Cronos Group Posts Fourth Quarter Revenues Of $17.0 Million, Net Loss Of $111.7 Million

Cronos Group (TSX: CRON) (NASDAQ: CRON) this morning reported its fourth quarter and full year fiscal 2020 financial results. The company reported fourth quarter consolidated net revenue of $17.0 million, along with a loss of $111.7 million. For the full fiscal year, the company reported revenues of $46.7 million, along with a net loss of $75.3 million.

Revenues were up on a quarter over quarter basis, growing 50.0% from $11.4 million to $17.0 million. However, the company has managed to post a gross loss yet again thanks to inventory impairments, with the firm reporting a loss of $14.9 million for the quarter on a gross basis.

On an annual basis, things did not look much better. The company overall saw its revenue grow 97% year over year from $23.8 million to $46.7 million, yet still posted a gross loss of $25.8 million, compared to a gross loss of $17.6 million in the prior year, leaving investors wondering what the company is doing. Writedowns for the year amounted to $26.1 million, which is on top of the $46.5 million cost of sales reported by the company.

Things fail to get any better when looking at operating expenses, with the company reporting total operational expenses of $43.5 million for the quarter, a figure many multiples higher than net revenue. The largest expense line item here is general and administrative, which came in at $19.5 million, followed by sales and marketing of $13.5 million and research and development of $7.4 million.

The company was also further impacted over the quarter by a decline in its gain on derivative liabilities under the other expenses heading, which declined by $53.5 million as the result of a rising share price, and contributing significantly to the firms overall net loss for the quarter.

Looking to the balance sheet, the company saw its cash position fall from $1,097.8 million to $1,078.0 million, while short term investments rose from $202.9 million to $211.8 million. Receivables were up slightly, to $8.9 million from $6.1 million, while inventory tumbled from $56.4 million to $44.0 million. Total current assets overall fell from $1,394.0 million to $1,372.2 million.

Accounts payable meanwhile rose from $39.0 million to $42.1 million, while its derivative liabilities climbed significantly, rising from $102.7 million to $163.4 million. Overall, total current liabilities grew from $142.9 million to $206.8 million.

Cronos Group last traded at $13.58 on the TSX.

Information for this briefing was found via Sedar, Sedi and Cronos Group. The author has no securities or affiliations related to these organizations. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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