Cannabis Central: Hexo Q2 Financial Results A Major Disappointment - Stock Tanks

HEXO Corp. (TSX: HEXO; NYSE: HEXO) reported its financial results for the second quarter fiscal 2020 ended January 31, 2020.

Financial Highlights (All amounts are expressed in Canadian dollars unless otherwise noted.)

Gross Revenue: increased 23%
Net Revenue: increased 17%
- net adult use increased 20%
Revenue/Gram: decreased 19.8%
Gross Margin: increased to 33% from 31%
Operating Expenses: increased 612.6% due to non-recurring or non-cash expenses related to significant changes in market conditions
Normalized Operating Expenses: decreased 19.9% due to a decrease in marketing expenses and headcount
Net Profit/Loss: Loss increased 377.6% to C$289.4M
Adjusted EBITDA: decreased 47%
Cash & Equivalents On Hand: C$81.4M

Operational Highlights

Production Levels: increased 38.5%
Sales Volume: increased 57%
Expanded Original Stash market distribution to Ontario, British Columbia, and Alberta
Obtained Phase 1 licence for Belleville facility
Obtained sale of cannabis topicals, extracts, edibles and beverages licence for Gatineau facility, and a research licence for the Company
Closed a $70M private placement of 8% unsecured convertible debentures, including key management and board participation of over 10%
Closed two registered direct offerings totaling USD$45 Million