Canopy Growth Corporation reports fourth quarter and fiscal 2019 results with annual sales of $226.3M
." data-reactid="88">Note 2: Adjusted EBITDA is a non-IFRS financial measure that does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. The Adjusted EBITDA reconciliation is presented within this news release and explained in Management's Discussion & Analysis under "Adjusted EBITDA (Non-IFRS Measure)", a copy of which will be filed on SEDAR after financial markets close on Friday, June 21, 2019.
Webcast Information
A live audio webcast will be available at:
https://event.on24.com/wcc/r/1971998/A4F8AB6B82EDF157155CC39603685130
Calling Information
Toll Free Dial-In Number: 1-888-231-8191
International Dial-In Number: (647) 427-7450
Conference ID: 4338214
Replay Information
A replay of the call will be accessible by telephone until
11:59 PM ET on September 21, 2019.
Toll Free Dial-in Number: 1-855-859-2056
Replay Password: 4338214
About Canopy Growth
Corporation
Canopy Growth (TSX:WEED, NYSE:CGC) is a
world-leading diversified cannabis, hemp and cannabis device
company, offering distinct brands and curated cannabis varieties in
dried, oil and Softgel 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, site and
country at a time. The Company has operations in over a dozen
countries across five continents.
The Company's medical division, Spectrum Therapeutics is proudly dedicated to educating healthcare practitioners, conducting robust clinical research, and furthering the public's understanding of cannabis, and has devoted millions of dollars toward cutting edge, commercializable research and IP development. Spectrum Therapeutics sells a range of full-spectrum products using its colour-coded classification Spectrum system as well as single cannabinoid Dronabinol under the brand Bionorica Ethics.
The Company operates retail stores across Canada under its award-winning Tweed and Tokyo Smoke banners. Tweed is a globally recognized cannabis brand which has built a large and loyal following by focusing on quality products and meaningful customer relationships.
From our historic public listing on the Toronto Stock Exchange and New York Stock Exchange to our continued international expansion, pride in advancing shareholder value through leadership is engrained in all we do at Canopy Growth. Canopy Growth has established partnerships with leading sector names including cannabis icons Snoop Dogg and Seth Rogen, breeding legends DNA Genetics and Green House Seeds, and Fortune 500 alcohol leader Constellation Brands, to name but a few. Canopy Growth operates eleven licensed cannabis production sites with over 4.7 million square feet of production capacity, including over one million square feet of GMP certified production space. For more information visit www.canopygrowth.com.
Notice Regarding Forward Looking
Statements
This news release contains "forward-looking
statements" within the meaning of the United States Private
Securities Litigation Reform Act of 1995 and "forward-looking
information" within the meaning of applicable Canadian securities
legislation. Often, but not always, forward-looking statements and
information can be identified by the use of words such as "plans",
"expects" or "does not expect", "is expected", "estimates",
"intends", "anticipates" or "does not anticipate", or "believes",
or variations of such words and phrases or state that certain
actions, events or results "may", "could", "would", "might" or
"will" be taken, occur or be achieved. Forward-looking statements
or information involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or
achievements of Canopy Growth or its subsidiaries to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking statements or
information contained in this news release. Examples of such
statements include statements with respect to the Company's
expectations with respect to the Q1 fiscal 2020 harvest, the
Company's expectation for additional finished inventory available
for sale in Q2 fiscal 2020, bringing CBD products to market by the
end of fiscal 2020, the accelerated market expansion for Acreage,
the anticipated benefits of the rebranding of Spectrum Therapeutics
on the Company's market share, the potential opportunity for
cannabis products in Europe and the anticipated
Increase in Canadian and Danish product availability, the
anticipated increased sales from Storz & Bickel, the
expectation that facilities will be fully operational in the months
ahead, the launch of new CBD consumer products and brands in fiscal
2020, the timing for implementation of the transaction with
Acreage. Risks, uncertainties and other factors involved with
forward-looking information could cause actual events, results,
performance, prospects and opportunities to differ materially from
those expressed or implied by such forward-looking information,
including changes in laws, regulations and guidelines; compliance
with laws; international laws; operational, regulatory and other
risks; execution of business strategy; management of growth;
difficulty to forecast; reliance on licences; risks inherent in an
agricultural business; contracts with provincial and territorial
governments; constraints on marketing products; risks inherent in
acquisitions and investments; expansion into foreign jurisdictions;
governmental regulations; cannabis is a controlled substance in
the United States; Farm Bill risks; assumptions as to
the ability of the parties to receive, in a timely manner and on
satisfactory terms, the necessary regulatory and court approvals
for the transaction with Acreage; and such risks contained in the
Company's management information circular of the Company dated
May 17, 2019 and in the annual information form dated
June 27, 2018 and filed with Canadian securities
regulators and available on the Company's issuer profile on SEDAR
at www.sedar.com. Readers are cautioned
that the foregoing list of factors is not exhaustive. Although the
Company believes that the assumptions and factors used in preparing
the forward-looking information or forward-looking statements in
this news release are reasonable, undue reliance should not be
placed on such information and no assurance can be given that such
events will occur in the disclosed time frames or at all. The
forward-looking information and forward-looking statements included
in this news release are made as of the date of this news release
and the Company does not undertake an obligation to publicly update
such forward-looking information or forward-looking information to
reflect new information, subsequent events or otherwise unless
required by applicable securities laws.
