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Canopy Reports Second Quarter 2020 Financial Results



SMITHS FALLS, ON, November 14, 2019 / PRNewswire / – Canopy Growth Corporation ("Canopy Growth" or "Company") (TSX: WEED) (NYSE: CGC) today announced its second quarter financial results. September 30, 2019. All financial information contained in this press release is reported in Canadian dollars unless otherwise indicated. This press release should be read in conjunction with the Company's Condensed Consolidated Interim Financial Statements and Management Discussion and Analysis for the three and six months ending December 31, 2006. September 30, 2019, which will be filed at SEDAR (www.sedar.com) and will be available at www.canopygrowth.com.

Key highlights include:

  • The company has established a leading market share across the country, including a remarkable share of over 35% in Alberta, Canada most developed provincial recreational market.
  • Consumer demand for cannabis continues to increase from the first quarter of 2020, with 17% growth in same-store recreational sales and 23% in organic organic worldwide.
  • Over 30 SKUs submitted to Health Canada for Cannabis 2.0 products in chocolate, vapes and beverage formats.
  • As part of a portfolio review initiated by management, the Company assumed a restructuring charge for $ 32.7 million for returns, provisions for returns and price subsidies related primarily to your softgel and oil portfolio. In addition, management has recorded an inventory fee of 15.9 million align the portfolio with the new strategy. This new strategy includes a new retail pricing architecture, a streamlined range of packages, and a focused marketing / education strategy to further develop this category. The impact of the second quarter 2020 gross margin on portfolio restructuring costs is $ 40.4 million. With this high cost of restructuring, management believes that current inventory levels, both internally and externally, are in line with demand forecasts.
  • Consolidated gross revenue for the second quarter of 2020, excluding portfolio restructuring costs, increased 6% to $ 118.3 million including full-quarter benefit increases from C3 and ThisWorks acquisitions (excluding incremental revenue from acquisitions). Net of portfolio restructuring costs, revenue was $ 76.6 million, a 15% reduction from the first quarter of 2020.
  • Cannabis gross revenue in the second quarter of 2020, excluding portfolio restructuring costs, was $ 94.7 million, an increase of 2% over the first quarter of 2020.
  • The Company ended the second quarter of 2020 with $ 2.7 billion cash and cash equivalents and marketable securities available for sale, with their substantially completed Canadian infrastructure and global merger and acquisition programs.

Management Comment

"The last two quarters have been challenging for the Canadian cannabis sector as provinces have reduced purchases to lower inventory levels, store openings have fallen short of expectations and Cannabis 2.0 products are yet to hit the market," he said. . Mark zekulin, CEO, Canopy Growth. "However, we believe these conditions are a short-term downturn in what is a whole new industry, and Canopy remains best positioned with available money, a world class infrastructure and an intellectual property portfolio to provide sustained market leadership and long term ".

Zekulin added: "We have taken the necessary steps to deal with the stock levels of our oils and capsules; furthermore, the fundamentals are strong: our retail store sales are growing on a general basis and same stores, our Canadian medical prescriptions have increased. , and international medical sales are growing both organically and inorganically, and while revenue declined during the quarter due to the restructuring rate, actual cannabis shipments grew quarter by quarter, a major achievement in light of the inventory redefine what is happening in the provinces. We believe our fundamentals are strong and confident that we are moving in the right direction. "

"After five years of investment in market research, product development, product marketing, production engineering as well as design, construction and qualification of production facilities, we are ready to launch our Cannabis 2.0 product offerings," said Zekulin. "This marks the end of significant expansion investments in Canada and we are confident that the high quality, premium drinks, vape and edible products we are bringing to market, combined with a retail channel that we expect to grow significantly in the coming fiscal year, will drive the next stage of growth for our business. "

Second Quarter 2020 Financial and Operating Summary







(Millions of CDN, except where noted)

Q2

2020

Q1

2020

%

change

Q2

2019

%

change



(Resubmitted1)


(Resubmitted1)


Gross revenue excluding other revenues settings

$ 118.3

$ 111.4

6%

$ 23.3

408%

Other Revenue Adjustments2

$ 32.7

$ 8.0

309%

$ –

NM

Excise duties

$ 9.0

$ 12.9

-30%

$ –

NM

Net Revenue3

$ 76.6

$ 90.5

-15%

$ 23.3

229%







Gross margin percentage, before fair value impacts on cost of sales4

-13%

19%

-32%

33%

-46%

Operational expenses5th

$ 269.4

$ 233.3

15%

$ 181.8

48%

Adjusted EBITDA6th

$ (155.7)

