Canopy cites ‘spreadsheet error’ for underreporting adjusted EBITDA


Canada’s major cannabis business, Canopy Development, was forced to refile its management discussion and evaluation (MD&ampA) with the Canadian Securities Administrators to right adjusted earnings just before interest, tax, depreciation and amortization (EBITDA).

The original MD&ampA stated that the adjusted EBITDA loss for the nine months ended Dec. 31, 2018, was 69 million Canadian dollars (CA$52 million).

Having said that, Canopy’s adjusted EBITDA loss amounted to CA$155 million for the nine months ended Dec. 31, 2018.

“The correction was produced due to a formula error in the spreadsheet supporting the year-to-date adjusted EBITDA loss calculation,” Canopy noted in a news release. “The Adjusted EBITDA loss for the 3 months ended as Dec. 31, 2018, was right as reported, as have been all prior quarters as released.”

Canopy stated no modifications are expected to the interim consolidated economic statement, released Feb. 14, 2019, for the 3 and nine months ended Dec. 31, 2018.

Matt Bottomley, an analyst with Toronto-primarily based investment firm Canaccord Genuity, stated the amended MD&ampA could add to investor confusion, but Canaccord views the refiling as “purely clerical in nature as it did not represent a restatement of the company’s previously issued operating functionality.”

“The sum of Canopy’s adjusted EBITDA loss for the 1st 3 quarters currently equated to (CA$155 million),” Bottomley added. “However, the figure in its most current Q3 MD&ampA did not add the nine-month period properly.”

Canopy did not straight away reply to queries from Marijuana Organization Each day.

It is not the 1st time Canopy Development had to refile an MD&ampA.

In 2017, the Smiths Falls, Ontario, business filed amended and restated consolidated economic statements and amended and restated MD&ampA for the year ended March 31, 2017.

As a outcome of that restatement, Canopy’s reported net loss was slashed from CA$16.7 million to CA$7.six million.

Canopy Growth’s shares trade on the New York Stock Exchange below the ticker symbol CGC and on the Toronto Stock Exchange as WEED.

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