UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
Form 6-K
REPORT OF FOREIGN PRIVATE
ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE
SECURITIES EXCHANGE ACT OF
1934
For the month of August
2024
Commission File Number 001-39005
SNDL INC.
(Registrant’s name)
#300, 919 - 11 Avenue SW
Calgary, AB T2R 1P3
Tel.: (403) 948-5227
(Address of principal executive
offices)
Indicate by check mark whether the registrant files
or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F ☐ Form 40-F ☒
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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SNDL
INC. |
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| Date:
August 1, 2024 |
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By: |
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/s/
Alberto Paredero Quiros |
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Name: |
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Alberto
Paredero Quiros |
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Title: |
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Chief Financial Officer |
EXHIBIT
Exhibit 99.1
SNDL Reports Second Quarter 2024 Financial and
Operational Results
The Company reports record
Gross Margin and material improvements in profitability and Free Cash Flow year-over-year
CALGARY, AB, Aug. 1, 2024 /CNW/ - SNDL Inc. (NASDAQ:
SNDL) ("SNDL" or the "Company") reported its financial and operational results for the second quarter
ended June 30, 2024. All financial information in this press release is reported in millions of Canadian dollars unless otherwise indicated.
SNDL has also posted a supplemental investor presentation
on its website, found at https://sndl.com.
The Company will hold a conference call and webcast
presentation at 10:00 a.m. EDT (8:00 a.m. MDT) on Friday, August 2, 2024. The conference call details can be found below.
SECOND QUARTER 2024 FINANCIAL AND OPERATIONAL HIGHLIGHTS
| • | Net revenue for the second quarter of 2024 was $228.1 million,
compared to $231.9 million in the second quarter of 2023, a decrease of 1.6%. This decrease was driven by market softness in the Liquor
Retail segment, while both Cannabis Retail and Cannabis Operations segments posted strong growth. This represents an increase of 15.4%
in net revenue quarter on quarter, as compared to net revenue of $197.8 million in the first quarter of 2024, mainly attributed to business
seasonality. |
| • | Achieved a gross profit of $58.2 million, representing a
record gross margin of 25.5% of sales in the second quarter of 2024, up from 22.4% in the second quarter of 2023. The 12% improvement
in gross profit year over year, or 15.4% improvement quarter on quarter, highlights the continuous success of the Company's margin improvement
initiatives, including the data sales programs, mix optimization and supply chain productivity initiatives. |
| • | Cash flow was negative $6.0 million in the second quarter
of 2024, compared to negative $27.8 million in the second quarter of 2023, a 78% improvement driven by the increase in profitability and
smaller working capital build up. |
| • | Free cash flow in the second quarter of 2024 was negative
$5.6 million, compared to negative $18.5 million in the second quarter of 2023, a 70% improvement driven by profitability and working
capital management improvements. |
| • | Operating loss was $4.8 million for the second quarter of
2024, compared to a loss of $29.6 million in the second quarter of 2023, an 84% improvement primarily driven by margin expansion and lower
Selling, General, and Administrative expenses. |
| • | Second quarter results reflect dynamic growth in our Cannabis
businesses, confirming the increased profitability we reported in the first quarter of 2024, despite softness in Liquor sales. The following
highlights are recent examples of initiatives driving SNDL towards sustained profitable growth: |
| • | Acquired 4 Dutch Love stores and launched the Value Buds
brand in British Columbia by rebranding 3 of these stores. |
| • | Continued the expansion of proprietary data licensing in
both Cannabis and Liquor Retail, increasing data sales from $3.8 million in the first quarter of 2024 to $4.2 million in the second quarter. |
| • | Increased SNDL's Liquor Retail segment private label
revenue by 17% year-to-date, reaching 11.8% share of revenue. |
| • | Completed the acquisition of the principal indebtedness of
Delta 9 for a purchase price of $28.1 million in early July, becoming its senior secured creditor with a first priority security interest
in all assets of Delta 9 and certain of its subsidiaries. |
| • | Entered into a stalking horse purchase agreement for Indiva
Limited's business and assets. |
| • | Delivered the first international export contract of 2024,
with the shipment of bulk flower to Israel. |
| • | The Company had $783.6 million of unrestricted cash, marketable
securities and investments and no outstanding debt, with $182.9 million of unrestricted cash as of June 30, 2024. SNDL has not raised
cash through share offerings since June 2021. |
"The second quarter of 2024 confirms our progress
and path to profitability, including an all-time record gross margin of 25.5%", said Zach George, Chief Executive Officer of SNDL.
