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Qumu Announces First Quarter 2019 Results, Reiterates Confidence in Annual Guidance
Reading Time: 7 minutes
Company reports record gross margins, growing revenues and second
consecutive quarter of positive adjusted EBITDA
Conference Call Wednesday, May 1, 2019 at 10:00 a.m. ET
MINNEAPOLIS–(BUSINESS WIRE)–Qumu Corporation (NASDAQ: QUMU) today reported financial results for the
first quarter ended March 31, 2019. The Company reported first quarter
revenue of $7.1 million, a net loss of $(950,000) and adjusted EBITDA, a
non-GAAP measure, of $210,000, ending the quarter with cash of $8.6
million.
“Qumu has delivered a strong start to 2019, building on momentum from
the second half of 2018. Given our growing revenue, strong sales
pipeline, solid balance sheet and positive adjusted EBITDA for three of
the last four quarters, we have a high degree of confidence in our 2019
annual financial guidance,” said Vern Hanzlik, Qumu’s President and CEO.
“Convergence of the Enterprise Video market with the Web and Video
Conferencing market traditionally dominated by firms like Zoom, Cisco,
Microsoft, and Google is happening as we speak—and Qumu is directly
benefiting from it.”
For the three months ended March 31, 2019, revenue was $7.1 million,
compared to $4.8 million last year, and net loss was $(950,000), or
$(0.10) per diluted share, compared to $(4.5) million, or $(0.48) per
diluted share, for the first quarter 2018. For the three months ended
March 31, 2019, adjusted EBITDA was $210,000, compared to adjusted
EBITDA of $(2.9) million for the first quarter 2018.
Other Financial Highlights
-
Operating loss decreased by $3.3 million in the three months ended
March 31, 2019, compared to corresponding 2018 period. -
Gross margin for the first quarter 2019 was 78.3%, compared to 56.3%
for first quarter 2018. -
Cash and cash equivalents totaled $8.6 million as of March 31, 2019,
compared to $8.6 million as of December 31, 2018. -
Software license and appliance revenue was $1.0 million and $451,000
for the three months ended March 31, 2019 and 2018, respectively. -
Subscription, maintenance and support revenue was $5.6 million and
$4.0 million for the three months ended March 31, 2019 and 2018,
respectively. -
Operating expenses decreased $503,000 during the three months ended
March 31, 2019, compared to the corresponding 2018 period, reflecting
the impact of the Company’s improved operating efficiencies.
Business Outlook
The Company is reiterating its financial guidance for 2019:
-
Annual contract value bookings growth is expected to be 20% to 25% in
2019 compared to 2018. -
Revenue for 2019 is expected to be approximately $27 million. Gross
margin percentage is expected to be in the high 60s to low 70s. -
Net loss for 2019 is expected to be approximately $(5.1) million.
Adjusted EBITDA for 2019 is expected to be approximately $(1.5)
million. Forecasted adjusted EBITDA for 2019 excludes forecasted
interest expense of approximately $1.0 million, income tax benefit of
approximately $(0.2) million, depreciation expense of
approximately $0.3 million, amortization of acquired intangible assets
of approximately $1.2 million, stock-based compensation of
approximately $0.9 million, and increase in warrant liability of
approximately $0.4 million.
Conference Call
The Company has scheduled a conference call and webcast to review its
first quarter 2019 results tomorrow, May 1, 2019 at 10:00 a.m. Eastern
Time. The dial-in number for the conference call is 877-456-6914 for
domestic participants and 929-387-3794 for international participants.
Investors can also access a webcast of the live conference call by
linking through the Investor Relations section of the Qumu website, https://qumu.com/en/investor-relations/.
Webcasts will be archived on Qumu’s website.
Non-GAAP Information
To supplement the Company’s condensed consolidated financial statements
presented on a GAAP basis, the Company uses adjusted EBITDA, a non-GAAP
measure, which excludes certain items from net income (loss), a GAAP
measure. Adjusted EBITDA excludes items related to interest income and
expense, the impact of income-based taxes, depreciation and
amortization, stock-based compensation, change in fair value of warrant
liabilities, foreign currency gains and losses, and other non-operating
income and expenses.
The Company uses both GAAP and non-GAAP measures when planning,
monitoring, and evaluating the Company’s performance. The Company
believes that adjusted EBITDA is useful to investors because it provides
supplemental information that allows investors to review the Company’s
results of operations from the same perspective as management and the
Company’s board of directors. Non-GAAP results are presented for
supplemental informational purposes only for understanding our operating
results. The non-GAAP results should not be considered a substitute for
financial information presented in accordance with generally accepted
accounting principles, and may be different from non-GAAP measures used
by other companies.
See the attached Supplemental Financial Information for a reconciliation
of net loss, a GAAP measure, to adjusted EBITDA, a non-GAAP measure, for
the three months ended March 31, 2019 and 2018.