|
CANOPY GROWTH CORPORATION |
||||
|
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION |
||||
|
(Expressed in CDN $000's) |
March 31, 2019 |
March 31, 2018 |
||
|
Assets |
||||
|
Current assets |
||||
|
Cash and cash equivalents |
$ |
2,480,830 |
$ |
322,560 |
|
Marketable securities |
2,034,133 |
- |
||
|
Amounts receivable |
106,974 |
21,425 |
||
|
Biological assets |
78,975 |
16,348 |
||
|
Inventory |
262,105 |
101,607 |
||
|
Prepaid expenses and other current assets |
107,123 |
19,837 |
||
|
5,070,140 |
481,777 |
|||
|
Investments in equity method investees |
112,385 |
63,106 |
||
|
Other financial assets |
363,427 |
163,463 |
||
|
Property, plant and equipment |
1,096,340 |
303,682 |
||
|
Intangible assets |
519,556 |
101,526 |
||
|
Goodwill |
1,544,055 |
314,923 |
||
|
Other long-term assets |
25,902 |
8,340 |
||
|
$ |
8,731,805 |
$ |
1,436,817 |
|
|
Liabilities |
||||
|
Current liabilities |
||||
|
Accounts payable and accrued liabilities |
$ |
226,533 |
$ |
89,571 |
|
Current portion of long-term debt |
103,716 |
1,557 |
||
|
Other current liabilities |
81,414 |
900 |
||
|
411,663 |
92,028 |
|||
|
Long-term debt |
842,259 |
6,865 |
||
|
Deferred tax liability |
96,031 |
33,536 |
||
|
Other long-term liabilities |
140,404 |
61,150 |
||
|
1,490,357 |
193,579 |
|||
|
Shareholders' equity |
||||
|
Share capital |
6,026,618 |
1,076,838 |
||
|
Other reserves |
1,673,472 |
127,418 |
||
|
Accumulated other comprehensive income |
28,630 |
46,166 |
||
|
Deficit |
(777,087) |
(91,649) |
||
|
Equity attributable to Canopy Growth Corporation |
6,951,633 |
1,158,773 |
||
|
Non-controlling interests |
289,815 |
84,465 |
||
|
Total equity |
7,241,448 |
1,243,238 |
||
|
$ |
8,731,805 |
$ |
1,436,817 |
|
|
CANOPY GROWTH CORPORATION |
|||||||||
|
CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||
|
FOR THE THREE AND TWELVE MONTHS ENDED MARCH 31, 2019 AND 2018 |
|||||||||
|
Three months ended |
Twelve months ended |
||||||||
|
(Expressed in CDN $000's except share amounts) |
March 31, 2019 |
March 31, 2018 |
March 31, 2019 |
March 31, 2018 |
|||||
|
Revenue |
$ |
106,485 |
$ |
22,806 |
$ |
253,431 |
$ |
77,948 |
|
|
Excise taxes |
12,435 |
- |
27,090 |
- |
|||||
|
Net revenue |
94,050 |
22,806 |
226,341 |
77,948 |
|||||
|
Inventory production costs expensed to cost of sales |
79,076 |
15,140 |
175,425 |
40,213 |
|||||
|
Gross margin before the undernoted |
14,974 |
7,666 |
50,916 |
37,735 |
|||||
|
Fair value changes in biological assets included in inventory sold and other inventory charges |
23,547 |
20,025 |
129,536 |
67,861 |
|||||
|
Unrealized gain on changes in fair value of biological assets |
(77,050) |
(17,500) |
(167,550) |
(96,721) |
|||||
|
Gross margin |
68,477 |
5,141 |
88,930 |
66,595 |
|||||
|
Sales and marketing |
53,184 |
14,751 |
154,392 |
38,203 |
|||||
|
Research and development |
7,274 |
539 |
15,238 |
1,453 |
|||||
|
General and administration |
65,657 |
16,883 |
168,434 |
43,819 |
|||||
|
Acquisition-related costs |
13,788 |
915 |
23,394 |
3,406 |
|||||
|
Share-based compensation expense |
74,678 |
11,923 |
182,837 |
29,631 |
|||||
|
Share-based compensation expense related to acquisition milestones |
