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.
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.
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.