SNDL Reports Fourth Quarter and Full Year 2024 Financial and Operational Results

Published: 2025-03-18 07:01:31 ET SNDL

The Company reports Record Full Year Net Revenue, Gross Profit and Gross Margin, as well as positive Cash Flow and Free Cash Flow

CALGARY, AB, March 18, 2025 /CNW/ - SNDL Inc. (NASDAQ: SNDL) ("SNDL" or the "Company") reported its financial and operational results for the full year and fourth quarter ended December 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 and shareholder letter on its website, found at https://sndl.com.

The Company will hold a conference call and webcast presentation at 10:00 a.m. EDT (8:00 a.m. MDT) on Tuesday, March 18, 2025. The conference call details can be found below.

MANAGEMENT HIGHLIGHTS

"We are pleased with the continued progress reflected in our fourth-quarter and full-year 2024 results, as we set new records and exceeded our commitment to achieving break-even free cash flow for the year. We have accomplished this while continuing to transform our business by investing in growth opportunities and strengthening our organizational capabilities. The SNDL team remains dedicated to raising the bar in 2025 and beyond," said Zach George, Chief Executive Officer of SNDL.

"During the fourth quarter of 2024 and the first months of 2025 up to this date, we took several strategic steps to enhance our foundation for long-term success and shareholder value:

In addition to these achievements, the Company has applied for listing of its common shares on the Canadian Securities Exchange ("CSE") and anticipate the CSE listing to go live in April 2025, providing our shareholders with increased flexibility and optionality.

The progress made during the last year in operational performance and financial discipline is undeniable, and we are encouraged by the many opportunities we still have ahead of us. Our strong balance sheet, including $218.4 million of unrestricted cash as of December 31, 2024, is not only a competitive differentiator but also gives us the flexibility to thoughtfully deploy capital into organic and inorganic investments with attractive returns. Our plan is to continue building strong fundamentals, as we expect to build momentum through 2025 with the goal of generating $100 million in positive annual free cash flow within the next three years.

We want to thank our employees for their dedication and passion in delivering the progress we made during the last year, as well as our shareholders for their continued trust and support," concluded Zach George.

TOTAL COMPANY HIGHLIGHTS

Three months ended December 31

Year ended December 31

($000s)

2024

2023

% Change

2024

2023

% Change

IFRS Financial Measures

Net revenue

257,679

248,450

3.7

920,448

909,006

1.3

Gross profit

68,799

57,336

20.0

240,331

190,415

26.2

Operating loss

(76,089)

(85,017)

10.5

(103,811)

(163,171)

36.4

Change in cash and cash equivalents

(44,617)

(6,942)

-543

23,318

(84,545)

128

Non-IFRS Financial Measures (1)

Gross margin

26.7

23.1

3.6

26.1

20.9

5.2

Adjusted operating loss

(60,472)

(27,094)

-123

(86,144)

(98,028)

Free cash flow

11,625

1,383

741

8,872

(60,883)

115

(1)

Gross Margin is a supplementary financial measure calculated by dividing Gross Profit by Net Revenue. Adjusted operating income (loss) and Free Cash Flow are specified financial measures that do not have a standardized meanings prescribed by IFRS and therefore may not be comparable to similar measures reported by other companies. See "Non-IFRS Measures" section below for further information.

BUSINESS SEGMENT HIGHLIGHTS

SNDL's business is operated and reported in four segments: Liquor Retail, Cannabis Retail, Cannabis Operations and Investments. Corporate and Shared Service expenses, as well as the revenue elimination associated with the Cannabis Operations sales to the provincial boards that are expected to be subsequently repurchased by the Company's licensed retail subsidiaries for resale, are reported as "Corporate".

Three months ended December 31

Year ended December 31

($000s)

2024

2023

% Change

2024

2023

% Change

Net Revenue

Liquor Retail

154,080

159,493

-3.4

555,259

578,895

-4.1

Cannabis Retail

83,170

75,152

10.7

311,689

289,980

7.5

Cannabis Operations

37,092

26,044

42.4

109,470

87,071

25.7

Investments

—

Corporate

(16,663)

(12,239)

-36.1

(55,970)

(46,940)

-19.2

Total

257,679

248,450

3.7

920,448

909,006

1.3

Operating Income

Liquor Retail

12,325

10,120

21.8

34,781

24,655

41.1

Cannabis Retail

(8,997)

(849)

-959.7

(1,742)

4,840

-136.0

Cannabis Operations

4,391

(65,749)

106.7

2,663

(112,744)

102.4

Investments

(63,724)

(5,217)

-1121.5

(50,013)

11,746

-525.8

Corporate

(20,084)

(23,322)

13.9

(89,500)

(91,668)

2.4

Total

(76,089)

(85,017)