"As we continue making progress on our long-term strategic plan, we are gaining sharper focus on key priorities, allowing us to effectively
deploy capital to support organic and inorganic growth. This sharper focus, and our continuous pursuit of greater efficiency, led to the
recent announcement of a restructuring project that is expected to deliver over $20 million of annualized savings, some of which are starting
to materialize in the third quarter of 2024. Our unique investment portfolio gives us additional optionality to close on U.S. assets currently
under restructuring and become a leading global cannabis company. We look forward to sharing our long-term strategic plan in detail with
investors in the coming months."
SECOND QUARTER 2024 KEY FINANCIAL METRICS
| OPERATING SEGMENTS |
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| ($000s) |
Liquor
Retail |
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Cannabis
Retail |
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Cannabis
Operations |
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Investments |
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Corporate |
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Total |
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| Three months ended June 30, 2024 |
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| Net revenue |
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140,560 |
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76,069 |
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24,976 |
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- |
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(13,478) |
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228,127 |
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| Gross profit |
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35,713 |
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19,268 |
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3,183 |
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- |
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58,164 |
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| Operating income (loss) |
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8,481 |
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3,902 |
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(1,916) |
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8,456 |
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(23,757) |
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(4,834) |
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| Adjusted operating income (loss) (1) |
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8,481 |
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3,902 |
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(1,916) |
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8,456 |
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(23,536) |
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(4,613) |
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| Three months ended June 30, 2023 |
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| Net revenue |
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151,690 |
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71,881 |
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20,940 |
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- |
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(12,595) |
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231,916 |
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| Gross profit |
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35,360 |
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17,780 |
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(1,207) |
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- |
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- |
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51,933 |
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| Operating income (loss) |
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8,207 |
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2,335 |
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(14,206) |
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(1,660) |
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(24,242) |
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(29,566) |
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| Adjusted operating income (loss) (1) |
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8,207 |
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2,335 |
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(12,924) |
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(1,660) |
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(21,482) |
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(25,524) |
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| (1) |
Adjusted operating income (loss) is a specified financial measure that does not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures reported by other companies. See "Non-IFRS Measures - Adjusted operating income (loss)" below. |
SECOND QUARTER 2024 RESULTS
SNDL's business is operated and reported in four segments:
Liquor Retail, Cannabis Retail, Cannabis Operations and Investments.
Liquor Retail
SNDL is Canada's largest private sector liquor
retailer, operating 168 locations, predominantly in Alberta, under its three retail banners: "Wine and Beyond",
"Liquor Depot", and "Ace Liquor".
| • | Net revenue for Liquor Retail sales was $140.6 million in
the second quarter of 2024, compared to $151.7 million for the same period in the year prior. The 7.3% reduction year-over-year was driven
by the shift of Easter timing, as well as overall market slow-down in customer traffic. |
| • | Same-store sales decreased by 8.4% for stores operating in
the second quarters of 2023 and 2024. Same-store sales refer to the revenue generated by the Company's existing retail liquor locations,
which operated during the current and comparative periods. |
| • | Gross profit for Liquor Retail was $35.7 million, or 25.4%
of sales, in the second quarter of 2024, compared to $35.4 million, or 23.3% of sales, in the second quarter of 2023. The Company achieved
record gross margin for its Liquor Retail segment in May 2024, with margins reaching 25.5%. This improvement was largely driven by productivity
in procurement and pricing optimization initiatives. |
| • | Operating income for Liquor Retail was $8.5 million in the
second quarter of 2024, compared to $8.2 million in the second quarter of 2023, a 3.7% improvement despite lower traffic. |
| • | SNDL's proprietary data licensing program for Liquor Retail
which launched in the first quarter of 2024, saw a 35% increase compared to the prior quarter. |
| • | Private label sales, a substantial driver of margin accretive
profitable growth, increased by 10.1% compared to the second quarter of 2023, and private label sales as a percent of total sales increased
from 10.1% in the second quarter of 2023 to 11.1% in the same quarter of 2024. This increase is driven by further additions to the private
label offerings, particularly new launches within our beer category, which has seen a 16.3% increase in sales in quarter 2 of 2024 compared
to the same period last year. |
| • | The Company opened its 13th Wine and Beyond location
in Airdrie, Alberta just before Easter this year, to further build on the success of the experiential, destination approach of the banner. |
As of August 1, 2024, the Ace Liquor store count was
135, the Liquor Depot store count was 20, and the Wine and Beyond store count was 13.
