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VPG Reports Fiscal 2019 First Quarter Results
Reading Time: 8 minutes
MALVERN, Pa.–(BUSINESS WIRE)–Vishay Precision Group, Inc. (NYSE: VPG), a leading producer of
precision sensors and sensor-based systems, today announced its results
for its fiscal 2019 first quarter ended March 30, 2019.
First Quarter Highlights:
- Growth in revenues to $76.5 million, up 4.7% year-over-year
-
Gross profit margin was 43.2% for the quarter as compared to 39.0% for
the prior year period -
Operating income increased by 54% to $12.6 million as compared to $8.2
million in the prior year period -
Operating margin for the quarter was 16.5%, compared to 11.2% for the
prior year period -
Earnings increased 65% to $0.61 per diluted share, compared to $0.37
reported last year -
Cash from operations was $8.1 million with free cash flow* of $4.8
million
Ziv Shoshani, Chief Executive Officer of VPG, commented, “We are pleased
to report a strong start to 2019, highlighted by solid revenues and a
substantial increase in margins. Performance in the quarter was largely
the result of execution on our strategic plan, which was bolstered by a
favorable mix of business during the period. We remain focused on
building on the strong cash generation delivered through the first
quarter, and driving long-term shareholder value.”
The Company grew first fiscal quarter 2019 net earnings attributable to
VPG stockholders to $8.2 million, or $0.61 per diluted share, compared
to $5.0 million, or $0.37 per diluted share, in the first fiscal quarter
of 2018. Foreign currency exchange rates for the first quarter of 2019
increased net income by $0.3 million, or $0.02 per diluted share,
relative to the prior year period.
Segments
Foil Technology Products segment revenues grew 8.5% to $37.0 million in
the first fiscal quarter of 2019, up from $34.2 million in the first
fiscal quarter of 2018; sequential revenue increased 0.8% compared to
$36.7 million in the fourth quarter of 2018. The year-over-year increase
in revenues were attributable to Pacific Instruments products in the
Americas for end user customers in the avionics, military and space
market and Advanced Sensor products in the force measurement market
primarily in Asia and the Americas.
Gross profit margin for the Foil Technology Products segment was 44.7%
for the first fiscal quarter of 2019, an increase compared to 42.8% in
the first fiscal quarter of 2018, and an increase compared to 42.0% in
the fourth fiscal quarter of 2018. The year-over-year increase in gross
profit margin was primarily due to an increase in volume. Sequentially,
gross profit margin increased due to an increase in volume and
manufacturing efficiencies.
Force Sensors segment revenues declined 13.0% to $16.7 million in the
first fiscal quarter of 2019, compared to $19.2 million in the first
fiscal quarter of 2018; sequential revenue decreased 1.6%, compared to
$17.0 million in the fourth quarter of 2018. The year-over-year and
sequential decreases in revenues were mainly attributable to OEM
customers in the force measurement market, primarily in the Americas.
Gross profit margin for the Force Sensors segment was 30.2% for the
first fiscal quarter of 2019, an increase compared to 27.3% in the first
fiscal quarter of 2018, and an increase compared to 26.6% in the fourth
fiscal quarter of 2018. The year-over-year increase in gross profit
margin was primarily due to manufacturing efficiencies and export grants
in India partially offset by a decrease in volume. Sequentially, gross
profit margin increased due to export grants in India and positive
foreign exchange rate impact partially offset by a decrease in volume.
Weighing and Control Systems segment revenues grew by 15.4% to $22.7
million in the first fiscal quarter of 2019, up from $19.7 million in
the first fiscal quarter of 2018; sequential revenue decreased 2.1% from
$23.2 million in the fourth fiscal quarter of 2018. The increase in
revenues year-over-year was primarily attributable to the steel product
line in all regions. The sequential decrease in revenue was primarily
attributable to a decrease in the steel product line in Asia and the
process weighing and onboard weighing product lines in the Americas
partially offset by an increase in the onboard weighing product line in
Europe.
The first fiscal quarter 2019 gross profit margin for the Weighing and
Control Systems segment was 50.2%, an increase compared to 43.9% from
the first fiscal quarter of 2018, and an increase compared to 46.8% from
the fourth fiscal quarter of 2018. The year-over-year increase in gross
profit margin was primarily due to the increase in volume. Sequential
gross profit margin increase was primarily due to manufacturing
efficiencies.
Near-Term Outlook
“Given the current business environment and our most recent order
intake, at constant first fiscal quarter 2019 exchange rates, we expect
net revenues in the range of $70 million to $76 million for the second
fiscal quarter of 2019,” concluded Mr. Shoshani.
