Full Press Release Details
SNDL Reports Third Quarter
2024 Financial and Operational Results
The Company reports record
Gross Margin and positive Cash Flow and
CALGARY, AB, Nov. 5, 2024 /CNW/ - SNDL Inc. (NASDAQ:
SNDL) ("SNDL" or the "Company") reported its financial and operational results for the third quarter
ended September 30, 2024. All financial information in this press release is reported in millions of Canadian dollars unless otherwise
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. EST (8:00 a.m. MST) on Tuesday, November 5, 2024. The conference call details can be found below.
THIRD QUARTER 2024 FINANCIAL AND OPERATIONAL HIGHLIGHTS
"We are pleased with the substantial progress
reflected in our results for the third quarter of 2024 as we advance towards sustainable profitability. Our team delivered a record gross
margin, positive cash flow and free cash flow, and closed the quarter with over a quarter billion dollars in unrestricted cash and zero
debt. We are materially improving our operational performance while executing multiple strategic initiatives that we believe will solidify
our foundation and drive sustained, profitable growth," said Zach George, Chief Executive Officer of SNDL. "Our strong balance
sheet serves as a beacon for future opportunities, allowing us to thoughtfully deploy capital into organic and inorganic investments with
attractive, risk-adjusted returns. I am more confident than ever that our team - setting new records with each quarter - has the expertise
and drive to unlock SNDL's significant potential."
THIRD QUARTER 2024 KEY FINANCIAL METRICS
| OPERATING SEGMENTS | ||||||||||||||||||
| ($000s) | Liquor Retail | Cannabis Retail | Cannabis Operations | Investments | Corporate | Total | ||||||||||||
| Three months ended September 30, 2024 | ||||||||||||||||||
| Net revenue | 144,565 | 81,144 | 25,007 | - | (13,824) | 236,892 | ||||||||||||
| Gross profit | 36,951 | 20,710 | 5,307 | - | - | 62,968 | ||||||||||||
| Operating income (loss) | 11,795 | 4,395 | (703) | (7,824) | (26,174) | (18,511) | ||||||||||||
| Adjusted operating income (loss) (1) | 11,795 | 4,395 | (578) | (7,824) | (24,381) | (16,593) | ||||||||||||
| Three months ended September 30, 2023 | ||||||||||||||||||
| Net revenue | 151,801 | 75,539 | 20,954 | - | (10,699) | 237,595 | ||||||||||||
| Gross profit | 37,263 | 20,046 | (8,704) | - | - | 48,605 | ||||||||||||
| Operating income (loss) | 8,278 | 3,432 | (13,957) | 9,886 | (24,023) | (16,384) | ||||||||||||
| Adjusted operating income (loss) (1) | 8,278 | 3,432 | (14,153) | 9,886 | (22,992) | (15,549) |
THIRD QUARTER 2024 RESULTS
SNDL's business is operated and reported in four segments:
Liquor Retail, Cannabis Retail, Cannabis Operations and Investments.
SNDL is Canada's largest private sector liquor
retailer, operating 166 locations, predominantly in Alberta, under its three retail banners: "Wine and Beyond",
"Liquor Depot", and "Ace Liquor".
As of November 4, 2024, the Ace Liquor store count
was 134, the Liquor Depot store count was 19, and the Wine and Beyond store count was 13.
SNDL is Canada's largest private-sector cannabis
retailer by number of stores, operating 187 locations under its three retail banners: "Value Buds", "Spiritleaf",
and "Superette". 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.
As of November 4, 2024, the Spiritleaf store count
was 81 (20 corporate stores and 61 franchise stores), the Superette store count was 4 corporate stores, and the Value Buds store count
was 102 corporate stores.
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
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 nine months ended September
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.
The Company will hold a conference call and webcast
presentation at 10:00 a.m. EST (8:00 a.m. MST) on Tuesday, November 5, 2024.