Forward-Looking Statements
This press release contains forward-looking statements that are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Any statements contained in this press
release that are not statements of historical fact may be deemed to be
forward-looking statements. Without limiting the foregoing, words such
as “may,” “will,” “expect,” “believe,” “anticipate,” or “estimate” or
comparable terminology are intended to identify forward-looking
statements. Such forward-looking statements include, for example,
statements about: the Company’s future revenue and operating
performance, cash balances, future product mix or the timing of
recognition of revenue and the demand for the Company’s products or
software. The statements made by the Company are based upon management’s
current expectations and are subject to certain risks and uncertainties
that could cause the actual results to differ materially from those
described in the forward-looking statements. These risks and
uncertainties include the risk factors described in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2018 and other
factors set forth in the Company’s filings with the Securities and
Exchange Commission.
About Qumu
Qumu (Nasdaq: QUMU) is the leading provider of best-in-class tools to
create, manage, secure, distribute and measure the success of live and
on-demand video for the enterprise. Backed by the most trusted and
experienced team in the industry, the Qumu platform enables global
organizations to drive employee engagement, increase access to video,
and modernize the workplace by providing a more efficient and effective
way to share knowledge.
|
QUMU CORPORATION |
||||||||
|
Condensed Consolidated Statements of Operations |
||||||||
|
(unaudited – in thousands, except per share data) |
||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2019 | 2018 | |||||||
| Revenues: | ||||||||
| Software licenses and appliances | $ | 1,005 | $ | 451 | ||||
| Service | 6,093 | 4,380 | ||||||
| Total revenues | 7,098 | 4,831 | ||||||
| Cost of revenues: | ||||||||
| Software licenses and appliances | 311 | 335 | ||||||
| Service | 1,226 | 1,777 | ||||||
| Total cost of revenues | 1,537 | 2,112 | ||||||
| Gross profit | 5,561 | 2,719 | ||||||
| Operating expenses: | ||||||||
| Research and development | 1,674 | 1,903 | ||||||
| Sales and marketing | 2,352 | 2,180 | ||||||
| General and administrative | 1,746 | 2,181 | ||||||
| Amortization of purchased intangibles | 218 | 229 | ||||||
| Total operating expenses | 5,990 | 6,493 | ||||||
| Operating loss | (429 | ) | (3,774 | ) | ||||
| Other income (expense): | ||||||||
| Interest expense, net | (205 | ) | (844 | ) | ||||
| Decrease (increase) in value of warrant liability | (289 | ) | 387 | |||||
| Other, net | (31 | ) | (387 | ) | ||||
| Total other expense, net | (525 | ) | (844 | ) | ||||
| Loss before income taxes | (954 | ) | (4,618 | ) | ||||
| Income tax benefit | (4 | ) | (88 | ) | ||||
| Net loss | $ | (950 | ) | $ | (4,530 | ) | ||
| Net loss per share – basic and diluted: | ||||||||
| Net income loss per share | $ | (0.10 | ) | $ | (0.48 | ) | ||
| Weighted average shares outstanding | 9,688 | 9,370 | ||||||
|
QUMU CORPORATION |
||||||||
|
Condensed Consolidated Balance Sheets |
||||||||
|
(unaudited – in thousands) |
||||||||
| March 31, | December 31, | |||||||
| Assets | 2019 | 2018 | ||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 8,571 | $ | 8,636 | ||||
| Receivables, net | 4,380 | 6,278 | ||||||
| Contract assets | 1,661 | 485 | ||||||
| Income taxes receivable | 339 | 327 | ||||||
| Prepaid expenses and other current assets | 2,140 | 2,192 | ||||||
| Total current assets | 17,091 | 17,918 | ||||||
| Property and equipment, net | 680 | 545 | ||||||
| Right of use assets – operating leases | 1,128 | — | ||||||
| Intangible assets, net | 3,956 | 4,247 | ||||||
| Goodwill | 7,134 | 6,971 | ||||||
| Deferred income taxes, non-current | 53 | 55 | ||||||
| Other assets, non-current | 476 | 544 | ||||||
| Total assets | $ | 30,518 | $ | 30,280 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and other accrued liabilities | $ | 2,640 | $ | 2,838 | ||||
| Accrued compensation | 1,150 | 1,548 | ||||||
| Deferred revenue | 9,558 | 9,672 | ||||||
| Operating lease liabilities | 549 | — | ||||||
| Deferred rent | — | 45 | ||||||
| Term loan and other financing obligations | 3,690 | 152 | ||||||
| Warrant liability | 3,087 | 2,798 | ||||||
| Total current liabilities | 20,674 | 17,053 | ||||||
| Long-term liabilities: | ||||||||
| Deferred revenue, non-current | 1,425 | 1,672 | ||||||
| Income taxes payable, non-current | 568 | 563 | ||||||
| Deferred tax liability, non-current | — | 2 | ||||||
| Operating lease liabilities, non-current | 1,021 | — | ||||||
| Deferred rent, non-current | — | 302 | ||||||
| Term loan and other financing obligations, non-current | 146 | 3,488 | ||||||