*Use of Non-GAAP Financial Information
We define “free cash flow” as the amount of cash generated from
operations ($8.1 million for the first fiscal quarter of 2019), in
excess of our capital expenditures ($3.3 million for the first fiscal
quarter of 2019) net of proceeds, if any, from the sale of assets ($0.0
million for the first fiscal quarter of 2019).
Conference Call and Webcast
A conference call will be held today (May 7) at 10:00 a.m. ET (9:00 a.m.
CT). To access the conference call, interested parties may call
1-888-317-6003 or internationally 1-412-317-6061 and use passcode
0105250, or log on to the investor relations page of the VPG website at www.vpgsensors.com.
A replay will be available approximately one hour after the completion
of the call by calling toll-free 1-877-344-7529 or internationally
1-412-317-0088 and by using the passcode 10130492. The replay will also
be available on the investor relations page of the VPG website at www.vpgsensors.com
for a limited time.
About VPG
Vishay Precision Group, Inc. (VPG) is an internationally recognized
designer, manufacturer and marketer of: components based on its
resistive foil technology; sensors; and sensor-based measurement systems
specializing in the growing markets of stress, force, weight, pressure,
and current measurements. VPG is a market leader of foil technology
products, providing ongoing technology innovations in precision foil
resistors and foil strain gages, which are the foundation of the
company’s force sensors products and its weighing and control systems.
The product portfolio consists of a variety of well-established brand
names recognized for precision and quality in the marketplace. To learn
more, visit VPG at www.vpgsensors.com.
Forward-Looking Statements
From time to time, information provided by us, including but not limited
to statements in this report, or other statements made by or on our
behalf, may contain “forward-looking” information within the meaning of
the Private Securities Litigation Reform Act of 1995. Such statements
involve a number of risks, uncertainties, and contingencies, many of
which are beyond our control, which may cause actual results,
performance, or achievements to differ materially from those anticipated.
Such statements are based on current expectations only, and are subject
to certain risks, uncertainties, and assumptions. Should one or more of
these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from
those anticipated, expected, estimated, or projected. Among the factors
that could cause actual results to materially differ include: general
business and economic conditions; difficulties or delays in completing
acquisitions and integrating acquired companies; the inability to
realize anticipated synergies and expansion possibilities; difficulties
in new product development; changes in competition and technology in the
markets that we serve and the mix of our products required to address
these changes; changes in foreign currency exchange rates; political,
economic and military instability in the countries in which we operate;
difficulties in implementing our cost reduction strategies, such as
underutilization of production facilities, labor unrest or legal
challenges to our lay-off or termination plans, operation of redundant
facilities due to difficulties in transferring production to achieve
efficiencies; significant developments from the recent and potential
changes in tariffs and trade regulation; and other factors affecting our
operations, markets, products, services, and prices that are set forth
in our Annual Report on Form 10-K for the fiscal year ended December 31,
2018. We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events, or otherwise.
| VISHAY PRECISION GROUP, INC. | ||||||||||
| Consolidated Condensed Statements of Operations | ||||||||||
| (Unaudited – In thousands, except per share amounts) | ||||||||||
| Fiscal quarter ended | ||||||||||
| March 30, 2019 | March 31, 2018 | |||||||||
| Net revenues | $ | 76,525 | $ | 73,091 | ||||||
| Costs of products sold | 43,474 | 44,586 | ||||||||
| Gross profit | 33,051 | 28,505 | ||||||||
| Gross profit margin | 43.2 | % | 39.0 | % | ||||||
| Selling, general, and administrative expenses | 20,448 | 20,319 | ||||||||
| Operating income | 12,603 | 8,186 | ||||||||
|
Operating margin |
16.5 | % | 11.2 | % | ||||||
| Other income (expense): | ||||||||||
| Interest expense | (388 | ) | (442 | ) | ||||||
| Other | (772 | ) | (649 | ) | ||||||
| Other income (expense) – net | (1,160 | ) | (1,091 | ) | ||||||
| Income before taxes | 11,443 | 7,095 | ||||||||
| Income tax expense | 3,117 | 2,137 | ||||||||
| Net earnings | 8,326 | 4,958 | ||||||||
| Less: net earnings attributable to noncontrolling interests | 83 | (30 | ) | |||||||