Cannabis Retail
With its 65% ownership interest in Nova Cannabis Inc.
("Nova"), SNDL is Canada's largest private-sector cannabis retailer by number of stores, operating 187 locations
under its four retail banners: "Value Buds", "Spiritleaf", "Superette", and "Firesale".
The Company's Cannabis Retail strategy is based on several pillars, including the quality of its store locations, its range of products,
and the unique experiences provided to customers. Using data and insights from a large volume of monthly transactions enables SNDL to
leverage technology and analytics to inform and improve its retail strategy.
| • | Net revenue for Cannabis Retail in the second quarter of
2024 was $76.1 million, compared to $71.9 million in the second quarter of 2023. The 5.8% increase year-over-year was driven by productivity
improvements and new stores opened throughout the year. |
| • | Same-store sales increased 2.4% for stores operating in the
second quarters of 2023 and 2024, an improvement from the 2.1% same-store sales growth rate in the first quarter. Same-store sales refer
to the revenue generated by the Company's existing retail cannabis locations, which operated during the current and comparative periods. |
| • | Gross profit for Cannabis Retail was $19.3 million, or 25.3%
of sales, in the second quarter of 2024, compared to $17.8 million, or 24.7% of sales, in the second quarter of 2023, an 8.4% increase
year-over-year. The increase showcases the Company's efforts in continued margin expansion initiatives, including growth of its data program,
in-store productivity programs, and the continued development of private label offerings. |
| • | Operating income for Cannabis Retail was $3.9 million in
the second quarter of 2024, compared to $2.3 million in the second quarter of 2023, an increase of 67.1% year-over-year. |
| • | SNDL's proprietary data licensing program generated revenue
of $3.8 million for the second quarter of 2024, an increase of 46.2% or $1.2 million from the same period in the year prior. |
| • | In June and early July, SNDL launched the Value Buds brand
in British Columbia with the rebranding of 3 stores acquired through the Dutch Love transaction. |
| • | Subsequent to quarter end, the Company opened 2 new stores
under the Value Buds banner, one in Alberta and the other in Ontario. |
As of August 1, 2024, the Spiritleaf store count was
82 (20 corporate stores and 62 franchise stores), the Superette store count was 4 corporate stores, the Firesale store count was 1 corporate
store, and the Value Buds store count was 100 corporate stores.
Cannabis Operations
SNDL has a diverse brand portfolio from value to premium,
emphasizing premium inhalable formats and a full suite of 2.0 products. With enhanced procurement capabilities and plans to continue evolving
toward a cost-effective cultivation and manufacturing operation, the Cannabis Operations segment is a key enabler of SNDL's vertical integration
strategy. Cannabis Operations include the operations of The Valens Company Inc. as of January 18, 2023.
| • | Net revenue for Cannabis Operations for the second quarter
of 2024 was $25.0 million, up 19% from $20.9 million in the second quarter of 2023, mainly as a result of increasing provincial board
and Business-to-Business distribution and a continued focus on consumer innovation, quality and operational efficiencies. |
| • | Gross profit for the segment in the second quarter of 2024
of $3.2 million, an increase of $4.4 million, from negative $1.2 million in the second quarter of 2023. The 367% improvement in gross
profit is largely attributable to several productivity initiatives, including the strategic decision to close the Olds, Alberta facility. |
| • | The Company continued ramping-up cultivation production at
its Atholville, New Brunswick facility, to ensure stable and consistent supply for both its retail Business-to-Business and international
partners as demand increases. |
| • | Operating income for the second quarter of 2024 improved
by $12.3 million over the same period in the prior year, going from negative $14.2 million to negative $1.9 million. The substantial increase
in operating income results from margin expansion, reduced overhead spending, and operational efficiencies. |
| • | Following SNDL's inaugural international export contract
with IM Cannabis Corp in Israel, the Company is pursuing EU-GMP certification at its Atholville facility to expand its international export
footprint further and increase B2B opportunities within emerging global markets such as the UK and Germany. |
Investments
| • | As of June 30, 2024, the Company has deployed capital to
a portfolio of cannabis-related investments with a carrying value of $600.5 million, including $571.2 million to SunStream Bancorp Inc.
