1 |
)% |
|
|
8 |
% |
|
|
N/A |
|
|
(9 |
)pp |
|
|
— |
% |
|
|
N/A |
|
|
(8 |
)pp |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating expenses |
|
|
29,485 |
|
|
|
164,578 |
|
|
|
(135,093 |
) |
|
(82 |
)% |
|
|
31,328 |
|
|
|
(133,250 |
) |
|
(81 |
)% |
| Net income (loss) |
|
|
(78,857 |
) |
|
|
(133,892 |
) |
|
|
55,035 |
|
|
41 |
% |
|
|
(80,954 |
) |
|
|
52,938 |
|
|
40 |
% |
| Adjusted EBITDA |
|
|
(21,212 |
) |
|
|
(27,357 |
) |
|
|
6,145 |
|
|
22 |
% |
|
|
(22,199 |
) |
|
|
5,158 |
|
|
19 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
As Reported |
|
As Adjusted for Constant Currency |
| |
|
Year ended December 31, |
|
As Reported Change |
|
Year ended December 31, |
|
Constant Currency Change |
| |
|
|
2022 |
|
|
|
2021 |
|
|
$ |
|
% |
|
|
2022 |
|
|
$ |
|
% |
| Net revenue |
|
$ |
91,904 |
|
|
$ |
74,435 |
|
|
$ |
17,469 |
|
|
23 |
% |
|
$ |
95,237 |
|
|
$ |
20,802 |
|
|
28 |
% |
| Gross profit |
|
|
11,969 |
|
|
|
(17,534 |
) |
|
|
29,503 |
|
|
168 |
% |
|
|
12,571 |
|
|
|
30,105 |
|
|
172 |
% |
| Gross margin |
|
|
13 |
% |
|
|
(24 |
)% |
|
|
N/A |
|
|
37 |
pp |
|
|
13 |
% |
|
|
N/A |
|
|
37 |
pp |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating expenses |
|
|
136,807 |
|
|
|
543,060 |
|
|
|
(406,253 |
) |
|
(75 |
)% |
|
|
140,064 |
|
|
|
(402,996 |
) |
|
(74 |
)% |
| Net loss |
|
|
(168,734 |
) |
|
|
(397,204 |
) |
|
|
228,470 |
|
|
58 |
% |
|
|
(170,888 |
) |
|
|
226,316 |
|
|
57 |
% |
| Adjusted EBITDA |
|
|
(80,608 |
) |
|
|
(160,463 |
) |
|
|
79,855 |
|
|
50 |
% |
|
|
(82,116 |
) |
|
|
78,347 |
|
|
49 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
As of December 31, |
|
As Reported Change |
|
As of December 31, |
|
Constant Currency Change |
| |
|
|
2022 |
|
|
|
2021 |
|
|
$ |
|
% |
|
|
2022 |
|
|
$ |
|
% |
| Cash and cash equivalents |
|
$ |
764,644 |
|
|
$ |
886,973 |
|
|
$ |
(122,329 |
) |
|
(14 |
)% |
|
$ |
793,525 |
|
|
$ |
(93,448 |
) |
|
(11 |
)% |
| Short-term investments |
|
|
113,077 |
|
|
|
117,684 |
|
|
|
(4,607 |
) |
|
(4 |
)% |
|
|
120,246 |
|
|
|
2,562 |
|
|
2 |
% |
| Total cash and cash
equivalents and short-term investments |
|
$ |
877,721 |
|
|
$ |
1,004,657 |
|
|
$ |
(126,936 |
) |
|
(13 |
)% |
|
$ |
913,771 |
|
|
$ |
(90,886 |
) |
|
(9 |
)% |
Net revenue
| |
|
As Reported |
|
As Adjusted for Constant Currency |
| |
|
Three months ended December 31, |
|
As Reported Change |
|
Three months ended December 31, |
|
Constant Currency Change |
| |
|
|
2022 |
|
|
|
2021 |
|
|
$ |
|
% |
|
|
2022 |
|
|
$ |
|
% |
|
Cannabis flower |
|
$ |
15,555 |
|
|
$ |
18,857 |
|
|
$ |
(3,302 |
) |
|
(18 |
)% |
|
$ |
17,009 |
|
|
$ |
(1,848 |
) |
|
(10 |
)% |
| Cannabis extracts |
|
|
7,179 |
|
|
|
6,893 |
|
|
|
286 |
|
|
4 |
% |
|
|
7,637 |
|
|
|
744 |
|
|
11 |
% |
| Other |
|
|
153 |
|
|
|
45 |
|
|
|
108 |
|
|
240 |
% |
|
|
165 |
|
|
|
120 |
|
|
267 |
% |
|
Net revenue |
|
$ |
22,887 |
|
|
$ |
25,795 |
|
|
$ |
(2,908 |
) |
|
(11 |
)% |
|
$ |
24,811 |
|
|
$ |
(984 |
) |
|
(4 |
)% |
| |
|
As Reported |
|
As Adjusted for Constant Currency |
| |
|
Year ended December 31, |
|
As Reported Change |
|
Year ended December 31, |
|
Constant Currency Change |
| |
|
|
2022 |
|
|
|
2021 |
|
|
$ |
|
% |
|
|
2022 |
|
|
$ |
|
% |
|
Cannabis flower |
|
$ |
63,593 |
|
|
$ |
55,194 |
|
|
$ |
8,399 |
|
|
15 |
% |
|
$ |
66,047 |
|
|
$ |