18,490 |
8,247 |
100,164 |
19,475 |
|||||
|
Depreciation and amortization |
9,870 |
2,915 |
21,510 |
12,889 |
|||||
|
Operating expenses |
242,941 |
56,173 |
665,969 |
148,876 |
|||||
|
Loss from operations |
(174,464) |
(51,032) |
(577,039) |
(82,281) |
|||||
|
Share of loss on equity investments |
(1,731) |
(1,303) |
(10,752) |
(1,473) |
|||||
|
Other (expense) income, net |
(133,451) |
(10,068) |
(69,985) |
31,213 |
|||||
|
Total other (expense) income, net |
(135,182) |
(11,371) |
(80,737) |
29,740 |
|||||
|
Loss before income taxes |
(309,646) |
(62,403) |
(657,776) |
(52,541) |
|||||
|
Income tax (expense) recovery |
(13,716) |
8,042 |
(12,318) |
(1,593) |
|||||
|
Net loss |
$ |
(323,362) |
$ |
(54,361) |
$ |
(670,094) |
$ |
(54,134) |
|
|
Net (loss) income attributable to: |
|||||||||
|
Canopy Growth Corporation |
$ |
(335,607) |
$ |
(61,544) |
$ |
(685,438) |
$ |
(70,353) |
|
|
Non-controlling interests |
12,245 |
7,183 |
15,344 |
16,219 |
|||||
|
$ |
(323,362) |
$ |
(54,361) |
$ |
(670,094) |
$ |
(54,134) |
||
|
Net loss per share, basic and diluted |
|||||||||
|
Net loss per share: |
$ |
(0.98) |
$ |
(0.31) |
$ |
(2.57) |
$ |
(0.40) |
|
|
Weighted average number of outstanding common shares: |
343,877,591 |
196,571,715 |
266,997,406 |
177,301,767 |
|||||
|
CANOPY GROWTH CORPORATION |
|||||||||
|
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||||
|
FOR THE THREE AND TWELVE MONTHS ENDED MARCH 31, 2019 AND 2018 |
|||||||||
|
Three months ended |
Twelve months ended |
||||||||
|
(Expressed in CDN $000's) |
March 31, 2019 |
March 31, 2018 |
March 31, 2019 |
March 31, 2018 |
|||||
|
Net inflow (outflow) of cash related to the following activities: |
|||||||||
|
Operating |
|||||||||
|
Net income (loss) |
$ |
(323,362) |
$ |
(54,361) |
$ |
(670,094) |
$ |
(54,134) |
|
|
Adjustments for: |
|||||||||
|
Depreciation of property, plant and equipment |
14,359 |
2,365 |
30,062 |
8,725 |
|||||
|
Amortization of intangible assets |
8,987 |
2,586 |
16,856 |
11,761 |
|||||
|
Share of loss on equity investments |
1,731 |
1,303 |
10,752 |
1,473 |
|||||
|
Fair value changes in biological assets included in inventory sold and other charges |
23,547 |
20,025 |
129,536 |
67,861 |
|||||
|
Unrealized gain on changes in fair value of biological assets |
(77,050) |
(17,500) |
(167,550) |
(96,721) |
|||||
|
Share-based compensation |
93,096 |
20,928 |
287,782 |
51,177 |
|||||
|
Other assets |
(2,451) |
79 |
(19,359) |
(1,853) |
|||||
|
Other liabilities |
54,345 |
- |
54,345 |
- |
|||||
|
Other income and expense |
120,262 |
2,925 |
75,786 |
(37,494) |
|||||
|
Income tax (recovery) expense |
13,716 |
(8,042) |
12,318 |
1,593 |
|||||
|
Non-cash foreign currency |
(20,170) |
(201) |
(18,776) |
(201) |
|||||
|
Changes in non-cash operating working capital items |
(132,621) |
(7,018) |
(262,168) |
(33,693) |
|||||
|
Net cash used in operating activities |
(225,611) |
(36,911) |
(520,510) |
(81,506) |
|||||
|
Investing |
|||||||||
|
Purchases and deposits of property, plant and equipment |
(149,220) |
(89,930) |
(644,456) |
(176,037) |
|||||
|
Purchases of intangible assets |
1,850 |
(1,099) |
(38,290) |