("SunStream"). |
| • | In the second quarter of 2024, the investment portfolio generated
positive operating income of $8.5 million compared to a loss of $1.7 million in the same quarter of the prior year. |
| • | SunStream is a joint venture sponsored by SNDL. During 2023,
SunStream directed the formation of the SunStream USA group of companies ("SunStream USA Group") in connection with the
restructuring of certain loans provided by SunStream. SunStream USA Group is anticipated to be a U.S. platform with one or more independent
third-party investors, which will be independently managed and governed. |
| • | On May 2, 2024, SNDL announced that SunStream USA Group would
proceed with acquiring equity positions in U.S. cannabis assets following the completion of its review by Nasdaq, which confirmed that
the proposed structure meets all applicable laws and Nasdaq listing rules. |
| • | At the end of the second quarter of 2024, the credit portfolio
controlled by SunStream comprised five investments: Jushi Holdings Inc., SKYMINT Brands ("Skymint"), Ascend Wellness
Holdings, Surterra Holdings, Inc. d/b/a Parallel ("Parallel"), and Columbia Care Inc. |
| • | Earlier in July 2024, Ascend Wellness Holdings repaid approximately
80% of their outstanding loan balance with SunStream, amounting to US$12 million. On July 31st, 2024, Jushi Holdings Inc. repaid their
full outstanding balance of $53 million with SunStream. Both repayments occurred several months ahead of the maturity date, increasing
SNDL's cash liquidity and enabling the deployment of additional capital to support our growth agenda. |
| • | The previously announced transactions to acquire certain
operations and assets of Parallel and Skymint are anticipated to close in 2024 and are subject to certain conditions and regulatory approvals. |
| • | SNDL continues to monitor local and international regulatory
changes, including the potential US reclassification of marijuana from a Schedule I drug to Schedule III drug under the U.S. Controlled
Substances Act. This decision does not directly affect SNDL's operations, which are located solely in Canada, though it is expected to
have a favourable effect on the SunStream joint venture investments in the United States. |
Equity Position
| • | $783.6 million of unrestricted cash, marketable securities
and investments, including investments in equity-accounted investees, and no outstanding debt at June 30, 2024, resulting in a net book
value of $1.2 billion. |
| • | On November 13, 2023, the Company announced that its board
of directors had approved a renewal of the share repurchase program upon its expiry on November 20, 2023. The Company's share repurchase
program continues to be available to lower the outstanding share float. SNDL will continue to assess opportunities to utilize the program
to the extent that management believes it is in the best interest of SNDL's shareholders. For the three months ended June 30, 2024, the
Company did not purchase common shares for cancellation. |
This press release is intended to be read in conjunction
with the Company's condensed consolidated interim financial statements and the notes thereto for the three and six months ended June 30,
2024, and the accompanying Management's Discussion and Analysis. These documents are available under the Company's profile on SEDAR+ at
www.sedarplus.ca and EDGAR at www.sec.gov/edgar.shtml.
CONFERENCE CALL
The Company will hold a conference call and webcast
presentation at 10:00 a.m. EDT (8:00 a.m. MDT) on Friday, August 2, 2024.
WEBCAST ACCESS
To access the live webcast of the call, please visit the following link:
https://edge.media-server.com/mmc/p/7jsrnxfd
REPLAY
A replay of the webcast will be available at https://sndl.com/financials/quarterly-results/default.aspx
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, Superette and Firesale. SNDL is a licensed cannabis
producer and one of the largest vertically integrated cannabis companies in Canada specializing in low-cost biomass sourcing, indoor cultivation,
product innovation, low-cost manufacturing facilities, and a cannabis brand portfolio that includes Top Leaf, Contraband, Citizen
Stash, Sundial Cannabis, Palmetto, Spiritleaf Selects Bon Jak, Versus, Value Buds, Namaste, Re-up, Grasslands and Vacay. SNDL's investment
portfolio seeks to deploy strategic capital through direct and indirect investments and partnerships throughout the North American cannabis
industry. For more information on SNDL, please go to https://sndl.com/.