$ (92.0)

69%

$ (61.9)

152%

Assigned as follows:






– Operations and corporate overheads

$ (109.0)

$ (57.8)

89%

$ (50.6)

115%

– Strategic Investments and Business development

$ (36.2)

$ (18.0)

101%

$ (4.3)

742%

– Non-operational or underused installations

$ (10.5)

$ (16.2)

-35%

$ (7.0)

50%







Net loss

$ (374.6)

$ (1,281.2)

-71%

$ (330.6)

13%

Loss on warrants extinction7th

$ –

$ (1,176.4)

-100%

$ –

NM

Kilograms harvested (kilograms)

40,570

40,960

-1%

15,217

167%

(Millions of CDN, except where noted)

Q2

2020

Q1

2020

%

change

Q4

2019

%

change







Cash, cash equivalents and securities

$ 2,736.2

$ 3,140.9

-13%

$ 4,515.0

-39%

Inventory

$ 461.8

$ 393.7

17%

$ 262.1

76%

NM = Not significant

1 See Note 2 (d) to the Interim Financial Statements for more details on the impact of the change in accounting policy on royalty payments for the three months ended September 30, 2019.

2 Other revenue adjustments represent the Company's determination of returns and price adjustments, which mainly refer to oils and softgels.

3 Includes other revenue adjustments and the impact of other revenue adjustments on excise duties.

4 Gross margin percentage, before fair value impacts on cost of sales, is a non-IFRS measure. See "Non-IFRS Measures" below.

5th Includes stock-based compensation expense and depreciation and amortization, both non-monetary expenses.

6th Adjusted EBITDA is a non-IFRS measure. See "Non-IFRS Measures" below.

7th This relates to a non-monetary loss on the termination of warrants held by Constellation by amending the Investor Rights Agreement between Canopy Growth and Constellation.

Second Quarter 2020 Tax Revenue Highlights







(Millions of CDN, except where noted)

Q2

2020

Q1

2020

%

change

Q2

2019

%

change

Canadian Recreational Cannabis






– From company to company1

$ 49.4

$ 58.4

-15%

$ –

NM

Canadian Recreational Cannabis






– Business to Consumer

$ 13.1

$ 10.6

24%

$ –

NM

Canadian Medical Cannabis

$ 14.1

$ 13.1

8%

$ 19.9

-29%

Canadian cannabis

$ 76.6

$ 82.1

-7%

$ 19.9

285%

International Medical Cannabis

$ 18.1

$ 10.5

72%

$ 2.2

723%

Cannabis Gross Revenue Excluding other revenue adjustments

$ 94.7

$ 92.6

2%

$ 22.1

329%

Other recipes

$ 23.6

$ 18.8

26%

$ 1.2

1867%

Gross revenue excluding other revenue adjustments

$ 118.3

$ 111.4

6%

$ 23.3

408%

Other Revenue Adjustments2

$ 32.7

$ 8.0

309%

$ –

NM

Excise duties3

$ 9.0

$ 12.9

-30%

$ –

NM

Net Revenue

$ 76.6

$ 90.5

-15%

$ 23.3

229%

1 Excludes the impact of other revenue adjustments.

2 Other revenue adjustments represent the Company's determination of returns and price adjustments, which mainly refer to oils and softgels.

3 Excise duties are presented net of the impact of other revenue adjustments.

Second Quarter 2020 Product Sales Highlights







(Millions of CDN, except where noted)

Q2

2020

Q1

2020

%

change

Q2

2019

%

change

Recreational – Business to business






Dried Cannabis Sales (kg)

7,497

6,881

9%

NM

Dried Cannabis Recipe

$ 47.4

$ 51.5

-8%

$ –

NM

Cannabis Oil Sales and Capsules (equivalent in kilograms)

259

1,288

-80%

NM

Cannabis Oil & Softgels Recipe, Excluding other revenue adjustments

$ 2.0

$ 6.9

-71%

$ –

NM

Other Revenue Adjustments1

$ (32.7)

$ (8.0)

309%

$ –

NM







Recreativo – Companies for the consumer






Dried Cannabis Sales (kg)

1,064

792

34%

NM

Dried Cannabis Recipe

$ 11.6

$ 9.3

25%

$ –

NM

Cannabis Oil Sales and Capsules (equivalent in kilograms)

