The Company expects to report record net
revenue and net cash provided by operating activities for the
fourth quarter of 2022
CALGARY,
AB, Feb. 13, 2023 /CNW/ - SNDL Inc. (NASDAQ:
SNDL) ("SNDL" or "the Company") announced changes to its operations
through a rightsizing of cannabis cultivation in Olds, Alberta, in an effort to focus the
facility on premium products and brands. The Valens Company Inc.
("Valens") transaction has accelerated the need to optimize and
rationalize SNDL's manufacturing and operational footprint to
better address market saturation and oversupply.
![SNDL Inc. Logo (CNW Group/Sundial Growers Inc.) SNDL Inc. Logo (CNW Group/Sundial Growers Inc.)](https://mma.prnewswire.com/media/2001524/Sundial_Growers_Inc__SNDL_Announces_Cost_Saving_Measures_and_Rig.jpg)
"We have made the difficult decision to materially reduce
staffing and activity levels in Olds,
Alberta, in order to improve the efficiency of our
operations as one of Canada's
largest adult-use cannabis manufacturers," said Zach George, Chief Executive Officer of SNDL.
"With the Olds facility already in
operation when I joined SNDL, I am proud of the cultivation
capabilities and high-quality flower that our teams have developed
and produced. We estimate that more than 1 billion grams of flower
are sitting in Canadian vaults today. Oversupply and excess
capacity have resulted in high-quality flower being widely
available and sold well below the marginal cost of production.
Using available and existing biomass, we will be better equipped to
leverage the current pricing environment to materially improve our
cost of goods sold and margins. We are taking a proactive approach
with our cultivation and manufacturing strategy to evolve with the
market while continuing to deliver exceptional products across a
variety of product and price segments."
SNDL has initiated a headcount reduction of approximately 85
employees at the Olds facility as
a part of a larger phased cost savings program that is expected to
deliver close to $9 million in
savings across labour and operational costs. The cost savings
initiatives are expected to position SNDL to exceed its
previously announced integration savings target as a result of the
acquisition of Valens. SNDL expects to complete most of this
transition within the first quarter of 2023, and the cost savings
will be immediately accretive to adjusted EBITDA. The Company
expects to report record net revenue and net cash provided by
operating activities for the fourth quarter of 2022, with the
year-end and fourth quarter of 2022 results expected to be
announced at the end of March
2023.
The Company's ongoing focus on high-quality cannabis cultivation
operations, combined with Valens' low-cost biomass procurement
capabilities, will enhance SNDL's ability to offer a wide range of
customized, innovative products to meet customer demand and current
market conditions. SNDL is confident that consumers will not see
changes to the availability and quality of the Company's brands.
Through its integration and rationalization efforts, the Company is
assessing all assets and will continue to make decisions based on
sustainable profitability.
About SNDL Inc.
SNDL is a public company whose shares are traded on the Nasdaq
under the symbol "SNDL."
SNDL is the largest private-sector liquor and cannabis retailer
in Canada with retail banners that
include Ace Liquor, Wine and Beyond, Liquor Depot, Value Buds,
Spiritleaf and Superette. SNDL is a licensed cannabis producer and
one of the largest vertically integrated cannabis companies in
Canada specializing in low-cost
biomass sourcing, premium indoor cultivation, product innovation,
low-cost manufacturing facilities, and a cannabis brand
portfolio that includes Top Leaf, Contraband, Citizen Stash,
Sundial Cannabis, Palmetto, Bon Jak, Spiritleaf Selects, Versus
Cannabis, Value Buds, Vacay, Grasslands and Superette. SNDL's
investment portfolio seeks to deploy strategic capital through
direct and indirect investments and partnerships throughout the
global cannabis industry. For more information on SNDL, please go
to www.sndl.com.
Forward-Looking Statement
This news release includes statements containing certain
"forward-looking information" within the meaning of applicable
securities law ("forward-looking statements"). Forward-looking
statements in this release includes, but is not limited to,
anticipated reductions in the work force, the Company's ability to
provide uninterrupted supply to its customer, and statements
regarding the future performance of the Company. Forward-looking
statements are frequently characterized by words such as "plan",
"continue", "expect", "project", "intend", "believe", "anticipate",
"estimate", "may", "will", "potential", "proposed" and other
similar words, or statements that certain events or conditions
"may" or "will" occur. These statements are only predictions.
Various assumptions were used in drawing conclusions or making the
projections contained in the forward-looking statements throughout
this news release. Forward-looking statements are based on the
opinions and estimates of management at the date the statements are
made, and are subject to a variety of risks and uncertainties and
other factors that could cause actual events or results to differ
materially from those projected in the forward-looking statements.
The Company is under no obligation, and expressly disclaims any
intention or obligation, to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as expressly required by applicable law.
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SOURCE Sundial Growers Inc.