Forward-Looking Information Cautionary Statement
This news release includes statements containing certain "forward-looking information" within the meaning of applicable securities
law ("forward-looking statements"), including, but not limited to, statements regarding the Company's operational goals,
the Company's margin improvement initiatives, the Company's ability to achieve long-term, sustainable profitability, growth and efficiencies,
the Company's long-term strategic plan, expectations with respect to the restructuring project, the benefits of the Company's Investment
Segment portfolio, expectations with respect to sharing information with investors, the Company's approach to its Wine and Beyond banner,
the Company's retail strategy, expectations with respect to the Company's Cannabis Operations segment, the Company's vertical integration
strategy, expectations with respect to the Company's pursuant of EU-GMP certification, expectations with respect to the ability of the
Company's to expand its international export footprint, the Company's proprietary data licensing program, expansion of product offerings
(including the expected expansion of the Company's private labels), performance of the Company's investments, including through the SunStream
joint venture and SunStream USA Group, expectations with respect to the SunStream USA Group, the timing and closing of the transactions
with Parallel and Skymint, potential local and international regulatory changes, the share repurchase program, including the anticipated
benefits thereof, and any other potential forms of shareholder value creation. Forward-looking statements are frequently characterized
by words such as "aim", "anticipate", "assume", "believe", "contemplate", "continue",
"could", "due", "estimate", "expect", "goal", "intend", "may", "objective",
"plan", "predict", "potential", "positioned", "pioneer", "seek", "should",
"target", "will", "would", and other similar expressions that are predictions of or indicate future events
and future trends, or the negative of these terms or other comparable terminology. These forward-looking statements are based on current
expectations, estimates, forecasts and projections about the Company's business and the industry in which it operates and management's
beliefs and assumptions and are not guarantees of future performance or development and involve known and unknown risks, uncertainties
and other factors that are in some cases beyond its control. 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. Please see "Risk Factors"
in the Company's Annual Information Form dated March 20, 2024, and the risk factors included in our other public disclosure documents
for a discussion of the material risk factors that could cause actual results to differ materially from the forward-looking information.
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.
Condensed Consolidated Interim Statement of Loss
and Comprehensive Loss
(Unaudited - expressed in thousands of Canadian dollars, except per share amounts)
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Three months ended
June 30 |
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2024 |
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|
2023 |
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| Net revenue |
|
|
228,127 |
|
|
|
231,916 |
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| Cost of sales |
|
|
169,963 |
|
|
|
179,983 |
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| Gross profit |
|
|
58,164 |
|
|
|
51,933 |
|
| |
|
|
|
|
|
|
|
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| Investment income (loss) |
|
|
3,204 |
|
|
|
(599) |
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| Share of profit of equity-accounted investees |
|
|
5,252 |
|
|
|
(936) |
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| |
|
|
|
|
|
|
|
|
| General and administrative |
|
|
48,036 |
|
|
|
52,727 |
|
| Sales and marketing |
|
|
3,439 |
|
|
|
4,104 |
|
| Research and development |
|
|
109 |
|
|
|
20 |
