Hexo Corp (TSX: HEXO) (NYSE: HEXO) reported its fiscal first quarter 2021 financial results this morning after announcing that it had seen its share consolidation approved earlier in the day. The quarterly was reportedly a record in terms of gross sales for the company, with gross figures hitting $41.3 million before excise taxes brought net revenue down to $29.5 million. Despite the record quarter however, the company still managed to post a net loss of $4.2 million.
Revenues were up on a quarterly basis, rising from $27.1 million to $29.5 million, an increase of 8.6% quarter over quarter. Net loss improved significantly as well, however that was largely a result in writedowns forcing a loss of $169.5 million in the fiscal fourth quarter of 2020. Revenues from the quarter on a gross basis saw $35.9 million derived from retail sales, while $3.3 million were a function of cannabis beverage sales. Medical revenues amounted to just $0.6 million, while wholesale came in at $0.4 million, and international sales totaled $1.1 million.
Following a cost of goods sold of $17.5 million along with associated excise taxes, the company managed to post a gross profit of $11.9 million before fair value adjustments. Operating expenses meanwhile came in at $20.8 million, meaning the company still has no reached profitability despite record sales. Selling, general and administrative expenses made up the bulk of operating expenditures at $11.9 million, followed by share based compensation of $3.0 million. Marketing and promotion accounts for $2.0 million, while R&D and depreciation each accounted for a little over $1.0 million in expenditures.
Other expenses extended the loss experienced this quarter, with interest and financing expenses of $2.3 million more than offsetting other income of $1.6 million. The company also posted a loss from its investment in associates and joint ventures of $1.1 million.
Looking to the balance sheet, Hexo saw its cash position slide from $184.2 million to $149.8 million, with the company seeing a sizable $23.2 million being shifted to restricted cash during the quarter, while also using $3.3 million in financing activities and $6.1 million in operating activities. Restricted funds as a result grew from $8.3 million to $31.4 million during the three month period ended October 31, 2020.
Trade receivables also grew, climbing from $19.4 million to $22.0 million, while taxes recoverable and other receivables declined from $16.7 million to $13.3 million. Inventory was final notable increase in terms of current assets, climbing from $65.0 million to $74.6 million. Total current assets overall increased somewhat marginally, climbing from $305.7 million to $308.3 million during the quarter.
Accounts payable also increased during the quarter, climbing from $32.5 million to $38.5 million, while excise taxes payable declined from $7.1 million to $4.1 million. The other notable mover here was the current term loans, falling from $29.9 million to $3.1 million. This however was not the result of a debt repayment, but rather certain debt going from current to long term once certain covenants were in compliance. Total current liabilities overall fell from $82.5 million to $58.0 million, largely a function of that term loan being transferred back to non-current liabilities.
Hexo Corp last traded at $1.28 on the TSX.
Information for this briefing was found via Sedar and Hexo Corp. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.