| Net earnings attributable to VPG stockholders | $ | 8,243 | $ | 4,988 | ||||||
| Basic earnings per share attributable to VPG stockholders | $ | 0.61 | $ | 0.37 | ||||||
| Diluted earnings per share attributable to VPG stockholders | $ | 0.61 | $ | 0.37 | ||||||
| Weighted average shares outstanding – basic | 13,495 | 13,342 | ||||||||
| Weighted average shares outstanding – diluted | 13,563 | 13,497 | ||||||||
| VISHAY PRECISION GROUP, INC. | ||||||||||
| Consolidated Condensed Balance Sheets | ||||||||||
| (In thousands) | ||||||||||
| March 30, 2019 | December 31, 2018 | |||||||||
| (Unaudited) | ||||||||||
| Assets | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 93,144 | $ | 90,159 | ||||||
| Accounts receivable, net | 52,484 | 53,156 | ||||||||
| Inventories: | ||||||||||
| Raw materials | 18,832 | 18,052 | ||||||||
| Work in process | 23,480 | 22,007 | ||||||||
| Finished goods | 21,059 | 22,182 | ||||||||
| Inventories, net | 63,371 | 62,241 | ||||||||
| Prepaid expenses and other current assets | 12,815 | 9,314 | ||||||||
| Total current assets | 221,814 | 214,870 | ||||||||
| Property and equipment, at cost: | ||||||||||
| Land | 3,411 | 3,390 | ||||||||
| Buildings and improvements | 51,298 | 51,055 | ||||||||
| Machinery and equipment | 107,404 | 105,840 | ||||||||
| Software | 8,942 | 8,532 | ||||||||
| Construction in progress | 1,542 | 2,157 | ||||||||
| Accumulated depreciation | (113,575 | ) | (111,555 | ) | ||||||
| Property and equipment, net | 59,022 | 59,419 | ||||||||
| Goodwill | 16,238 | 16,141 | ||||||||
| Intangible assets, net | 17,390 | 17,656 | ||||||||
| Other assets | 28,326 | 18,297 | ||||||||
| Total assets | $ | 342,790 | $ | 326,383 | ||||||
| Liabilities and equity | ||||||||||
| Current liabilities: | ||||||||||
| Trade accounts payable | $ | 10,736 | $ | 11,461 | ||||||
| Payroll and related expenses | 18,411 | 17,757 | ||||||||
| Other accrued expenses | 18,780 | 17,031 | ||||||||
| Income taxes | 2,277 | 3,879 | ||||||||
| Current portion of long-term debt | 4,766 | 4,654 | ||||||||
| Total current liabilities | 54,970 | 54,782 | ||||||||
| Long-term debt, less current portion | 21,172 | 22,421 | ||||||||
| Deferred income taxes | 2,200 | 2,200 | ||||||||
| Other liabilities | 21,541 | 13,545 | ||||||||
| Accrued pension and other postretirement costs | 15,029 | 14,982 | ||||||||
| Total liabilities | 114,912 | 107,930 | ||||||||
| Commitments and contingencies | ||||||||||
| Equity: | ||||||||||
| Common stock | 1,311 | 1,307 | ||||||||
| Class B convertible common stock | 103 | 103 | ||||||||
| Treasury stock | (8,765 | ) | (8,765 | ) | ||||||
| Capital in excess of par value | 196,578 | 196,666 | ||||||||
| Retained earnings | 75,343 | 66,569 | ||||||||
| Accumulated other comprehensive loss | (36,779 | ) | (37,465 | ) | ||||||
| Total Vishay Precision Group, Inc. stockholders equity | 227,791 | 218,415 | ||||||||
| Noncontrolling interests | 87 | 38 | ||||||||
| Total equity | 227,878 | 218,453 | ||||||||
| Total liabilities and equity | $ | 342,790 | $ | 326,383 | ||||||
| VISHAY PRECISION GROUP, INC. | ||||||||||
| Consolidated Condensed Statements of Cash Flows | ||||||||||
| (Unaudited – In thousands) | ||||||||||
| Fiscal quarter ended | ||||||||||
|
|
March 30, 2019 | March 31, 2018 | ||||||||
| Operating activities | ||||||||||
| Net earnings | $ | 8,326 | $ | 4,958 | ||||||
|
Adjustments to reconcile net earnings to net cash provided by operating activities: |
||||||||||
| Depreciation and amortization | 2,854 | 2,684 | ||||||||
| Loss/(gain) on disposal of property and equipment | 1 | (53 | ) | |||||||
| Share-based compensation expense | 514 | 373 | ||||||||
| Inventory write-offs for obsolescence | 489 | 613 | ||||||||
| Deferred income taxes | 313 | 268 | ||||||||
| Other | (2,367 | ) | (723 | ) | ||||||
| Net changes in operating assets and liabilities: | ||||||||||
| Accounts receivable, net | 850 | (5,519 | ) | |||||||
| Inventories, net | (1,507 | ) | (1,910 | ) | ||||||
| Prepaid expenses and other current assets | (3,484 | ) | (2,517 | ) | ||||||
| Trade accounts payable | 628 | 1,687 | ||||||||
| Other current liabilities | 1,488 | 1,943 | ||||||||
| Net cash provided by operating activities | 8,105 | 1,804 | ||||||||
| Investing activities | ||||||||||
| Capital expenditures | (3,334 | ) | (4,296 | ) | ||||||
| Proceeds from sale of property and equipment | 29 | 53 | ||||||||
| Net cash used in investing activities | (3,305 | ) | (4,243 | ) | ||||||
| Financing activities | ||||||||||
| Principal payments on long-term debt | (1,155 | ) | (2,970 | ) | ||||||
| Proceeds from revolving facility | — | 8,000 | ||||||||
| Payments on revolving facility | — | (3,000 | ) | |||||||