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| Depreciation and amortization |
|
|
13,519 |
|
|
|
13,443 |
|
| Share-based compensation |
|
|
4,883 |
|
|
|
3,893 |
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| Restructuring (recovery) costs |
|
|
221 |
|
|
|
4,042 |
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| Asset impairment |
|
|
919 |
|
|
|
1,658 |
|
| Loss on disposition of assets |
|
|
328 |
|
|
|
77 |
|
| Operating income (loss) |
|
|
(4,834) |
|
|
|
(29,566) |
|
| |
|
|
|
|
|
|
|
|
| Other income (expenses) |
|
|
(1,417) |
|
|
|
(422) |
|
| Loss before income tax |
|
|
(6,251) |
|
|
|
(29,988) |
|
| Income tax recovery |
|
|
1,284 |
|
|
|
- |
|
| Net loss from continuing operations |
|
|
(4,967) |
|
|
|
(29,988) |
|
| Net loss from discontinued operations |
|
|
- |
|
|
|
(3,170) |
|
| Net loss |
|
|
(4,967) |
|
|
|
(33,158) |
|
| |
|
|
|
|
|
|
|
|
| Equity-accounted investees - share of other comprehensive income (loss) |
|
|
4,300 |
|
|
|
(11,621) |
|
| Gain on translation of foreign operations |
|
|
- |
|
|
|
(5) |
|
| Comprehensive income (loss) |
|
|
(667) |
|
|
|
(44,784) |
|
| |
|
|
|
|
|
|
|
|
| Net loss from continuing operations attributable to: |
|
|
|
|
|
|
|
|
| Owners of the Company |
|
|
(5,772) |
|
|
|
(29,350) |
|
| Non-controlling interest |
|
|
805 |
|
|
|
(638) |
|
| |
|
|
(4,967) |
|
|
|
(29,988) |
|
| Net loss attributable to: |
|
|
|
|
|
|
|
|
| Owners of the Company |
|
|
(5,772) |
|
|
|
(32,520) |
|
| Non-controlling interest |
|
|
805 |
|
|
|
(638) |
|
| |
|
|
(4,967) |
|
|
|
(33,158) |
|
| Comprehensive income (loss) attributable to: |
|
|
|
|
|
|
|
|
| Owners of the Company |
|
|
(1,472) |
|
|
|
(44,146) |
|
| Non-controlling interest |
|
|
805 |
|
|
|
(638) |
|
Condensed Consolidated Interim Statement of Financial
Position
(Unaudited - expressed in thousands of Canadian dollars)
| As at |
June 30, 2024 |
|
December 31, 2023 |
|
| |
|
|
|
|
|
|
| Assets |
|
|
|
|
|
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| Current assets |
|
|
|
|
|
|
| Cash and cash equivalents |
|
182,934 |
|
|
195,041 |
|
| Restricted cash |
|
19,972 |
|
|
19,891 |
|
| Marketable securities |
|
156 |
|
|
225 |
|
| Accounts receivable |
|
22,361 |
|
|
27,059 |
|
| Biological assets |
|
868 |
|
|
429 |
|
| Inventory |
|
132,912 |
|
|
129,060 |
|
| Prepaid expenses and deposits |
|
19,303 |
|
|
22,464 |
|
| Investments |
|
28,514 |
|
|
3,400 |
|
| Assets held for sale |
|
19,051 |
|
|
6,375 |
|
| Net investment in subleases |
|
2,819 |
|
|
2,970 |
|
| |
|
428,890 |
|
|
406,914 |
|
| Non-current assets |
|
|
|
|
|
|
| Long-term deposits and receivables |
|
6,232 |
|
|
4,837 |
|
| Right of use assets |
|
119,473 |
|
|
129,679 |
|
| Property, plant and equipment |
|
132,362 |
|
|
152,916 |
|
| Net investment in subleases |
|
16,572 |
|
|
18,396 |
|
| Intangible assets |
|
73,961 |
|
|
73,149 |
|
| Investments |
|
835 |
|
|
29,660 |
|
| Equity-accounted investees |
|
571,178 |
|
|
538,331 |
|
| Goodwill |
|
124,552 |
|
|
119,282 |
|
| Total assets |
|
1,474,055 |
|
|
1,473,164 |
|
| |
|
|
|
|
|
|
| Liabilities |
|
|
|
|
|
|
| Current liabilities |
|
|
|
|
|
|
| Accounts payable and accrued liabilities |
|
62,389 |
|
|
68,210 |
|
| Lease liabilities |
|
32,618 |
|
|
30,537 |
|
| Derivative warrants |
|
3,900 |
|
|
4,400 |
|
| |
|
98,907 |
|
|
103,147 |
|
| Non-current liabilities |
|
|
|
|
|
|
| Lease liabilities |
|
124,994 |
|
|
136,492 |
|
| Other liabilities |
|
6,236 |
|
|
4,185 |
|
| Total liabilities |
|
230,137 |
|
|
243,824 |
|
| |
|
|
|
|
|
|
| Shareholders' equity |
|
|
|
|
|
|
| Share capital |
|
2,380,753 |
|
|
2,375,950 |
|
| Warrants |
|
667 |
|
|
2,260 |
|
| Contributed surplus |
|
79,568 |
|
|
73,014 |
|
| Contingent consideration |
|
2,279 |
|
|
2,279 |
|
| Accumulated deficit |
|
(1,269,177) |
|
|
(1,260,851) |
|
| Accumulated other comprehensive income |
|
33,751 |
|
|
19,417 |
|
| Total shareholders' equity |
|
1,227,841 |
|
|
1,212,069 |
|
| Non-controlling interest |
|
16,077 |
|
|
17,271 |
|
| Total liabilities and shareholders' equity |
|
