SNDL Inc. (NASDAQ: SNDL) ("SNDL" or the "Company") reported its financial and operational results for the first quarter ended March 31, 2024. All financial information in this press release is reported in millions of Canadian dollars unless otherwise indicated.

SNDL has also posted a supplemental investor presentation on its website, found at https://sndl.com.

The Company will hold a conference call and webcast presentation at 10:30 a.m. EDT (8:30 a.m. MDT) on Thursday, May 9, 2024. The conference call details can be found below.

FIRST QUARTER 2024 FINANCIAL AND OPERATIONAL HIGHLIGHTS

"The SNDL team has delivered a solid first quarter result, exemplified by a record gross margin of 25% and the undeniable improvement in the profitability of all of our operating segments over multiple years," said Zach George, Chief Executive Officer of SNDL. "We are well positioned to further expand our retail network and product distribution in Canada where we expect further consolidation and attrition. Building on the momentum of our Canadian operations, the recent completion of Nasdaq's review of our SunStream USA structure creates an opportunity for SNDL to close on U.S. assets currently under restructuring, positioning us to become a leading global cannabis company. We intend to complete a rigorous strategic planning exercise in June of 2024 and are focused on a material reduction in corporate expenses to drive further improvements into the back half of the year. SNDL remains steadfast in its commitment to driving long-term, stabilized profitability. Following our first-ever two quarters of positive free cash flow in 2023, we are targeting the generation of positive free cash flow for the aggregate 2024 calendar year."  

FIRST QUARTER 2024 KEY FINANCIAL METRICS

 

FIRST QUARTER 2024 RESULTS

SNDL's business is operated and reported in four segments: Liquor Retail, Cannabis Retail, Cannabis Operations and Investments. 

Liquor Retail

SNDL is Canada's largest private sector liquor retailer, operating 171 locations, predominantly in Alberta, under its three retail banners: "Wine and Beyond", "Liquor Depot", and "Ace Liquor".

As of May 9, 2024, the Ace Liquor store count is 138, the Liquor Depot store count is 20, and the Wine and Beyond store count is 13.  

Cannabis Retail

With its 63% ownership interest in Nova Cannabis Inc. ("Nova"), SNDL is Canada's�largest private-sector cannabis retailer by number of stores, operating 188 locations under its four retail banners: "Value Buds", "Spiritleaf", "Superette", and "Firesale Cannabis". The Company's Cannabis Retail strategy is based on several pillars, including the quality of its store locations, its range of products, and the unique experiences it provides customers. Using data and insights from a large volume of monthly transactions enables SNDL to leverage technology and analytics to inform and improve its retail strategy. 

As of May 9, 2024, the Spiritleaf store count was 84 (20 corporate stores and 64 franchise stores), the Superette store count was 4 corporate stores, the Firesale store count was 1 corporate store, and the Value Buds store count was 99 corporate stores.

Cannabis Operations

SNDL has a diverse brand portfolio from value to premium, emphasizing premium inhalable formats and a full suite of 2.0 products. With enhanced procurement capabilities and plans to continue evolving toward a cost-effective cultivation and manufacturing operation, the Cannabis Operations segment is a key enabler of SNDL's vertical integration strategy. Cannabis Operations include the operations of The Valens Company Inc. ("Valens") for the period of January 18, 2023, to December 31, 2023.

Investments

Equity Position

This press release is intended to be read in conjunction with the Company's condensed consolidated interim financial statements and the notes thereto for the three months ended March 31, 2024, and the accompanying Management's Discussion and Analysis. These documents are available under the Company's profile on SEDAR+ at www.sedarplus.ca and EDGAR at www.sec.gov/edgar.shtml.  

CONFERENCE CALL  

The Company will hold a conference call and webcast presentation at 10:30 a.m. EDT (8:30 a.m. MDT) on Thursday, May 9, 2024.

WEBCAST ACCESS

To access the live webcast of the call, please visit the following link:https://services.choruscall.ca/links/sndl2024q1.html 

REPLAY

A telephone replay will be available for one month. To access the replay, dial:Canada/USA Toll Free: 1-855-669-9658 or International Toll: +1-604-674-8052When prompted, enter Replay Access Code: 0888 #The webcast archive will be available for three months via the link provided above.

ABOUT SNDL INC. 

