Canadian cannabis company Hexo Corp. on Thursday announced a share consolidation and posted a 52.1 million Canadian dollar ($38.2 million) net loss for the first quarter of its 2023 fiscal year.
The share consolidation will combine 14 of the company’s common shares into one share and is expected to take place on or around Dec. 19.
It will affect the company’s listings on both the Nasdaq in the U.S. and the Toronto Stock Exchange in Canada.
The reverse stock split has been expected since February, after Nasdaq notified the company that its share price had fallen below the minimum required value for listing on the exchange.
Separately on Thursday, Hexo announced its financial results for the quarter ended Oct. 31.
The CA$52.1 million quarterly net loss, a significant improvement over the previous quarter’s CA$102.4 million net loss, came as net revenue declined 16% from the previous quarter to CA$35.8 million.
Hexo attributed that sequential revenue decline in part to “certain shipments (failing) to reach their destination due to severe weather towards the period end.”
“Other challenges were faced, leading to shortages of desired products, and short filling purchase orders as the company continues to implement its revised demand planning process,” said Hexo in a news release.
Quarterly revenue was 29% lower compared to the same quarter a year before, attributed to “proactive decisions to realign the Hexo brand’s profitable product and cull products that were no longer meeting profitability standards.”
In a statement, Hexo CEO Charlie Bowman said the company is positioned “for long-term success.”
“Our laser focus on tackling the balance sheet, pulling back on those unprofitable products where our strengths in premium cultivation were not being leveraged and expanding further into opportunities where we know we can win, is paying off across the business,” Bowman said.
Chief Financial Officer Julius Ivancsits highlighted balance sheet improvements such as the company’s amended debt structure as well as its repayment earlier this month of more than CA$40 million in debt.
“We’ve reduced our general and administrative and selling, marketing and promotion expenses by CA$18 million and have substantially lowered our overhead costs,” Ivancsits said in a statement.
