Financial Performance - Gross revenue for the year ended December 31, 2023, was CAD 957,725 thousand, an increase of 31.2% from CAD 729,694 thousand in 2022[30] - Net revenue for 2023 was CAD 909,006 thousand, up 27.7% from CAD 712,197 thousand in 2022[30] - The company reported a net loss of CAD 176,551 thousand for 2023, compared to a net loss of CAD 372,428 thousand in 2022, indicating a 52.7% improvement[30] - The company experienced a gross profit of CAD 190,415 thousand in 2023, compared to CAD 140,375 thousand in 2022, reflecting a 35.7% increase[30] - Adjusted EBITDA from continuing operations for the year was $29,205,000, with liquor retail contributing $61,739,000 and cannabis retail operations showing a loss of $12,425,000[37] - The total operating loss for the year ended December 31, 2023, was $162,818,000, primarily driven by cannabis operations which reported a loss of $112,445,000[41] - Adjusted operating income for the year ended December 31, 2023, was a loss of $97,675,000, with liquor retail showing a positive adjusted operating income of $24,630,000[41] - The company incurred restructuring costs of $19,573,000 for the year ended December 31, 2023, impacting overall profitability[41] - Depreciation and amortization expenses for the year totaled $60,216,000, with liquor retail accounting for $35,662,000[36] Cash Flow and Liquidity - Cash and cash equivalents at the end of 2023 were CAD 195,041 thousand, a decrease of 30.3% from CAD 279,586 thousand at the end of 2022[33] - Free cash flow for Q4 2023 was $1.383 million, a decrease of 87% compared to $10.584 million in Q4 2022[44] - Full-year free cash flow for 2023 was negative at $(60.883) million, compared to $(31.900) million in 2022[44] - The change in cash and cash equivalents for Q4 2023 was $(6.942) million, an improvement from $(11.841) million in Q4 2022[44] - Total cash used for common share repurchases in 2023 was $1.536 million, down from $13.390 million in 2022[44] - Cash provided by long-term investments in Q4 2023 was $8.325 million, compared to $17.693 million in Q4 2022[44] - The company had no cash used for acquisitions in Q4 2023, while it recorded $(2.509) million in Q4 2022[44] - Total cash used for changes to debt instruments was $0 in 2023, compared to $10 million in 2022[44] - The company reported a total change in cash and cash equivalents of $(84.545) million for the full year 2023, an improvement from $(278.665) million in 2022[44] - The company aims to enhance its financial performance by focusing on free cash flow as a key metric for investors[43] - The company continues to evaluate its operational cash flows by excluding non-operational cash uses in its free cash flow calculation[43] Strategic Initiatives - The company aims to achieve sustainable, positive gross margins and positive free cash flow in the future[28] - The company plans to expand its product offerings, including the expected expansion of its wine private label[28] - The company is focused on strategic capital deployment through investments and partnerships in the North American cannabis industry[27] Asset Management - Total assets decreased to CAD 1,473,164 thousand as of December 31, 2023, down from CAD 1,559,350 thousand in 2022[31] - The company recognized an asset impairment of $54,967,000, with cannabis operations contributing significantly to this figure[37] - For the year ended December 31, 2023, the total net loss from continuing operations was $172,016,000, with significant losses in cannabis operations amounting to $112,159,000[36] Other Financial Metrics - The company reported a net loss of $85,423,000 for the three months ended December 31, 2023, with cannabis retail operations incurring a loss of $65,434,000[37] - For the three months ended December 31, 2023, the company reported an adjusted EBITDA of $3,479,000, with liquor retail contributing $17,812,000[38] - The change in fair value of biological assets resulted in a gain of $7,936,000 for the year, indicating potential growth in cannabis operations[37]