SNDL is a public company whose shares are traded on the Nasdaq under the symbol "SNDL." SNDL is the largest private-sector liquor and cannabis retailer in Canada with retail banners that include Ace Liquor, Wine and Beyond, Liquor Depot, Value Buds, Spiritleaf, and Firesale Cannabis. SNDL is a licensed cannabis producer and one of the largest vertically integrated cannabis companies in Canada specializing in low-cost biomass sourcing, indoor cultivation, product innovation, low-cost manufacturing facilities,�and a cannabis brand portfolio that includes Top Leaf, Contraband, Palmetto, Bon Jak, Versus, Value Buds, and Vacay. SNDL's investment portfolio seeks to deploy strategic capital through direct and indirect investments and partnerships throughout the North American cannabis industry.�For more information on SNDL, please go to�https://sndl.com/.� 

Forward-Looking Information Cautionary Statement��� 

This news release includes statements containing certain "forward-looking information" within the meaning of applicable securities law ("forward-looking statements"), including, but not limited to, statements regarding the Company's operational goals, the Company's ability to achieve improved profitability, growth and efficiencies across all segments, or its goal of sustainable, positive gross margin and positive free cash flow, revenue generation from the Liquor Retail proprietary data licensing program, expansion of product offerings (including the expected expansion of the Company's wine private label), the impact of productivity initiatives within the Cannabis Operations segment and owned retail locations, the expansion and additional cost savings at the Atholville facility, performance of the Company's investments, including through the SunStream joint venture and SunStream USA Group, implementation of the proposed SunStream USA Group investment structure, the timing and closing of the transactions with Parallel and Skymint, and any other potential forms of shareholder value creation. Forward-looking statements are frequently characterized by words such as "aim", "anticipate", "assume", "believe", "contemplate", "continue", "could", "due", "estimate", "expect", "goal", "intend", "may", "objective", "plan", "predict", "potential", "positioned", "pioneer", "seek", "should", "target", "will", "would", and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology. These forward-looking statements are based on current expectations, estimates, forecasts and projections about the Company's business and the industry in which it operates and management's beliefs and assumptions and are not guarantees of future performance or development and involve known and unknown risks, uncertainties and other factors that are in some cases beyond its control. Forward-looking statements are based on the opinions and estimates of management at the date the statements are�made and�are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Please see "Risk Factors" in the�Company's Annual Information Form dated March 20, 2024, and the risk factors included in our other public disclosure documents for�a discussion of the material risk factors that could cause actual results to differ materially from the forward-looking information. The Company is under no obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether�as a result of�new information, future events or otherwise, except as expressly required by applicable law.���

Condensed Consolidated Interim Statement of Loss and Comprehensive Loss(Unaudited â?? expressed in thousands of Canadian dollars, except per share amounts)

 

Condensed Consolidated Interim Statement of Financial Position(Unaudited â?? expressed in thousands of Canadian dollars)

 

Condensed Consolidated Interim Statement of Cash Flows(Unaudited â??expressed in thousands of Canadian dollars)

 

NON-IFRS MEASURES

Certain specified financial measures in this news release are non-IFRS measures. These terms are not defined by IFRS and, therefore, may not be comparable to similar measures reported by other companies. These non-IFRS financial measures should not be considered in isolation or as an alternative for or superior to measures of performance prepared in accordance with IFRS.�These measures are presented and described in order to provide shareholders and potential investors with additional measures in understanding the Company's operating results in the same manner as the management team.� 

ADJUSTED OPERATING INCOME (LOSS)

Adjusted operating income (loss) is a non-IFRS financial measure which the Company uses to evaluate its operating performance. Adjusted operating income (loss) provides information to investors, analysts, and others to aid in understanding and evaluating the Company's operating results in a similar manner to its management team. The Company defines adjusted operating income (loss) as operating income (loss) less restructuring costs (recovery), goodwill and intangible asset impairments and asset impairments triggered by restructuring activities.

The following tables reconcile adjusted operating income (loss) to operating income (loss) for the periods noted.

 

FREE CASH FLOW 

Free cash flow is a non-IFRS financial measure which the Company uses to evaluate its financial performance. Free cash flow provides information which management believes to be useful to investors, analysts and others in understanding and evaluating the Company's ability to generate positive cash flows as it removes cash used for non-operational items. The Company defines free cash flow as the total change in cash and cash equivalents less cash used for common share repurchases, dividends (if any), changes to debt instruments, changes to long-term investments, net cash used for acquisitions plus cash provided by dispositions (if any).

The following table reconciles free cash flow to change in cash and cash equivalents for the periods noted.

SOURCE SNDL Inc.

SOURCE: SNDL Inc.

Sophie Pilon, SNDL Inc., O: 1.587.327.2017, E:aEURinvestors@sndl.com

COMTEX_452109492/2197/2024-05-09T06:00:00