| Distributions to noncontrolling interests | (34 | ) | (117 | ) | ||||||
| Payments of employee taxes on certain share-based arrangements | (795 | ) | (785 | ) | ||||||
| Net cash (used in) provided by financing activities | (1,984 | ) | 1,128 | |||||||
| Effect of exchange rate changes on cash and cash equivalents | 169 | 753 | ||||||||
| Increase(decrease) in cash and cash equivalents | 2,985 | (558 | ) | |||||||
| Cash and cash equivalents at beginning of period | 90,159 | 74,292 | ||||||||
| Cash and cash equivalents at end of period | $ | 93,144 | $ | 73,734 | ||||||
| Supplemental disclosure of non-cash investing transactions: | ||||||||||
| Capital expenditures purchased | $ | (1,986 | ) | $ | (1,773 | ) | ||||
| Supplemental disclosure of non-cash financing transactions: | ||||||||||
| Conversion of exchangeable notes to common stock | — | $ | (2,794 | ) | ||||||
Contacts
For Investors
ICR, Inc.
Michael Callahan, 203-682-8311
[email protected]
For Media
ICR, Inc.
Phil Denning, 646-277-1258
[email protected]
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Cannabis
Medical Cannabis Market Report 2024-2030: Asia-Pacific Set to Witness Robust Growth, Driven by R&D Discovery Initiatives
Schwazze Management to Host Conference Call Today at 5:00 p.m. Eastern Time
DENVER, May 15, 2024 /PRNewswire/ — Medicine Man Technologies, Inc., operating as Schwazze, (OTCQX: SHWZ) (Cboe CA: SHWZ) (“Schwazze” or the “Company”), today announced financial and operational results for the first quarter ended March 31, 2024.
“We delivered another period of revenue growth in Q1 as we further refined our retail strategy while contending with the prolonged competitive challenges in Colorado and New Mexico,” said Forrest Hoffmaster, Interim CEO of Schwazze. “Throughout the quarter, we continued to sharpen our pricing and promotional efforts while enhancing the in-store experience, widening assortment, improving in-stock position, and advancing our loyalty program to attract and retain new customers. We also strengthened our wholesale business with quarter-over-quarter growth, while surpassing 30% total door penetration across both states.”
“The Colorado market remains highly competitive with more than 680 active recreational licenses, underscoring the importance of delivering an exceptional customer experience and fully integrated retail support program. Although retail pricing has recently stabilized, Colorado sales in Q1 were down 10% year-over-year due to lower volumes. Nonetheless, we significantly outpaced the market as our sales were up 9%, demonstrating the effectiveness of our operating playbook to compete in challenging environments. We expect to continue driving improvements in customer acquisition, retention, and loyalty as we further increase market share in the state.”
“In New Mexico, the proliferation of new licenses continued to outpace state cannabis sales as store count in Q1 increased 31% year-over-year while the market grew only 13%. In addition to pricing and promotional efforts, we’ve focused on driving traffic into our stores by expanding assortment with high quality flower and delivering an elevated customer experience. The New Mexico regulatory body has also increased its license enforcement efforts in recent months, contributing to more than 70 store closures and a 33% sequential decrease in net new store openings in the first quarter. We will continue to support the New Mexico Cannabis Control Division as it develops its regulatory framework.”
“Over the past four years we have rapidly scaled our footprint through 13 acquisitions, building a leading retail presence in both Colorado and New Mexico. We are beginning to see positive momentum from our pricing and promotional strategy and will remain focused on driving operating efficiencies while further optimizing our assets as we consolidate cultivation facilities and eliminate underperforming stores that do not meet our high-margin thresholds. We believe these initiatives, coupled with our operating playbook and strict cost controls, will enable us to return to stronger levels of profitability moving forward.”
First Quarter 2024 Financial Summary
|
$ in Thousands USD |
Q1 2024 |
Q4 2023 |
Q1 2023 |
|
Total Revenue |
$41,601 |
$43,325 |
$40,001 |
|
Gross Profit |
$17,934 |
$7,034[1] |
$21,849 |
|
Operating Expenses |
$20,643 |
$23,276 |
$16,199 |
|
Income (Loss) from Operations |
$(2,709) |
$(16,242) |
$5,650 |
|
Adjusted EBITDA[2] |
$7,341 |
$10,953 |
$14,525 |
|
Operating Cash Flow |
$(3,700) |
$3,452 |
$(880) |
Recent Highlights
- Announced the grand opening of a medical and recreational dispensary in March under the Everest Apothecary banner in Las Cruces, New Mexico, increasing the Company’s retail footprint to 34 stores across the state.
