CALGARY, April 9, 2020 /CNW/ - Sundial Growers Inc.
(Nasdaq: SNDL) ("Sundial" or "the Company") announced changes to
its operations to improve liquidity and lower its cost structure,
in response to current market conditions and the COVID-19 pandemic.
These changes include a focus on accelerating the monetization of
inventory, further reductions to its workforce and the temporary
curtailment of cultivation and harvest activities, while
maintaining current processing levels to meet anticipated
demand.
"We have taken significant actions to restructure our business
over the last few months to drive operational efficiencies and
adapt to current market conditions," said Zach George, Sundial's Chief Executive Officer.
"Reducing our cultivation and harvest activities while drawing down
inventory are strategic choices we are making to improve cash
conversion and control our variable production costs. These actions
are consistent with Sundial's long-term goals of reaching
sustainable profitability and optimizing our asset base."
On January 30th,
Sundial announced an annualized cost reduction target of
$10-15 million. Management has
surpassed this target, and with these additional labour adjustments
expects to realize annualized net cost reductions of approximately
$28 million. The cost reduction
initiatives include reductions in workforce, enhancing facility
workflows and processes, eliminating all non-essential spend and
pausing all new hiring, with the exception of a very small number
of critical roles to be filled.
Sundial is committed to producing high quality products while
also maintaining its steadfast approach to cost discipline. The
Company's unique "craft-at-scale" operational infrastructure allows
it to quickly adjust operating capacity to reflect industry
conditions. Sundial is closely monitoring customer demand and is
prepared to further adjust operations as the industry dictates.
Sundial continues to have strong partnerships with provincial
boards and has shipped its first order of cannabis products to the
Société québécoise du cannabis (SQDC), Quebec's legal retailer of recreational
cannabis. With Quebec, Sundial's network reaches 97% of
the Canadian cannabis market.
Approximately 65% of the impacted employees are considered
temporary layoffs and can be recalled back to work for the Company
in the next 120 days, as per the new Alberta Government guidelines.
This allows Sundial to respond quickly to increased market demand,
or employee absenteeism as a result of COVID-19, by accessing
furloughed employees quickly. The Company will continue to cover
the cost of employee health and dental benefits for all employees
temporarily laid-off during this difficult time. The Company
appreciates the challenges this decision will present to its valued
employees and their families and has made every effort to provide
those impacted with clear direction on how to access government
sponsored wage loss programs.
Sundial is closely monitoring the COVID 19 virus in Canada and has developed a risk assessment and
corresponding action plan to ensure the health and safety of
employees and assure business continuity. The situation is evolving
quickly, and Sundial stands ready to adjust its plan and take
action as necessary.
"The safety and well-being of our people is our priority and we
are taking a number of precautionary measures to prevent the
possible spread of the virus at our facilities. In addition, we are
actively encouraging all employees to closely follow the advice of
our public health authorities," added Mr. George.
To date Sundial has responded by implementing the following:
- An Emergency Response Team was established to monitor pandemic
updates, review safety protocols, assess public health risk and
develop action plans
- Moved to a work-from-home environment for any functions not
required onsite
- Mandatory temperature screening before entering the premises at
the Olds and Rocky View County
facilities
- Implemented travel restrictions for work related travel,
restricted visitor access to the facility and imposed
self-isolation for employees who have symptoms of sickness and/or
returned from international travel as of March 13
- Increased focus on sanitation and physical distancing, with
additional hand sanitizing stations throughout the facility,
cleaning and sanitizing of high touch surfaces, and additional
cleaning in common areas
- Imposed restrictions on large meetings and gatherings, opting
for video conferencing meetings
- Worked collaboratively with appropriate government programs at
both provincial and federal levels
- Reminders of measures to reduce risk of infection and prevent
possible spread including regular washing of hands and avoiding
face touching.
About Sundial Growers Inc.
Sundial is a public company with Common Shares traded on Nasdaq
under the symbol "SNDL". Sundial is a licensed producer that crafts
cannabis using state-of-the-art indoor facilities. Our
'craft-at-scale' modular growing approach, award-winning genetics
and experienced master growers set us apart.
Our Canadian operations cultivate small-batch cannabis using an
individualized "room" approach, with 470,000 square feet of total
space. In the United Kingdom, we
grow traceable plants, including hemp, ornamental flowers and
edible herbs within 1.75 million square feet of environmentally
friendly facilities.
Sundial's brand portfolio includes Top Leaf, Sundial
Cannabis, Palmetto and Grasslands. Our
consumer-packaged goods experience enables us to not just grow
quality cannabis, but also to create exceptional consumer and
customer experiences.
We are proudly Albertan, headquartered in Calgary, AB, with operations in Olds, AB, and Rocky View County, AB.
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")
Forward-looking-statements in this release include, but are not
limited to, the potential cost -reduction plans of the Company.
Forward-looking statements are frequently characterized by words
such as "plan", "continue", "expect", "project", "intend",
"believe", "anticipate", "estimate", "may", "will", "potential",
"proposed" and other similar words, or statements that certain
events or conditions "may" or "will" occur. These statements are
only predictions. Various assumptions were used in drawing the
conclusions or making the projections contained in the
forward-looking statements throughout this news release.
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.
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.
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SOURCE Sundial Growers Inc.