98

99

-1%

NM

Cannabis and Softgels Oil Recipe

$ 1.5

$ 1.3

15%

$ –

NM







Doctor






Dried Cannabis Sales (kg)

998

807

24%

1,698

-41%

Dried Cannabis Recipe

$ 9.6

$ 7.2

33%

$ 14.7

-35%

Cannabis Oil Sales and Capsules (equivalent in kilograms)

997

682

46%

499

100%

Cannabis and Softgels Oil Recipe

$ 22.6

$ 16.4

38%

$ 7.4

205%

1 Other revenue adjustments represent the Company's determination of returns and price adjustments, which mainly refer to oils and softgels.

We sold 10,913 kg and equivalent in kilograms of cannabis products during the second quarter of 2020, an increase of 3% over the previous quarter. Total gross revenue for the second quarter of 2020, before portfolio restructuring costs, was $ 118.3 million.

Gross Revenue $ 32.2 million was generated in the medical channel in the second quarter of 2020 as sales increased by 34% over the previous quarter to 1,995 kg and equivalent in kilograms. Oils and capsules accounted for 50% of our drug sales during the quarter. Canadian gross medical cannabis revenue increased 8% from Q1 2020 to $ 14.1 million in the second quarter of 2020, as our largest harvests in recent months, the expansion of our brand and product offerings to our medical customers and an increase in the number of Spectrum Therapeutics registered patients to 75,600 in September 30, 2019 resulted in sequential improvements in the number of orders placed by our customers and in our revenue growth during the quarter.

International gross prescription for medicinal cannabis was $ 18.1 million second quarter of 2020, with 72% growth driven mainly by the acquisition in May 2019 from C3, which contributed a quarter of the revenue of 14.0 million second quarter of 2020. In addition, our German medical business resumed growth in the second quarter of 2020, when we resolved the supply constraints experienced in previous quarters, leading to remarkable shipments to Germany July and early August 2019. Marijuana now available today at our facilities in Germany and kept in stock by German pharmacy customers can meet the partial needs of Q3 2020. Although management is very confident of sustained market growth In the longer term, management does not expect this level of growth to repeat in the third quarter of 2020.

Canadian Recreational Channel gross revenue in the second quarter of 2020 was $ 29.8 million and reflects the costs of restructuring the portfolio of $ 32.7 million. Receipt of $ 13.1 million was generated in the consumer business channel, representing sequential growth of 24% over the previous quarter as we continue to build our retail store platform Canada. At the time of this launch, there were 27 stores open throughout Canada, operating under the track Tweed or Tokyo Smoke. Business-to-business channel gross revenue was 16.7 million, reflecting portfolio restructuring costs as described above. Canopy's solid product inventory levels in the second half of the quarter, provided by our large harvest in the first quarter, helped drive high shipment speeds of dried flowers and pre-wound joints in our Canadian recreation channels. This resulted in shipments of dried shoots an increase of 12% over the previous quarter. Revenue from the sale of our dried gem products was $ 59.0 million second quarter of 2020 and included revenue from $ 7.8 million in sales 1.2 million higher margin pre-rolled cannabis products.

Another recipe was $ 23.6 million in the second quarter of 2020, an increase of $ 18.8 million in the previous quarter, which was attributable to the acquisition of This Works, which contributed a quarter of revenue in the second quarter of 2020, and revenue from other strategic sources, including extraction services and clinical partners.

Second Quarter Fiscal Gross Margin 2020 (before impact of fair value on cost of sales) Overview (See Non-IFRS Measures)

Our gross margin before fair value impacts on cost of sales was negative 13% of net revenue in the second quarter of 2020. Gross margin before fair value impacts on cost of sales was 38% in the second quarter of 2020, when adjusted for the following items: (1) operating costs of $ 10.5 million concerning facilities that were not yet growing cannabis, were underused or not yet producing cannabis-related products, (2) the impact of $ 9.2 million gross margin of portfolio restructuring costs, as described above, (3) a charge for recreational finished cannabis overstock 15.9 million resulting from our assessment of current and expected sell-in rates for certain petroleum products and capsules as described above, and (4) other adjustments related to the net realizable value of the inventory.

We continue to build an inventory of high quality dried flowers that we believe are needed to meet the increased demand that will be generated by the growth of the recreational cannabis retail platform. Canada over the next 12 to 18 months, mainly in the province of Ontario. As the company nears the end of its expansion program in Canada, we expect our gross margins to continue to improve in the coming quarters, when all cultivation and processing is in use and approaching planned capacity.