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SNDL's Retail Footprint and Strategy - SNDL has the largest cannabis retail footprint in Canada through its Value Buds, Spiritleaf, Superette, and Firesale banners[1] - SNDL's retail strategy includes diverse banners targeting distinct consumer segments to maximize market penetration[117] - Firesale aims to provide the most affordable cannabis products in Canada by liquidating aged inventory[29] Financial Performance and Investments - SNDL reported $6.6 million in interest and fee revenue[11] - The fair value of Canadian credit and equity investments is $551 million[13] - SNDL's Q3 2023 cannabis operations net revenue was $21 million[54] - SNDL's Q3 2023 liquor retail net revenue was $75.5 million[43] - SNDL's investment portfolio generates positive cashflows and provides strategic alternatives for M&A activities[72] SunStream Investments - SunStream was launched to provide SNDL exposure to the US cannabis market[135] - The fair value of the SunStream portfolio is $583 million[155]

Financial Data and Key Metrics Changes - For the first time, the company achieved positive free cash flow of CAD 16.5 million in Q3 2023, compared to negative CAD 67.1 million in Q3 2022 [8] - Cash flow from operations increased to CAD 27.5 million in Q3 2023, up from CAD 8.6 million in Q3 2022 [8] - Revenue for the quarter reached CAD 237.6 million, a 3.1% increase from Q3 2022 [20] - Adjusted EBITDA was CAD 16.1 million, slightly down from CAD 18.3 million in Q3 2022 [9] - The unrestricted cash balance grew from CAD 185.5 million at June 30, 2023, to CAD 785 million by the end of Q3 2023 [17][21] Business Line Data and Key Metrics Changes - The cannabis retail segment generated CAD 75.5 million in revenue, a 14.1% increase from Q3 2022, with gross margin reaching CAD 20 million, a 38% growth year-over-year [45] - The liquor retail segment reported revenues of CAD 152 million, maintaining stable basket value and customer count despite economic challenges [23] - Private label sales in the liquor segment increased by 33% compared to Q3 2022, contributing significantly to gross margin growth [48] Market Data and Key Metrics Changes - The cannabis retail segment saw a same-store sales increase of 3.9% year-over-year across all banners [45] - The company has a robust liquidity profile with CAD 785 million in unrestricted cash, marketable securities, and long-term investments, contrasting with a market capitalization of approximately CAD 500 million [17] Company Strategy and Development Direction - The company is focused on operational improvements and cost efficiencies, including divesting equity securities and optimizing its investment portfolio [6] - A new private label for wine is set to launch in Q1 2024, aimed at enhancing margin growth and differentiation in the liquor retail segment [12] - The company is committed to expanding its cannabis retail operations into markets where its presence is currently limited [5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating market uncertainties and emphasized the importance of operational efficiency to improve profitability [4] - The company anticipates run rate synergies exceeding CAD 40 million annually and expects to achieve significant cost savings from its cannabis operations [42] - Management highlighted the potential for the cannabis segment to yield over CAD 1 billion in annual revenue, indicating that the market undervalues the company's growth potential [17] Other Important Information - The company has extended its share repurchase program to November 20, 2024, although no shares were purchased for cancellation in the last quarter [10] - The company has paid CAD 35.6 million in excise taxes this year, reflecting its commitment to responsible business practices [10] Q&A Session Summary Question: Regarding the liquor retail segment's strong margins and efficiency opportunities - Management indicated they are focused on achieving margin improvements and will provide more details as the 2024 budget is finalized [32] Question: Impact of potential cannabis rescheduling on U.S. investments - Management acknowledged that rescheduling could materially impact free cash flow but emphasized a focus on optimizing current operations before allocating more capital [33] Question: Details on the CAD 11 million charge under corporate operations - The charge was related to cannabis operations and retail, reflecting an adjustment to eliminate intercompany revenue double counting as the business expanded [36] Question: Expectations for cannabis segment margins moving forward - Management expressed optimism for margin improvements in Q4 and 2024 due to completed operational efficiency initiatives [38] Question: Update on SunStream USA structure and Nasdaq review - Management expects to resolve the Nasdaq review process by Q1 2024 and does not anticipate negative impacts on day-to-day operations during this period [34]

