E Canopy Growth Q4 Results Disappoint

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Canopy Growth Inc. (CGC), a constituent in the munKNEE Pure-Play Pot Stock Index, reported its financial results for the fourth quarter fiscal 2021 ended March 31, 2020, today with a net loss of $617 million.

Q4 Financial Highlights 

(All figures are in Canadian dollars and compared to the previous quarter - see here)

  • Net Revenue: decreased 2.7% to $148.4M
    • Other Revenue: decreased 12.3% to $47.1M
    • Cannabis Revenue: increased 2.5% to $101.3M
      • Business-to-Business Recreational: increased 0.5% to $43.3M
      • Business-to-Consumer Recreational: decreased 11.9% to $17.8M
      • Canadian Medical: decreased 2.1% to $13.7M
      • International Medical: decreased 26.5% to $15.8M
  • Gross Margindeclined to 14% from 16% 
  • Adj. EBITDA (Loss): loss increased 37.4% to $(94.0)M
  • Net Income (Loss): loss declined 25.6% to $(616.7)M from $(829.3)M  
  • Cash on Handdecreased 43.8% to $2.3B

Management Comments

David Klein, CEO, said:

  • "We are starting to see strong momentum across all of our key businesses and remain firmly focused on capitalizing on U.S. opportunities in Fiscal 2022."

Mike Lee, CFO, added:

  • "We made tremendous progress improving our supply chain and right-sizing our manufacturing footprint, bringing supply and demand into balance.
  • Our cost savings program is on track to deliver $150 - $200 million of savings within the next 18 months, and we remain committed to our path to profitability by the end of Fiscal 2022 while continuing to invest in an organization that is focused on insights, innovation and gaining momentum in the U.S. market."

Q4 Business & Operational Highlights

Canopy Growth continues to build momentum across its key product lines in Canada: (All figures are compared to the previous quarter)

  • Further strengthened competitive positioning in the Canadian recreational market
    • maintained #1 market share in the total flower category in Canadian recreational market during Q4 2021, capturing over 19% share of the market.
    • strengthened its positioning in the Canadian vape market with the transition to 0.5 ml 510 cartridges during Q4 2021.
    • launched a portfolio of THC beverages in the Canadian recreational cannabis market during FY 2021, capturing 35% dollar share of the total beverage category during the full year.
    • launched Twd. Strawberry gummies in Ontario in Q4 2021 with nationwide distribution rolling out in Q1 2022.
  • Strengthened its U.S. business with a strong foundation in place for both CBD and non-CBD products
    • established its Martha Stewart health and wellness CBD products as a top 9 brand among all CBD supplements.
    • launched Quatreau CBD beverages and became the first U.S. CBD beverage brand to sign with a major beverage distributor.
    • maintained its BioSteel Ready-to-Drink beverages as a top-7 sports drink brand.
  • Strengthened its balance sheet by securing a US$750 million senior secured term loan, with an ability to raise an additional $500 million in debt and now expects to achieve positive Adjusted EBITDA during the second half of FY 2022
  • Improved its cannabis supply and demand balance with the equivalent kilograms of cannabis sold in Q4 2021 exceeding kilograms harvested by over 40%.
  • Reduced its overall Inventory levels even as finished inventory increased in support of various new product launches
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Weed Investor 1 week ago Member's comment

Why did you find them so disappointing?