Fiscal Second Quarter 2020 Summary of Operating Expenses







(Millions of CDN, except where noted)

Q2

2020

Q1

2020

%

change

Q2

2019

%

change



(Resubmitted1)


(Resubmitted1)


Sales and Marketing

$ 60.5

$ 49.2

23%

$ 40.2

50%

Research and Development

$ 11.9

$ 8.5

40%

$ 1.9

526%

General and administration

$ 87.9

$ 62.3

41%

$ 37.1

137%

Acquisition-related costs

$ 2.6

$ 13.2

-80%

$ 3.2

-19%

Share-based compensation expense2

$ 92.9

$ 87.3

6%

$ 95.8

-3%

Depreciation and amortization2

$ 13.6

$ 12.8

6%

$ 3.6

278%

Total

$ 269.4

$ 233.3

15%

$ 181.8

48%

1 See Note 2 (d) to the Interim Financial Statements for more details on the impact of the change in accounting policy on royalty payments for the three months ended September 30, 2019.

2 Share-based compensation expense and depreciation and amortization are non-monetary expenses.

The increase in sales and marketing expenses in the second quarter of 2020 over the previous quarter was mainly due to pre-revenue investments in brand awareness, product marketing and consumer education initiatives focused on preparing for the launch of our products. Cannabis 2.0 in Canadaand the deployment of CBD products in the United States and other international markets in the coming months. Personnel costs have also increased as we continue to improve our marketing and sales capabilities in Canada, United Statesand international markets, and as we build our network of Tweed and Tokyo Smoke Canada.

The increase in research and development expenses in the second quarter of 2020 over the previous quarter was due to our investment in new research and development efforts. Included in this are the costs associated with hiring researchers and engineers in the areas of vaporizer and vape research and development, new form factors for cannabis-based products including beverages and edibles, plant genetics, applied technology and clinical research. cannabis-based medical therapy. As a result, we incur higher compensation costs associated with the teams conducting research and development activities, costs associated with the development and advanced testing of products and systems, as well as costs associated with conducting external laboratory tests and clinical trials for human and CBD-based animal health products.

General and administrative expenses increased in the second quarter of 2020 compared to the previous quarter due to increased costs associated with improving our financial and information technology capabilities, increased public company compliance and regulatory requirements, losses incurred in connection with legal disputes. with a third party, losses associated with additional reserves on costly retail lease obligations, driven by a general slowdown in the retail real estate market Canadaand other pre-revenue administrative costs associated with the expansion of our operations.

The increase in stock-based compensation expense is mainly attributable to the continued increase in the number of stock options granted to employees, which is mainly related to the approximately 2,000 increase in the Company's employees. September 30, 2018 to approximately 4,550 September 30, 2019. The number of outstanding stock options increased from 22.2 million in September 30, 2018 to 32.9 million in September 30, 2019. The Company has restructured its stock option formula as part of a broader assessment of total rewards to ensure that the overall compensation structures reflect the size and maturity of the Company.

Fiscal Second Quarter 2020 Adjusted EBITDA Summary (See Non-IFRS Measures)

Adjusted EBITDA in the second quarter of 2020 represented a loss of $ 155.7 million, reflecting continuing losses on our core operations in Canada and Europe As we scale up as a new business, serving a completely new industry, we make revenue-driven investments in many new markets around the world, and we make research and development investments that we believe will generate future value as we build a portfolio of intellectual property that can be used to generate new streams of profit in the future. We believe these pre-revenue investments are necessary to position the growth of the canopy to generate a significant and sustained increase in long-term shareholder value.

Total other net expenses were $ 109.3 million in the second quarter of 2020 compared to $ 1,1430.7 million in the first quarter of 2020. The other expense recorded in the first quarter of 2020 reflects the extinction loss of the warrants held by Constellation, as discussed in our first quarter 2020 earnings release.

