Canadian weed giant Hexo Corp. (TSX: HEXO) (NYSE: HEXO) says it had its best quarter yet for sales, while year-over-year the firm’s losses have been drastically reduced, according to the firm’s latest earnings report.
On Friday, Hexo released its earnings for the three- and 12-month periods ended July 31.
For the year, topline revenue rose 57 per cent to $173 million from $110.1 million, while total net loss for the year dropped 79 per cent to $113.6 million from $546.4 million.
Operating expenses were cut by 67 per cent to $134.2 million from $418.5 million last year. And loss from operations was slashed by 82 per cent to $85.4 million from $476.5 million.
As for the latest quarter, Hexo said it reached its highest revenue to date, with sales growing 60 per cent to $53 million from $33 million in the previous period.
Excluding beverages, the firm’s adult-use sales grew 31 per cent to $38.5 million from $29.2 million.
For its beverage sector, sales went up 66 per cent to $5.5 million from $3.3 million.
Total losses for the period jumped 228 per cent to $67.9 million from $20.7 million. This quarter last year, however, saw losses of $169.5, higher by 60 per cent in comparison.
Earlier this month, Hexo announced the departure of co-founder and former CEO Sebastien St-Louis, and the resignation of COO Donald Courtney.
Shortly after, Scott Cooper moved from Truss Beverage Co., where he had been CEO and president, to take on those roles at Hexo.
“I look forward to continuing to build on HEXO’s strong foundation with an immediate priority of continuing to integrate our recent acquisitions and reviewing our financial position, with the ultimate goal of driving growth and profitability through the commercialization of cannabis consumer packaged goods products,” Cooper said in a statement.
Truss Beverage is a joint venture between Molson-Coors Canada and Hexo, which holds the number one market share in Canada for cannabis-infused beverages, according to the company.
In the report, the firm explained it’s continuing to assess the financial and accounting impact of Truss Beverage Co. receiving its cannabis manufacturing licence this month.
Hexo and Truss are in the process of a new agreement, “which may result in [Hexo] acting as an agent, facilitating sales between Truss LP and our customers, and therefore the company would likely cease recording such sales on a gross basis.”
The firm acknowledges concern with its senior secured convertible notes issued in May.
“[Hexo] has sufficient funding for ongoing working capital requirements, however, current funds on hand, combined with operational cash flows, are not sufficient to also support funding potential cash requirements under the senior secured convertible note, investments required to continue to develop cultivation and distribution infrastructure, and the future growth plans of the company,” reads the report.
“Management is exploring several options to secure the necessary financing, which could include the issuance of new public or private equity or debt instruments, supplemented with operating cash inflows from operations.
As of July 31, cash on hand totalled $67.4 million, down from $81 million last period.
Company stock dropped nearly 11 per cent to USD$1.47 on Friday.