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ON Semiconductor Reports First Quarter 2019 Results
Reading Time: 16 minutes
- Revenue of $1,386.6 million
- Gross margin of 37.0 percent
-
GAAP operating margin of 12.9 percent and non-GAAP operating margin of
15.5 percent -
GAAP diluted earnings per share of $0.27 and non-GAAP diluted earnings
per share of $0.43
PHOENIX–(BUSINESS WIRE)–ON Semiconductor Corporation (Nasdaq: ON)
today announced that revenue in first quarter of 2019 was
$1,386.6 million, up approximately one percent compared to revenue in
first quarter of 2018. First quarter 2019 revenue was down approximately
eight percent as compared to revenue in fourth quarter of 2018.
“Our execution continues to be strong, despite soft business conditions.
While we are facing near-term headwinds, key secular drivers powering
our business remain intact, and we are well positioned to benefit from
increasing semiconductor content in automotive, industrial, and
cloud-power applications,” said Keith Jackson, president and CEO of ON
Semiconductor. “We are prudently managing our business, and we intend to
deliver strong operational results to mitigate the impact of slowing
demand environment.”
“We remain upbeat about our future, and we are making prudent long term
investments to strengthen our position in our strategic markets and to
further improve our industry-leading cost structure.”
|
First Quarter Results (GAAP) |
||||||||||||||||
| (in millions, except per share data) | 1Q 2019 | 1Q 2018 |
Year-Over- |
4Q 2018 |
Sequential
Change |
|||||||||||
| Revenue | $1,386.6 | $1,377.6 | 1 | % | $1,503.1 | (8 | )% | |||||||||
| Gross Profit | $513.7 | $517.4 | (1 | )% | $569.7 | (10 | )% | |||||||||
| Operating Income | $179.4 | $185.7 | (3 | )% | $222.7 | (19 | )% | |||||||||
| Net Income Attributable to ON Semiconductor Corporation | $114.1 | $139.6 | (18 | )% | $165.6 | (31 | )% | |||||||||
| Diluted Earnings Per Share | $0.27 | $0.31 | (13 | )% | $0.39 | (31 | )% | |||||||||
| Diluted Share Count | 417.7 | 444.2 | (6 | )% | 420.0 | (1 | )% | |||||||||
|
First Quarter Results (Non-GAAP) |
||||||||||||||||
| (in millions, except per share data) | 1Q 2019 | 1Q 2018 |
Year-Over- Year Change |
4Q 2018 |
Sequential
Change |
|||||||||||
| Revenue | $1,386.6 | $1,377.6 | 1 | % | $1,503.1 | (8 | )% | |||||||||
| Gross Profit | $513.7 | $517.4 | (1 | )% | $570.3 | (10 | )% | |||||||||
| Operating Income | $215.2 | $216.7 | (1 | )% | $253.0 | (15 | )% | |||||||||
| Net Income Attributable to ON Semiconductor Corporation | $177.1 | $170.7 | 4 | % | $222.0 | (20 | )% | |||||||||
| Diluted Earnings Per Share | $0.43 | $0.40 | 8 | % | $0.53 | (19 | )% | |||||||||
| Diluted Share Count | 413.8 | 431.6 | (4 | )% | 420.0 | (1 | )% | |||||||||
|
First Quarter Key Cash Flow Items |
|||||||||||||||||
| (in millions) | 1Q 2019 | 1Q 2018 |
Year-Over- Year Change |
4Q 2018 |
Sequential
Change |
||||||||||||
| Cash Taxes, net of indemnification | $15.2 | $19.1 | (20 | )% | $8.2 | 85 | % | ||||||||||
| Operating Cash Flow | $138.2 | $226.5 | (39 | )% | $421.0 | (67 | )% | ||||||||||
| Free Cash Flow | ($18.8 | ) | $127.0 | (115 | )% | $289.0 | (107 | )% | |||||||||
SECOND QUARTER 2019 OUTLOOK
Based on product booking trends, backlog levels, and estimated turns
levels, the Company anticipates revenue in second quarter of 2019 to be
approximately $1,360 to $1,410 million. Revenue outlook for second
quarter of 2019 includes revenue of approximately $15 million from
manufacturing services provided by ON Semiconductor Aizu Co., Ltd.
(“OSA”).
Gross margin for second quarter of 2019 is expected to be in range of
36.5 percent to 37.5 percent. Second quarter 2019 gross margin outlook
includes negative impact of 40 basis points from manufacturing services
provided by OSA.
The outlook for second quarter of 2019 also includes anticipated
stock-based compensation expense of approximately $26 million to $28
million. Net cash paid for income taxes is expected to be $12 million to
$16 million.