Second Quarter 2020 Earnings Summary







(Millions of CDN, except where noted)

Q2

2020

Q1

2020

%

change

Q2

2019

%

change

Adjusted EBITDA1

$ (155.7)

$ (92.0)

69%

$ (61.9)

152%

Assigned as follows:






– Operations and corporate overheads

$ (109.0)

$ (57.8)

89%

$ (50.6)

115%

– Strategic Investments and Business Development

$ (36.2)

$ (18.0)

101%

$ (4.3)

742%

– Non-operational or underused installations

$ (10.5)

$ (16.2)

-35%

$ (7.0)

50%







Net loss

$ (374.6)

$ (1,281.2)

-71%

$ (330.6)

13%

Net loss per share (basic and diluted)

$ (1.08)

US $ (3.70)

-71%

$ (1.52)

-29%

1 Adjusted EBITDA is a non-IFRS measure. See "Non-IFRS Measures" below.

Second Quarter 2020 Balance Sheet and Cash Flow Summary

At September 30, 2019, the Company's cash and cash equivalents and marketable securities totaled $ 2.7 billion, representing a decrease of $ 4040.7 million June 302019. The main cash uses during the quarter were for our operations, as reflected in the loss of Adjusted EBITDA in the quarter and capital expenditures of $ 228.3 million as we approach the completion of building our infrastructure in Canada, mainly building advanced and highly scalable advanced beverage manufacturing and manufacturing facilities.

Inventory in September 30, 2019 totalizing $ 461.8 million (March 31, 2018$ 262.1 million), Including $ 131.5 million in finished products and $ 280.1 million of work in process.

The unaudited Consolidated Financial Statements and Management Analysis and Discussion for the three and six months ended September 30, 2019 will be archived in SEDAR and will be available at www.sedar.com. The basis of the financial reports in the Unaudited Condensed Consolidated Financial Statements and Management Discussion and Analysis is thousands of Canadian dollars, unless otherwise indicated.

Non-IFRS Measures

Gross margin percentage, before fair value impacts on cost of sales, a non-IFRS measure, is an essential operating metric that has no standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. This measure is calculated as net income minus inventory production costs spent as cost of sales, divided by net revenue, and can be calculated from the consolidated statements of operations presented in this press release.

Adjusted EBITDA, a non-IFRS measure, is an essential operating metric that has no standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. Adjusted EBITDA is calculated as earnings before interest, taxes, depreciation and amortization, stock-based compensation expense, changes in fair value and other non-cash items, and further adjusted to remove acquisition-related costs. The Company attributes Adjusted EBITDA to its operations and corporate overheads, strategic investments and business developments and non-operating or underused facilities. The Adjusted EBITDA reconciliation is presented in this press release and explained in Management's Discussion and Analysis under "Adjusted EBITDA (Non-IFRS Measure)", a copy of which will be filed with SEDAR.

Transition to US GAAP Reports

As part of our US financial reporting requirements, Canopy Growth has confirmed that as of September 30, 2019, no longer meets the criteria for qualification as a foreign private issuer because (1) more than 50% of outstanding voting securities are held by residents of the United Statesand (2) most Canopy Growth directors are United States citizens.

Therefore, from April 1, 2020 Canopy growth will be considered a United States home emitter and a large accelerated register. As a result of this change, Canopy Growth will be required to issue its consolidated financial statements in accordance with generally accepted accounting principles. the United Statesand provide an auditor attestation report pursuant to Section 404 (b) of the Sarbanes-Oxley Act.

Webcast and teleconferencing information
The Company will host a conference call and audio webcast with Mark zekulin, CEO and Mike Lee, CFO at 8:30 AM Eastern Time in November 14, 2019.

Webcast Info
A live audio webcast will be available at:
https://event.on24.com/wcc/r/2118418/9F112F44A037BCC4D081CBECAF10EA1E

Call Information
Toll free number: 1-888-231-8191
International Dialing Number: (647) 427-7450
Conference ID: 3878046

Repeat Info
A call replay will be accessible by phone until 23:59 ET in February 14, 2020.
Toll free number: 1-855-859-2056
Replay Password: 3878046

About Canopy Growth Corporation
Canopy Growth (TSX: WEED, NYSE: CGC) is a world leader in diversified cannabis, hemp and cannabis devices, offering distinct brands and curated cannabis varieties in the form of dry, oily and soft capsule forms as well as medical devices through the company's subsidiary, Storz & Bickel GMbH & Co. KG. From product and process innovation to market execution, Canopy Growth is driven by a passion for leadership and a commitment to building a world-class cannabis company, one product, location and country at a time. The Company operates in more than a dozen countries on five continents.

The company's medical division, Spectrum Therapeutics, prides itself on educating healthcare professionals, conducting robust clinical research and deepening public understanding of marijuana, and has dedicated millions of dollars to cutting-edge, marketable research and development. PI. Spectrum Therapeutics sells a full spectrum product range using its Spectrum color-coded grading system as well as the unique Cannabinoid Dronabinol under the Bionorica Ethics brand.