10,853 |
|
|
20 |
% |
| Cannabis extracts |
|
|
27,677 |
|
|
|
18,681 |
|
|
|
8,996 |
|
|
48 |
% |
|
|
28,532 |
|
|
|
9,851 |
|
|
53 |
% |
| Other |
|
|
634 |
|
|
|
560 |
|
|
|
74 |
|
|
13 |
% |
|
|
658 |
|
|
|
98 |
|
|
18 |
% |
|
Net revenue |
|
$ |
91,904 |
|
|
$ |
74,435 |
|
|
$ |
17,469 |
|
|
23 |
% |
|
$ |
95,237 |
|
|
$ |
20,802 |
|
|
28 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
As Reported |
|
As Adjusted for Constant Currency |
| |
|
Three months ended December 31, |
|
As Reported Change |
|
Three months ended December 31, |
|
Constant Currency Change |
| |
|
|
2022 |
|
|
|
2021 |
|
|
$ |
|
% |
|
|
2022 |
|
|
$ |
|
% |
|
Canada |
|
$ |
14,897 |
|
|
$ |
17,862 |
|
|
$ |
(2,965 |
) |
|
(17 |
)% |
|
$ |
16,009 |
|
|
$ |
(1,853 |
) |
|
(10 |
)% |
| Israel |
|
|
7,136 |
|
|
|
4,796 |
|
|
|
2,340 |
|
|
49 |
% |
|
|
7,948 |
|
|
|
3,152 |
|
|
66 |
% |
| United States |
|
|
854 |
|
|
|
3,106 |
|
|
|
(2,252 |
) |
|
(73 |
)% |
|
|
854 |
|
|
|
(2,252 |
) |
|
(73 |
)% |
| Other countries |
|
|
— |
|
|
|
31 |
|
|
|
(31 |
) |
|
(100 |
)% |
|
|
— |
|
|
|
(31 |
) |
|
(100 |
)% |
|
Net revenue |
|
$ |
22,887 |
|
|
$ |
25,795 |
|
|
$ |
(2,908 |
) |
|
(11 |
)% |
|
$ |
24,811 |
|
|
$ |
(984 |
) |
|
(4 |
)% |
| |
|
As Reported |
|
As Adjusted for Constant Currency |
| |
|
Year ended December 31, |
|
As Reported Change |
|
Year ended December 31, |
|
Constant Currency Change |
| |
|
|
2022 |
|
|
|
2021 |
|
|
$ |
|
% |
|
|
2022 |
|
|
$ |
|
% |
|
Canada |
|
$ |
56,233 |
|
|
$ |
50,294 |
|
|
$ |
5,939 |
|
|
12 |
% |
|
$ |
58,367 |
|
|
$ |
8,073 |
|
|
16 |
% |
| Israel |
|
|
30,516 |
|
|
|
13,376 |
|
|
|
17,140 |
|
|
128 |
% |
|
|
31,715 |
|
|
|
18,339 |
|
|
137 |
% |
| United States |
|
|
5,155 |
|
|
|
9,874 |
|
|
|
(4,719 |
) |
|
(48 |
)% |
|
|
5,155 |
|
|
|
(4,719 |
) |
|
(48 |
)% |
| Other countries |
|
|
— |
|
|
|
891 |
|
|
|
(891 |
) |
|
(100 |
)% |
|
|
— |
|
|
|
(891 |
) |
|
(100 |
)% |
|
Net revenue |
|
$ |
91,904 |
|
|
$ |
74,435 |
|
|
$ |
17,469 |
|
|
23 |
% |
|
$ |
95,237 |
|
|
$ |
20,802 |
|
|
28 |
% |
Foreign currency exchange
rates
All currency amounts in this press
release are stated in U.S. dollars (“USD”), which is
our reporting currency, unless otherwise noted. All references to
“dollars” or “$” are to USD. The assets and liabilities
of the Company's foreign operations are translated into USD at the
exchange rate in effect as of December 31, 2022,
December 31, 2021 and December 31, 2020. Transactions
affecting shareholders’ equity are translated at historical foreign
exchange rates. The consolidated statements of net income (loss)
and comprehensive income (loss) and the consolidated statements of
cash flows of the Company’s foreign operations are translated into
USD by applying the average foreign exchange rate in effect for the
reporting period using Bloomberg.
The exchange rates used to translate from USD to
Canadian dollars (“C$”) is shown below:
| (Exchange rates are shown as
C$ per $) |
|
As of December 31, |
| |
|
2022 |
|
2021 |
|
2020 |
|
Average rate |
|
1.3017 |
|
|
1.2541 |
|
|
1.3411 |
|
| Spot rate |
|
1.3554 |
|
|
1.2746 |
|
|
1.2751 |
|
For further information, please
contact:Shayne LaidlawInvestor RelationsTel: (416)
504-0004investor.relations@thecronosgroup.com
Cronos (TSX:CRON)
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