| Other liabilities, non-current | — | 195 | ||||||
| Total long-term liabilities | 3,160 | 6,222 | ||||||
| Total liabilities | 23,834 | 23,275 | ||||||
| Stockholders’ equity: | ||||||||
| Common stock | 98 | 96 | ||||||
| Additional paid-in capital | 69,266 | 69,072 | ||||||
| Accumulated deficit | (59,635 | ) | (58,875 | ) | ||||
| Accumulated other comprehensive loss | (3,045 | ) | (3,288 | ) | ||||
| Total stockholders’ equity | 6,684 | 7,005 | ||||||
| Total liabilities and stockholders’ equity | $ | 30,518 | $ | 30,280 | ||||
|
QUMU CORPORATION |
||||||||
|
Condensed Consolidated Statements of Cash Flows |
||||||||
|
(unaudited – in thousands) |
||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2019 | 2018 | |||||||
| Operating activities: | ||||||||
| Net loss | $ | (950 | ) | $ | (4,530 | ) | ||
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
||||||||
| Depreciation and amortization | 408 | 699 | ||||||
| Stock-based compensation | 231 | 210 | ||||||
| Accretion of debt discount and issuance costs | 128 | 746 | ||||||
| Gain on lease modification | (21 | ) | — | |||||
| Decrease in value of warrant liability | 289 | (387 | ) | |||||
| Deferred income taxes | — | (37 | ) | |||||
| Changes in operating assets and liabilities: | ||||||||
| Receivables | 1,914 | 1,645 | ||||||
| Contract assets | (1,176 | ) | 14 | |||||
| Income taxes receivable / payable | (3 | ) | (62 | ) | ||||
| Prepaid expenses and other assets | 125 | (317 | ) | |||||
| Accounts payable and other accrued liabilities | (75 | ) | (444 | ) | ||||
| Accrued compensation | (405 | ) | — | |||||
| Deferred revenue | (424 | ) | 603 | |||||
| Deferred rent | — | (75 | ) | |||||
| Other non-current liabilities | (24 | ) | 186 | |||||
| Net cash provided by (used in) operating activities | 17 | (1,749 | ) | |||||
| Investing activities: | ||||||||
| Purchases of property and equipment | (14 | ) | (2 | ) | ||||
| Net cash used in investing activities | (14 | ) | (2 | ) | ||||
| Financing activities: | ||||||||
| Proceeds from term loan and warrant issuance | — | 10,000 | ||||||
| Principal payments on term loans | — | (8,000 | ) | |||||
| Payments for term loan issuance costs | — | (1,308 | ) | |||||
| Principal payments on financing obligations | (80 | ) | (99 | ) | ||||
| Common stock repurchases to settle employee withholding liability | (36 | ) | (19 | ) | ||||
| Net cash provided by (used in) financing activities | (116 | ) | 574 | |||||
| Effect of exchange rate changes on cash | 48 | 45 | ||||||
| Net decrease in cash and cash equivalents | (65 | ) | (1,132 | ) | ||||
| Cash and cash equivalents, beginning of period | 8,636 | 7,690 | ||||||
| Cash and cash equivalents, end of period | $ | 8,571 | $ | 6,558 | ||||
|
QUMU CORPORATION |
||||||||
|
Supplemental Financial Information |
||||||||
|
(unaudited – in thousands) |
||||||||
|
A summary of revenue is as follows: |
||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2019 | 2018 | |||||||
| Software licenses and appliances | $ | 1,005 | $ | 451 | ||||
| Service | ||||||||
| Subscription, maintenance and support | 5,563 | 4,038 | ||||||
| Professional services and other | 530 | 342 | ||||||
| Total service | 6,093 | 4,380 | ||||||
| Total revenue | $ | 7,098 | $ | 4,831 | ||||
|
A reconciliation from GAAP results to adjusted EBITDA is as |
||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2019 | 2018 | |||||||
| Net loss | $ | (950 | ) | $ | (4,530 | ) | ||
| Interest expense, net | 205 | 844 | ||||||
| Income tax benefit | (4 | ) | (88 | ) | ||||
| Depreciation and amortization expense: | ||||||||
| Depreciation and amortization in cost of revenues | — | 3 | ||||||
| Depreciation and amortization in operating expenses | 73 | 169 | ||||||
| Total depreciation and amortization expense | 73 | 172 | ||||||
| Amortization of intangibles included in cost of revenues | 117 | 298 | ||||||
| Amortization of intangibles included in operating expenses | 218 | 229 | ||||||
| Total amortization of intangibles expense | 335 | 527 | ||||||
| Total depreciation and amortization expense | 408 | 699 | ||||||
| EBITDA | (341 | ) | (3,075 | ) | ||||
| Increase (decrease) in fair value of warrant liability | 289 | (387 | ) | |||||
| Other expense, net | 31 | 387 | ||||||
| Stock-based compensation expense: | ||||||||
| Stock-based compensation included in cost of revenues | 8 | 10 | ||||||
| Stock-based compensation included in operating expenses | 223 | 200 | ||||||
| Total stock-based compensation expense | 231 | 210 | ||||||
| Adjusted EBITDA | $ | 210 | $ | (2,865 | ) | |||
Contacts
Dave Ristow
Chief Financial Officer
Qumu Corporation
[email protected]
+1.612.638.9045
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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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