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Pacific City Financial Corporation Reports Earnings of $6.6 million for Q1 2019 and Increased Cash Dividend
LOS ANGELES–(BUSINESS WIRE)–Pacific City Financial Corporation (the “Company”) (NASDAQ: PCB), the
holding company of Pacific City Bank (the “Bank”), today reported net
income of $6.6 million, or $0.40 per diluted common share for the first
quarter of 2019, compared with $6.7 million, or $0.41 per diluted common
share, in the previous quarter and $6.3 million, or $0.46 per diluted
common share, in the year-ago quarter.
Q1 2019 Financial Highlights
- Net income totaled $6.6 million or $0.40 per diluted common share;
-
Total assets were $1.72 billion at March 31, 2019, an increase of
$20.7 million, or 1.2%, from $1.70 billion at December 31, 2018 and an
increase of $138.8 million, or 8.8%, from $1.58 billion at March 31,
2018; -
Loans held-for-investment, net of deferred costs (fees), were $1.34
billion at March 31, 2019, an increase of $4.5 million, or 0.3%, from
$1.34 billion at December 31, 2018 and an increase of $119.9 million,
or 9.8%, from $1.22 billion at March 31, 2018; -
Total deposits were $1.45 billion at March 31, 2019, an increase of
$4.0 million, or 0.3%, from $1.44 billion at December 31, 2018, and an
increase of $65.8 million, or 4.8%, from $1.38 billion at March 31,
2018; -
The board of directors approved a $6.5 million share repurchase
program to begin in the second quarter of 2019; and -
Reflecting the Company’s continued earnings performance in the first
quarter of 2019, the Company declared an increased cash dividend of
$0.06 per common share for shareholders of record on May 31, 2019, and
payable on June 14, 2019.
“I am pleased with another strong financial performance for the quarter
that is highlighted by earnings of $6.6 million, or $0.40 per diluted
common share. I am also pleased with board’s declaration of quarterly
cash dividend of $0.06 per common share, or an increase of 20% from
first quarter cash dividend of $0.05, that will be paid in June,” stated
Henry Kim, President and Chief Executive Officer. “Although our loan and
deposit growth moderated during the quarter, we maintained net interest
margin of 4.22% and efficiency ratio of 52.60%. Since the tail end of
the first quarter, we are experiencing an increase in loan demand and
stabilization in deposit costs, which lead us to be optimistic on our
ability to deliver a continued strong financial performance for the
remainder of 2019.”
Financial Highlights (Unaudited)
Three Months Ended | ||||||||||||||||||||||||||||
($ in thousands, except per share data) | 3/31/2019 | 12/31/2018 | % Change | 3/31/2018 | % Change | |||||||||||||||||||||||
Net income | $ | 6,564 | $ | 6,732 | (2.5 | )% | $ | 6,264 | 4.8 | % | ||||||||||||||||||
Diluted earnings per common share | $ | 0.40 | $ | 0.41 | (2.4 | )% | $ | 0.46 | (13.0 | )% | ||||||||||||||||||
Net interest income | $ | 17,153 | $ | 17,856 | (3.9 | )% | $ | 15,294 | 12.2 | % | ||||||||||||||||||
Provision (reversal) for loan losses | (85 | ) | 294 | (128.9 | )% | 95 | (189.5 | )% | ||||||||||||||||||||
Noninterest income | 2,409 | 2,239 | 7.6 | % | 3,362 | (28.3 | )% | |||||||||||||||||||||
Noninterest expense | 10,289 | 10,135 | 1.5 | % | 9,631 | 6.8 | % | |||||||||||||||||||||
Return on average assets (1) | 1.57 | % | 1.60 | % | 1.73 | % | ||||||||||||||||||||||
Return on average shareholders’ equity (1), (2) | 12.43 | % | 12.92 | % | 17.50 | % | ||||||||||||||||||||||
Net interest margin (1) | 4.22 | % | 4.33 | % | 4.33 | % | ||||||||||||||||||||||
Efficiency ratio (3) | 52.60 | % | 50.44 | % | 51.62 | % | ||||||||||||||||||||||
($ in thousands, except per share data) | 3/31/2019 | 12/31/2018 | % Change | 3/31/2018 | % Change | |||||||||||||||||||||||
Total assets | $ | 1,717,774 | $ | 1,697,028 | 1.2 | % | $ | 1,578,970 | 8.8 | % | ||||||||||||||||||
