February 14, 2020 / 4:24 PM / 3 days ago

BRIEF-Canopy Growth Sees Modest Sequential Jump in Q4 Revenue

Feb 14 (Reuters) - Canopy Growth Corp:

* CEO DAVID KLEIN SAYS WILL DETAIL PATH FORWARD DURING FOURTH QUARTER CALL AFTER COMPLETING HIS ASSESSMENT - CONFERENCE CALL

* CEO DAVID KLEIN SAYS PRIORITIES INCLUDE BRINGING “MORE FOCUS AND DISCIPLINE” TO CO; NEED TO FOCUS ON SPECIFIC MARKETS AND PRODUCT LINES

* CEO DAVID KLEIN SAYS PRIORITIES INCLUDE ALIGNING RESOURCES WITH SIZE AND GROWTH WITH MARKET AS IT EXISTS TODAY

* CEO DAVID KLEIN SAYS THOROUGH STRATEGIC REVIEW OF FOOTPRINT IS UNDERWAY

* CEO DAVID KLEIN SAYS NEED TO MOVE FASTER AND MAKE BOLDER MOVES IN THE U.S.

* CEO DAVID KLEIN ON CANNABIS BEVERAGES SAYS WILL TAKE “NEXT FEW MONTHS” TO GET IT RIGHT

* SEES OVERALL REVENUE TO BE UP MODESTLY IN Q4 VERSUS Q3 - CONF CALL

* EXPECT ISOLATED LOWER PRICING ACTIONS BY RIVALS TO CONTINUE IN Q4

* COMMITTED TO DELIVERING 40% GROSS MARGINS IN SHORT-TERM

* DELAYS IN VAPE AND BEVERAGES COULD BE SHORT-TERM HEADWINDS TO GROSS MARGINS

* IN FISCAL 2021, EXPECT SHARE BASED COMPENSATION TO BE 30-40% LOWER

* EXPECT SHARE BASED COMPENSATION TO NORMALIZE BETWEEN C$125 MILLION TO C$150 PER YEAR GOING FORWARD

* CEO SAYS WE ARE NOT GOING TO RUN OUT OF CASH, HAVE A LOT OF LEVERS TO PULL IN THAT REGARDS

* CEO SAYS WILL PULL BACK ON M&A ACTIVITY

* CEO SAYS DON’T SEE INCREMENTAL CAPITAL REQUIRED IN THE U.S.

* CEO SAYS WHOLESALE NOT A FOCUS AT THIS TIME BUT AN OPTION THAT CONTINUES TO EXIST

* CFO SAYS WOULD NOT MODEL THAT Q3 WAS PEAK INVENTORY BUT INCREASE SHOULD NOT BE BIG IN Q4

* CEO SAYS GOAL IS STILL TO GET TO 25-30% MARKET SHARE; MIGHT SEE SOME NOISE IN BETWEEN NOW AND LONG-TERM DUE TO LOWER PRICING BY RIVALS

* CEO SAYS IN DEC. TOOK DOWN SOME CAPACITY AT DELTA FACILITY AS FIRST STEP TO BRING SOME SUPPLY-DEMAND BALANCE

* SEES REVENUE PROVISIONS OF 3-4% TO BE NORMAL RANGE GOING FORWARD Further company coverage:

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