(2,132) |
|||||
|
Proceeds on disposals of property and equipment |
- |
- |
- |
75 |
|||||
|
Purchases of marketable securities |
(1,227,565) |
- |
(2,029,812) |
(118) |
|||||
|
Proceeds on assets classified as held for sale |
- |
- |
- |
7,000 |
|||||
|
Investments in equity method investees |
(9,695) |
- |
(36,896) |
(26,179) |
|||||
|
Investments in other financial assets |
(17,266) |
(2,062) |
(91,337) |
(22,439) |
|||||
|
Net cash outflow on acquisition of NCI |
(4,716) |
- |
(6,712) |
- |
|||||
|
Net cash outflow on acquisition of subsidiaries |
(36,010) |
(153) |
(380,482) |
(3,753) |
|||||
|
Net cash used in investing activities |
(1,442,622) |
(93,244) |
(3,227,985) |
(223,583) |
|||||
|
Financing |
|||||||||
|
Payment of share issue costs |
(3,029) |
(8,663) |
(21,646) |
(10,008) |
|||||
|
Proceeds from issuance of common shares and warrants |
- |
200,680 |
5,072,500 |
470,670 |
|||||
|
Proceeds from issuance of shares by Canopy Rivers |
63,758 |
19,763 |
154,976 |
54,876 |
|||||
|
Proceeds from exercise of stock options |
19,429 |
3,509 |
48,159 |
11,053 |
|||||
|
Proceeds from exercise of warrants |
106 |
89 |
18,790 |
770 |
|||||
|
Issuance of long-term debt |
- |
- |
600,000 |
- |
|||||
|
Payment of long-term debt issue costs |
- |
- |
(16,380) |
- |
|||||
|
Payment of interest on long-term debt |
(11,793) |
- |
(14,521) |
- |
|||||
|
Repayment of long-term debt |
(1,181) |
(371) |
(4,680) |
(1,512) |
|||||
|
Net cash provided by financing activities |
67,290 |
215,007 |
5,837,198 |
525,849 |
|||||
|
Effect of exchange rate changes on cash and cash equivalents |
(34,097) |
- |
69,567 |
- |
|||||
|
Net cash inflow |
(1,635,040) |
84,852 |
2,158,270 |
220,760 |
|||||
|
Cash and cash equivalents, beginning of period |
4,115,870 |
237,708 |
322,560 |
101,800 |
|||||
|
Cash and cash equivalents, end of period |
$ |
2,480,830 |
$ |
322,560 |
$ |
2,480,830 |
$ |
322,560 |
|
|
Adjusted EBITDA1 Non-IFRS Measure |
Three months ended |
Year ended |
|||||||
|
(In CDN$000's) |
March 31, |
March 31, |
March 31, |
March 31, |
|||||
|
(Restated) |
(Restated) |
||||||||
|
Adjusted EBITDA1 Reconciliation |
|||||||||
|
Loss from operations - as reported |
$ |
(174,464) |
$ |
(51,032) |
$ |
(577,039) |
$ |
(82,281) |
|
|
IFRS fair value accounting related to biological assets and inventory |
|||||||||
|
Fair value changes in biological assets included in inventory sold and other charges |
23,547 |
20,025 |
129,536 |
67,861 |
|||||
|
Unrealized gain on changes in fair value of biological assets |
(77,050) |
(17,500) |
(167,550) |
(96,721) |
|||||
|
(53,503) |
2,525 |
(38,014) |
(28,860) |
||||||
|
Share-based compensation expense (per statement of cash flows) |
93,096 |
20,928 |
287,782 |
51,177 |
|||||
|
Acquisition-related costs |
13,788 |
915 |
23,394 |
3,406 |
|||||
|
Depreciation and amortization (per statement of cash flows) |
23,346 |
4,951 |
46,918 |
20,486 |
|||||
|
130,230 |
26,794 |
358,094 |
75,069 |
||||||
|
Adjusted EBITDA |
$ |
(97,737) |
$ |
(21,713) |
$ |
(256,959) |
$ |
(36,072) |
|
|
1Adjusted 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. |
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