The following table outlines ON Semiconductor’s projected second quarter
of 2019 GAAP and non-GAAP outlook.
|
Total ON Semiconductor
GAAP |
Special
Items *** |
Total ON Semiconductor
Non-GAAP**** |
||||
| Revenue | $1,360 to $1,410 | $1,360 to $1,410 | ||||
| Gross Margin | 36.5% to 37.5% | 36.5% to 37.5% | ||||
| Operating Expenses | $322 to $340 million | $27 to $31 million | $295 to $309 million | |||
| Other Income and Expense (including interest expense), net | $31 to $34 million | $9 to $10 million* | $22 to $24 million | |||
| Diluted Share Count ** | 418 million | 4 million | 414 million |
| * |
Convertible Notes, Non-cash Interest Expense is calculated pursuant to FASB’s Accounting Standards Codification Topic 470: Debt. |
|
| ** |
Diluted share count can vary as a result of, among other things, the actual exercise of options or vesting of restricted stock units, the incremental dilutive shares from the Company’s convertible senior subordinated notes, and the repurchase or the issuance of stock or convertible notes or the sale of treasury shares. In periods in which the quarterly average stock price per share exceeds $18.50, the non-GAAP diluted share count and non-GAAP net income per share includes the impact of the Company’s hedge transactions issued concurrently with our 1.00% convertible notes. As such, at an average stock price per share between $18.50 and $25.96, the hedging activity offsets the potentially dilutive effect of the 1.00% convertible notes. In periods when the quarterly average stock price per share exceeds $20.72, the non-GAAP diluted share count and non-GAAP net income per share includes the anti-dilutive impact of the Company’s hedge transactions issued concurrently with the 1.625% convertible notes. At an average stock price per share between $20.72 and $30.70, the hedging activity offsets the potentially dilutive effect of the 1.625% convertible notes. Both GAAP and non-GAAP diluted share counts are based on the Company’s stock price as of March 29, 2019. |
|
| *** |
Special items may include: amortization of acquisition-related intangibles; expensing of appraised inventory fair market value step-up; purchased in-process research and development expenses; restructuring, asset impairments and other, net; goodwill impairment charges; gains and losses on debt prepayment; non-cash interest expense; actuarial (gains) losses on pension plans and other pension benefits; and certain other special items, as necessary. These special items are out of our control and could change significantly from period to period. As a result, we are not able to reasonably estimate and separately present the individual impact or probable significance of these special items, and we are similarly unable to provide a reconciliation of the non-GAAP measures. The reconciliation that is unavailable would include a forward-looking income statement, balance sheet and statement of cash flows in accordance with GAAP. For this reason, we use a projected range of the aggregate amount of special items in order to calculate our projected non-GAAP operating expense outlook. |
|
| **** |
We believe these non-GAAP measures provide important supplemental information to investors. We use these measures, together with GAAP measures, for internal managerial purposes and as a means to evaluate period-to-period comparisons. However, we do not, and you should not, rely on non-GAAP financial measures alone as measures of our performance. We believe that non-GAAP financial measures reflect an additional way of viewing aspects of our operations that, when taken together with GAAP results and the reconciliations to corresponding GAAP financial measures that we also provide in our releases, provide a more complete understanding of factors and trends affecting our business. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures, even if they have similar names. |
TELECONFERENCE
ON Semiconductor will host a conference call for the financial community
at 9 a.m. Eastern Daylight Time (EDT) on April 29, 2019 to discuss this
announcement and ON Semiconductor’s results for first quarter of 2019.
The Company will also provide a real-time audio webcast of the
teleconference on the Investor Relations page of its website at http://www.onsemi.com.
The webcast replay will be available at this site approximately one hour
following the live broadcast and will continue to be available for
approximately 30 days following the conference call. Investors and
interested parties can also access the conference call through a
telephone call by dialing (877) 356-3762 (U.S./Canada) or (262) 558-6155
(International). In order to join this conference call, you will be
required to provide the Conference ID Number, which is 2874546.
About ON Semiconductor
ON Semiconductor (Nasdaq: ON) is driving energy efficient innovations,
empowering customers to reduce global energy use. The Company is a
leading supplier of semiconductor-based solutions, offering a
comprehensive portfolio of energy efficient power management, analog,
sensors, logic, timing, connectivity, discrete, SoC and custom devices.
The Company’s products help engineers solve their unique design
challenges in automotive, communications, computing, consumer,
industrial, medical, aerospace and defense applications. ON
Semiconductor operates a responsive, reliable, world-class supply chain
and quality program, a robust compliance and ethics program and a
network of manufacturing facilities, sales offices and design centers in
key markets throughout North America, Europe and the Asia Pacific
regions. For more information, visit http://www.onsemi.com.
