Hexo, like Aphria, does not break Inventory into Work in Progress or Finished Goods in their notes or MDA. Hexo always had minor Medical sales and was looking to adult recreational to be their core business. Bio Assets has been growing the last two Q's, and Inventory has certainly also shown growth. Inventory, like Aphria, is very linear but it is tough to tell if they will be able to keep up the sales pace without knowing the FG available for sale.. The Sales delta is exceeding the Inventory Delta in the last Q.
I thought I would try to tell the story of Hexo Q2 in pictures. Income Statement Drivers and Implied Breakeven TREND. Income Statement Drivers and Implied Breakeven PEER. Gross Margin % TREND & PEER Tier 2 LPs. Gross Margin Peer Comparison Latest Q - Full Peer Group TREND Analysis SGA & SBC as % of Sales. PEER Analysis SGA & SBC as % Sales. PEER: Implied Breakeven Sales divided by Current Sales. PEER: Implied Breakeven Sales to +EBITDA divided by Current Sales.
Looks like I will need to replace HIP in my Tier 2 Cdn LP Peer Group. Here are latest Breakeven and SGA & SBC as % of Sales.
I have playing with some data and thought I'd share.
This is the first time I’ve darkened their financial door (as it were) in any detail, although I’ve viewed them from afar as a possible regional hedge of producer exposure.And despite my less than ebullient view of the provincial marketplace they are about to launch and expand within, they do have a large supply deal with a wretch (the provincial monopoly) that will at least get their product into stores and shelves.Straight to it:$2.5MM license capitalized, aggregate $4.5MM in intangibles. Pretty negligible, and alot less than $500MM.Note 10 reads like a shitty Victorian romance novel: ornate, fussy, unclear, and ultimately ends up with a…