To access the live webcast of the call, please visit the following link:
A replay of the webcast will be available at https://sndl.com/financials/quarterly-results/default.aspx
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
pursuit 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)
| Three months ended September 30 | ||||||||
| 2024 | 2023 | |||||||
| Net revenue | 236,892 | 237,595 | ||||||
| Cost of sales | 173,924 | 188,990 | ||||||
| Gross profit | 62,968 | 48,605 | ||||||
| Investment income | 5,577 | 3,416 | ||||||
| Share of profit (loss) of equity-accounted investees | (13,401) | 6,581 | ||||||
| General and administrative | 49,980 | 48,235 | ||||||
| Sales and marketing | 2,813 | 3,271 | ||||||
| Research and development | 76 | 57 | ||||||
| Depreciation and amortization | 13,389 | 15,545 | ||||||
| Share-based compensation | 5,702 | 5,373 | ||||||
| Restructuring (recovery) costs | 1,918 | 708 | ||||||
| Asset impairment | (258) | 1,783 | ||||||
| Loss on disposition of assets | 35 | 14 | ||||||
| Operating income (loss) | (18,511) | (16,384) | ||||||
| Other income (expenses) | 609 | (5,443) | ||||||
| Loss before income tax | (17,902) | (21,827) | ||||||
| Income tax recovery (expense) | (1,434) | - | ||||||
| Net loss from continuing operations | (19,336) | (21,827) | ||||||
| Net loss from discontinued operations | - | - | ||||||
| Net loss | (19,336) | (21,827) | ||||||
| Equity-accounted investees - share of other comprehensive income (loss) | (4,802) | 11,124 | ||||||
| Comprehensive income (loss) | (24,138) | (10,703) | ||||||
| Net loss from continuing operations attributable to: | ||||||||
| Owners of the Company | (19,328) | (21,784) | ||||||
| Non-controlling interest | (8) | (43) | ||||||
| (19,336) | (21,827) | |||||||
| Net loss attributable to: | ||||||||
| Owners of the Company | (19,328) | (21,784) | ||||||
| Non-controlling interest | (8) | (43) | ||||||
| (19,336) | (21,827) | |||||||
| Comprehensive income (loss) attributable to: | ||||||||
| Owners of the Company | (24,130) | (10,660) | ||||||
| Non-controlling interest | (8) | (43) | ||||||
| (24,138) | (10,703) |
Condensed Consolidated Interim Statement of Financial Position
(Unaudited - expressed in thousands of Canadian dollars)
| As at | September 30, 2024 | December 31, 2023 | |||||
| Assets | |||||||
| Current assets | |||||||
| Cash and cash equivalents | 262,976 | 195,041 | |||||
| Restricted cash | 20,215 | 19,891 | |||||
| Marketable securities | 483 | 225 | |||||
| Accounts receivable | 24,589 | 27,059 | |||||
| Biological assets | 901 | 429 | |||||
| Inventory | 127,863 | 129,060 | |||||
| Prepaid expenses and deposits | 15,507 | 22,464 | |||||
| Investments | 22,900 | 3,400 | |||||
| Assets held for sale | 19,051 | 6,375 | |||||
| Net investment in subleases | 2,927 | 2,970 | |||||
| 497,412 | 406,914 | ||||||
| Non-current assets | |||||||
| Long-term deposits and receivables | 3,702 | 4,837 | |||||
| Right of use assets | 118,409 | 129,679 | |||||
| Property, plant and equipment | 128,310 | 152,916 | |||||
| Net investment in subleases | 16,820 | 18,396 | |||||
| Intangible assets | 77,019 | 73,149 | |||||
| Investments | 26,413 | 29,660 | |||||
| Equity-accounted investees | 451,068 | 538,331 | |||||
| Goodwill | 123,924 | 119,282 | |||||
| Total assets | 1,443,077 | 1,473,164 | |||||
| Liabilities | |||||||
| Current liabilities | |||||||
| Accounts payable and accrued liabilities | 54,038 | 68,210 | |||||
| Lease liabilities | 34,541 | 30,537 | |||||
| Derivative warrants | 52 | 4,400 | |||||
| 88,631 | 103,147 | ||||||
| Non-current liabilities | |||||||