SNDL Inc. (NASDAQ:SNDL) AGP Annual Virtual Cannabis Conference October 4, 2023 9:45 AM ET Company Participants David Klein - Chief Executive Officer, Canopy Growth Corp Zach George - Chief Executive Officer, Sundial, Inc. Steve Ruffini - Chief Financial Officer, Village Farms Conference Call Participants Aron Govil - AGP Aron Govil [Starts Abruptly] Cannabis Conference. Thanks for joining us. A lot of exciting news happening in the cannabis sector over the past couple of weeks. Welcome to see and I'm great ...

Additionally, all financial figures mentioned are in Canadian dollars unless otherwise indicated. We will now make prepared remarks, and then we'll move on to analyst questions. In connection, SunStream is exploring the restructuring and transfer of certain credit interests in Skymint and Parallel to a new U.S. holding entity of SunStream USA. The SunStream USA structure is expected to allow SNDL to participate in SunStream assets, while complying with all US and Federal State laws. This SunStream USA struc ...

Financial Performance - SNDL's Cannabis Operations Net Revenue increased by 2.1% year-over-year in 2023[8] - Cannabis Retail Net Revenue increased by 9.3% year-over-year, reaching $244.5 million[17] - Liquor Retail Net Revenue increased by 13.2% year-over-year, totaling $71.9 million[18] - Adjusted EBITDA was $2.2 million[9] - Liquor Retail Net Revenue was $151.7 million, with a Gross Margin of $35.4 million and Adjusted EBITDA of $16.4 million[52] - Cannabis Retail Gross Margin was $17.8 million[61] - Cannabis Operations Q2 2023 Gross Revenue was $20.9 million[78] Retail Operations - The company has over 930,000 square feet of retail space[2] - SNDL has approximately 2600 employees in Cannabis Operations[4] - SNDL's Liquor Retail segment has 170 retail locations in Alberta and British Columbia[49] - SNDL's Cannabis Retail segment has a 9.4% market share of privatized stores[35] - Liquor Retail average basket size is $39.12, with 3.8 million customer transactions in Q2 2023[49] - Cannabis Retail average basket size is $38.73, with 2.53 million customer transactions[58, 59] Investments - Fair value of all cannabis industry investments is $569 million[85, 89] - Fair value of SunStream Portfolio is $533 million[90] - Fair value of Canadian credit and equity investments is $36 million[91]

Company Overview - SNDL is the largest private sector distributor of liquor and cannabis in Canada with 367 retail locations[10, 12] - The company has extinguished debt and raised over $1.2 billion of capital since 2020[12] - SNDL has $616 million in market capitalization and $589 million in enterprise value[13, 14] - The company possesses significant tax pools of $925 million[16] Financial Highlights - SNDL's latest quarter annualized net revenue is approximately $810 million[10] - Strategic cannabis investments total $579.9 million[10] - The company has $240 million in cash and marketable securities and no debt[14, 15] Segment Performance - Liquor retail gross revenue was $115.9 million with a gross margin of $26.3 million and adjusted EBITDA of $8.4 million in Q1 2023[41] - Cannabis retail gross revenue was $67.4 million with a gross margin of $15.8 million and adjusted EBITDA of $3.6 million in Q1 2023[60, 65, 66] - Cannabis operations generated gross revenue of $29.6 million and a gross margin of -$9.5 million in Q1 2023[83] - Investment revenue was -$4.9 million, while interest and fee revenue was $4.2 million in Q1 2023[93]

SNDL, Inc. (NASDAQ:SNDL) Q1 2023 Earnings Conference Call May 15, 2023 1:00 PM ET Company Participants Zachary George - CEO James Keough - CFO Tank Vander - President, Liquor Retail Tyler Robson - President, Cannabis Conference Call Participants Andrew Partheniou - Stifel, Nicolaus & Company Matt Bottomley - Canaccord Genuity Frederico Gomes - ATB Capital Markets Sahil Dhingra - RBC Capital Markets Operator Good morning, and welcome to SNDL's First Quarter 2023 Financial Results Conference Call. This mornin ...