Net loans held-for-investment | 1,330,035 | 1,325,515 | 0.3 | % | 1,210,901 | 9.8 | % | |||||||||||||||||||||
Total deposits | 1,447,758 | 1,443,753 | 0.3 | % | 1,381,925 | 4.8 | % | |||||||||||||||||||||
Book value per common share (2), (4) | $ | 13.57 | $ | 13.16 | 3.1 | % | $ | 10.97 | 23.7 | % | ||||||||||||||||||
Tier 1 leverage ratio (consolidated) | 12.83 | % | 12.60 | % | 10.09 | % | ||||||||||||||||||||||
Total shareholders’ equity to total assets (2) | 12.64 | % | 12.39 | % | 9.32 | % | ||||||||||||||||||||||
(1) |
Ratios are presented on an annualized basis. |
||
(2) |
The Company did not have any intangible equity components for |
||
(3) |
The ratios are calculated by dividing noninterest expense by |
||
(4) |
The ratios are calculated by dividing total shareholders’ |
||
Result of Operations (Unaudited)
Net Interest Income and Net Interest Margin
The following table presents the components of net interest income for
the periods indicated:
Three Months Ended | ||||||||||||||||||||||||||||
($ in thousands) | 3/31/2019 | 12/31/2018 | % Change | 3/31/2018 | % Change | |||||||||||||||||||||||
Interest income: | ||||||||||||||||||||||||||||
Interest and fees on loans | $ | 20,934 | $ | 21,088 | (0.7 | )% | $ | 17,440 | 20.0 | % | ||||||||||||||||||
Interest on investment securities | 1,093 | 1,076 | 1.6 | % | 848 | 28.9 | % | |||||||||||||||||||||
Interest and dividend on other interest-earning assets | 925 | 1,067 | (13.3 | )% | 340 | 172.1 | % | |||||||||||||||||||||
Total interest income | 22,952 | 23,231 | (1.2 | )% | 18,628 | 23.2 | % | |||||||||||||||||||||
Interest expense: | ||||||||||||||||||||||||||||
Interest on deposits | 5,665 | 5,239 | 8.1 | % | 3,166 | 78.9 | % | |||||||||||||||||||||
Interest on other borrowings | 134 | 136 | (1.5 | )% | 168 | (20.2 | )% | |||||||||||||||||||||
Total interest expense | 5,799 | 5,375 | 7.9 | % | 3,334 | 73.9 | % | |||||||||||||||||||||
Net interest income | $ | 17,153 | $ | 17,856 | (3.9 | )% | $ | 15,294 | 12.2 | % | ||||||||||||||||||
The decrease in net interest income compared with the previous quarter
was primarily due to decreases in number of days and dividend on Federal
Home Loan Bank (“FHLB”) stock, and an increase in deposit cost in the
current quarter. The increase compared with the year-ago quarter was
primarily due to increases in average balance and average yield of
interest-earning assets, partially offset by increases in average
balance and average cost of interest-bearing liabilities.
The decrease in interest and fees on loans compared with the previous
quarter was primarily due to a decrease in number of days, partially
offset by an increase in average loan balance. The increase compared
with the year-ago quarter was primarily due to increases in both average
balance and average yield of loans. The increase in average yield on
loans was primarily due to the Company’s high proportion of variable
rate loans that had repriced along with the rising interest rate
environment in 2018. The following table presents a composition of total
loans by interest rate type accompanied with the weighted-average
contractual rates as of the dates indicated:
3/31/2019 | 12/31/2018 | 3/31/2018 | ||||||||||||||||||||||||||||
% to Total |
Weighted- |
% to Total |
Weighted- |
% to Total |
Weighted- |
|||||||||||||||||||||||||
Fixed rate loans | 34.6 | % | 5.17 | % | 34.4 | % | 5.13 | % | 26.8 | % | 5.07 | % | ||||||||||||||||||
Variable rate loans | 65.4 | % | 6.29 | % | 65.6 | % | 6.30 | % | 73.2 | % | 5.62 | % | ||||||||||||||||||
The increases in interest on investment securities were primarily due to
increases in both average balance and average yield of investment
securities. The increase in average yield on investment securities was
primarily due to additional purchases of investment securities during
the rising rate environment. The Company purchased investment securities
of $4.1 million and $44.1 million, respectively, during the current
quarter and last 12-month period.