-10.5

(103,811)

(163,171)

400.2

Adjusted Operating Income

Liquor Retail

12,325

10,120

21.8

34,781

24,655

41.1

Cannabis Retail

6,003

(849)

807.1

13,258

4,840

173.9

Cannabis Operations

4,439

(7,715)

157.5

3,091

(52,728)

105.9

Investments

(63,724)

(5,217)

-1121.5

(50,013)

11,746

-525.8

Corporate

(19,515)

(23,433)

16.7

(87,261)

(86,541)

-0.8

Total

(60,472)

(27,094)

-1355.1

(86,144)

(98,028)

133.4

Liquor Retail

SNDL is Canada's largest private sector liquor retailer, operating at March 17, 2025 in 165 locations, predominantly in Alberta, under its three retail banners: "Wine and Beyond" (13), "Liquor Depot" (19), and "Ace Liquor" (133).

Three months ended December 31

Year ended December 31

($000s)

2024

2023

% Change

2024

2023

% Change

Net Revenue

154,080

159,493

-3.4

555,259

578,895

-4.1

Gross Profit

38,236

38,396

-0.4

139,706

137,286

1.8

Gross margin

24.8

24.1

0.7

25.2

23.7

1.4

Operating Income

12,325

10,120

21.8

34,781

24,655

41.1

Adjusted Operating Income

12,325

10,120

21.8

34,781

24,655

41.1

(2)

Same store sales are specified financial measures that do not have standardized meanings prescribed by IFRS Accounting Standards and therefore may not be comparable to similar measures used by other companies. Refer to the "Non-IFRS Financial Measures and Other Measures" section of this MD&A for further information.

Cannabis Retail

SNDL is one of Canada's largest private-sector cannabis retailer, operating at March 17, 2025 in 185 locations under its three retail banners: "Value Buds" (117), "Spiritleaf" (67, of which 8 are corporate stores and 59 are franchise stores), and "Superette" (1). 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 provided to 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.

Three months ended December 31

Year ended December 31

($000s)

2024

2023

% Change

2024

2023

% Change

Net Revenue

83,170

75,152

10.7

311,689

289,980

7.5

Gross Profit

20,490

20,045

2.2

78,827

73,690

7.0

Gross margin

24.6

26.7

-2.0

25.3

25.4

-0.1

Operating Income

(8,997)

(849)

-959.7

(1,742)

4,840

-136.0

Adjusted Operating Income

6,003

(849)

807.1

13,258

4,840

173.9

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.

Three months ended December 31

Year ended December 31

($000s)

2024

2023

% Change

2024

2023

% Change

Net Revenue

37,092

26,044

42.4

109,470

87,071

25.7

Gross Profit

10,073

(1,105)

1011.6

21,798

(20,561)

206.0

Gross margin

27.2

-4.2

31.4

19.9

-23.6

43.5

Operating Income

4,391

(65,749)

106.7

2,663

(112,744)

102.4

Adjusted Operating Income

4,439

(7,715)

157.5

3,091

(52,728)

105.9

Investments

Equity Position

This press release is intended to be read in conjunction with the Company's consolidated financial statements and the notes thereto for the years ended December 31, 2024 and 2023, 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 10:00 a.m. EDT (8:00 a.m. MDT) on Tuesday, March 18, 2025.

WEBCAST ACCESSTo access the live webcast of the call, please visit the following link:

https://edge.media-server.com/mmc/p/yxxmbsby

REPLAY

A replay of the webcast will be available at https://sndl.com/financials/quarterly-results/default.aspx

ABOUT SNDL INC.

SNDL Inc. (NASDAQ: SNDL), through its wholly owned subsidiaries, is one of the largest vertically integrated cannabis companies and 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 Superette. With products available in licensed cannabis retail locations nationally, SNDL's consumer-facing cannabis brands include Top Leaf, Contraband, Palmetto, Bon Jak, La Plogue, Versus, Value Buds, Grasslands, Vacay, Pearls by Grön, No Future and Bhang Chocolate. 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, please visit www.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 and plans, the anticipated impact of the Company's strategic steps on long-term success and shareholder value, the Company's intentions to activate a listing on the CSE and anticipated timing thereof, the anticipated benefit of the Company's strong balance sheet, the Company's strategy with respect to its operating segments, the impact of the negative Florida election vote to legalize adult use cannabis, expectations with respect to the Parallel restructuring process, the Company's margin improvement initiatives, the Company's ability to achieve long-term, sustainable profitability, growth and efficiencies, the Company's long-term strategic plan, the benefits of the Company's Investment Segment portfolio, expectations with respect to sharing information with investors, the Company's retail strategy, expectations with respect to the Company's Cannabis Operations segment, the Company's vertical integration strategy, the Company's proprietary data licensing program, expansion of product offerings (including the expected expansion of the Company's private labels), performance of the Company's investments, including through the SunStream joint venture and SunStream USA Group, expectations with respect to the SunStream USA Group, the timing and closing of the transactions with Parallel and Skymint, potential local and international regulatory changes, the share repurchase program, including the anticipated benefits thereof, 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 18, 2025, 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 Statement of Loss and Comprehensive Loss(Expressed in thousands of Canadian dollars, except per share amounts)