ON Semiconductor and the ON Semiconductor logo are registered
trademarks of Semiconductor Components Industries, LLC. All other
brand and product names appearing in this document are registered
trademarks or trademarks of their respective holders. Although
the Company references its website in this news release, information on
the website is not to be incorporated herein.
This document contains “forward-looking statements,” as that term is
defined in Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. All
statements, other than statements of historical facts, included or
incorporated in this document could be deemed forward-looking
statements, particularly statements about the future financial
performance of ON Semiconductor, including financial guidance for the
year ending December 31, 2019. Forward-looking statements are often
characterized by the use of words such as “believes,” “estimates,”
“expects,” “projects,” “may,” “will,” “intends,” “plans” or
“anticipates” or by discussions of strategy, plans or intentions. All
forward-looking statements in this document are made based on our
current expectations, forecasts, estimates and assumptions and involve
risks, uncertainties and other factors that could cause results or
events to differ materially from those expressed in the forward-looking
statements. Among these factors are our revenue and operating
performance; economic conditions and markets (including current
financial conditions); risks related to our ability to meet our
assumptions regarding outlook for revenue and gross margin as a
percentage of revenue; effects of exchange rate fluctuations; the
cyclical nature of the semiconductor industry; changes in demand for our
products; changes in inventories at our customers and distributors;
risks associated with restructuring actions and workforce reductions;
technological and product development risks; enforcement and protection
of our intellectual property rights and related risks; risks related to
the security of our information systems and secured network;
availability of raw materials, electricity, gas, water and other supply
chain uncertainties; our ability to effectively shift production to
other facilities when required in order to maintain supply continuity
for our customers; variable demand and the aggressive pricing
environment for semiconductor products; our ability to successfully
manufacture in increasing volumes on a cost-effective basis and with
acceptable quality for our current products; risks associated with our
acquisitions and dispositions generally, including our ability to
realize the anticipated benefits of our acquisitions and dispositions;
risks that acquisitions or dispositions may disrupt our current plans
and operations, the risk of unexpected costs, charges or expenses
resulting from acquisitions or dispositions and difficulties arising
from integrating and consolidating acquired businesses, our timely
filing of financial information with the Securities and Exchange
Commission (“SEC”) for acquired businesses and our ability to accurately
predict the future financial performance of acquired businesses);
competitor actions, including the adverse impact of competitor product
announcements; pricing and gross profit pressures; loss of key customers
or distributors; order cancellations or reduced bookings; changes in
manufacturing yields; control of costs and expenses and realization of
cost savings and synergies from restructurings; significant litigation;
risks associated with decisions to expend cash reserves for various uses
in accordance with our capital allocation policy such as debt
prepayment, stock repurchases or acquisitions rather than to retain such
cash for future needs; risks associated with our substantial leverage
and restrictive covenants in our debt agreements that may be in place
from time to time; risks associated with our worldwide operations,
including changes in trade policies, foreign employment and labor
matters associated with unions and collective bargaining arrangements as
well as man-made and/or natural disasters affecting our operations or
financial results; the threat or occurrence of international armed
conflict and terrorist activities both in the United States and
internationally; risks of changes in U.S. or international tax rates or
legislation; risks and costs associated with increased and new
regulation of corporate governance and disclosure standards; risks
related to new legal requirements; and risks involving environmental or
other governmental regulation. Additional factors that could affect our
future results or events are described under Part I, Item 1A “Risk
Factors” in our 2018 Annual Report on Form 10-K filed with the SEC on
February 20, 2019 (our “2018 Form 10-K”) and from time-to-time in our
other SEC reports. Readers are cautioned not to place undue reliance on
forward-looking statements. We assume no obligation to update such
information, except as may be required by law. You should carefully
consider the trends, risks and uncertainties described in this document,
our 2018 Form 10-K and other reports filed with or furnished to the SEC
before making any investment decision with respect to our securities. If
any of these trends, risks or uncertainties actually occurs or
continues, our business, financial condition or operating results could
be materially adversely affected, the trading prices of our securities
could decline and you could lose all or part of your investment. All
forward-looking statements attributable to us or persons acting on our
behalf are expressly qualified in their entirety by this cautionary
statement.