The decrease in interest and dividend on other interest-earning assets
compared with the previous quarter was primarily due to decreases in
dividend on FHLB stock and average balance of interest-bearing deposits
in other financial institutions. The increase compared with the year-ago
quarter was primarily due to an increase in average balance of
interest-bearing deposits in other financial institutions from excess
cash generated from deposit growth and initial public offering (“IPO”)
completed in 2018, and higher interest rates earned on these deposits
during the rising rate environment.
The increases in total interest expense were primarily due to increases
in average balance and average cost of interest-bearing deposits. The
increase in average cost on interest-bearing deposits was primarily due
to the rising interest rate environment in 2018 and high competition in
the Company’s deposit target markets.
Provision (Reversal) for Loan Losses
Provision (reversal) for loan losses was $(85) thousand for the current
quarter compared with $294 thousand for the previous quarter and $95
thousand for the year-ago quarter. The Company recognized reversal for
loan losses primarily due to a decrease in historical loss rates,
changes in qualitative adjustment factors and a net recovery during the
current quarter. The Company recorded a net recovery of $55 thousand
during the current quarter compared with a net charge-off of $223
thousand for the previous quarter and a net recovery of $52 thousand for
the year-ago quarter. Allowance for loan losses to total loans
held-for-investment ratio was 0.98% at March 31, 2019, 0.98% at
December 31, 2018, and 1.01% at March 31, 2018.
Noninterest Income
The following table presents the components of noninterest income for
the periods indicated:
Three Months Ended | ||||||||||||||||||||||||||||
($ in thousands) | 3/31/2019 | 12/31/2018 | % Change | 3/31/2018 | % Change | |||||||||||||||||||||||
Gain on sale of SBA loans | $ | 1,104 | $ | 1,059 | 4.2 | % | $ | 2,049 | (46.1 | )% | ||||||||||||||||||
Gain on sale of residential property loans | 16 | 6 | 166.7 | % | 22 | (27.3 | )% | |||||||||||||||||||||
Gain on sale of other loans | — | 18 | (100.0 | )% | 45 | (100.0 | )% | |||||||||||||||||||||
Total gain on sale of loans | 1,120 | 1,083 | 3.4 | % | 2,116 | (47.1 | )% | |||||||||||||||||||||
Service charges and fees on deposits | 364 | 398 | (8.5 | )% | 349 | 4.3 | % | |||||||||||||||||||||
Loan servicing income | 631 | 371 | 70.1 | % | 626 | 0.8 | % | |||||||||||||||||||||
Other income | 294 | 387 | (24.0 | )% | 271 | 8.5 | % | |||||||||||||||||||||
Total noninterest income |
$ | 2,409 | $ | 2,239 | 7.6 | % | $ | 3,362 | (28.3 | )% | ||||||||||||||||||
The increase in total noninterest income compared with the previous
quarter was primarily due to increases in gain on sale of loans and loan
servicing income, partially offset by decreases in other income and
service charges and fees on deposits. The decrease compared with the
year-ago quarter was primarily due to a decrease in gain on sale of
loans, partially offset by increases in the other noninterest income
components.
The decreases in gain on sale of SBA loans in the current and previous
quarters compared with the year-ago quarter were primarily due to
decreases in sales volume and premium rates due to the conditions in the
secondary market. The Company sold the guaranteed portion of SBA loans
of $21.2 million, $26.2 million and $29.9 million, respectively, for the
three months ended March 31, 2019, December 31, 2018 and March 31, 2018.
The Company also sold residential property loans of $2.4 million, $702
thousand and $1.2 million, respectively, and other real estate loans of
none, $1.0 million and $1.1 million, respectively, for the three months
ended March 31, 2019, December 31, 2018 and March 31, 2018.
The increase in loan servicing income compared with the previous quarter
was primarily due to lower loan servicing income during the previous
quarter from an increase in servicing asset amortization from a higher
prepayment trend.
The decrease in other income compared with previous quarter was
primarily due to decreases in wire fees and a non-recurring loan
referral fee income of $33 thousand during the previous quarter.
