Sundial(SNDL) - 2025 Q2 - Quarterly Report

Financial Performance - Net revenue for Q2 2025 was CAD 244,769,000, an increase of 7.4% compared to CAD 228,127,000 in Q2 2024[6] - Gross profit for the six months ended June 30, 2025, was CAD 124,242,000, up 14.4% from CAD 108,564,000 in the same period of 2024[6] - The company reported a net loss of CAD 11,822,000 for the six months ended June 30, 2025, compared to a net loss of CAD 9,619,000 for the same period in 2024[6] - For the three months ended June 30, 2025, SNDL reported net earnings of CAD 2,885,000, a significant improvement compared to a net loss of CAD 4,967,000 in the same period of 2024[9] - Total net revenue for the three months ended June 30, 2025, was CAD 102,840,000, up from CAD 84,399,000 in the previous year, representing a growth of 22%[30] - Gross profit for the three months ended June 30, 2025, was CAD 31,115,000, compared to CAD 21,882,000 in the same period of 2024, indicating a 42% increase[30] - The company reported a comprehensive loss of CAD 35,967,000 for the six months ended June 30, 2025, compared to a comprehensive income of CAD 4,715,000 in the same period of 2024[6] - The company reported a net loss attributable to owners of CAD 11.8 million for the six months ended June 30, 2025, compared to a loss of CAD 8.3 million in the same period of 2024[87] Assets and Liabilities - Total assets decreased to CAD 1,293,420,000 as of June 30, 2025, down from CAD 1,349,242,000 at the end of 2024[4] - Current liabilities decreased to CAD 82,520,000 from CAD 90,557,000 at the end of 2024, reflecting a reduction of 8.2%[4] - Shareholders' equity as of June 30, 2025, was CAD 1,088,138,000, down from CAD 1,133,356,000 at the end of 2024[4] - The company’s cash and cash equivalents were CAD 208,224,000, a decrease from CAD 218,359,000 at the end of 2024[4] - As of June 30, 2025, total contractual commitments amount to CAD 49.424 million, with CAD 49.162 million in accounts payable and accrued liabilities[24] Cash Flow and Operating Activities - The company generated net cash provided by operating activities of CAD 6,117,000 for the three months ended June 30, 2025, compared to CAD 4,702,000 for the same period in 2024, reflecting a 30% increase[9] - Cash used in operating activities for the six months ended June 30, 2025, was CAD 14.2 million, compared to CAD 9.0 million in the same period of 2024[86] Investments and Acquisitions - The company completed the acquisition of Indiva Group for approximately CAD 21.1 million, which included the extinguishment of CAD 20.7 million in debt[22][23] - The company reported a bargain purchase gain of CAD 5.46 million from the Indiva acquisition, recorded in other expenses, net[26] - On April 9, 2025, the company announced the acquisition of 32 cannabis retail stores for a total consideration of CAD 32.2 million, with a CAD 1.0 million deposit held in escrow[96][97] - The 1CM Transaction includes 2 stores in Alberta, 3 in Saskatchewan, and 27 in Ontario[97] - The transaction is expected to close in Q3 2025, pending regulatory approvals and customary closing conditions[99] Biological Assets and Inventory - The company’s biological assets increased significantly to CAD 4,085,000 from CAD 1,187,000 at the end of 2024, indicating growth in cultivation[4] - The Company harvested 11,273 kilograms of dry cannabis during the six months ended June 30, 2025, compared to 3,453 kilograms in the same period of 2024[37] - Biological assets increased to CAD 4,085 thousand as of June 30, 2025, from CAD 1,187 thousand at the beginning of the year, reflecting a net change in fair value of CAD 1,775 thousand[35] - Inventory recognized in cost of sales for the six months ended June 30, 2025, was CAD 326.4 million, compared to CAD 315.1 million for the same period in 2024[38] - The Company recognized inventory write-downs of CAD 0.8 million for the six months ended June 30, 2025, compared to CAD 3.0 million in the same period of 2024[39] Shareholder Information - The company repurchased and canceled 5.8 million common shares at a weighted average price of CAD 2.57 per share, totaling CAD 15.0 million[67] - The weighted average shares outstanding for the six months ended June 30, 2025, was 258,213,000, compared to 263,400,000 in the same period of 2024[87] - As of June 30, 2025, the company had 569,791 stock options outstanding with a weighted average exercise price of $12.43[75] - The company granted 4,082,665 Restricted Share Units (RSUs) during the six months ended June 30, 2025, increasing the total outstanding RSUs to 13,170,608[77] - The company recognized a liability of $5.3 million related to Deferred Share Units (DSUs) as of June 30, 2025, down from $7.1 million at December 31, 2024[78] Legal and Regulatory Matters - The company is involved in various legal claims, but believes potential losses will not be material to financial statements[95] - The company has entered into supply agreements for dried cannabis, with penalties for non-delivery applicable in cash or product[94]