Hexo Corp (TSX: HEXO) (NYSE: HEXO) this morning reported its third quarter 2020 financial results, posting revenues of $22.1 million, up from $17.0 million in the previous quarter, along with a net loss of $19.5 million.
Despite the significant increase in revenue, the company has yet to show a path to profitability. Gross margins before fair value adjustments came in at $8.8 million, far less than the firms operating expenses of $26.8 million for the quarter. General and administrative was the largest expense at $11.2 million, which alone was more than any gross profit exhibited by the firm within the quarter.
Additional expenses during the quarter include share based compensation of $6.2 million, marketing and promotion of $2.1 million, depreciation at $1.6 million and research and development at $1.0 million. Finally, the company also realized a loss on the disposal of property of $3.2 million.
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Looking to the balance sheet, Hexo saw its cash position grow to $94.3 million from that of $80.4 million, a small figure considering the company raised $46 million in equity during the quarter. Receivables grew mildly from $14.0 million to $16.82 million, while commodity taxes receivable and other receivables fell to $12.2 million from $21.2 million. Inventory grew significant during the quarter, jumping from $93.5 million to $105.2 million. Total current assets was up slightly overall, from $257.4 million to $259.5 million.
Looking to the liability side of things, accounts payable was down significantly from $45.1 million to $26.7 million, while warrant liabilities fell from $7.0 million to $2.0 million. Total current liabilities fell from $68.2 million to $43.8 million, largely a result of the firm finally settling some payables.
Hexo Corp last traded at $1.01 on the NYSE.
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.