| ON SEMICONDUCTOR CORPORATION | ||||||||||||
| UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS | ||||||||||||
|
(in millions, except per share data) |
||||||||||||
| Quarters Ended | ||||||||||||
| March 29, 2019 | December 31, 2018 | March 30, 2018 | ||||||||||
| Revenue | $ | 1,386.6 | $ | 1,503.1 | $ | 1,377.6 | ||||||
| Cost of revenue (exclusive of amortization shown below) | 872.9 | 933.4 | 860.2 | |||||||||
| Gross profit | 513.7 | 569.7 | 517.4 | |||||||||
| Gross margin | 37.0 | % | 37.9 | % | 37.6 | % | ||||||
| Operating expenses: | ||||||||||||
| Research and development | 151.8 | 162.2 | 155.2 | |||||||||
| Selling and marketing | 77.1 | 82.1 | 77.8 | |||||||||
| General and administrative | 72.9 | 74.5 | 70.9 | |||||||||
| Amortization of acquisition-related intangible assets | 25.7 | 28.4 | 27.4 | |||||||||
| Restructuring, asset impairments and other, net | 5.6 | (3.7 | ) | 0.4 | ||||||||
| Intangible asset impairment | 1.2 | 3.5 | — | |||||||||
|
Total operating expenses |
334.3 | 347.0 | 331.7 | |||||||||
| Operating income | 179.4 | 222.7 | 185.7 | |||||||||
| Other income (expense), net: | ||||||||||||
| Interest expense | (31.7 | ) | (32.9 | ) | (31.5 | ) | ||||||
| Interest income | 2.5 | 2.8 | 0.9 | |||||||||
| Licensing income | — | 3.7 | 3.8 | |||||||||
| Other income (expense) | 2.1 | (7.6 | ) | (2.0 | ) | |||||||
| Other income (expense), net | (27.1 | ) | (34.0 | ) | (28.8 | ) | ||||||
| Income before income taxes | 152.3 | 188.7 | 156.9 | |||||||||
| Income tax provision | (38.2 | ) | (22.7 | ) | (16.4 | ) | ||||||
| Net income | 114.1 | 166.0 | 140.5 | |||||||||
| Less: Net income attributable to non-controlling interest | — | (0.4 | ) | (0.9 | ) | |||||||
| Net income attributable to ON Semiconductor Corporation | $ | 114.1 | $ | 165.6 | $ | 139.6 | ||||||
|
Net income per common share attributable to ON Semiconductor Corporation: |
||||||||||||
| Basic | $ | 0.28 | $ | 0.40 | $ | 0.33 | ||||||
| Diluted | $ | 0.27 | $ | 0.39 | $ | 0.31 | ||||||
| Weighted average common shares outstanding: | ||||||||||||
| Basic | 410.6 | 416.9 | 425.9 | |||||||||
| Diluted | 417.7 | 420.0 | 444.2 | |||||||||
| ON SEMICONDUCTOR CORPORATION | ||||||||||||
| UNAUDITED CONSOLIDATED BALANCE SHEETS | ||||||||||||
|
(in millions) |
||||||||||||
| March 29, 2019 | December 31, 2018 | March 30, 2018 | ||||||||||
| Assets | ||||||||||||
| Cash and cash equivalents | $ | 939.6 | $ | 1,069.6 | $ | 924.9 | ||||||
| Receivables, net | 704.0 | 686.0 | 696.9 | |||||||||
| Inventories | 1,225.2 | 1,225.2 | 1,160.0 | |||||||||
| Other current assets | 177.9 | 187.0 | 185.2 | |||||||||
| Total current assets | 3,046.7 | 3,167.8 | 2,967.0 | |||||||||
| Property, plant and equipment, net | 2,585.0 | 2,549.6 | 2,336.4 | |||||||||
| Goodwill | 932.5 | 932.5 | 916.9 | |||||||||
| Intangible assets, net | 539.5 | 566.4 | 600.9 | |||||||||
| Deferred tax assets | 238.2 | 266.2 | 333.3 | |||||||||
| Other assets | 222.4 | 105.1 | 108.6 | |||||||||
| Total assets | $ | 7,564.3 | $ | 7,587.6 | $ | 7,263.1 | ||||||
| Liabilities, Non-Controlling Interest and Stockholders’ Equity | ||||||||||||
| Accounts payable | $ | 583.3 | $ | 671.7 | $ | 612.0 | ||||||
| Accrued expenses and other current liabilities | 603.4 | 659.1 | 585.8 | |||||||||
| Current portion of long-term debt | 130.8 | 138.5 | 747.2 | |||||||||
| Total current liabilities | 1,317.5 | 1,469.3 | 1,945.0 | |||||||||
| Long-term debt | 2,639.0 | 2,627.6 | 2,084.4 | |||||||||
| Deferred tax liabilities | 54.1 | 54.8 | 57.1 | |||||||||
| Other long-term liabilities | 333.0 | 241.8 | 225.1 | |||||||||
| Total liabilities | 4,343.6 | 4,393.5 | 4,311.6 | |||||||||
