HEXO reports over $16.2 million in total gross revenue in the second quarter of fiscal 2019
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) (the "Company") 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.
Second Quarter 2019 Financial Results >
Webcast and Conference Call Information
HEXO Corp will host a conference call at 8:30 a.m. EDT on March 14, 2019.
Conference Call Details
Date: March 14, 2019
Time: 8:30 a.m. EDT
Webcast: Registration
Replay Information
A replay of the call will be accessible by telephone until 11:59 a.m. EDT on March 28, 2019.
Toll Free Dial-In Number: 1-888-390-0541
Replay Password: 432690#
About HEXO Corp
HEXO Corp is an award-winning consumer packaged goods cannabis company that creates and distributes products to serve the global cannabis market. Through our hub and spoke business strategy, we are partnering with Fortune 500 companies, bringing our brand value, cannabinoid isolation technology, licensed infrastructure and regulatory expertise to established companies, leveraging their distribution networks and capacity. As one of the largest licensed cannabis companies in Canada, HEXO Corp has over 1.8 million sq. ft of facilities in Ontario and Quebec and a foothold in Greece to establish a Eurozone processing, production and distribution centre. We serve the Canadian adult-use market under the HEXO brand while continuing to provide our medical cannabis clients with consistent access to Hydropothecary medical cannabis products. For more information please visit hexocorp.com.
Forward-Looking Statements
This press release contains forward-looking information and forward-looking statements within the meaning of applicable securities laws (“forward-looking statements”). Forward-looking statements are based on certain expectations and assumptions and are subject to known and unknown risks and uncertainties and other factors that could cause actual events, results, performance and achievements to differ materially from those anticipated in these forward-looking statements. Forward-looking statements should not be read as guarantees of future performance or results. A more complete discussion of the risks and uncertainties facing the Company appears in the Company’s Annual Information Form and other continuous disclosure filings, which are available on SEDAR at www.sedar.com and EDGAR at www.sec.gov. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company disclaims any intention or obligation, except to the extent required by law, to update or revise any forward-looking statements as a result of new information or future events, or for any other reason.
Investor Relations:
Jennifer Smith
1-866-438-8429
invest@HEXO.com
www.hexocorp.com
Media Relations:
Caroline Milliard
(819) 317-0526
media@hexo.com
Director
Adam Miron
819-639-5498
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