- Increased wholesale penetration in the first quarter to more than 30% of total doors in Colorado and New Mexico.
- Lowell Herb Co. pre-roll sales increased more than 3x quarter-over-quarter in Colorado, where it continues to be the #1 pre-roll in the state.
- Wana gummy sales up more than 2x quarter-over-quarter in New Mexico.
First Quarter 2024 Financial Results
Total revenue in the first quarter of 2024 increased 4% to $41.6 million compared to $40.0 million for the same quarter last year. The increase was primarily due to growth from new stores compared to the prior year period, partially offset by continued pricing pressure and the proliferation of new licenses in New Mexico.
Gross profit for the first quarter of 2024 was $17.9 million or 43.1% of total revenue, compared to $21.8 million or 54.6% of total revenue for the same quarter last year. The decrease in gross margin was primarily driven by the aforementioned pricing pressure in New Mexico, as well as higher medical sales mix in Colorado.
|
____________________________ |
|
1 Q4 2023 Gross Profit includes one-time, non-cash inventory adjustments of approximately $13.1 million comprised of $3.1 million of product consolidation, obsolescence, and shrinkage expenses, $4.3 million of net realizable value adjustments, and $5.8 million of fair value adjustments on acquired inventory in New Mexico in 2023. |
Operating expenses for the first quarter of 2024 were $20.6 million compared to $16.2 million for the same quarter last year. The year-ago period benefitted from a payroll tax credit of $3.9M. The remaining increase was primarily driven by personnel expenses and four-wall SG&A costs associated with 21 additional stores in Colorado and New Mexico that are still ramping.
Loss from operations for the first quarter of 2024 was $2.7 million compared to income from operations of $5.6 million in the same quarter last year. Net loss was $16.1 million for the first quarter of 2024 compared to net income of $1.7 million for the same quarter last year.
Adjusted EBITDA for the first quarter of 2024 was $7.3 million compared to $14.5 million for the same quarter last year. The decrease in Adjusted EBITDA was primarily driven by lower gross margin and higher operating expenses associated with the 21 additional stores that are still ramping.
As of March 31, 2024, cash and cash equivalents were $13.2 million compared to $19.2 million on December 31, 2023. Total debt as of March 31, 2024, was $159.7 million compared to $156.8 million on December 31, 2023.
Conference Call
The Company will conduct a conference call today, May 15, 2024, at 5:00 p.m. Eastern time to discuss its results for the first quarter ended March 31, 2024.
Schwazze management will host the conference call, followed by a question-and-answer period. Interested parties may submit questions to the Company prior to the call by emailing [email protected].
Date: Wednesday, May 15, 2024
Time: 5:00 p.m. Eastern time
Toll-free dial-in: (888) 664-6383
International dial-in: (416) 764-8650
Conference ID: 84167910
Webcast: SHWZ Q1 2024 Earnings Call
The conference call will also be broadcast live and available for replay on the investor relations section of the Company’s website at https://ir.schwazze.com.
Toll-free replay number: (888) 390-0541
International replay number: (416) 764-8677
Replay ID: 167910
If you have any difficulty registering or connecting with the conference call, please contact Elevate IR at (720) 330-2829.
About Schwazze
Schwazze (OTCQX: SHWZ) (Cboe CA: SHWZ) is building a premier vertically integrated regional cannabis company with assets in Colorado and New Mexico and will continue to explore taking its operating system to other states where it can develop a differentiated regional leadership position. Schwazze is the parent company of a portfolio of leading cannabis businesses and brands spanning seed to sale.
Schwazze is anchored by a high-performance culture that combines customer-centric thinking and data science to test, measure, and drive decisions and outcomes. The Company’s leadership team has deep expertise in retailing, wholesaling, and building consumer brands at Fortune 500 companies as well as in the cannabis sector.
Medicine Man Technologies, Inc. was Schwazze’s former operating trade name. The corporate entity continues to be named Medicine Man Technologies, Inc. Schwazze derives its name from the pruning technique of a cannabis plant to enhance plant structure and promote healthy growth. To learn more about Schwazze, visit https://schwazze.com/.
