Sundial Growers Inc (NASDAQ:SNDL) inked a stock sale agreement with ATB Capital Markets and Canaccord Genuity agents. As per the deal’s terms, the company expects to raise a capital of up to $800 million. The agents will receive 3% of the gross proceeds of the capital.
Sundial reported an increase of 10% YoY in revenues to $73.3 million in 2020. Its revenues in Q4 2020 surged to $13.9 million (up 8% QoQ).
The company posted branded revenues of $11.4 million (up 15% QoQ) in Q4 2020. However, its unbranded sales declined to $2.4 million (down 18%) in Q4 2020.
Growing need for inhalable products
Recreational customers well accept sundial’s inhalable products. The company posted growth in recreational sales, comprising a majority of pre-rolls and dried flower, to $12 million in Q4 2020. Sundial reported a QoQ growth of 19% to $4.3 million from the sale of vape cartridges.
The average per-gram selling price for branded products declined to $4.14 in Q4 2020 from $5.53 in Q3 2020. It is on the backdrop of a shift of the consumers to value segments and supply condition-related compression.
Realigns operating model
Sundial realigned its operating model and achieved significant cost savings in 2020. As a result, its cash burn declined to $12.2 million (down 63% QoQ) in Q4 2020. It also lowered its G&A expenses to $32 million (down 18% QoQ) in Q4 2020 by reducing wages, salaries, and consulting fees.
Apart from financial discipline, Sundial improved investments in marketing, sales, and brands to $2.3 million (up 109% QoQ) in Q4 2020 to cater to consumers’ preferences.
The cultivation cost per gram in Q4 2020 declined to $1.11 (down 6% QoQ) by improving efficiency and cost-saving measures.
Sundial completed the cultivation facilities in early 2020. In H2 2020, the company completed the processing facilities.
To ensure consistent delivery of Top Leaf brand promise, Sundial improved its quality processes that comprise hand manicured and hand dried flower offerings. It also expects to unveil new cultivars in H2 2021 with the recent completion of R&D. To continue growth; the company also focuses on developing an innovative pipeline.
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