| ON Semiconductor Corporation stockholders’ equity: | ||||||||||||
| Common stock | 5.6 | 5.6 | 5.5 | |||||||||
| Additional paid-in capital | 3,722.5 | 3,702.3 | 3,615.5 | |||||||||
| Accumulated other comprehensive loss | (43.7 | ) | (37.9 | ) | (34.4 | ) | ||||||
| Accumulated earnings | 1,093.7 | 979.6 | 491.7 | |||||||||
| Less: Treasury stock, at cost | (1,579.9 | ) | (1,478.0 | ) | (1,149.9 | ) | ||||||
| Total ON Semiconductor Corporation stockholders’ equity | 3,198.2 | 3,171.6 | 2,928.4 | |||||||||
| Non-controlling interest | 22.5 | 22.5 | 23.1 | |||||||||
| Total stockholders’ equity | 3,220.7 | 3,194.1 | 2,951.5 | |||||||||
| Total liabilities and stockholders’ equity | $ | 7,564.3 | $ | 7,587.6 | $ | 7,263.1 | ||||||
| ON SEMICONDUCTOR CORPORATION | ||||||||||||
| UNAUDITED RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA AND | ||||||||||||
| NET CASH PROVIDED BY OPERATING ACTIVITIES | ||||||||||||
|
(in millions) |
||||||||||||
| Quarters Ended | ||||||||||||
| March 29, 2019 | December 31, 2018 | March 30, 2018 | ||||||||||
| Net income | $ | 114.1 | $ | 166.0 | $ | 140.5 | ||||||
| Adjusted for: | ||||||||||||
| Licensing income | — | (3.7 | ) | (3.8 | ) | |||||||
| R&D costs related to licensing income | — | — | 2.8 | |||||||||
| Restructuring, asset impairments and other, net | 5.6 | (3.7 | ) | 0.4 | ||||||||
| Intangible asset impairment | 1.2 | 3.5 | — | |||||||||
| Interest expense | 31.7 | 32.9 | 31.5 | |||||||||
| Interest income | (2.5 | ) | (2.8 | ) | (0.9 | ) | ||||||
| Income tax provision | 38.2 | 22.7 | 16.4 | |||||||||
| Net income attributable to non-controlling interest | — | (0.4 | ) | (0.9 | ) | |||||||
| Depreciation and amortization | 135.8 | 136.2 | 119.9 | |||||||||
| Amortization of fair market value step-up of inventory | — | 0.6 | — | |||||||||
| Adjustment to contingent consideration | — | — | (2.1 | ) | ||||||||
| Actuarial losses on pension plans and other pension benefits | — | 5.8 | — | |||||||||
| Third party acquisition and divestiture related costs | 3.3 | 1.5 | 0.4 | |||||||||
| Indemnification gain | (4.9 | ) | — | — | ||||||||
| Adjusted EBITDA | 322.5 | 358.6 | 304.2 | |||||||||
| Increase (decrease): | ||||||||||||
| Licensing income | — | 3.7 | 3.8 | |||||||||
| R&D costs related to licensing income | — | — | (2.8 | ) | ||||||||
| Restructuring, asset impairments and other, net | (5.6 | ) | 3.7 | (0.4 | ) | |||||||
| Interest expense | (31.7 | ) | (32.9 | ) | (31.5 | ) | ||||||
| Interest income | 2.5 | 2.8 | 0.9 | |||||||||
| Income tax provision | (38.2 | ) | (22.7 | ) | (16.4 | ) | ||||||
| Net income attributable to non-controlling interest | — | 0.4 | 0.9 | |||||||||
| Amortization of fair market value step-up of inventory | — | (0.6 | ) | — | ||||||||
| Adjustment to contingent consideration | — | — | 2.1 | |||||||||
| Actuarial losses on pension plans and other pension benefits | — | (5.8 | ) | — | ||||||||
| Third party acquisition and divestiture related costs | (3.3 | ) | (1.5 | ) | (0.4 | ) | ||||||
| Indemnification gain | 4.9 | — | — | |||||||||
| Loss (gain) on sale or disposal of fixed assets | 0.4 | (1.2 | ) | 1.3 | ||||||||
| Amortization of debt discount and issuance costs | 3.2 | 3.4 | 3.3 | |||||||||
| Share-based compensation expense | 19.7 | 18.9 | 18.4 | |||||||||
| Non-cash interest on convertible notes | 9.1 | 9.5 | 8.7 | |||||||||
| Change in deferred taxes | 29.0 | (10.7 | ) | 7.5 | ||||||||
| Other | (4.3 | ) | 2.0 | (1.2 | ) | |||||||
| Changes in operating assets and liabilities | (170.0 | ) | 93.4 | (71.9 | ) | |||||||
| Net cash provided by operating activities | $ | 138.2 | $ | 421.0 | $ | 226.5 | ||||||