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include financial outlooks; any projections of net sales, earnings, or other financial items; any statements of the strategies, plans and objectives of our management team for future operations; expectations in connection with the Company’s previously announced business plans; any statements regarding future economic conditions or performance; and statements regarding the intent, belief or current expectations of our management team. Such statements may be preceded by the words “may,” “will,” “could,” “would,” “should,” “expect,” “intends,” “plans,” “strategy,” “prospects,” “anticipate,” “believe,” “approximately,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” or the negative of these terms or other words of similar meaning in connection with a discussion of future events or future operating or financial performance, although the absence of these words does not necessarily mean that a statement is not forward-looking. We have based our forward-looking statements on management’s current expectations and assumptions about future events and trends affecting our business and industry. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. Therefore, forward-looking statements are not guarantees of future events or performance, are based on certain assumptions, and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company’s control and cannot be predicted or quantified. Consequently, actual events and results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, risks and uncertainties associated with (i) regulatory limitations on our products and services and the uncertainty in the application of federal, state, and local laws to our business, and any changes in such laws; (ii) our ability to manufacture our products and product candidates on a commercial scale on our own or in collaboration with third parties; (iii) our ability to identify, consummate, and integrate anticipated acquisitions; (iv) general industry and economic conditions; (v) our ability to access adequate capital upon terms and conditions that are acceptable to us; (vi) our ability to pay interest and principal on outstanding debt when due; (vii) volatility in credit and market conditions; (viii) the loss of one or more key executives or other key employees; and (ix) other risks and uncertainties related to the cannabis market and our business strategy. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company’s filings with the Securities and Exchange Commission (SEC), including the Company’s Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. Investors and security holders are urged to read these documents free of charge on the SEC’s website at http://www.sec.gov. The Company assumes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise except as required by law.
Investor Relations Contact
Sean Mansouri, CFA or Aaron D’Souza
Elevate IR
(720) 330-2829
[email protected]
MEDICINE MAN TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
For the Periods Ended March 31, 2024 and December 31, 2023
Expressed in U.S. Dollars
|
March 31, |
December 31, |
||||
|
2024 |
2023 |
||||
|
ASSETS
|
|||||
|
Current Assets |
|||||
|
Cash & Cash Equivalents |
$ |
13,151,317 |
$ |
19,248,932 |
|
|
Accounts Receivable, net of Allowance for Doubtful Accounts |
3,356,032 |
4,261,159 |
|||
|
Inventory |
26,382,184 |
25,787,793 |
|||
|
Marketable Securities, net of Unrealized Loss of $347,516 and Loss of $1,816, respectively |
108,583 |
456,099 |
|||
|
Prepaid Expenses & Other Current Assets |
3,502,310 |
3,914,064 |
|||
|
Total Current Assets |
46,500,426 |
53,668,047 |
|||
|
Non-Current Assets |
|||||
|
Fixed Assets, net Accumulated Depreciation of $10,061,700 and $8,741,782, respectively |
31,326,000 |
31,113,630 |
|||
|
Investments |
2,000,000 |
2,000,000 |
|||
|
Investments Held for Sale |
– |
202,111 |
|||
|
Goodwill |
67,492,705 |
67,499,199 |
|||
|
Intangible Assets, net Accumulated Amortization of $36,483,160 and $32,706,765, respectively |
