Canopy Growth (NYSE: CGC) reported Q1 EPS of (Cdn$0.30), versus (Cdn$0.54) reported last year. Revenue for the quarter came in at Cdn$110 million, versus Cdn$90.48 million reported last year.

First Quarter Fiscal 2021 Corporate Financial Highlights

• Revenues: Net revenue in Q1 2021 increased by 22% versus Q1 2020 driven by higher medical cannabis sales in Canada and Germany, strong Storz & Bickel ("S&B") vaporizer sales and the benefit of a full quarter of contribution from acquired businesses C3 (acquired in April 2019) and This Works (acquired in May 2019) that were reflected for a full quarter in Q1 2021. Excluding the impact from acquired businesses, net sales growth increased 9% versus Q1 2020. The growth was partially offset by a decline in Canadian Recreational cannabis revenue due to restricted retail operating environment in response to the COVID-19 pandemic and increased competition in dried flower-based products.
• Gross margin: Gross margin was 6%. Adjusted gross margin, excluding inventory step-up costs, was 7%, down 1,300 bps versus Q1 2020. Gross margin was impacted by lower production output as well as manufacturing variances and inventory adjustments.
• Operating expenses: Total SG&A expenses declined by 23% versus Q1 2020, driven by year-over-year reductions in Sales & Marketing expenses, partially offset by higher General & Administrative (G&A) and Research & Development ("R&D") expenses. Sales & Marketing expense decline of 25% reflects lower compensation expenses resulting from corporate restructuring actions taken earlier in the year, delayed or cancelled marketing activities and reduced travel-related expenses due to the COVID-19 pandemic. G&A expenses increased 2%, while R&D expenses rose 61% mainly driven by research studies that commenced in Q2 and Q3 2020 and increased activities to support Cannabis 2.0 product development. Share-based Compensation expenses decreased 65% over Q1 2020.
• Net Loss: Net loss of $128 million in Q1 2021, a $66 million narrower loss versus Q1 2020, was driven by higher revenue and lower SG&A expenses.
• Adjusted EBITDA: Adjusted EBITDA loss was $92 million in Q1 2021, compared to a loss of $93 million in Q1 2020.
• Cash Position: Cash and Short-term Investments amounted to $2.0 billion at June 30, 2020, unchanged from $2.0 billion at March 31, 2020 reflecting the investment of approximately $245 million by an indirect wholly-owned subsidiary of Constellation Brands (NYSE: STZ) to exercise warrants in the Company offset by the EBITDA loss and capital investments.

"We're proud of our strong first-quarter performance, despite unprecedented volatility and uncertainty in the market and across the globe," said David Klein, CEO. "We grew our revenue year-over-year and are seeing market share improvement, notably achieving number one market share in cannabis-infused beverages in the Canadian market. We are implementing a renewed corporate strategy with the appointment of a new leadership team which will focus on delivering quality products to our consumers, positioning our business for continued growth. The proposed retooled Acreage announcement refocuses our entry for the evolving U.S. market, where we are seeing increased momentum."

"Following our previously announced restructuring actions, we have substantially reduced our expense and cash burn in this quarter in addition to reducing headcount by over 18% since beginning of this calendar year. Our marketing and R&D investments are being re-allocated to programs with high-return potential in order to drive sales," added Mike Lee, CFO. "Our gross margins in the quarter came in below our expectations due to under-utilization of our large-scale infrastructure. We've already proven we can deliver 40%-plus gross margin and are confident that we can return to that level as we work toward higher capacity utilization across our facilities as demand for our cannabis products continue to grow. In the meantime, we are focused on further optimizing our operating footprint through a full end-to-end strategy that looks at people, process, technology, and infrastructure that we believe will lead to best in class margins over time."

For earnings history and earnings-related data on Canopy Growth (CGC) click here.