1,474,055 |
|
|
1,473,164 |
|
Condensed Consolidated Interim Statement of Cash
Flows
(Unaudited - expressed in thousands of Canadian dollars)
| |
|
Three months ended
June 30 |
|
| |
|
2024 |
|
|
2023 |
|
| Cash provided by (used in): |
|
|
|
|
|
|
|
|
| Operating activities |
|
|
|
|
|
|
|
|
| Net loss for the period |
|
|
(4,967) |
|
|
|
(33,158) |
|
| Adjustments for: |
|
|
|
|
|
|
|
|
| Income tax recovery |
|
|
(1,284) |
|
|
|
- |
|
| Interest and fee income |
|
|
(3,218) |
|
|
|
(3,421) |
|
| Change in fair value of biological assets |
|
|
(336) |
|
|
|
1,413 |
|
| Share-based compensation |
|
|
4,883 |
|
|
|
3,893 |
|
| Depreciation and amortization |
|
|
14,139 |
|
|
|
14,674 |
|
| Loss on disposition of assets |
|
|
328 |
|
|
|
77 |
|
| Inventory impairment and obsolescence |
|
|
1,069 |
|
|
|
4,291 |
|
| Finance costs, net |
|
|
2,157 |
|
|
|
2,458 |
|
| Change in estimate of fair value of derivative warrants |
|
|
(1,800) |
|
|
|
(2,240) |
|
| Unrealized foreign exchange loss |
|
|
51 |
|
|
|
(72) |
|
| Asset impairment |
|
|
919 |
|
|
|
1,658 |
|
| Share of (profit) of equity-accounted investees |
|
|
(5,252) |
|
|
|
936 |
|
| Realized loss on settlement of marketable securities |
|
|
- |
|
|
|
48,988 |
|
| Unrealized (gain) loss on marketable securities |
|
|
14 |
|
|
|
(44,968) |
|
| Proceeds from settlement of marketable securities |
|
|
- |
|
|
|
3,437 |
|
| Interest received |
|
|
2,649 |
|
|
|
3,217 |
|
| Change in non-cash working capital |
|
|
(4,650) |
|
|
|
(14,193) |
|
| Net cash provided by (used in) operating activities from continuing operations |
|
|
4,702 |
|
|
|
(13,010) |
|
| Net cash provided by operating activities from discontinued operations |
|
|
- |
|
|
|
4,167 |
|
| Net cash provided by (used in) operating activities |
|
|
4,702 |
|
|
|
(8,843) |
|
| Investing activities |
|
|
|
|
|
|
|
|
| Additions to property, plant and equipment |
|
|
(1,190) |
|
|
|
(1,247) |
|
| Additions to intangible assets |
|
|
- |
|
|
|
(39) |
|
| Changes to investments |
|
|
1,235 |
|
|
|
125 |
|
| Changes to equity-accounted investees |
|
|
- |
|
|
|
(9,443) |
|
| Proceeds from disposal of property, plant and equipment |
|
|
188 |
|
|
|
55 |
|
| Acquisitions, net of cash acquired |
|
|
(1,654) |
|
|
|
- |
|
| Change in non-cash working capital |
|
|
75 |
|
|
|
1,586 |
|
| Net cash used in investing activities from continuing operations |
|
|
(1,346) |
|
|
|
(8,963) |
|
| Net cash used in investing activities from discontinued operations |
|
|
- |
|
|
|
- |
|
| Net cash used in investing activities |
|
|
(1,346) |
|
|
|
(8,963) |
|
| Financing activities |
|
|
|
|
|
|
|
|
| Change in restricted cash |
|
|
150 |
|
|
|
(76) |
|
| Payments on lease liabilities, net |
|
|
(9,706) |
|
|
|
(10,116) |
|
| Proceeds from common shares, net of costs |
|
|
(57) |
|
|
|
- |
|
| Issuance of common shares by subsidiaries |
|
|
174 |
|
|
|
- |
|
| Change in non-cash working capital |
|
|
63 |
|
|
|
200 |
|
| Net cash used in financing activities from continuing operations |
|
|
(9,376) |
|
|
|
(9,992) |
|
| Net cash used in financing activities from discontinued operations |
|
|
- |
|
|
|
- |
|
| Net cash used in financing activities |
|
|
(9,376) |
|
|
|
(9,992) |
|
| Change in cash and cash equivalents |
|
|
(6,020) |
|
|
|
(27,798) |
|
| Cash and cash equivalents, beginning of period |
|
|
188,954 |
|
|
|
213,253 |
|
| Cash and cash equivalents, end of period |
|
|
182,934 |
|
|
|
185,455 |
|
NON-IFRS MEASURES
Certain specified financial measures in this news release are non-IFRS measures. These terms are not defined by IFRS and, therefore, may
not be comparable to similar measures reported by other companies. These non-IFRS financial measures should not be considered in isolation
or as an alternative for or superior to measures of performance prepared in accordance with IFRS. These measures are presented and
described in order to provide shareholders and potential investors with additional measures in understanding the Company's operating results
in the same manner as the management team.