| Lease liabilities | 122,959 | 136,492 | |||||
| Other liabilities | 7,214 | 4,185 | |||||
| Total liabilities | 218,804 | 243,824 | |||||
| Shareholders' equity | |||||||
| Share capital | 2,383,233 | 2,375,950 | |||||
| Warrants | 667 | 2,260 | |||||
| Contributed surplus | 81,591 | 73,014 | |||||
| Contingent consideration | 2,279 | 2,279 | |||||
| Accumulated deficit | (1,288,505) | (1,260,851) | |||||
| Accumulated other comprehensive income | 28,949 | 19,417 | |||||
| Total shareholders' equity | 1,208,214 | 1,212,069 | |||||
| Non-controlling interest | 16,059 | 17,271 | |||||
| Total liabilities and shareholders' equity | 1,443,077 | 1,473,164 |
Condensed Consolidated Interim Statement of Cash Flows
(Unaudited - expressed in thousands of Canadian dollars)
| Three months ended September 30 | |||||||||||
| 2024 | 2023 | ||||||||||
| Cash provided by (used in): | |||||||||||
| Operating activities | |||||||||||
| Net loss for the period | (19,336) | (21,827) | |||||||||
| Adjustments for: | |||||||||||
| Income tax expense | 1,434 | - | |||||||||
| Interest and fee income | (5,577) | (3,445) | |||||||||
| Change in fair value of biological assets | 167 | 1,819 | |||||||||
| Share-based compensation | 5,702 | 5,373 | |||||||||
| Depreciation and amortization | 13,970 | 16,602 | |||||||||
| Loss on disposition of assets | 35 | 14 | |||||||||
| Inventory impairment and obsolescence | 413 | 9,126 | |||||||||
| Finance costs, net | 1,740 | 2,142 | |||||||||
| Change in estimate of fair value of derivative warrants | (3,848) | 2,840 | |||||||||
| Unrealized foreign exchange loss | 80 | 68 | |||||||||
| Asset impairment (reversal) | (258) | 1,783 | |||||||||
| Share of (profit) loss of equity-accounted investees | 13,401 | (6,581) | |||||||||
| Realized loss on settlement of marketable securities | - | 46,082 | |||||||||
| Unrealized (gain) loss on marketable securities | - | (46,053) | |||||||||
| Additions to marketable securities | (327) | - | |||||||||
| Proceeds from settlement of marketable securities | - | 3,241 | |||||||||
| Income distributions from equity-accounted investees | 10,715 | - | |||||||||
| Interest received | 4,496 | 3,325 | |||||||||
| Change in non-cash working capital | (13) | 13,033 | |||||||||
| Net cash provided by operating activities from continuing operations | 22,794 | 27,542 | |||||||||
| Net cash provided by operating activities from discontinued operations | - | - | |||||||||
| Net cash provided by operating activities | 22,794 | 27,542 | |||||||||
| Investing activities | |||||||||||
| Additions to property, plant and equipment | (1,706) | (3,042) | |||||||||
| Additions to intangible assets | (2,421) | (32) | |||||||||
| Changes to investments | (18,952) | 195 | |||||||||
| Capital distributions from equity-accounted investees | 89,758 | - | |||||||||
| Proceeds from disposal of property, plant and equipment | - | 1,150 | |||||||||
| Change in non-cash working capital | (191) | 730 | |||||||||
| Net cash provided by (used in) investing activities | 66,488 | (999) | |||||||||
| Financing activities | |||||||||||
| Change in restricted cash | (243) | (205) | |||||||||
| Payments on lease liabilities, net | (9,780) | (9,793) | |||||||||
| Change in non-cash working capital | 783 | (17) | |||||||||
| Net cash used in financing activities | (9,240) | (10,015) | |||||||||
| Change in cash and cash equivalents | 80,042 | 16,528 | |||||||||
| Cash and cash equivalents, beginning of period | 182,934 | 185,455 | |||||||||
| Cash and cash equivalents, end of period | 262,976 | 201,983 |
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