Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) announced its 2021 fourth quarter and full-year business results. Cronos reported that in the fourth quarter it had net revenue of $25.8 million an increase of $8.7 million from the same time period last year. Cronos said the increase year-over-year was primarily driven by continued growth in the adult-use market in Canada and increased sales in the Israeli medical market. Once again though the company recorded an eye-popping net loss of $133 million in the quarter and earnings per share of ($0.36). The stock was slipping 2% in early trading to lately sell at $3.50, down from its year high of $11.67.
For the full year, the net revenue was $74.4 million an increase of $27.7 million over 2020. The company attributed the increase year-over-year to continued growth in the adult-use market in Canada and increased sales in the Israeli medical market. The operating loss for the full year was a staggering $560 million, while the net loss was $389 million. This was even higher than 2020’s net loss of $321 million. The earnings per share for the year was ($1.07).
“I am proud of the dedication and resilience our team has shown throughout the past year as we navigated through a dynamic market environment,” said Kurt Schmidt, President, and CEO, Cronos Group. “Our fourth quarter 2021 results indicate positive momentum, which we will look to carry forward as we begin to implement our strategic and operational realignment initiatives. As we look to 2022, we will continue to realign Cronos Group’s organizational structure to match our strategy, with a primary focus on adult-use products and elevating our brands through rare cannabinoids. We also remain intensely focused on positioning ourselves for long-term opportunities by continuing to invest in our brands, creating and supporting an efficient manufacturing strategy, investing in rare cannabinoids and innovation, and readying Cronos Group for entry into the U.S. cannabis market once federally permitted. We are optimistic about the future of the Company and the year ahead.”
Peace Out To Peace Naturals
Cronos announced in its earnings report that it plans to exit its Peace Naturals Campus in Stayner, Ontario, Canada. Cronos Group said it will continue to operate the Peace Naturals Campus with a phased reduction and transition of activities with a planned exit by the end of 2022. The company did say that various research and development initiatives, inclusive of cannabinoid formulation, product development, tissue culture and micropropagation will continue across multiple facilities available to Cronos Group.
“In addition to the results we are announcing today and in line with our focus on enhancing agility and fostering long-term growth, we have made the decision to exit our Peace Naturals Campus in Stayner, Ontario. As we continue to execute our asset-light approach and focus on brands and R&D, we will continue to leverage our joint venture with Cronos GrowCo and other contract manufacturing partnerships moving forward. We are grateful to our Stayner associates for their hard work and the contributions they have made to Cronos Group, and appreciate their ongoing support in helping to provide a seamless transition out of the facility throughout 2022.”
As a result of the company’s planned exit from the Peace Naturals Campus, the company has incurred a $119.9 million non-cash impairment charge on long-lived assets in the fourth quarter of 2021. In addition, the company expects to incur charges of approximately $4.5 million in connection with the planned exit, all of which impact the ROW segment. These charges include employee-related costs, such as severance, relocation, and other termination benefits, as well as contract termination and other related costs, which are expected to be incurred primarily in the second half of 2022. In addition, the company said it expects capital expenditures of approximately $2.5 million to modernize information technology systems and build distribution capabilities.