Year ended

December 31

2024

2023

Net revenue

920,448

909,006

Cost of sales

680,117

718,591

Gross profit

240,331

190,415

Investment income

15,551

5,259

Share of (loss) profit of equity-accounted investees

(65,459)

6,758

General and administrative

187,243

199,725

Sales and marketing

12,004

15,045

Research and development

346

324

Depreciation and amortization

54,250

60,216

Share-based compensation

20,037

15,400

Restructuring costs

2,667

19,573

Asset impairment, net

17,317

54,967

Loss on disposition of assets

370

353

Operating loss

(103,811)

(163,171)

Other expenses, net

(1,798)

(8,845)

Loss before income tax

(105,609)

(172,016)

Income tax recovery

9,405

—

Net loss from continuing operations

(96,204)

(172,016)

Net loss from discontinued operations

—

(4,535)

Net loss

(96,204)

(176,551)

Equity-accounted investees - share of other comprehensive income (loss)

31,489

(12,771)

Investments at FVOCI - change in fair value

1,864

—

Comprehensive loss

(62,851)

(189,322)

Net loss from continuing operations attributable to:

Owners of the Company

(94,796)

(168,125)

Non-controlling interest

(1,408)

(3,891)

(96,204)

(172,016)

Net loss attributable to:

Owners of the Company

(94,796)

(172,660)

Non-controlling interest

(1,408)

(3,891)

(96,204)

(176,551)

Comprehensive loss attributable to:

Owners of the Company

(61,443)

(185,431)

Non-controlling interest

(1,408)

(3,891)

Condensed Consolidated Statement of Financial Position(Expressed in thousands of Canadian dollars)

As at

December 31, 2024

December 31, 2023

Assets

Current assets

Cash and cash equivalents

218,359

195,041

Restricted cash

19,815

19,891

Marketable securities

139

225

Accounts receivable

28,118

27,059

Biological assets

1,187

429

Inventory

127,919

129,060

Prepaid expenses and deposits

16,860

22,464

Investments

27,560

3,400

Assets held for sale

19,051

6,375

Net investment in subleases

2,832

2,970

461,840

406,914

Non-current assets

Long-term deposits and receivables

3,679

4,837

Right of use assets

115,435

129,679

Property, plant and equipment

145,810

152,916

Net investment in subleases

15,354

18,396

Intangible assets

61,325

73,149

Investments

8,427

29,660

Equity-accounted investees

413,124

538,331

Goodwill

124,248

119,282

Total assets

1,349,242

1,473,164

Liabilities

Current liabilities

Accounts payable and accrued liabilities

56,275

68,210

Lease liabilities

34,256

30,537

Derivative warrants

4,400

90,557

103,147

Non-current liabilities

Lease liabilities

118,017

136,492

Other liabilities

7,312

4,185

Total liabilities

215,886

243,824

Shareholders' equity

Share capital

2,346,728

2,375,950

Warrants

667

2,260

Contributed surplus

57,156

73,014

Contingent consideration

—

2,279

Accumulated deficit

(1,323,965)

(1,260,851)

Accumulated other comprehensive income

52,770

19,417

Total shareholders' equity

1,133,356

1,212,069

Non-controlling interest

—

17,271

Total liabilities and shareholders' equity

1,349,242

1,473,164

Condensed Consolidated Statement of Cash Flows(Expressed in thousands of Canadian dollars)

Year ended

December 31

2024

2023

Cash provided by (used in):

Operating activities

Net loss for the period

(96,204)

(176,551)

Adjustments for:

Income tax recovery

(9,405)

—

Interest and fee income

(15,637)

(14,517)

Change in fair value of biological assets

(892)

7,936

Share-based compensation

20,037

15,400

Depreciation and amortization

56,711

64,946

Loss on disposition of assets

370

353

Inventory impairment and obsolescence

3,707

30,644

Finance costs, net

7,161

11,362

Change in estimate of fair value of derivative warrants

(4,374)

(6,602)

Unrealized foreign exchange loss

108

(13)

Transaction costs

164

1,221

Bargain purchase gain

(5,456)

—

Asset impairment, net

17,317

54,967

Share of loss (profit) of equity-accounted investees

65,459

(6,758)

Realized loss on settlement of marketable securities

—

138,874

Unrealized loss (gain) on marketable securities

(129,616)

