SNDL Sees Revenue Hit $712.2 Million In 2022, Suggests It May Acquire Multi-State Operator
SNDL Inc (NASDAQ: SNDL), formerly known as Sundial Growers, continues to see growth in its operation, reporting this morning Q4 net revenues of $240.4 million, a 4% improvement on a quarter over quarter basis.
“2022 was another transformational year for SNDL. We increased the sustainability of our business model by achieving record-breaking revenue and gross margin as well as positive and increasing cash provided from operating activities in our two most recent quarters,” commented CEO Zach George.
Revenue was largely driven by the firms liquor segment, which produced revenues of $159.7 million, followed by cannabis retail at $68.4 million and cannabis operations at $12.3 million. All three segments managed to produce sequential improvements over the third quarter.
Gross margins however took a hit in the fourth quarter, with SNDL posting gross margins of $43.6 million for the three month period, versus $50.3 million in the third quarter. The decline is said to be a result of inventory impairments, and “monetization of low value inventory.” Liquor retail saw margins improve to $36.9 million, while cannabis retail saw margins of $15.7 million. Cannabis operations however had negative gross margins of $9.0 million.
READ: SNDL Finally Acquires Zenabis Assets Via CCAA Process
Margins however still came short relative to the firms expenses, with the firm reporting a loss before taxes of $160.7 million, and a net loss for the quarter of $161.6 million. The loss is said to primarily have been driven by a $88.0 million write-off related to the purchase of Alcanna. Adjusted EBITDA for the quarter meanwhile was negative $7.5 million.
“Despite the positive milestones and growth we have achieved, SNDL’s shares are trading at near all-time lows, well below our book value and materially less than 1X our annualized revenue. We must continue to find ways to unlock value and evaluate all options regarding the future of our business and operating segments,” continued George.
For the full fiscal year, SNDL saw its revenue hit $712.2 million, an increase of 1,170% over 2021, thanks in large part to the firms strategy of growth by acquisition. Gross margins for the full year hit $140.4 million.
The net loss for the full fiscal year meanwhile hit $372.4 million, thanks in large part to inventory and asset impairments of $203.0 million over the course of the year. Adjusted EBITDA for 2022 came in at negative $15.8 million.
Despite this, the company currently has $918.0 million in cash, marketable securities, and long-term investments and no debt. And its SunStream portfolio, where it has investments of $519.3 million, is currently in the process of restructuring two credit exposures in the US, where it has investments in six multi state operators. The firm suggested that it “may become a majority owner of one or more” multi-state operators in 2023 as a result.
SunStream currently has investments in AFC Gamma, Skymint Brands, Parallel, Columbia Care, Ascend Wellness, and Jushi Holdings.
SNDL last traded at $1.44 on the Nasdaq.
Information for this briefing was found via Sedar and Refinitiv. 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.