The Company operates retail stores in Canada under their award winning Tweed and Tokyo Smoke banners. Tweed is a world-renowned cannabis brand that has built a large and loyal following, focusing on quality products and meaningful customer relationships.

From our historic public listing on the Toronto Stock Exchange and the New York Stock Exchange to our continued international expansion, pride in enhancing shareholder value through leadership is rooted in everything we do at Canopy Growth. Canopy Growth has partnered with the industry's top names, including Snoop Dogg cannabis icons and Seth rogen, legends of creation DNA Genetics and Green House Seeds, and Fortune 500, leader in alcohol Constellation Brands, to name just a few. Canopy Growth operates eleven licensed cannabis production sites with over 5.2 million square feet of production capacity, including more than one million square feet of GMP certified production space. For more information, visit www.canopygrowth.com

Forward-Looking Statement Notice
Este comunicado à imprensa contém "declarações prospectivas" na aceção da Lei de Reforma de Litígios de Valores Mobiliários dos Estados Unidos de 1995 e "informações prospectivas" na acepção da legislação canadense de valores mobiliários aplicável. Freqüentemente, mas nem sempre, as declarações e informações prospectivas podem ser identificadas pelo uso de palavras como "planos", "espera" ou "não espera", "é esperado", "estimativas", "pretende", " antecipa "ou" não antecipa ", ou" acredita ", ou variações de tais palavras e frases ou afirma que certas ações, eventos ou resultados" podem "," poderiam "," poderiam "," poderiam "ou" serão " tomada, ocorrer ou ser alcançada. Declarações ou informações prospectivas envolvem riscos conhecidos e desconhecidos, incertezas e outros fatores que podem fazer com que os resultados reais, desempenho ou realizações da Canopy Growth ou de suas subsidiárias sejam materialmente diferentes de quaisquer resultados futuros, desempenho ou realizações expressas ou implícitas pelos declarações ou informações contidas neste comunicado de imprensa. Exemplos de tais declarações incluem declarações com relação às expectativas da Companhia em relação a colheitas futuras, a expectativa da Companhia de estoques acabados adicionais disponíveis para venda em trimestres futuros, lançando produtos CBD no mercado até o final do ano fiscal de 2020, a expansão acelerada do mercado para a área cultivada , os benefícios esperados da nova marca da Spectrum Therapeutics na participação de mercado da Companhia, a oportunidade potencial para produtos de cannabis em Europe e o aumento antecipado da disponibilidade de produtos canadenses e dinamarqueses, o aumento antecipado de vendas da Storz & Bickel, a expectativa de que as instalações estejam totalmente operacionais nos próximos meses, o lançamento de novos produtos e marcas de consumo CBD no ano fiscal de 2020, o momento da implementação da transação com a área cultivada. Riscos, incertezas e outros fatores envolvidos com informações prospectivas podem fazer com que eventos, resultados, desempenho, perspectivas e oportunidades reais diferam materialmente daqueles expressos ou implícitos em tais informações prospectivas, incluindo alterações nas leis, regulamentos e diretrizes; cumprimento das leis; leis internacionais; riscos operacionais, regulatórios e outros; execução da estratégia de negócios; gestão do crescimento; dificuldade em prever; dependência de licenças; riscos inerentes a um negócio agrícola; contratos com governos provinciais e territoriais; restrições em produtos de marketing; riscos inerentes a aquisições e investimentos; expansão para jurisdições estrangeiras; regulamentos governamentais; cannabis é uma substância controlada os Estados Unidos; Riscos da Fazenda; suposições quanto à capacidade das partes de receber, em tempo hábil e em termos satisfatórios, as aprovações regulatórias e judiciais necessárias para a transação com a Área cultivada; e tais riscos contidos na circular de informações da administração da Companhia datada de 17 de maio de 2019 e no formulário de informações anuais datado 24 de junho de 2019 e arquivado nos reguladores de valores mobiliários do Canadá e disponível no perfil de emissor da Companhia no SEDAR em www.sedar.com. Os leitores são advertidos de que a lista de fatores acima não é exaustiva. Embora a Companhia acredite que as suposições e os fatores usados ​​na preparação das informações e declarações prospectivas contidas neste comunicado à imprensa sejam razoáveis, não se deve confiar indevidamente nessas informações e não se pode garantir que tais eventos ocorrerão no futuro. os prazos divulgados ou de todo. As informações e declarações prospectivas incluídas neste comunicado de imprensa são feitas na data deste comunicado de imprensa e a Companhia não assume a obrigação de atualizar publicamente essas informações e informações prospectivas para refletir novas informações. , eventos subsequentes ou outros, a menos que exigido pelas leis de valores mobiliários aplicáveis.






