SNDL Reports Record CA$909M In Net Revenue For 2023, CEO Zach George Calls It 'Foundational' Period

SNDL Inc. SNDL reported on Thursday its financial and operational results for the full year and fourth quarter ended Dec. 31, 2023, revealing a record net revenue for 2023 of CA$909 million ($670.3 million) compared to CA$712.2 million in 2022. That's an increase of 28% year-over-year.

The Calgary-based company also reported positive free cash flow achieved in the second half of 2023, totaling CA$17.7 million.

“2023 was a year of significant financial success for SNDL, including record-breaking revenue and gross profit, and the achievement of free cash flow in the second half of the year,” said Zach George, CEO of SNDL. “The generation of stabilized free cash flow continues to be a top priority for our team, and I am proud that we delivered on this stated objective during the last two quarters."

One of the largest players in the Canadian cannabis market, the company has undergone a notable transition since George became CEO in early 2020, including organic change and M&A. Before rebranding, SNDL was known as Sundial Growers.

"When I arrived and started as a CEO, the company was experiencing extreme challenges," George said at a 2022 Benzinga cannabis event. "We had cost-control issues and we lacked focus. We were trying to pursue initiatives in wellness, recreational and medical cannabis, spending money in half-dozen countries, and at a point, we were about to miss payroll."

Benzinga Cannabis Capital Conference returns to Florida on April 16-17. Attendees can look forward to numerous sessions for an in-depth look at what cannabis businesses are facing these days.

Fast forward a couple of years and SNDL boasts one of the strongest balance sheets in the North American cannabis industry. In 2023, the company finalized the CA$138 million acquisition of all issued and outstanding common shares of The Valens Company Inc.

George praised the company's efforts in 2023, calling the period "foundational."

"We acquired Valens, welcomed top-tier leaders and streamlined our balance sheet, positioning SNDL for improved performance in 2024 and beyond," he said in Thursday's press release.

Pro tip for Benzinga readers: Secure your tickets for the conference ASAP. Prices will increase very soon! You can get a 20% discount on tickets following this link right now.

Q4 2023 Financial Highlights

• Net revenue totaled CA$248.5 million, compared to CA$240.4 million in the fourth quarter of 2022, an increase of 3%.
• Gross profit amounted to CA$57.3 million, or 23% of sales, compared to CA$43.6 million, or 18% of sales, in the same period of 2022.
• Cash flow was negative CA$6.9 million, up by 42% year-over-year.
• Operating income loss of CA$84.9 million, including CA$13.3 million of restructuring cost and CA$29 million of goodwill impairment, representing a 45% year-over-year improvement.
• Adjusted EBITDA from continuing operations came in positive at CA$3.5 million, compared to an adjusted EBITDA loss of CA$7.5 million in the fourth quarter of 2022, a 147% improvement.

FY 2023 Financial Highlights

• Gross profit grew to CA$190.4 million, or 21% of sales, representing a year-over-year increase of 36%.
• Cash flow was negative CA$84.5, representing a 70% year-over-year improvement.
• Operating income loss of CA$162.8 million for 2023, partly attributable to restructuring charges of CA$19.6 million and goodwill impairment of CA$29 million, marking a 53% year-over-year improvement.
• Adjusted EBITDA from continuing operations came in positive at CA$29.2 million, compared to an adjusted EBITDA loss of CA$15.8 million in the previous year.
• CA$766.7 million of unrestricted cash, marketable securities and investments and no outstanding debt, with $195 million of unrestricted cash on Dec. 31, 2023.
• The company has not raised cash through share offerings since June 2021.

SNDL Price Action

SNDL's shares traded 1.31% higher at $1.55 per share during the pre-market session on Thursday morning.

The Benzinga Cannabis Capital Conference is returning to Florida, in a new venue in Hollywood, on April 16 and 17, 2024. The two-day event at The Diplomat Beach Resort will be a chance for entrepreneurs, both large and small, to network, learn and grow. Renowned for its trendsetting abilities and influence on the future of cannabis, mark your calendars – this conference is the go-to event of the year for the cannabis world.

Get your tickets now on bzcannabis.com – Prices will increase very soon!