162,391,482 |
166,167,877 |
|||
|
Other Non-Current Assets |
1,328,187 |
1,263,837 |
|||
|
Operating Lease Right of Use Assets |
34,575,832 |
34,233,142 |
|||
|
Deferred Tax Assets, net |
992,144 |
1,996,489 |
|||
|
Total Non-Current Assets |
300,106,350 |
304,476,285 |
|||
|
Total Assets |
$ |
346,606,776 |
$ |
358,144,332 |
|
|
LIABILITIES & STOCKHOLDERS’ EQUITY
|
|||||
|
Current Liabilities |
|||||
|
Accounts Payable |
$ |
9,443,233 |
$ |
13,341,561 |
|
|
Accrued Expenses |
8,106,618 |
7,774,691 |
|||
|
Derivative Liabilities |
1,319,845 |
638,020 |
|||
|
Lease Liabilities – Current |
5,186,316 |
4,922,724 |
|||
|
Current Portion of Long Term Debt |
29,579,713 |
3,547,011 |
|||
|
Income Taxes Payable |
28,235,039 |
25,232,782 |
|||
|
Total Current Liabilities |
81,870,764 |
55,456,789 |
|||
|
Non-Current Liabilities |
|||||
|
Long Term Debt, net of Debt Discount & Issuance Costs |
130,120,753 |
153,262,203 |
|||
|
Lease Liabilities – Non-Current |
30,735,072 |
30,133,452 |
|||
|
Total Non-Current Liabilities |
160,855,825 |
183,395,655 |
|||
|
Total Liabilities |
$ |
242,726,589 |
$ |
238,852,444 |
|
|
Stockholders’ Equity |
|||||
|
Preferred Stock, $0.001 Par Value. 10,000,000 Shares Authorized; 82,185 Shares Issued and |
|||||
|
82,185 Outstanding as of March 31, 2024 and 85,534 Shares Issued and 85,534 Outstanding as of |
|||||
|
December 31, 2023. |
82 |
86 |
|||
|
Common Stock, $0.001 Par Value. 250,000,000 Shares Authorized; 79,168,539 Shares Issued |
|||||
|
and 78,248,389 Shares Outstanding as of March 31, 2024 and 74,888,392 Shares Issued |
|||||
|
and 73,968,242 Shares Outstanding as of December 31, 2023. |
79,169 |
74,888 |
|||
|
Additional Paid-In Capital |
202,677,665 |
202,040,968 |
|||
|
Accumulated Deficit |
(96,843,602) |
(80,790,927) |
|||
|
Common Stock Held in Treasury, at Cost, 920,150 Shares Held as of March 31, 2024 and |
|||||
|
920,150 Shares Held as of December 31, 2023. |
(2,033,127) |
(2,033,127) |
|||
|
Total Stockholders’ Equity |
103,880,187 |
119,291,888 |
|||
|
Total Liabilities & Stockholders’ Equity |
$ |
346,606,776 |
$ |
358,144,332 |
|
MEDICINE MAN TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME AND (LOSS)
For the Periods Ended March 31, 2024 and 2023
Expressed in U.S. Dollars
|
For the Three Months Ended |
|||||
|
March 31, |
|||||
|
2024 |
2023 |
||||
|
(Unaudited) |
(Unaudited) |
||||
|
Operating Revenues |
|||||
|
Retail |
$ |
37,633,252 |
$ |
35,820,111 |
|
|
Wholesale |
3,898,320 |
4,058,925 |
|||
|
Other |
69,421 |
121,900 |
|||
|
Total Revenue |
41,600,993 |
40,000,936 |
|||
|
Total Cost of Goods & Services |
23,667,319 |
18,152,163 |
|||
|
Gross Profit |
17,933,674 |
21,848,773 |
|||
|
Operating Expenses |
|||||
|
Selling, General and Administrative Expenses |
11,835,818 |
10,100,934 |
|||
|
Professional Services |
1,671,881 |
1,187,364 |
|||
|
Salaries |
6,880,988 |
4,695,971 |
|||
|
Stock Based Compensation |
253,916 |
214,544 |
|||
|
Total Operating Expenses |
20,642,603 |
16,198,813 |
|||
|
Income from Operations |
(2,708,929) |
5,649,960 |
|||
|
Other Income (Expense) |
|||||
|
Interest Expense, net |
(8,307,369) |
(7,745,854) |
|||
|
Unrealized Gain (Loss) on Derivative Liabilities |
(681,825) |
8,501,685 |
|||
|
Other Loss |
10,500 |
– |
|||
|
Loss on Investment |
(33,382) |
– |
|||
|
Unrealized Gain on Investment |
(347,516) |
1,816 |
|||
|
Total Other Income (Expense) |
(9,359,592) |
757,647 |
|||
|
Pre-Tax Net Income (Loss) |
(12,068,521) |
6,407,607 |
|||
|
Provision for Income Taxes |
3,984,154 |
4,662,178 |
|||
|
Net Income (Loss) |
$ |
(16,052,675) |
$ |
1,745,429 |
|
|
Less: Accumulated Preferred Stock Dividends for the Period |
(2,155,259) |
(2,029,394) |
|||
|
Net Income (Loss) Attributable to Common Stockholders |
$ |
(18,207,934) |
$ |
(283,965) |
|
|
Earnings (Loss) per Share Attributable to Common Stockholders |
|||||
|
Basic Earnings (Loss) per Share |
$ |
(0.24) |
$ |
(0.01) |
|
|
Diluted Earnings (Loss) per Share |
$ |
(0.24) |
$ |
(0.06) |
|
|
Weighted Average Number of Shares Outstanding – Basic |
