HEXO Reports First Quarter 2022 Results and Launches New Strategic Plan, "The Path Forward" to Solidify its Position as Canada's Leading Cannabis Company
This news release constitutes a "designated news release" for the purposes of the Company's prospectus supplement dates May 11, 2021, to its short form base shelf prospectus dated May 7, 2021, and amended and restated on May 25, 2021.
All amounts are expressed in Canadian dollars unless otherwise noted.
-- HEXO reports $50.2 million in total net revenue for Q1'22, an increase of 29% compared to the fiscal quarter ended July 31, 2021 (Q4'21) -- Maintains #1 Market Share position in Canada1 -- Announces new strategic plan, "The Path Forward" to strengthen its balance sheet and accelerate its transformation to become a cash flow positive company within the next four quarters.
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(1) Based on Headset data for the quarter of August to October 2021
GATINEAU, Quebec, Dec. 14, 2021 (GLOBE NEWSWIRE) -- HEXO Corp (TSX: HEXO; NASDAQ: HEXO) ("HEXO" or the "Company"), a leading producer of high-quality cannabis products, today reported its financial results for the fiscal quarter ended October 31, 2021 (Q1'22), and announced "The Path Forward", a new strategic plan to solidify itself as Canada's leading cannabis company and position it to capitalize on international opportunities. The plan utilizes HEXO's current assets, including its recent acquisitions and unique capabilities to drive accelerated growth and become cash flow positive within the next four quarters. This plan is underpinned by actions to strengthen its balance sheet, its executive team and its corporate governance.
Q1 2022 Highlights
-- Total net revenue increased 29% to $50.2 million from $38.7 million in Q4'21, and up 70% from the comparative quarter of fiscal 2021. -- The Company closed its acquisitions of Redecan and 48North which contributed net revenues of $13.5 Million and $1.1 Million respectively during the two months ended October 31, 2022. -- The Company's total non-beverage gross margin before adjustments increased to 28% from 25% in the previous quarter. -- Revising expected synergies from acquisitions to over $50M from previously reported $35M. -- Forecasting positive cash flow within the next four quarters based on incremental cash flow of $37.5 million in fiscal 2022 and an additional $135 million in 2023 for a total of $175 million over the two years.
"We are taking immediate steps through our new strategic plan, The Path Forward, to strengthen our capital position, improve operations, accelerate organic growth and complete our transformation to be cash flow positive from operations within the next four quarters," said Scott Cooper, President & CEO, HEXO. "Having visited all our core sites, and in meeting with our employees and customers, I am more confident than ever in HEXO's future and our ability to accelerate the creation of short and long-term value for shareholders.