Noninterest Expense
The following table presents the components of noninterest expense for
the periods indicated:
Three Months Ended | ||||||||||||||||||||||||||||
($ in thousands) | 3/31/2019 | 12/31/2018 | % Change | 3/31/2018 | % Change | |||||||||||||||||||||||
Salaries and employee benefits | $ | 6,622 | $ | 6,234 | 6.2 | % | $ | 6,246 | 6.0 | % | ||||||||||||||||||
Occupancy and equipment | 1,313 | 1,358 | (3.3 | )% | 1,144 | 14.8 | % | |||||||||||||||||||||
Professional fees | 758 | 452 | 67.7 | % | 523 | 44.9 | % | |||||||||||||||||||||
Marketing and business promotion | 228 | 526 | (56.7 | )% | 388 | (41.2 | )% | |||||||||||||||||||||
Data processing | 318 | 309 | 2.9 | % | 302 | 5.3 | % | |||||||||||||||||||||
Director fees and expenses | 189 | 281 | (32.7 | )% | 230 | (17.8 | )% | |||||||||||||||||||||
Regulatory assessments | 116 | 75 | 54.7 | % | 132 | (12.1 | )% | |||||||||||||||||||||
Other expenses | 745 | 900 | (17.2 | )% | 666 | 11.9 | % | |||||||||||||||||||||
Total noninterest expense | $ | 10,289 | $ | 10,135 | 1.5 | % | $ | 9,631 | 6.8 | % | ||||||||||||||||||
The increase in salaries and employee benefits compared with the
previous quarter was primarily due to an increase in vacation accrual
and a decrease in direct loan origination cost, which reduces salaries
and benefits at origination, from a lower loan production during the
current quarter. The increase compared with the year-ago quarter was
primarily due to increases in number of employees, partially offset by a
decrease in bonus accruals and a retirement bonus paid to the former
chief executive officer of $192 thousand in the year-ago quarter.
The increases in occupancy and equipment in the current and previous
quarters compared with the year-ago quarter was primarily due to
increases in depreciation, occupancy lease, and maintenance expenses.
The increases in professional fees were primarily due to increased audit
fees for the year-end process as the Company became a public company and
increased professional fees for enhancement of the Bank’s controls and
processes on Bank Secrecy Act and Anti-Money Laundering compliance
programs.
The decrease in market and business promotion compared with the previous
quarter was primarily due to an additional expense incurred during the
previous quarter for the year-end promotions and gifts for customers.
The decrease compared with the year-ago quarter was due to a decrease in
advertising expense.
The decreases in director fees and expenses was primarily due to a fewer
number of directors during the current quarter as well as a severance
payment of $68 thousand paid to the estate of former director and
chairman, Kwang Jin Chung, who passed away during the previous quarter.
The increase in regulatory assessments compared with the previous
quarter was due to an adjustment made for the assessment rate reduction
in previous quarter. The decrease compared with the year-ago quarter was
primarily due to a decrease in assessment rate, partially offset by
balance sheet growth.
The decrease in other expenses compared with the previous quarter was
primarily due to decreases in other loan related legal and office
expenses. The increase compared with the year-ago period was primarily
due to growth in operations.
Balance Sheet (Unaudited)
Loans
The following table presents a composition of total loans (includes both
loans held-for-sale and loans held-for-investment, net of deferred costs
(fees)) as of the dates indicated:
($ in thousands) | 3/31/2019 | 12/31/2018 | % Change | 3/31/2018 | % Change | |||||||||||||||||||||||
Real estate loans: | ||||||||||||||||||||||||||||
Commercial property | $ | 715,488 | $ | 709,409 | 0.9 | % | $ | 674,958 | 6.0 | % | ||||||||||||||||||
Residential property | 237,115 | 233,816 | 1.4 | % | 184,396 | 28.6 | % | |||||||||||||||||||||
SBA property | 124,751 | 120,939 | 3.2 | % | 135,581 | (8.0 | )% | |||||||||||||||||||||
Construction | 19,983 | 27,323 | (26.9 | )% | 25,969 | (23.1 | )% | |||||||||||||||||||||
Commercial and industrial loans: | ||||||||||||||||||||||||||||
Commercial term | 103,866 | 102,133 | 1.7 | % | 79,707 | 30.3 | % | |||||||||||||||||||||
Commercial lines of credit | 77,022 | 80,473 | (4.3 | )% | 58,184 | 32.4 | % | |||||||||||||||||||||
SBA commercial term | 26,347 | 27,147 | (2.9 | )% | 29,508 | (10.7 | )% | |||||||||||||||||||||
Trade finance | 14,046 | 11,521 | 21.9 | % | 2,124 | 561.3 | % | |||||||||||||||||||||
Other consumer loans | 24,554 | 25,921 | (5.3 | )% | 32,845 | (25.2 | )% | |||||||||||||||||||||
Loans held-for-investment | 1,343,172 | 1,338,682 | 0.3 | % | 1,223,272 | 9.8 | % | |||||||||||||||||||||
Loans held-for-sale | 3,915 | 5,781 | (32.3 | )% | 6,182 | (36.7 | )% | |||||||||||||||||||||
Total loans | $ | 1,347,087 | $ | 1,344,463 | 0.2 | % | $ | 1,229,454 | 9.6 | % | ||||||||||||||||||
The increase in loans held-for-investment for the current quarter was
primarily due to new funding of $73.2 million and advances on lines of
credit of $23.5 million, partially offset by pay-downs and pay-offs of
$91.8 million.