ADJUSTED OPERATING INCOME (LOSS)
Adjusted operating income (loss) is a non-IFRS financial measure which the Company uses to evaluate its operating performance. Adjusted
operating income (loss) provides information to investors, analysts, and others to aid in understanding and evaluating the Company's operating
results in a similar manner to its management team. The Company defines adjusted operating income (loss) as operating income (loss) less
restructuring costs (recovery), goodwill and intangible asset impairments and asset impairments triggered by restructuring activities.
The following tables reconcile adjusted operating
income (loss) to operating income (loss) for the periods noted.
| ($000s) |
Liquor
Retail |
|
Cannabis
Retail |
|
Cannabis
Operations |
|
Investments |
|
Corporate |
|
Total |
|
| Three months ended June 30, 2024 |
|
| Operating income (loss) |
|
8,481 |
|
|
3,902 |
|
|
(1,916) |
|
|
8,456 |
|
|
(23,757) |
|
|
(4,834) |
|
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Restructuring costs (recovery) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
221 |
|
|
221 |
|
| Adjusted operating income (loss) |
|
8,481 |
|
|
3,902 |
|
|
(1,916) |
|
|
8,456 |
|
|
(23,536) |
|
|
(4,613) |
|
| ($000s) |
Liquor
Retail |
|
Cannabis
Retail |
|
Cannabis
Operations |
|
Investments |
|
Corporate |
|
Total |
|
| Three months ended June 30, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating income (loss) |
|
8,207 |
|
|
2,335 |
|
|
(14,206) |
|
|
(1,660) |
|
|
(24,242) |
|
|
(29,566) |
|
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Restructuring costs |
|
- |
|
|
- |
|
|
1,282 |
|
|
- |
|
|
2,760 |
|
|
4,042 |
|
| Adjusted operating income (loss) |
|
8,207 |
|
|
2,335 |
|
|
(12,924) |
|
|
(1,660) |
|
|
(21,482) |
|
|
(25,524) |
|
FREE CASH FLOW
Free cash flow is a non-IFRS financial measure which
the Company uses to evaluate its financial performance. Free cash flow provides information which management believes to be useful to
investors, analysts and others in understanding and evaluating the Company's ability to generate positive cash flows as it removes cash
used for non-operational items. The Company defines free cash flow as the total change in cash and cash equivalents less cash used for
common share repurchases, dividends (if any), changes to debt instruments, changes to long-term investments, net cash used for acquisitions
plus cash provided by dispositions (if any).
The following table reconciles free cash flow to change
in cash and cash equivalents for the periods noted.
| |
Three months ended
June 30 |
|
| ($000s) |
2024 |
|
2023 |
|
| Change in cash and cash equivalents |
|
(6,020) |
|
|
(27,798) |
|
| Adjustments: |
|
|
|
|
|
|
| Repurchase of common shares |
|
- |
|
|
- |
|
| Changes to long-term investments |
|
(1,235) |
|
|
9,318 |
|
| Acquisitions, net of cash acquired |
|
1,654 |
|
|
- |
|
| Free cash flow |
|
(5,601) |
|
|
(18,480) |
|
View original content to download multimedia:https://www.prnewswire.com/news-releases/sndl-reports-second-quarter-2024-financial-and-operational-results-302213153.html
SOURCE SNDL Inc.
View original content to download multimedia: http://www.newswire.ca/en/releases/archive/August2024/01/c8751.html
%CIK: 0000176660
For further information: For more information: Tomas Bottger,
SNDL Inc., O: 1.587.327.2017, E: investors@sndl.com
CO: SNDL Inc.
CNW 22:10e 01-AUG-24
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