Hexo Reports Record Revenues, But Suffers Half-Billion Dollar Write-DownMarch 22, 2022
Gatineau, Quebec-based Hexo Corp. reported results for the three months ended January 31, in which record high revenues were overshadowed by a C$616 million ($531.9m) write-down in impairments. The news comes as little surprise after the recent announcement of Tilray’s agreement to bail out the troubled producer in exchange for a 37% stake in the company.
Total net revenues of C$52.8 million ($42m) marked a second consecutive record quarter, and the company’s adjusted gross margin improved quarter over quarter from 25% to 36%. Hexo continues to execute on The Path Forward, its plan to become cash flow positive within the next four quarters.
“Since joining Hexo in November, my top priority has been to clean up a very challenged balance sheet as a result of the Secured Note that was previously put in place,” said Scott Cooper, president and CEO of Hexo. “We’re now on the path to establishing a strong foundation that we expect will, once finalized, enable us to become a cash flow positive business within the next four quarters, along with continuing to grow our significant market share.”—Danny SullivanSubscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning. You will also receive the Cannabis edition as part of your subscription.