Sundial Growers (NASDAQ: SNDL) reported its first quarter financial results yesterday evening, reporting net revenues of $9.9 million for the quarter, a decline of 28.6% from the prior quarter. The company also reported a net loss of $134.4 million.
Financial results were a miss in terms of revenues, with analysts expecting gross revenues of $13.88 million for the three month period, while the company reported just $11.7 million. The quarter however was a beat from an adjusted EBITDA standpoint, with consensus pointing to a loss of $5.23 million, while the company actually posted positive adjusted EBITDA of $3.3 million.
Curiously, the company posted positive adjusted EBITDA numbers despite posting negative gross margins of $3.3 million before fair value adjustments. This positive EBITDA figure is a result of the company recording additional revenue to the tune of $2.8 million in the form of interest and fees, as well as $12.9 million from investment revenue, the latter of which consists of realized and unrealized gains.
This additional revenue lead to the company seeing an income from operations of $1.7 million. Operating expenses during the quarter include $7.1 million in general and administrative expenses, $3.5 million in share based compensation, and $1.1 million in depreciation and amortization. Expenses were partially offset by government subsidies of $2.2 million.
The company however posted a notable net loss of $134.4 million, much of which is attributable to a $129.4 million charge from the change in estimate of fair value of derivative warrants, as well as transaction costs of $5.6 million and other expenses of $1.9 million.
Perhaps the bigger story for Sundial is its cash position, which grew from $60.4 million to $873.4 million over the course of the quarter, while marketable securities grew from nil to $33.6 million.
Subsequent to quarter end, the company added an additional $97.7 million to the books as well through their ongoing ATM program. As of yesterday, the company has issued 942 million new shares through the various financings conducted this year, with its cash balance sitting at $752.7 million following several investments.
Sundial Growers last traded at $0.74 on the Nasdaq.
Information for this briefing was found via Sedar and the companies mentioned. 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.