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Now, allow me quickly cover our operating costs. In general, SG&A reduced by 7% over the contrast duration in 2015. Sales and marketing costs reduced 25% year on year as well as 44% quarter on quarter driven by a pair of aspects. Initially, marketing as well as coupon expenditure declined by over $10 million versus the previous year as a result of delayed or terminated activities as a result of COVID-19 and in addition to elevated investing from in 2014 to record retail area - awning design.


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investment, however Canada payment expenses reduced due to head count reductions. And about Q4, compensation expenditures decreased by $4 million following our business restructuring actions and also the short-term furlough of corporate retail team due to the closure of our corporate stores. G&A prices increased by 2% year over year however reduced 18% quarter over quarter due partly to a decline in professional charges, lower facility expenses and reduced traveling costs.


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R&D costs decreased by 34% quarter on quarter as we are now reapportioning our R&D initiatives to concentrate on tasks that have high commercial return possibility with less focus on pharmaceutical-driven scientific tests. Stock-based compensation expenditure in Q1 lowered 63% versus prior year to $28.6 million, in part as a result of the loss of choices resulting from staff reductions that occurred throughout the quarter.


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Next, I would certainly like to review totally free cash money circulation. Our complimentary money flow in the initial quarter of monetary '21 was an outflow of $181 million which mores than 50% improvement contrasted to the prior year. Our capital decreased year over year as a result of reduced stock degrees. As well as notably, we ended the quarter with inventory of $389 million, a little below the prior quarter.


Capex decreased to $62 million, down both on a year-on-year basis and a quarter-on-quarter basis. As you can see in our quarterly outcomes, we are making progress versus our essential monetary metrics that we presented at our June investor meeting. On productivity, we provided a decrease in SG&A load as a percent of sales, while we are working to return to our 40% gross margin target.


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Before I close, I want to offer a few key factors to consider on Q2. Initially, from a web revenue point ofview, we anticipate gradual renovation in our Canadian Rec service as shop openings in Ontario ought to provide continued tailwind. Our strategic services should continue to see solid development from a brand-new product launch and increased circulation, while we anticipate Storz & Bickel to see even more stabilized growth in the 2nd quarter.


Third, while we anticipate a sequential pickup in advertising expenses as well as profession promo activities as COVID-related limitations are lifted, we anticipate to see additional advantage from decreased head count as we finish our business testimonial in coming months. So to summarize, we are proceeding versus our calculated concerns, we stay concentrated on enhancing our commercial and also functional implementation, while preserving our monetary discipline - aluminium canopy.


Driver, David as well as I would be delighted to take concerns from experts. [Operator guidelines] Your very first inquiry comes from Vivien Azer from Cowen. Please go on.-- Cowen as well as Company-- Expert Hi There. Thanks. Greetings. I intended to focus on your overview for rates. David, you noted some rate adjustments on vapes as well as after that layered on top of that certainly the worth launch.






Simply attempting to think of type of order of magnitude, where you think you're visiting the most pressure on the top line from the price depreciation that you gone over? Many thanks. awning shade.-- Chief Executive Policeman Yeah. From a top-line perspective, Viv, I believe that we'll proceed to see the worth flower category grow.


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However once again, I believe that's just a healthy advancement in the marketplace. I additionally simply check it out desire to talk about that also. Like the-- as we remain to resolve difficulties, as it connects to gross margins, our goal is to deliver that over 40% gross margin, despite having a growing worth section which indicates we just visit this site right here need to develop our manufacturing possessions to ensure that we can provide beneficially where the customer intends to spend - architectural awnings.


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-- Cowen and Firm-- Expert Thanks. As well as if you could simply comment on the vape cost adjustments that you pointed out?-- Principal Exec Officer Yeah. I believe, Viv, we still have-- the marketplace is so young, it's-- it feels various to me than even more well established markets where you see a pattern start and after that people have to adhere to.


And also we don't believe that places a whole lot of stress on our leading line due to the fact that we're just not all that large in vape, and also our company believe we have the margins to be a bit a lot more hostile which is why we're mosting likely to be a bit much more aggressive on 510s.


Thanks. Our Following inquiry comes from Tamy Chen from BMO Capital Markets. Please go on.-- BMO Capital Markets-- Expert Yes, thanks. Greetings. Many thanks for the inquiry. I wished to discuss the brand-new high THC difficulties that you set on your product quality for flowers. So when I consider your existing grow possessions, many are fairly big and some are quite labor-intensive.


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So my inquiry is, I imply just how can these facilities I guess satisfy the brand-new high THC difficulties that you've set for flower continually at scale, and also do it at far better margins than you're doing currently, especially if prices pressure continues to increase?-- Principal Exec Officer Yeah, Tamy. So I believe-- you may correct me if I'm wrong below, however I believe like 88% of our output in the quarter was high-THC blossom.


We're additionally doing a great deal of work around enhancing that footprint. We'll look for some items for-- to count maybe a little bit camo pop up canopy on exterior grow as we move forward. So I assume it's much less about what we can generating and also perhaps even much less concerning the margins in each center.

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