Proceeds from settlement of marketable securities

—

6,704

Income distributions from equity-accounted investees

10,715

—

Interest received

12,494

13,563

Change in non-cash working capital

(7,447)

(32,875)

Net cash provided by (used in) operating activities from continuing operations

54,914

(20,962)

Net cash provided by operating activities from discontinued operations

—

4,314

Net cash provided by (used in) operating activities

54,914

(16,648)

Investing activities

Additions to property, plant and equipment

(8,615)

(7,845)

Additions to intangible assets

(2,404)

(87)

Changes to investments

(22,617)

(732)

Capital refunds (contributions) to equity-accounted investees

168

(25,089)

Capital distributions from equity-accounted investees

89,758

—

Proceeds from disposal of property, plant and equipment

734

1,213

Acquisitions, net of cash acquired

(39,644)

3,695

Change in non-cash working capital

383

4,028

Net cash provided by (used in) investing activities

17,763

(24,817)

Financing activities

Change in restricted cash

(553)

Payments on lease liabilities, net

(36,952)

(41,013)

Repurchase of common shares

(13,219)

(1,536)

Proceeds from issuance of shares, net of costs

(59)

—

Issuance of common shares by subsidiaries

174

—

Distributions declared by subsidiaries

—

(20)

Change in non-cash working capital

621

Net cash used in financing activities

(49,359)

(43,080)

Change in cash and cash equivalents

23,318

(84,545)

Cash and cash equivalents, beginning of period

195,041

279,586

Cash and cash equivalents, end of period

218,359

195,041

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 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 to un-adjusted operating income (loss) for the periods noted.

($000s)

Liquor

Retail

Cannabis

Retail

Cannabis

Operations

Investments

Corporate

Total

Three months ended December 31, 2024

Operating income (loss)

12,325

(8,997)

4,391

(63,724)

(20,084)

(76,089)

Adjustments:

Restructuring costs

—

569

617

Goodwill and intangible asset impairments

—

15,000

—

15,000

Adjusted operating income (loss)

12,325

6,003

4,439

(63,724)

(19,515)

(60,472)

($000s)

Liquor

Retail

Cannabis

Retail

Cannabis

Operations

Investments

Corporate

Total

Three months ended December 31, 2023

Operating income (loss)

10,120

(849)

(65,749)

(5,217)

(23,322)

(85,017)

Adjustments:

Restructuring costs (recovery)

—

13,398

—

(111)

13,287

Goodwill and intangible asset impairments

—

29,000

—

29,000

Impairments triggered by restructuring

—

15,636

—

15,636

Adjusted operating income (loss)

10,120

(849)

(7,715)

(5,217)

(23,433)

(27,094)

($000s)

Liquor

Retail

Cannabis

Retail

Cannabis

Operations

Investments

Corporate

Total

Year ended December 31, 2024

Operating income (loss)

34,781

(1,742)

2,663

(50,013)

(89,500)

(103,811)

Adjustments:

Restructuring costs

—

428

—

2,239

2,667

Goodwill and intangible asset impairments

—

15,000

—

15,000

Adjusted operating income (loss)

34,781

13,258

3,091

(50,013)

(87,261)

(86,144)

($000s)

Liquor

Retail

Cannabis

Retail

Cannabis

Operations

Investments

Corporate

Total

Year ended December 31, 2023

Operating income (loss)

24,655

4,840

(112,744)

11,746

(91,668)

(163,171)

Adjustments:

Restructuring costs

—

14,446

—

5,127

19,573

Goodwill and intangible asset impairments

—

29,934

—

29,934

Impairments triggered by restructuring

—

15,636

—

15,636

Adjusted operating income (loss)

24,655

4,840

(52,728)

11,746

(86,541)

(98,028)

GROSS MARGIN

Gross margin is a supplementary financial measure calculated by dividing gross profit by net revenue 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, providing information which management believes to be useful 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.

Three months ended

December 31

Year ended

December 31

($000s)

2024

2023

2024

2023

Change in cash and cash equivalents

(44,617)

(6,942)

23,318

(84,545)

Adjustments

Repurchase of common shares

13,219

—

13,219

1,536

Changes to long-term investments

5,033

8,325

(67,309)

25,821

Acquisitions, net of cash acquired

37,990

—

39,644

(3,695)

Free cash flow

11,625

1,383

8,872

(60,883)

SAME STORE SALESSame store sales is a non-IFRS financial measure which the Company uses to evaluate its financial performance in its retail segments. Same store sales provides information which management believes to be useful to investors, analysts and others in understanding and evaluating the Company's sales trends excluding the effect of the opening and closure of stores.

Same store sales refers to the revenue generated by the Company's existing retail locations during the current and prior comparison periods.

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SOURCE SNDL Inc.