76,006,932 |
55,835,501 |
|||
|
Weighted Average Number of Shares Outstanding – Diluted |
76,006,932 |
101,608,278 |
|||
|
Comprehensive Income (Loss) |
$ |
(16,052,675) |
$ |
1,745,429 |
|
MEDICINE MAN TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Periods Ended March 31, 2024 and 2023
Expressed in U.S. Dollars
|
For the Three Months Ended |
|||||
|
March 31, |
|||||
|
2024 |
2023 |
||||
|
(Unaudited) |
(Unaudited) |
||||
|
Cash Flows from Operating Activities: |
|||||
|
Net Income (Loss) for the Period |
$ |
(16,052,675) |
$ |
1,745,429 |
|
|
Adjustments to Reconcile Net Income (Loss) to Cash for Operating Activities |
|||||
|
Depreciation & Amortization |
5,096,314 |
6,151,395 |
|||
|
Non-Cash Interest Expense |
1,031,431 |
991,184 |
|||
|
Non-Cash Lease Expense |
2,871,226 |
2,251,459 |
|||
|
Deferred Taxes |
1,004,345 |
(637,225) |
|||
|
Loss on Investment |
202,111 |
– |
|||
|
Change in Derivative Liabilities |
681,825 |
(8,501,685) |
|||
|
Amortization of Debt Issuance Costs |
421,512 |
421,513 |
|||
|
Amortization of Debt Discount |
2,303,246 |
1,999,933 |
|||
|
(Gain) Loss on Investments, net |
347,516 |
(1,816) |
|||
|
Stock Based Compensation |
640,974 |
214,544 |
|||
|
Changes in Operating Assets & Liabilities (net of Acquired Amounts): |
|||||
|
Accounts Receivable |
905,127 |
(118,181) |
|||
|
Inventory |
(587,900) |
(3,023,251) |
|||
|
Prepaid Expenses & Other Current Assets |
411,754 |
(3,036,801) |
|||
|
Other Assets |
(64,350) |
360,674 |
|||
|
Change in Operating Lease Liabilities |
(2,348,703) |
(1,531,765) |
|||
|
Accounts Payable & Other Liabilities |
(3,566,401) |
(3,464,671) |
|||
|
Income Taxes Payable |
3,002,257 |
5,299,403 |
|||
|
Net Cash Provided by (Used in) Operating Activities |
(3,700,390) |
(879,861) |
|||
|
Cash Flows from Investing Activities: |
|||||
|
Collection of Notes Receivable |
– |
10,631 |
|||
|
Purchase of Fixed Assets |
(1,532,287) |
(2,913,394) |
|||
|
Net Cash Provided by (Used in) Investing Activities |
(1,532,287) |
(2,902,763) |
|||
|
Cash Flows from Financing Activities: |
|||||
|
Payment on Notes Payable |
(864,938) |
– |
|||
|
Net Cash Provided by (Used in) Financing Activities |
(864,938) |
– |
|||
|
Net (Decrease) in Cash & Cash Equivalents |
(6,097,615) |
(3,782,624) |
|||
|
Cash & Cash Equivalents at Beginning of Period |
19,248,932 |
38,949,253 |
|||
|
Cash & Cash Equivalents at End of Period |
$ |
13,151,317 |
$ |
35,166,628 |
|
|
Supplemental Disclosure of Cash Flow Information: |
|||||
|
Cash Paid for Interest |
$ |
4,515,205 |
$ |
6,540,748 |
|
MEDICINE MAN TECHNOLOGIES, INC.
ADJUSTED EBITDA RECONCILIATION (NON-GAAP)
For the Periods Ended March 31, 2024 and 2023
Expressed in U.S. Dollars
|
For the Three Months Ended |
|||||
|
March 31, |
|||||
|
2024 |
2023 |
||||
|
Net Income (Loss) |
$ |
(16,052,675) |
$ |
1,745,429 |
|
|
Interest Expense, net |
8,307,369 |
7,745,854 |
|||
|
Provision for Income Taxes |
3,984,154 |
4,662,178 |
|||
|
Other (Income) Expense, net of Interest Expense |
1,052,223 |
(8,503,501) |
|||
|
Depreciation & Amortization |
5,618,834 |
6,612,814 |
|||
|
Earnings Before Interest, Taxes, Depreciation and |
|||||
|
Amortization (EBITDA) (non-GAAP) |
$ |
2,909,905 |
$ |
12,262,774 |
|
|
Non-Cash Stock Compensation |
253,916 |
214,544 |
|||
|
Deal Related Expenses |
637,761 |
1,195,802 |
|||
|
Capital Raise Related Expenses |
20,760 |
35,068 |
|||
|
Severance |
484,561 |
118,436 |
|||
|
Retention Program Expenses |
807,500 |
280,632 |
|||
|
Pre-Operating & Dark Carry Expenses |
1,053,837 |
391,917 |
|||
|
One-Time Legal Settlements |
417,653 |
– |
|||
|
Other Non-Recurring Items |
754,751 |
25,707 |
|||
|
Adjusted EBITDA (non-GAAP) |
$ |
7,340,644 |
$ |
14,524,880 |
|
|
Revenue |
41,600,993 |
40,000,936 |
|||
|
Adjusted EBITDA Percent |
17.6 % |
36.3 % |
|||
View original content:https://www.prnewswire.co.uk/news-releases/schwazze-announces-first-quarter-2024-financial-results-302146858.html
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