RE:RE:RE:HEXO 2020 Year End Comments / EPS Positive Outlookquebec4ever wrote: quinlash wrote: Am I the only one looking forward to Monday's Earnings call ? :-D
quinlash wrote: HEXO's last QTR report was the 2020 Year End, the upcoming one this monday will be 2021 Q1 Report. The following was taken from the 2020 Year End Call Transcript: At HEXO, we feel we are extremely well-positioned in this regard. With today's PP&E impairments, we believe we are or are near best-in-class in terms of reachable asset base, especially when compared to our potential future EBITDA, which, again, is clearing the path for positive EPS. Unlike many LPs, we wanted to stop piecemealing our inventory writedowns, PP&E impairments and goodwill and intangible impairments. We truly wanted to go into the next fiscal year with a strong balance sheet, putting the path behind us so we can focus on the future.
I believe we've done just that. And so, my top goals are to ensure we optimize the business, not just to get to adjusted EBITDA positive, but to achieve meaningful profitability on a per-share basis, and I see plenty of opportunities to do this. Starting at the top. This was a record quarter and year for sales.
Link to 2020 Year End Call Transcript:
https://www.fool.com/earnings/call-transcripts/2020/10/30/hexo-corp-hexo-q4-2020-earnings-call-transcript/
Assuming the 4:1 Stock Consolidation is approved on Friday and that it takes affect in early 2021 (Feb 1st, being my guess). HEXO will be going from a current outstanding share count of 488 Million down to 122 Million.
If, post-RS they do not issue any more shares OR only issue a limited number of shares for the purpose of either raising capitial or for a M&A deal to the amount LESS THAN 488 Million the company will be setting themselves up to be reporting a positive EPS as their revenue will be higher however their sharecount will be lower.
HEXO reported a cash position of 180 Million on the 2020 Year end with a cash burn rate of 3.8 million. IMHO, unless they are buying someone out, they have no need to raise capitial for the purpose of maintaining the operation. This may leave HEXO with no other option than to proceed with a M&A deal for a smaller company if they wish to increase sharecount while providing value to shareholders.
Link to HEXO 2020 Year End / Q4 Report
https://staticproduction.s3.amazonaws.com/financial-statements/2020/Q4/FY20+ANNUAL+FS+MASTER+FINAL.pdf
Link to HEXO 2020 Year End / Q4 Summary
https://www.newcannabisventures.com/hexo-q4-revenue-increases-22-sequentially-as-company-writes-down-assets-by-87-4-million/
Q
Dont get too excited....we ve felt like this many times and guess what? Maybe they had the rabbit for supper already......why does it seem that shareholders always get the meat left on the bones? Are Hexo Shateholders happy??? You know the answer !! We ll have to wait a long time I guess !!
They are expecting EBITDA positive either on this report or the one in March. This report they have 3 full months of drinks sales to report rather than one and their EBITDA gap is only 3.5 Million. The incremental drinks sales could close that gap on it's own, any increase in Vape and powder sales will be gravy. Imigine if they surprise the market with a postive per earnings report on monday .. BOOM ! Market is set on it's butt with HEXO being one of the only Cannabis Producers reporting cash positive numbers !
Cheer up old fella, the glass can be half empty or half full... you decide which way to look at.
All the best
Q