Cronos Group(US:CRON)2025-02-27 12:33Financial Performance - In 2024, net revenue increased by 35% to $117,615,000 compared to $87,241,000 in 2023[342]. - Gross profit for 2024 was $25,198,000, representing a 112% increase from $11,909,000 in 2023[343]. - The company reported an operating loss of $76,529,000 in 2024, an improvement from a loss of $84,800,000 in 2023[342]. - For 2024, consolidated net revenue was $117.6 million, an increase of $30.4 million from 2023, driven by higher cannabis flower and extract sales in Canada and other countries[344]. - Consolidated cost of sales for 2024 was $91.7 million, reflecting a $17.2 million increase from 2023, primarily due to inventory step-up from the Cronos GrowCo Transaction[345]. - Net income for 2024 was $40.0 million, a substantial improvement from a net loss of $74.6 million in 2023[356]. - Adjusted EBITDA for 2024 was $(34,942,000), an improvement from $(61,564,000) in 2023[373]. - The company reported a foreign currency transaction gain of $57.9 million in 2024, a significant increase from a loss of $7.3 million in 2023[363]. - The company recognized a loss on held-for-sale assets of $11.2 million in 2024, reflecting a strategic shift in asset marketing[364]. - For the year ended December 31, 2024, the company reported a net income of $40,022,000, compared to a net loss of $70,439,000 in 2023[372]. Operational Changes - The company exited its U.S. hemp-derived cannabinoid product operations in Q2 2023, marking a strategic shift that significantly impacted financial results[323]. - Cronos launched new products in 2024, including Spinach Grindz™ and SOURZ by Spinach gummies, expanding its offerings in the edible and vape categories[328]. - The Cronos GrowCo transaction, completed in July 2024, allows the company to consolidate operations and expand its cannabis supply capabilities[322]. - Cronos expects to complete the expansion of the Cronos GrowCo facility by Q2 2025, with the first harvests anticipated in the second half of 2025[334]. - The company plans to wind down the Cronos Fermentation facility and list it for sale, indicating a strategic shift in operations[404]. - The company has transitioned to a single operating segment following the exit of its U.S. operations in Q2 2023, with all prior segment disclosures reclassified accordingly[510]. Investment and Assets - Cash and cash equivalents increased by 28% to $858.8 million as of December 31, 2024, compared to $669.3 million in 2023, with a constant currency increase of 30% to $869.8 million[385]. - The company reported total assets of $1,166,312,000 as of December 31, 2024, an increase from $1,140,266,000 in 2023, representing a growth of approximately 2.3%[453]. - The total liabilities rose to $55,330,000 in 2024, compared to $44,142,000 in 2023, indicating an increase of approximately 25.3%[453]. - Shareholders' equity attributable to Cronos Group decreased to $1,064,063,000 in 2024 from $1,099,571,000 in 2023, a decline of about 3.2%[453]. - The company acquired majority control of Cronos Growing Company Inc. on July 1, 2024, which was classified as a business combination under ASC 805[427]. - The valuation of the net assets of Cronos Growing Company involved significant assumptions including real estate appraisals and forecasted revenues, which required substantial auditor judgment[428]. Research and Development - Research and development expenses decreased to $4.2 million in 2024, down $1.6 million from 2023, due to lower collaboration costs[350]. - The Company has a research and development center in Canada focusing on cannabinoids, with ongoing initiatives around rare cannabinoids and a collaboration with Ginkgo for cultured cannabinoids[494]. Market Expansion - In 2024, Cronos expanded its international footprint by entering the UK market with the PEACE NATURALS brand[331]. - The company plans to continue focusing on market expansion and new product development as part of its strategic initiatives[375]. Financial Adjustments - Operating expenses totaled $101.7 million for 2024, a 5% increase from 2023, with significant impairment loss on long-lived assets rising to $16.4 million[348][355]. - The impairment loss on long-lived assets for 2024 included $14,258,000 related to the write-down of Ginkgo Exclusive Licenses[373]. - The company incurred transaction costs of $701,000 related to the Cronos GrowCo Transaction in 2024[373]. - The company recognized uncertain tax positions only if they are more likely than not to be sustained upon examination by tax authorities[508]. Currency and Interest - Interest income for 2024 was $52.0 million, up $0.8 million from 2023, mainly due to higher interest rates[357]. - A 10% change in the interest rate in effect for 2024 would affect interest income by approximately $5.2 million[412]. - The company experienced a foreign currency loss of $(86.3) million for the year ended December 31, 2024, compared to a gain of $21.5 million in 2023[414]. - A 10% change in the exchange rates for the Canadian dollar would affect the carrying amount of net assets by approximately $40.1 million as of December 31, 2024[414].