The decrease in loans held-for-sale for the current quarter was
primarily due to sales of $23.6 million, partially offset by new funding
of $21.5 million and a loan transferred from loans held-for-investment
of $303 thousand.
Credit Quality
The following table presents compositions of non-performing loans and
non-performing assets as of the dates indicated:
($ in thousands) | 3/31/2019 | 12/31/2018 | % Change | 3/31/2018 | % Change | |||||||||||||||||||||||
Nonaccrual loans: | ||||||||||||||||||||||||||||
Real estate loans: | ||||||||||||||||||||||||||||
Commercial property | $ | — | $ | — | — | % | $ | 311 | (100.0 | )% | ||||||||||||||||||
Residential property | — | 302 | (100.0 | )% | 730 | (100.0 | )% | |||||||||||||||||||||
SBA property | 1,011 | 540 | 87.2 | % | 1,022 | (1.1 | )% | |||||||||||||||||||||
Commercial and industrial loans: | ||||||||||||||||||||||||||||
SBA commercial term | 186 | 203 | (8.4 | )% | 318 | (41.5 | )% | |||||||||||||||||||||
Consumer loans | 74 | 16 | 362.5 | % | 16 | 362.5 | % | |||||||||||||||||||||
Total nonaccrual loans held-for-investment | 1,271 | 1,061 | 19.8 | % | 2,397 | (47.0 | )% | |||||||||||||||||||||
Loans past due 90 days or more and still accruing | — | — | — | % | — | — | % | |||||||||||||||||||||
Non-performing loans (“NPLs”) | 1,271 | 1,061 | 19.8 | % | 2,397 | (47.0 | )% | |||||||||||||||||||||
Other real estate owned | 395 | — | — | % | — | — | % | |||||||||||||||||||||
Non-performing assets (“NPAs”) | $ | 1,666 | $ | 1,061 | 57.0 | % | $ | 2,397 | (30.5 | )% | ||||||||||||||||||
Loans past due and still accruing: | ||||||||||||||||||||||||||||
Loans past due 30 to 59 days and still accruing | $ | 950 | $ | 368 | 158.2 | % | $ | 864 | 10.0 | % | ||||||||||||||||||
Loans past due 60 to 89 days and still accruing | 12 | 9 | 33.3 | % | 128 | (90.6 | )% | |||||||||||||||||||||
Loans past due 90 days or more and still accruing | — | — | — | % | — | — | % | |||||||||||||||||||||
Total loans past due and still accruing | $ | 962 | $ | 377 | 155.2 | % | $ | 992 | (3.0 | )% | ||||||||||||||||||
Troubled debt restructurings (“TDRs”): | ||||||||||||||||||||||||||||
Accruing TDRs | $ | 412 | $ | 432 | (4.6 | )% | $ | 554 | (25.6 | )% | ||||||||||||||||||
Nonaccrual TDRs | 127 | 131 | (3.1 | )% | 595 | (78.7 | )% | |||||||||||||||||||||
Total TDRs | $ | 539 | $ | 563 | (4.3 | )% | $ | 1,149 | (53.1 | )% | ||||||||||||||||||
NPLs to loans held-for-investment | 0.09 | % | 0.08 | % | 0.20 | % | ||||||||||||||||||||||
NPAs to total assets | 0.10 | % | 0.06 | % | 0.15 | % | ||||||||||||||||||||||
Classified Assets
Classified loans were $7.0 million at March 31, 2019, an increase of
$814 thousand, or 13.1%, from $6.2 million at December 31, 2018, and an
increase of $2.1 million, or 41.5%, from $5.0 million at March 31, 2018.
Classified assets, which consist of classified loans and OREO, and the
classified assets to total assets ratios were $7.4 million and 0.43%,
respectively, at March 31, 2019, $6.2 million and 0.37%, respectively,
at December 31, 2018, and $5.0 million and 0.32%, respectively, at
March 31, 2018.
