Thursday , 22 October 2020

Cannabis Central: HEXO Q2 Financial Results Disappoint – Stock Tanks

HEXO Corp. (TSX: HEXO; NYSE: HEXO)  today reported its financial results today for the second quarter fiscal 2020 ended January 31, 2020. The results failed to meet analysts’ expectations causing its stock to go into freefall.

By: Lorimer Wilson, editor of (Your KEY To Making Money!)

Financial Highlights (All amounts are expressed in Canadian dollars unless otherwise noted and percentage changes are vs. the previous quarter.)

  • Gross Revenue: increased 23%
  • Net Revenue: increased 17%
    • net adult use revenue increased 20%
  • Gross Margin: increased 57%
  • Operating Expenses: increased 612.6% due to non-recurring or non-cash expenses related to significant changes in market conditions
  • Normalized Operating Expenses: decreased 19.9% due to a decrease in marketing expenses and headcount
  • Net Profit or Loss: Loss increased 377.6% to C$289.4 (go here to convert into USD or other currencies)
  • Adjusted EBITDA: decreased 47%
  • Cash & Equivalents On Hand: C$81.4M (go here to convert into USD or other currencies)

Operational Highlights

  • Production Levels: increased 38.5%
  • Sales Volume: increased 57%
  • Expanded Original Stash market distribution to Ontario, British Columbia and Alberta
  • Obtained Phase 1 licence for Belleville facility
  • Obtained sale of cannabis topicals, extracts, edibles and beverages licence for Gatineau facility, and a research licence for the Company
  • Closed a $70M private placement of 8% unsecured convertible debentures, including key management and board participation of over 10%
  • Closed two registered direct offerings totalling USD$45 Million

Stock Performance:

  • Stock was down 21% as of noon on Monday