CANOPY GROWTH CORPORATION





DEMONSTRAÇÕES CONSOLIDADAS INTERCALARES CONDENSADAS DA POSIÇÃO FINANCEIRA

UNAUDITED

September 30,

March 31,

(Expressed in CDN $000's)

2019

2019






Ativos





Current assets





Cash and cash equivalents

$

1,102,464

$

2,480,830

Marketable securities


1,633,692


2,034,133

Amounts receivable


107,487


106,974

Biological assets


110,347


78,975

Inventory


461,757


262,105

Prepaid expenses and other current assets


152,761


107,123



3,568,508


5,070,140






Investments in equity method investees


113,046


112,385

Other financial assets


449,028


363,427

Property, plant and equipment


1,633,303


1,096,340

Intangible assets


514,033


519,556

Boa vontade


1,912,484


1,544,055

Other long-term assets


34,781


25,902







$

8,225,183

$

8,731,805






Liabilities





Passivo circulante





Accounts payable and accrued liabilities

$

286,862

$

226,533

Current portion of long-term debt


14,115


103,716

Other current liabilities


124,853


81,414



425,830


411,663






Long-term debt


590,373


842,259

Deferred tax liability


91,026


96,031

Share repurchase credit liability


1,288,079


Other long-term liabilities


207,183


140,404








2,602,491


1,490,357






Shareholders' equity





Share capital


6,331,325


6,026,618

Other reserves


2,756,749


1,673,472

Accumulated other comprehensive income


(29,064)


28,630

Deficit


(3,707,022)


(777,087)






Equity attributable to Canopy Growth Corporation


5,351,988


6,951,633






Non-controlling interests


270,704


289,815






Total equity


5,622,692


7,241,448







$

8,225,183

$

8,731,805


CANOPY GROWTH CORPORATION

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2019 AND 2018

UNAUDITED

Three months ended

Six months ended


September 30,

September 30,

September 30,

September 30,

(Expressed in CDN $000's except share amounts)

2019

2018

2019

2018




(Restated – see
note 2(d))

(Restated – see note 2(d))










receita

$

85,621

$

23,327

$

189,012

$

49,243

Excise taxes


9,008



21,917











Net revenue


76,613


23,327


167,095


49,243










Inventory production costs expensed to cost of sales


86,321


15,624


159,503


29,029










Gross margin before the undernoted


(9,708)


7,703


7,592


20,214










Fair value changes in biological assets included in inventory sold and other charges


69,089


51,496


115,219


77,884

Unrealized gain on changes in fair value of biological assets


(82,320)


(10,944)


(221,339)


(68,233)










Gross margin


3,523


(32,849)


113,712


10,563










Sales and marketing


60,483


40,182


109,710


58,875

Pesquisa e desenvolvimento


11,922


1,944


20,396


2,700

General and administration


87,861


37,101


150,132


56,689

Acquisition-related costs


2,562


3,202


15,744


5,086

Share-based compensation expense


83,767


45,025


160,848


68,097

Share-based compensation expense related to acquisition milestones


9,114


50,730


19,395


57,825

Depreciation and amortization


13,644


3,595


26,423


6,625










Operating expenses


269,353


181,779


502,648


255,897










Loss from operations


(265,830)


(214,628)


(388,936)


(245,334)










Loss on extinguishment of warrants




(1,176,350)


Other income (expense), net


(109,283)


(115,702)


(76,662)


(178,697)

Total other income (expense), net


(109,283)


(115,702)


(1,253,012)


(178,697)










Loss before income taxes


(375,113)


(330,330)


(1,641,948)


(424,031)










Income tax recovery (expense)


493


(284)


(13,840)


2,439










Net loss

$

(374,620)

$

(330,614)

$

(1,655,788)

$

(421,592)










Net (loss) income attributable to:









Canopy Growth Corporation

$

(374,184)

$

(337,136)

$

(1,657,239)

$

(417,413)

Non-controlling interests


(436)


6,522


1,451


(4,179)


$

(374,620)