Investment Securities
Total investment securities were $167.7 million at March 31, 2019, a
decrease of $1.1 million, or 0.6%, from $168.8 million at December 31,
2018, and an increase of $20.9 million, or 14.2%, from $146.8 million at
March 31, 2018. The decrease for the current quarter was primarily due
to principal pay-downs and calls of $6.2 million and net premium
amortization of $188 thousand, partially offset by purchases of $4.1
million and an increase in fair value of securities available-for-sale
of $1.2 million.
Deposits
The following table presents deposit mix as of the dates indicated:
3/31/2019 | 12/31/2018 | 3/31/2018 | |||||||||||||||||||||||||||||||
($ in thousands) | Amount | % to Total | Amount | % to Total | Amount | % to Total | |||||||||||||||||||||||||||
Noninterest-bearing demand deposits | $ | 330,645 | 22.8 | % | $ | 329,270 | 22.8 | % | $ | 321,109 | 23.2 | % | |||||||||||||||||||||
Interest-bearing deposits: | |||||||||||||||||||||||||||||||||
NOW | 13,045 | 0.9 | % | 24,683 | 1.7 | % | 9,716 | 0.7 | % | ||||||||||||||||||||||||
Money market accounts | 272,085 | 18.8 | % | 280,733 | 19.4 | % | 272,208 | 19.7 | % | ||||||||||||||||||||||||
Savings | 9,510 | 0.7 | % | 8,194 | 0.6 | % | 8,181 | 0.6 | % | ||||||||||||||||||||||||
Time deposits of $250,000 or less | 455,270 | 31.4 | % | 477,134 | 33.0 | % | 477,575 | 34.6 | % | ||||||||||||||||||||||||
Time deposits of more than $250,000 | 209,693 | 14.5 | % | 181,239 | 12.6 | % | 140,636 | 10.2 | % | ||||||||||||||||||||||||
State and brokered deposits | 157,510 | 10.9 | % | 142,500 | 9.9 | % | 152,500 | 11.0 | % | ||||||||||||||||||||||||
Total interest-bearing deposits | 1,117,113 | 77.2 | % | 1,114,483 | 77.2 | % | 1,060,816 | 76.8 | % | ||||||||||||||||||||||||
Total deposits | $ | 1,447,758 | 100.0 | % | $ | 1,443,753 | 100.0 | % | $ | 1,381,925 | 100.0 | % | |||||||||||||||||||||
The increase for the current quarter was primarily due to new accounts
of $133.1 million, partially offset by closed accounts of $95.4 million
and net balance decreases of $33.6 million on existing accounts.
Operating Lease Assets and Liabilities
During the current quarter, the Company adopted Accounting Standard
Update (“ASU”) 2016-02, “Leases (Topic 842),” and all subsequent
ASUs that are related to Topic 842. The Company adopted this ASU using
the optional transition method with a cumulative effect adjustment to
retained earnings without restating prior financial statements for
comparable amounts. As a result, the Company recognized right-of-use
assets and liabilities of $9.6 million and $10.6 million, respectively,
with a cumulative effect adjustment of $53 thousand to retained earnings
at the date of adoption.
Shareholders’ Equity
Shareholders’ equity was $217.2 million at March 31, 2019, an increase
of $6.9 million, or 3.3%, from $210.3 million at December 31, 2018, and
an increase of $70.0 million, or 47.5%, from $147.2 million at March 31,
2018. The increase for the current quarter was primarily due to
retention of earnings, partially offset by cash dividends paid on common
stock. The year-over-year increase was primarily due to the IPO
completed in August 2018 and retention of earnings, partially offset by
cash dividends paid on common stock.
On March 28, 2019, the Company’s Board of Directors approved the
repurchase of up to $6.5 million of the Company’s common stock through
March 27, 2020.
