TGOD Posts Revenues of $3.13 Million, Net Loss of $144.75 Million For Fourth Quarter

The Green Organic Dutchman (TSX: TGOD) reported its fiscal fourth quarter and full year 2019 financial results this evening, posting net revenues of $3.13 million, of which $0.56 million was attributable to cannabis sales, while posting a loss of $144.75 million for the quarter. The majority of its revenues came from that of subsidiary Hempoland for the sale of hemp and CBD products.

Full year financial results saw the company record $10.9 million in net revenues, of which $1.07 million came from the sale of cannabis products within Canada. The remainder was attributed to the firms international hemp operation. Net loss for fiscal year 2019 for The Green Organic Dutchman totaled out at $195.75 million.

For the fourth quarter, gross profit came in at $2.79 million, compared to $1.58 million in the prior quarter however this was not broken out by the company based on business unit. Nor were fourth quarter results separated from the full fiscal year. Expenses during the quarter totaled out at $22.2 million, with general and administrative expenses accounting for the bulk of expenses at $13.4 million, followed by sales and marketing at $3.0 million and share based compensation at $2.9 million.

Looking at the balance sheet, TGOD’s cash position actually increased during the quarter thanks in part to extensive financing activities, with cash moving up to $27.5 million from $22.9 million. However, cash flows from financing activities during the quarter amounted to $42.5 million. Restricted cash also declined during the quarter due to continuous spend, decreasing to $8.5 million from $40.1 million. Inventory increased to $8.2 million from that of $5.8 million. Overall, current assets decreased significantly, from $92.3 million to $68.1 million.

Comparatively, current liabilities decreased much less dramatically on a quarter over quarter basis, with the firm seeing the figure drop to $53.2 million from $68.3 million. The decrease was largely seen in accounts payable, which decreased from $66.6 million to $52.0 million. Working capital as a whole decreased on a quarter over quarter basis from $24.0 million to $14.9 million. It should be noted however that current liabilities still outsize the firms cash position.

While 2019 was a challenging year for the entire sector, we have made significant progress on the operational front and adjusted our construction and operating plan to preserve shareholder capital and in light of changing market conditions. Despite taking impairment charges this quarter, as we continue to evaluate financing options, we note that the value of our assets still far exceeds our liabilities. With our first 2.0 product, TGOD Infusers, now available, our teas and vapes launching next month, as well as additional launches planned later this year, we anticipate continued sales momentum for the rest of 2020.

Brian Athaide, CEO of TGOD

Other notable items contributing to poor quarterly results for The Green Organic Dutchman include impairments of $4.2 million in investments in associates, as well as impairments of $123.4 million on non-financial assets, which is attributable to reduced expansion plans for its Canadian facilities, as well as a write-down in the value of the firms Epican Medicinals investment.

On an annual basis, it should also be noted that total compensation for key management personnel exceeded the firms total revenues for 2019, with combined compensation totaling out at $13.6 million. Of this, share based payments accounted for $9.3 million, while “compensation” amounted to $4.3 million.

The Green Organic Dutchman last traded at $0.44 on the TSX.

Information for this briefing was found via Sedar and The Green Organic Dutchman. 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.