Financial Performance and Investments - Capital expenditures in 2020 totaled $4.4 million, primarily for the construction and development of the second phase of the Clay Lake facility[254]. - The Company has a total capital expenditure of $186.5 million as of December 31, 2022, with production capacities of 71 million grams for indoor cultivation in Alberta and 46 million grams in New Brunswick[385]. - The Company reported a share of loss of equity-accounted investees amounting to $43.0 million for the year ended December 31, 2022[319]. - The Company’s investment policy aims to protect or enhance funds flow and shareholder value while managing risks[328]. - The Company’s investment activities are focused on attaining a rate of return while preserving capital[329]. Market Presence and Operations - The company operates 105 corporate-owned and franchised Spiritleaf retail cannabis stores across five provinces in Canada[276]. - The company has established supply agreements with ten Canadian provinces, covering 98% of the national adult-use cannabis industry[296]. - The company operates 63% ownership in Nova Cannabis Inc., which includes multiple subsidiaries in Alberta, indicating a significant market presence[384]. - The company’s retail operations include corporate-owned and franchised Spiritleaf stores, typically aiming for a lease term of five years with renewal options[386]. - The company utilizes data from over 70 operating locations to identify ideal retail locations, leveraging its real estate development team and custom mapping software[387]. Competition and Market Dynamics - The cannabis retail market is highly competitive, with significant competition from vertically integrated companies and the illegal market[284]. - The company anticipates increased competition as the retail cannabis industry matures and consolidates[292]. - The Company is facing increased competition from both legal and illicit cannabis markets, impacting market share[306][307]. Regulatory Environment - The Cannabis Act, effective October 17, 2018, regulates the production, distribution, and sale of cannabis for adult use in Canada[359]. - The Cannabis Regulations establish six classes of licenses, including cultivation and processing, with differing rules based on public health and safety risks[365]. - The Cannabis Regulations impose specific THC limits and packaging requirements for edible cannabis, extracts, and topicals, affecting product development strategies[376][377]. - The company is in compliance with the Cannabis Act and related regulations, except for pending security clearance for certain executive officers[382]. - Each province and territory in Canada has established a minimum age for adult-use cannabis consumption, impacting market access strategies[380]. Supply Chain and Product Development - The Company has a significant reliance on supply contracts with Canadian provinces, which are critical for current revenues[311]. - The company began exporting dried cannabis flower products to Israel in 2022 and medical cannabis products to Australia in 2023[261]. - The company is expanding its brand portfolio with new products under existing brands like Top Leaf and Sundial Cannabis[298]. - The company’s processing licenses require amendments for producing new cannabis products, which may affect product launch timelines[374]. Liquor Retail Operations - The liquor retail operations include convenience-focused liquor stores and large-format stores, with product selection ranging from 1,000 to over 10,000 items[265]. - The company focuses on urban centers for its liquor retail operations, believing they provide better revenue opportunities[268]. - In British Columbia, the number of private industry stores has remained stable at approximately 871 since the moratorium on new retail liquor store licenses was extended indefinitely in 2007[348]. - Privately-owned retail liquor stores in British Columbia can set their own prices, subject to minimum prices established by the BCLDB[349]. - The BCLDB offers month-long LTOs and three-month temporary price reductions, with the company aiming to purchase larger volumes at discounted prices[356]. Cultivation and Production - The Company has approximately 448,000 square feet of cultivation space in Olds and 380,000 square feet in Atholville[299]. - The Company utilizes a modular grow room approach, allowing for multiple harvests per day and higher yields[300]. - The wholesale price for products shipped from CLS' warehouse requires a minimum order of 25 cases, with additional charges based on delivery schedule and number of cases ordered[342]. - A "postage stamp" delivery system applies, meaning delivery charges per case are uniform across Alberta regardless of location[343].