Capital Ratios
The following table presents capital ratios for the Company and the Bank
as of dates indicated:
3/31/2019 | 12/31/2018 | 3/31/2018 | |||||||||||||
Pacific City Financial Corporation | |||||||||||||||
Common tier 1 capital (to risk-weighted assets) | 16.52 | % | 16.28 | % | 12.32 | % | |||||||||
Total capital (to risk-weighted assets) | 17.53 | % | 17.31 | % | 13.36 | % | |||||||||
Tier 1 capital (to risk-weighted assets) | 16.52 | % | 16.28 | % | 12.32 | % | |||||||||
Tier 1 capital (to average assets) | 12.83 | % | 12.60 | % | 10.09 | % | |||||||||
Pacific City Bank | |||||||||||||||
Common tier 1 capital (to risk-weighted assets) | 16.41 | % | 16.19 | % | 12.25 | % | |||||||||
Total capital (to risk-weighted assets) | 17.42 | % | 17.21 | % | 13.29 | % | |||||||||
Tier 1 capital (to risk-weighted assets) | 16.41 | % | 16.19 | % | 12.25 | % | |||||||||
Tier 1 capital (to average assets) | 12.74 | % | 12.53 | % | 10.03 | % | |||||||||
Declaration of Increased Cash Dividend
On April 25, 2019, the Company’s Board of Directors declared a quarterly
cash dividend of $0.06 per common share, an increase of 20% from $0.05
per share in the prior quarter. The dividend will be paid on or about
June 14, 2019, to shareholders of record as of the close of business on
May 31, 2019.
“I am pleased to announce our seventeenth consecutive quarterly cash
dividend and an increase in that cash dividend to $0.06 per share,” said
Henry Kim, President and Chief Executive Officer. “The decision is based
on our strong financial performance and the Board of Directors’
continuing confidence in our anticipated growth in 2019 and beyond.”
About Pacific City Financial Corporation
Pacific City Financial Corporation is the bank holding company for
Pacific City Bank, a California state chartered bank, offering a full
suite of commercial banking services to small to medium-sized
businesses, individuals and professionals, primarily in Southern
California, and predominantly in Korean-American and other minority
communities.
Cautionary Note Regarding Forward-Looking
Statements
This press release contains forward-looking statements. These
forward-looking statements represent plans, estimates, objectives,
goals, guidelines, expectations, intentions, projections and statements
of our beliefs concerning future events, business plans, objectives,
expected operating results and the assumptions upon which those
statements are based. Forward-looking statements include without
limitation, any statement that may predict, forecast, indicate or imply
future results, performance or achievements, and are typically
identified with words such as ‘‘may,’’ “could,” “should,” “will,”
“would,” “believe,” “anticipate,” “estimate,” “expect,” “aim,” “intend,”
“plan,” or words or phases of similar meaning. We caution that the
forward-looking statements are based largely on our expectations and are
subject to a number of known and unknown risks and uncertainties that
are subject to change based on factors which are, in many instances,
beyond our control. These and other important factors are detailed in
various securities law filings made periodically by the Company, copies
of which are available from the Company without charge. Actual results,
performance or achievements could differ materially from those
contemplated, expressed, or implied by the forward-looking statements.
Any forward-looking statements presented herein are made only as of the
date of this press release, and we do not undertake any obligation to
update or revise any forward-looking statements to reflect changes in
assumptions, the occurrence of unanticipated events, or otherwise,
except as required by law.
Pacific City Financial Corporation and Subsidiary | ||||||||||||||||||||||||||||
Consolidated Balance Sheets (Unaudited) | ||||||||||||||||||||||||||||
($ in thousands, except share and per share data) |
||||||||||||||||||||||||||||
3/31/2019 | 12/31/2018 | % Change | 3/31/2018 | % Change | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||
Cash and due from banks | $ | 22,106 | $ | 24,121 | (8.4 | )% | $ | 16,765 | 31.9 | % | ||||||||||||||||||
Interest-bearing deposits in financial institutions | 151,481 | 138,152 | 9.6 | % | 164,788 | (8.1 | )% | |||||||||||||||||||||