| Cash flows from investing activities: | ||||||||||||
| Purchase of property, plant and equipment | $ | (157.0 | ) | $ | (132.0 | ) | $ | (99.5 | ) | |||
| Proceeds from sales of property, plant and equipment | — | 30.2 | 5.6 | |||||||||
|
Deposits utilized (made) for purchase of property, plant and equipment |
(10.1 | ) | 9.7 | (11.6 | ) | |||||||
| Purchase of equity interest and assets, net of cash acquired | — | (4.8 | ) | — | ||||||||
| Proceeds from divestiture of business, net of cash transferred | — | 1.1 | — | |||||||||
| Other | — | 2.2 | — | |||||||||
| Net cash used in investing activities | $ | (167.1 | ) | $ | (93.6 | ) | $ | (105.5 | ) | |||
| Cash flows from financing activities: | ||||||||||||
| Proceeds for the issuance of common stock under the ESPP | 7.4 | $ | 6.3 | $ | — | |||||||
| Proceeds from exercise of stock options | 0.5 | 1.3 | 3.6 | |||||||||
| Payment of tax withholding for RSUs | (26.1 | ) | (2.4 | ) | (18.8 | ) | ||||||
| Repurchase of common stock | (75.0 | ) | (200.3 | ) | — | |||||||
| Proceeds from debt issuance | 4.5 | 7.1 | 5.3 | |||||||||
| Repayment of long-term debt | (12.2 | ) | (18.5 | ) | (135.9 | ) | ||||||
| Payment of finance lease obligations | (0.2 | ) | (0.3 | ) | (1.1 | ) | ||||||
| Dividend to non-controlling shareholder | — | (2.2 | ) | — | ||||||||
| Net cash used in financing activities | $ | (101.1 | ) | $ | (209.0 | ) | $ | (146.9 | ) | |||
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
$ | — | $ | 0.2 | $ | 1.6 | ||||||
| Net (decrease) increase in cash, cash equivalents and restricted cash | $ | (130.0 | ) | $ | 118.6 | $ | (24.3 | ) | ||||
| Cash, cash equivalents and restricted cash, beginning of period | $ | 1,087.1 | $ | 968.5 | $ | 966.6 | ||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 957.1 | $ | 1,087.1 | $ | 942.3 | ||||||
| ON SEMICONDUCTOR CORPORATION | |||||||||||||||
| RECONCILIATION OF GAAP VERSUS NON-GAAP DISCLOSURES | |||||||||||||||
|
(in millions, except per share and percentage data) |
|||||||||||||||
| Quarters Ended | |||||||||||||||
| March 29, 2019 | December 31, 2018 | March 30, 2018 | |||||||||||||
| Reconciliation of GAAP gross profit to non-GAAP gross profit: | |||||||||||||||
| GAAP gross profit | $ | 513.7 | $ | 569.7 | $ | 517.4 | |||||||||
| Special items: | |||||||||||||||
| a) | Expensing of appraised inventory at fair market value step-up | — | 0.6 | — | |||||||||||
| Total special items | — | 0.6 | — | ||||||||||||
| Non-GAAP gross profit | $ | 513.7 | $ | 570.3 | $ | 517.4 | |||||||||
| Reconciliation of GAAP gross margin to non-GAAP gross margin: | |||||||||||||||
| GAAP gross margin | 37.0 | % | 37.9 | % | 37.6 | % | |||||||||
| Special items: | |||||||||||||||
| a) | Expensing of appraised inventory at fair market value step-up | — | % | — | % | — | % | ||||||||
| Total special items | — | % | — | % | — | % | |||||||||
| Non-GAAP gross margin | 37.0 | % | 37.9 | % | 37.6 | % | |||||||||
|
Reconciliation of GAAP operating expenses to non-GAAP operating expenses: |
|||||||||||||||
| GAAP operating expenses | $ | 334.3 | $ | 347.0 | $ | 331.7 | |||||||||
| Special items: | |||||||||||||||
| a) | Amortization of acquisition-related intangible assets | (25.7 | ) | (28.4 | ) | (27.4 | ) | ||||||||
| b) | Restructuring, asset impairments and other, net | (5.6 | ) | 3.7 | (0.4 | ) | |||||||||
| c) | Intangible asset impairment | (1.2 | ) | (3.5 | ) | — | |||||||||
| d) | Third party acquisition and divestiture related costs | (3.3 | ) | (1.5 | ) | (0.4 | ) | ||||||||
| e) | R&D costs related to licensing income | — | — | (2.8 | ) | ||||||||||
| Total special items | (35.8 | ) | (29.7 | ) | (31.0 | ) | |||||||||
