Key highlights of second quarter of 2019 fiscal year
- Gross revenue increased 1,269% as compared to the second quarter of fiscal 2018 and increased144% from the first quarter of fiscal 2019
- Gross adult-use revenue in Q2 exceeded revenues for the 2018 fiscal year by 200%
- 4,938 kg of dried cannabis produced, an increase of 39% over the first quarter of fiscal 2019
- 2,689 kg of gram and gram equivalents sold, an increase of 142% quarter over quarter
- Began trading on the NYSE American (“NYSE-A”) in January, 2019 under the symbol “HEXO”
- Over $54.2 million in net proceeds raised through a marketed public offering co-led by the Canadian Imperial Bank of Commerce (“CIBC”) and the Bank of Montreal
- Subsequent to quarter end, HEXO entered an agreement to acquire Newstrike Brands Ltd.
GATINEAU, Quebec, March 14, 2019 (GLOBE NEWSWIRE) -- HEXO Corp (TSX:HEXO; NYSE-A:HEXO) is reporting its financial results for the second quarter of the 2019 fiscal year, the Company’s first full quarter following the legalization of adult-use cannabis in Canada. Total gross revenue for the quarter reached $16.2 million, an increase of 144% from the previous quarter.
“This is an exciting time for HEXO as we continue to achieve milestones on the way to becoming a top two cannabis company,” said HEXO Corp CEO and co-founder, Sebastien St-Louis.
“This quarter not only saw an exponential increase in gross revenue and production, but also saw us continue to execute on our promises including reaching a construction and licensing milestone on our 1,000,000 sq. ft. greenhouse expansion and listing on the NYSE-A. Just yesterday, we announced an agreement to acquire Newstrike Brands Limited. HEXO’s future is very promising, I am looking forward to continually driving shareholder value and achieving milestones with our team.”
Other financial highlights from the quarter include:
Over $13.4 million in net revenue
Made first investment tranche for a 33% interest in the Greek joint venture HEXOMed, to establish a Eurozone distribution center, with the option to increase ownership interest in HEXOMed to 50%
During the quarter ended January 31, 2019, the Company announced that its 1,000,000 sq. ft. greenhouse expansion reached construction and licensing milestones. The first harvest from the facility is expected later this month and will allow HEXO to continue ramping up to an annual production capacity of 108,000 kg of dried cannabis annually.
Subsequent to quarter end, HEXO announced that it entered into a syndicated credit facility for up to $65 million available credit through a $50 million credit facility with an option to increase by an additional $135 million and a $15 million revolving loan with CIBC. The proceeds of the total available credit of $200 million will be used in part to fund the Company’s ongoing expansion projects and innovation initiatives.
HEXO most recently announced an agreement to acquire Newstrike Brands Ltd. This transaction was unanimously approved by the board of directors of both HEXO Corp and Newstrike Brands Limited. The acquisition will provide HEXO Corp capacity to produce approximately 150,000 kg of high-quality cannabis annually with access to four cutting-edge production campuses. It also provides the Company diversified domestic market penetration with combined distribution agreements in eight provinces. The combined entity is estimated to realize annual synergies of $10 million, allowing HEXO to operate more efficiently with a continued commitment to excellence. The acquisition requires Newstrike shareholder approval before being finalized.
The management’s discussion and analysis for the period and the accompanying financial statements and notes are available under the Company's profile on SEDAR at www.sedar.com and on its website at www.hexocorp.com.
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