Total cash and cash equivalents | 173,587 | 162,273 | 7.0 | % | 181,553 | (4.4 | )% | |||||||||||||||||||||
Securities available-for-sale, at fair value | 144,353 | 146,991 | (1.8 | )% | 125,940 | 14.6 | % | |||||||||||||||||||||
Securities held-to-maturity | 23,311 | 21,760 | 7.1 | % | 20,826 | 11.9 | % | |||||||||||||||||||||
Total investment securities | 167,664 | 168,751 | (0.6 | )% | 146,766 | 14.2 | % | |||||||||||||||||||||
Loans held-for-sale | 3,915 | 5,781 | (32.3 | )% | 6,182 | (36.7 | )% | |||||||||||||||||||||
Loans held-for-investment, net of deferred loan costs (fees) | 1,343,172 | 1,338,682 | 0.3 | % | 1,223,272 | 9.8 | % | |||||||||||||||||||||
Allowance for loan losses | (13,137 | ) | (13,167 | ) | (0.2 | )% | (12,371 | ) | 6.2 | % | ||||||||||||||||||
Net loans held-for-investments | 1,330,035 | 1,325,515 | 0.3 | % | 1,210,901 | 9.8 | % | |||||||||||||||||||||
Premises and equipment, net | 4,259 | 4,588 | (7.2 | )% | 5,069 | (16.0 | )% | |||||||||||||||||||||
Federal Home Loan Bank and other bank stock | 7,433 | 7,433 | — | % | 6,589 | 12.8 | % | |||||||||||||||||||||
Other real estate owned, net | 395 | — | — | % | — | — | % | |||||||||||||||||||||
Deferred tax assets, net | 3,251 | 3,377 | (3.7 | )% | 4,239 | (23.3 | )% | |||||||||||||||||||||
Servicing assets | 7,485 | 7,666 | (2.4 | )% | 8,890 | (15.8 | )% | |||||||||||||||||||||
Operating lease assets | 9,132 | — | — | % | — | — | % | |||||||||||||||||||||
Accrued interest receivable and other assets | 10,618 | 11,644 | (8.8 | )% | 8,781 | 20.9 | % | |||||||||||||||||||||
Total assets | $ | 1,717,774 | $ | 1,697,028 | 1.2 | % | $ | 1,578,970 | 8.8 | % | ||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||||||
Noninterest-bearing demand | $ | 330,645 | $ | 329,270 | 0.4 | % | $ | 321,109 | 3.0 | % | ||||||||||||||||||
Savings, NOW and money market accounts | 294,650 | 313,610 | (6.0 | )% | 290,105 | 1.6 | % | |||||||||||||||||||||
Time deposits of $250,000 or less | 492,770 | 519,634 | (5.2 | )% | 530,075 | (7.0 | )% | |||||||||||||||||||||
Time deposits of more than $250,000 | 329,693 | 281,239 | 17.2 | % | 240,636 | 37.0 | % | |||||||||||||||||||||
Total deposits | 1,447,758 | 1,443,753 | 0.3 | % | 1,381,925 | 4.8 | % | |||||||||||||||||||||
Federal Home Loan Bank advances | 30,000 | 30,000 | — | % | 40,000 | (25.0 | )% | |||||||||||||||||||||
Operating lease liabilities | 10,133 | — | — | % | — | — | % | |||||||||||||||||||||
Accrued interest payable and other liabilities | 12,672 | 12,979 | (2.4 | )% | 9,812 | 29.1 | % | |||||||||||||||||||||
Total liabilities | 1,500,563 | 1,486,732 | 0.9 | % | 1,431,737 | 4.8 | % | |||||||||||||||||||||
Commitments and contingent liabilities | ||||||||||||||||||||||||||||
Shareholders’ equity | ||||||||||||||||||||||||||||
Common stock | 171,407 | 171,067 | 0.2 | % | 125,511 | 36.6 | % | |||||||||||||||||||||
Additional paid-in capital | 3,336 | 3,299 | 1.1 | % | 3,072 | 8.6 | % | |||||||||||||||||||||
Retained earnings | 43,288 | 37,577 | 15.2 | % | 20,898 | 107.1 | % | |||||||||||||||||||||
Accumulated other comprehensive loss, net | (820 | ) | (1,647 | ) | (50.2 | )% | (2,248 | ) | (63.5 | )% | ||||||||||||||||||
Total shareholders’ equity | 217,211 | 210,296 | 3.3 | % | 147,233 | 47.5 | % | |||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 1,717,774 | $ | 1,697,028 | 1.2 | % | $ | 1,578,970 | 8.8 | % | ||||||||||||||||||
Outstanding common shares | 16,011,151 | 15,977,754 | 13,424,777 | |||||||||||||||||||||||||
Book value per common share (1) | $ | 13.57 | $ | 13.16 | $ | 10.97 | ||||||||||||||||||||||
Total loan to total deposit ratio | 93.05 | % | 93.12 | % | 88.97 | % | ||||||||||||||||||||||
Noninterest-bearing deposits to total deposits | 22.84 | % | 22.81 | % | 23.24 | % | ||||||||||||||||||||||
Contacts
Timothy Chang
Executive Vice President & Chief Financial Officer
213-210-2000
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Cannabis
Medical Cannabis Market Report 2024-2030: Asia-Pacific Set to Witness Robust Growth, Driven by R&D Discovery Initiatives
Cannabis
Rubicon Organics Reports Q1 2024 Financial Results
SCHWAZZE
Schwazze Announces First Quarter 2024 Financial Results
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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