| Non-GAAP operating expenses | $ | 298.5 | $ | 317.3 | $ | 300.7 | |||||||||
|
Reconciliation of GAAP operating income to non-GAAP operating income: |
|||||||||||||||
| GAAP operating income | $ | 179.4 | $ | 222.7 | $ | 185.7 | |||||||||
| Special items: | |||||||||||||||
| a) | Expensing of appraised inventory at fair market value step-up | — | 0.6 | — | |||||||||||
| b) | Amortization of acquisition-related intangible assets | 25.7 | 28.4 | 27.4 | |||||||||||
| c) | Restructuring, asset impairments and other, net | 5.6 | (3.7 | ) | 0.4 | ||||||||||
| d) | Intangible asset impairment | 1.2 | 3.5 | — | |||||||||||
| e) | Third party acquisition and divestiture related costs | 3.3 | 1.5 | 0.4 | |||||||||||
| f) | R&D costs related to licensing income | — | — | 2.8 | |||||||||||
| Total special items | 35.8 | 30.3 | 31.0 | ||||||||||||
| Non-GAAP operating income | $ | 215.2 | $ | 253.0 | $ | 216.7 | |||||||||
|
Reconciliation of GAAP operating margin to non-GAAP operating margin (operating income / revenue): |
|||||||||||||||
| GAAP operating margin | 12.9 | % | 14.8 | % | 13.5 | % | |||||||||
| Special items: | |||||||||||||||
| a) | Expensing of appraised inventory at fair market value step-up | — | % | — | % | — | % | ||||||||
| b) | Amortization of acquisition-related intangible assets | 1.9 | % | 1.9 | % | 2.0 | % | ||||||||
| c) | Restructuring, asset impairments and other, net | 0.4 | % | (0.2 | )% | — | % | ||||||||
| d) | Intangible asset impairment | 0.1 | % | 0.2 | % | — | % | ||||||||
| e) | Third party acquisition and divestiture related costs | 0.2 | % | 0.1 | % | — | % | ||||||||
| f) | R&D costs related to licensing income | — | % | — | % | 0.2 | % | ||||||||
| Total special items | 2.6 | % | 2.0 | % | 2.2 | % | |||||||||
| Non-GAAP operating margin | 15.5 | % | 16.8 | % | 15.7 | % | |||||||||
|
Reconciliation of GAAP income before income taxes to non-GAAP income before income taxes: |
|||||||||||||||
| GAAP income before income taxes | $ | 152.3 | $ | 188.7 | $ | 156.9 | |||||||||
| Special items: | |||||||||||||||
| a) | Expensing of appraised inventory at fair market value step-up | — | 0.6 | — | |||||||||||
| b) | Amortization of acquisition-related intangible assets | 25.7 | 28.4 | 27.4 | |||||||||||
| c) | Restructuring, asset impairments and other, net | 5.6 | (3.7 | ) | 0.4 | ||||||||||
| d) | Intangible asset impairment | 1.2 | 3.5 | — | |||||||||||
| e) | Third party acquisition and divestiture related costs | 3.3 | 1.5 | 0.4 | |||||||||||
| f) | R&D costs related to licensing income | — | — | 2.8 | |||||||||||
| g) | Actuarial losses on pension plans and other pension benefits | — | 5.8 | — | |||||||||||
| h) | Non-cash interest on convertible notes | 9.1 | 9.5 | 8.7 | |||||||||||
| i) | Indemnification gain | (4.9 | ) | — | — | ||||||||||
| j) | Adjustment to contingent consideration | — | — | (2.1 | ) | ||||||||||
| k) | Licensing income | — | (3.7 | ) | (3.8 | ) | |||||||||
| Total special items | 40.0 | 41.9 | 33.8 | ||||||||||||
| Non-GAAP income before income taxes | $ | 192.3 | $ | 230.6 | $ | 190.7 | |||||||||
|
Reconciliation of GAAP net income attributable to ON Semiconductor Corporation to non-GAAP net income attributable to ON Semiconductor Corporation: |
|||||||||||||||
| GAAP net income attributable to ON Semiconductor Corporation | $ | 114.1 | $ | 165.6 | $ | 139.6 | |||||||||
| Special items: | |||||||||||||||
| a) | Expensing of appraised inventory at fair market value step-up | — | 0.6 | — | |||||||||||
| b) | Amortization of acquisition-related intangible assets | 25.7 | 28.4 | 27.4 | |||||||||||
| c) | Restructuring, asset impairments and other, net | 5.6 | (3.7 | ) | 0.4 | ||||||||||
