MedMen Reports First Quarter Fiscal Year 2019 Financial Results
LOS ANGELES--(BUSINESS WIRE)--Nov 29, 2018--MedMen Enterprises Inc. (“MedMen” or the “Company”) (CSE: MMEN) (OTCQX: MMNFF) (FSE: A2JM6N), today released its consolidated financial results for the first quarter of fiscal 2019. All financial information for the three-month period ended September 30, 2018 is reported in U.S. dollars, unless otherwise indicated.
“Our first quarter performance underlines the successful execution of our growth strategy and ongoing commitment to provide mainstream cannabis consumers a wide breadth of products for their lifestyle and wellness needs,” said Adam Bierman, MedMen chief executive and co-founder. “Our four-pillars strategy – built around a quality team, superior assets, strong balance sheet and the ability to efficiently and effectively raise and deploy capital – has set us up to successfully achieve our vision. We are now entering a new phase focused on fully operationalizing our vast footprint.”
Since going public in May, MedMen has advanced its first-mover advantage at a highly accelerated pace. Upon closing of all pending transactions, MedMen will be licensed for 69 retail stores and 16 cultivation and production factories across 12 states, reaching about half of the U.S. addressable market. MedMen has a proven concept and track record, having established a 5.3% market share in California, one of the most mature cannabis markets in the U.S. The Company now plans to leverage this experience to accelerate the development of new locations and its seed-to-sale operations.
First Quarter 2019 Overview
Business and Brand Development:
MedMen expanded its executive team and continued to build its Board of Directors.
Board of Directors:
Capital Markets and Financing Activities:
Capital Markets and Financing Activities:
First Quarter Fiscal Year 2019 Review
For the first quarter of fiscal 2019, systemwide revenue was $21.5 million across the Company’s operations in California, Nevada and New York. This represents a 1,094% increase over the first quarter of fiscal 2018 and a 4.4% increase over the fourth quarter of fiscal 2018. The year-over-year increase was driven primarily by the opening of seven additional retail stores and strong results from the California market. The Company operated 14 locations at the end of the first quarter. Southern California accounted for 86% of first quarter systemwide revenue and 8 out of the 14 open retail stores at quarter end. The quarter was impacted by a state-wide supply chain challenge in California during the month of July. This supply shortage, which all operators in the state faced, impacted our California store sales into August, but was fully resolved by month’s end.
Gross profit for the first quarter, before biological asset adjustment, was $11.7 million, as compared to $5.9 million in the fourth quarter last year. This represents a 98% growth rate. Gross profit margin in the first quarter, excluding biological asset adjustments, was 54% compared to 29% in the previous quarter
During the first quarter, the Company continued to make significant investments in building the corporate infrastructure and team required to execute its strategy for long-term growth. SG&A expenses included $4.8 million in marketing and branding, $16.3 million for salaries and benefits. Furthermore, SG&A expenses for the first quarter also included $1.4 million acquisition related costs and $24.9 million of cash and non-cash stock-based compensation and employee incentive plans expense and $4.7 million for state, local and federal tax-related expenses.
For the first quarter 2019, the Company reported a net loss attributable to the Company of $66.5 million, or loss of $1.42 per share, compared to a net loss of $78.7 million, or loss of $1.95 per share, for the fourth quarter last year.
Additional information relating to the Company’s first quarter 2019 results is available on SEDAR at www.sedar.com in the Company’s Annual Financial Statements and Management Discussion & Analysis (“MD&A”).
MedMen refers to certain non-IFRS financial measures such as annualized sales per square foot, Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and adjusted EBITDA (earnings defined as earnings before interest, taxes, depreciation, amortization, less certain non-cash equity compensation expense, including one-time transaction fees and all other non-cash items). These measures do not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other issuers.
Please see the “Supplemental Information (Unaudited) Regarding Non-IFRS Financial Measures” at the end of this press release for more detailed information regarding non-IFRS financial measures.
CONFERENCE CALL AND WEBCAST:
MedMen Enterprises will host a conference call and audio webcast with Chief Executive Officer and Co-Founder Adam Bierman and interim Chief Financial Officer Jim Miller today at 5:00 pm Eastern to discuss the financial results in further detail.
Webcast Information: A live audio webcast of the call will be available on the Events and Presentations section of MedMen’s website at: https://investors.medmen.com/events-and-presentations/default.aspx.
Calling Information: Toll Free Dial-In Number: (844) 559-7829 International Dial-In Number: (647) 689-5387 Conference ID: 1980019
MedMen Enterprises is a leading cannabis company in the U.S. with assets and operations across the country. Based in Los Angeles, MedMen brings expertise and capital to the cannabis industry and is one of the nation’s largest financial supporters of progressive marijuana laws. Visit http://www.medmen.com
Cautionary Note Regarding Forward-Looking Information and Statements
This press release contains certain “forward-looking information” within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only MedMen’s beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of MedMen’s control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or may contain statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “will continue”, “will occur” or “will be achieved”. The forward-looking information and forward-looking statements contained herein may include, but are not limited to, information concerning proposed acquisitions in Northern California, Arizona, Illinois and of PharmaCann LLC, expectations regarding whether such proposed acquisitions will be consummated, including whether conditions to the consummation of the proposed acquisitions will be satisfied and whether the proposed acquisitions will be completed on the current terms, the timing for completing the proposed acquisitions, expectations for the effects of the proposed acquisitions (including on the Company’s footprint and asset base) on the ability of the Company to successfully achieve business objectives, and expectations for other economic, business, and/or competitive factors.
By identifying such information and statements in this manner, MedMen is alerting the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of MedMen to be materially different from those expressed or implied by such information and statements. In addition, in connection with the forward-looking information and forward-looking statements contained in this press release, MedMen has made certain assumptions. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking information and statements are the following: the inability to consummate the proposed acquisitions; the failure to obtain requisite regulatory approvals and third party consents and the failure to satisfy other conditions to the consummation of the proposed acquisitions, which could impact closing or closing on the proposed terms and schedule; the potential impact of the announcement or consummation of the proposed acquisitions on relationships, including with regulatory bodies, employees, suppliers, customers and competitors; changes in general economic, business and political conditions, including changes in the financial markets; changes in applicable laws; compliance with extensive government regulation; and the diversion of management time on the proposed acquisitions. Should one or more of these risks, uncertainties or other factors materialize, or should assumptions underlying the forward-looking information or statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected.
Although MedMen believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements. The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and MedMen does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws. All subsequent written and oral forward-looking information and statements attributable to MedMen or persons acting on its behalf is expressly qualified in its entirety by this notice.
SOURCE: MedMen Enterprises
View source version on businesswire.com:https://www.businesswire.com/news/home/20181129005732/en/
CONTACT: MedMen Enterprises Inc.
Adam Bierman, 855-292-8399
Chief Executive Officer
Briana Chester, 424-888-4260
INVESTOR RELATIONS CONTACT:
Stéphanie Van Hassel, 323-705-3025
Head of Investor Relations
KEYWORD: UNITED STATES NORTH AMERICA CANADA CALIFORNIA
INDUSTRY KEYWORD: HEALTH ALTERNATIVE MEDICINE RETAIL TOBACCO
SOURCE: MedMen Enterprises
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PUB: 11/29/2018 04:02 PM/DISC: 11/29/2018 04:02 PM