$

(330,614)

$

(1,655,788)

$

(421,592)










Net loss per share, basic and diluted









Net loss per share:

$

(1.08)

$

(1.52)

$

(4.79)

$

(1.98)

Weighted average number of outstanding common shares:


347,226,921


221,725,511


346,028,903


210,972,889






CANOPY GROWTH CORPORATION





CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2019 AND 2018

UNAUDITED

September 30,

September 30,

(Expressed in CDN $000's)

2019

2018






Net inflow (outflow) of cash related to the following activities:










Operating





Net loss

$

(1,655,788)

$

(421,592)

Adjustments for:





Depreciation of property, plant and equipment


35,309


10,446

Amortization of intangible assets


15,955


5,236

Share of loss on equity investments


4,004


6,932

Fair value changes in biological assets included in inventory sold and other charges


115,219


77,884

Unrealized gain on changes in fair value of biological ativos


(221,339)


(68,233)

Share-based compensation


180,243


130,596

Other assets


(23)


(18,810)

Loss on extinguishment of warrants


1,176,350


Other income and expense


104,909


171,109

Income tax (recovery) expense


13,840


(2,439)

Non-cash foreign currency


(1,463)


(410)

Changes in non-cash operating working capital items


(126,551)


(88,855)






Net cash used in operating activities


(359,335)


(198,136)






Investir





Purchases and deposits of property, plant and equipment


(440,150)


(293,179)

Purchases of intangible assets


(3,614)


(6,340)

Redemption (purchase) of marketable securities, net


388,027


(2,829)

Investments in equity method investees


(4,719)


(42,439)

Investments in other financial assets


(36,423)


(29,695)

Premium paid for Acreage Call Option


(395,190)


Net cash outflow on acquisition of non-controlling interests



(1,999)

Net cash outflow on acquisition of subsidiaries


(421,952)


427

Change in acquisition related liabilities


(21,447)







Net cash used in investing activities


(935,468)


(376,054)






Financiamento





Payment of share issue costs


(129)


(6,819)

Proceeds from issuance of shares by Canopy Rivers


156


91,218

Proceeds from exercise of stock options


36,023


13,626

Proceeds from exercise of warrants


446


133

Issuance of long-term debt


5,278


600,000

Payment of long-term debt issue costs



(16,380)

Payment of interest on long-term debt


(12,750)


Repayment of long-term debt


(104,282)


(747)






Net cash (used) provided by financing activities


(75,258)


681,031






Effect of exchange rate changes on cash and cash equivalents


(8,305)







Net cash (outflow) inflow


(1,378,366)


106,841

Cash and cash equivalents, beginning of period


2,480,830


322,560






Cash and cash equivalents, end of period

$

1,102,464

$

429,401

Adjusted EBITDA1 Non-IFRS Measure

Three months ended

(In CDN$000's)

September 30,

2019

September 30,

2018






Adjusted EBITDA1 Reconciliation





Loss from operations – as reported

$

(265,830)

$

(214,628)






IFRS fair value accounting related to biological assets and inventory

Fair value changes in biological assets included in inventory sold and other charges


69,089


51,496

Unrealized gain on changes in fair value of biological assets


(82,320)


(10,944)



(13,231)


40,552

Share-based compensation expense (per statements of cash flows)


92,881


99,556

Acquisition-related costs


2,562


3,202

Depreciation and amortization (per statements of cash flows)


27,873


9,389



123,316


112,147

Adjusted EBITDA

$

(155,745)

$

(61,929)






Six months ended

(In CDN$000's)

September 30,

2019

September 30,

2018






Adjusted EBITDA1 Reconciliation





Loss from operations – as reported

$

(388,936)

$

(245,334)






IFRS fair value accounting related to biological assets and inventory

Fair value changes in biological assets included in inventory sold and other charges


115,219


77,884

Unrealized gain on changes in fair value of biological assets


(221,339)


(68,233)



(106,120)


9,651

Share-based compensation expense (per statements of cash flows)


180,243


130,507

Acquisition-related costs


15,744


5,086

Depreciation and amortization (per statements of cash flows)


51,264


15,682



247,251


151,275

Adjusted EBITDA

$

(247,805)

$

(84,408)


1 Adjusted EBITDA is earnings before interest, tax, depreciation and amortization, share-based compensation expense, fair value changes and other non-cash items, and further adjusted to remove acquisition-related costs.

SOURCE Canopy Growth Corporation

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