| d) | Intangible asset impairment | 1.2 | 3.5 | — | |||||||||||
| e) | Third party acquisition and divestiture related costs | 3.3 | 1.5 | 0.4 | |||||||||||
| f) | R&D costs related to licensing income | — | — | 2.8 | |||||||||||
| g) | Actuarial losses on pension plans and other pension benefits | — | 5.8 | — | |||||||||||
| h) | Non-cash interest on convertible notes | 9.1 | 9.5 | 8.7 | |||||||||||
| i) | Indemnification gain | (4.9 | ) | — | — | ||||||||||
| j) | Adjustment to contingent consideration | — | — | (2.1 | ) | ||||||||||
| k) | Licensing income | — | (3.7 | ) | (3.8 | ) | |||||||||
| l) | Adjustment of income taxes | 23.0 | 14.5 | (2.7 | ) | ||||||||||
| Total special items | 63.0 | 56.4 | 31.1 | ||||||||||||
| Non-GAAP net income attributable to ON Semiconductor Corporation | $ | 177.1 | $ | 222.0 | $ | 170.7 | |||||||||
| Adjustment of income taxes: | |||||||||||||||
| Tax adjustment for special items (1) | $ | (8.4 | ) | $ | (8.8 | ) | $ | (7.1 | ) | ||||||
| Other non-GAAP tax adjustment (2) | 31.0 | 36.4 | 4.4 | ||||||||||||
| Non-cash impact of U.S. tax reform (3) | — | 35.1 | — | ||||||||||||
| Impact of U.S. tax method changes | — | (48.2 | ) | — | |||||||||||
| Tax indemnified by third parties | 0.4 | — | — | ||||||||||||
| Total adjustment of income taxes | $ | 23.0 | $ | 14.5 | $ | (2.7 | ) | ||||||||
|
Reconciliation of GAAP diluted share count to non-GAAP diluted share count: |
|||||||||||||||
| GAAP diluted share count | 417.7 | 420.0 | 444.2 | ||||||||||||
| Special items: | |||||||||||||||
| a) | Dilutive share count attributable to convertible notes | (3.9 | ) | — | (12.6 | ) | |||||||||
| Total special items | (3.9 | ) | — | (12.6 | ) | ||||||||||
| Non-GAAP diluted share count | 413.8 | 420.0 | 431.6 | ||||||||||||
| Non-GAAP diluted earnings per share: | |||||||||||||||
| Non-GAAP net income attributable to ON Semiconductor Corporation | $ | 177.1 | $ | 222.0 | $ | 170.7 | |||||||||
| Non-GAAP diluted share count | 413.8 | 420.0 | 431.6 | ||||||||||||
| Non-GAAP diluted earnings per share | $ | 0.43 | $ | 0.53 | $ | 0.40 | |||||||||
|
Reconciliation of net cash provided by operating activities to free cash flow: |
|||||||||||||||
| Net cash provided by operating activities | $ | 138.2 | $ | 421.0 | $ | 226.5 | |||||||||
| Special items: | |||||||||||||||
| a) | Purchase of property, plant and equipment | (157.0 | ) | (132.0 | ) | (99.5 | ) | ||||||||
| Total special items | (157.0 | ) | (132.0 | ) | (99.5 | ) | |||||||||
| Free cash flow | $ | (18.8 | ) | $ | 289.0 | $ | 127.0 | ||||||||
| (1) |
Tax impact of non-GAAP special items (a-k) is calculated using the federal statutory rate of 21% for all periods presented. |
||||||||||||||
| (2) |
The income tax adjustment primarily represents the use of the net operating loss, non-cash impact of not asserting indefinite reinvestment on earnings of our foreign subsidiaries, deferred tax expense not affecting taxes payable, and non-cash expense (benefit) related to uncertain tax positions. |
||||||||||||||
| (3) |
Tax impacts of U.S. tax reform legislation, H.R.1, commonly referred to as the “Tax Cuts and Jobs Act,” and related provisional impacts recorded pursuant to Staff Accounting Bulletin (SAB) No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act. |
||||||||||||||
Contacts
Kris Pugsley
Corporate/Media Communications
ON Semiconductor
(312)
909-0661
[email protected]
Parag Agarwal
Vice President – Investor Relations & Corporate
Development
ON Semiconductor
(602) 244-3437
[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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