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Getty Realty Corp. Announces First Quarter 2019 Results
JERICHO, N.Y.–(BUSINESS WIRE)–Getty Realty Corp. (NYSE: GTY) (“Getty” or the “Company”) announced
today its financial results for the quarter ended March 31, 2019.
Highlights For The First Quarter
- Net earnings of $0.26 per share
- Funds From Operations (FFO) of $0.43 per share
- Adjusted Funds From Operations (AFFO) of $0.42 per share
- Completed one redevelopment project
- Re-Affirms 2019 Outlook
Christopher J. Constant, Getty’s President & Chief Executive Officer
commented, “In the first quarter, we produced solid revenue growth
reflecting the additional properties we added last year. We remain
focused on growing our national portfolio of convenience stores and
gasoline stations in markets that have high barriers to entry in
established metropolitan areas, along with targeted high growth markets.
We maintain a well occupied portfolio which generates stable growth,
while continuing to analyze our growing acquisition and redevelopment
pipeline of opportunities that would be accretive to earnings. With a
strong balance sheet and stable cashflows, we will continue to work to
deliver additional value to our shareholders.”
Net Earnings
The Company reported net earnings for the quarter ended March 31, 2019,
of $10.9 million, or $0.26 per share, as compared to net earnings of
$10.0 million, or $0.25 per share, for the same period in 2018.
Funds From Operations (FFO) and Adjusted Funds From Operations
(AFFO)
FFO for the quarter ended March 31, 2019, was $17.8 million, or $0.43
per share, as compared to $17.8 million, or $0.44 per share, for the
same period in 2018.
AFFO for the quarter ended March 31, 2019, was $17.5 million, or $0.42
per share, as compared to $16.8 million, or $0.42 per share, for the
same period in 2018.
All per share amounts in this press release are presented on a fully
diluted per common share basis, unless stated otherwise. FFO and AFFO
are defined and reconciled to net earnings in the financial tables at
the end of this release. See “Non-GAAP Financial Measures” below.
Results of Operations
Revenues from rental properties increased 6.1%, or $1.9 million, to
$33.3 million for the quarter ended March 31, 2019, as compared to $31.4
million for the same period in 2018. The growth in revenues from rental
properties for the quarter ended March 31, 2019, was primarily due to
revenue from properties acquired by the Company in 2018, along with
contractual increases. Tenant reimbursements included in revenues from
rental properties, which consist of real estate taxes and other
municipal charges paid by the Company which were reimbursable by the
tenants pursuant to the terms of triple-net lease agreements, were $3.7
million and $3.1 million for the three months ended March 31, 2019 and
2018, respectively.
Property costs were $5.5 million for the quarter ended March 31, 2019,
as compared to $4.9 million for the same period in 2018. The increase
was principally due to higher reimbursable real estate taxes and
professional fees related to property redevelopments.
Environmental expenses were $0.9 million for the quarter ended March 31,
2019, as compared to $1.0 million for the same period in 2018. The
decrease was principally due to lower environmental legal and
professional fees. Environmental expenses vary from period to period
and, accordingly, undue reliance should not be placed on the magnitude
or the direction of change in reported environmental expenses for one
period, as compared to prior periods.
General and administrative expense was $4.0 million for the quarter
ended March 31, 2019, as compared to $3.6 million for the same period in
2018. The increase in general and administrative expense for the quarter
ended March 31, 2019, was principally due to $0.3 million of
non-recurring employee related expenses attributable to retirement costs.
Impairment charges were $0.8 million for the quarter ended March 31,
2019, as compared to $2.8 million for the same period in 2018.
Impairment charges for the quarter ended March 31, 2019 and 2018, were
primarily attributable to the effect of adding asset retirement costs
due to changes in estimates associated with the Company’s environmental
liabilities, reductions in estimated undiscounted cash flows expected to
be received during the assumed holding period for certain of its
properties, and reductions in estimated sales prices from third-party
offers based on signed contracts, letters of intent or indicative bids
for certain of its properties.
Portfolio Activities
There were no property acquisitions or dispositions during the quarter
ended March 31, 2019 and 2018.
Redevelopment Activities
During the quarter ended March 31, 2019, rent commenced on one
redevelopment project and the Company spent $0.2 million (net of
write-offs) of construction-in-progress costs.
As of March 31, 2019, the Company was actively redeveloping seven of its
properties either as a new convenience and gasoline use or for
alternative single-tenant net lease retail uses. In addition, as of
March 31, 2019, the Company had signed leases on five properties, that
are currently part of its net lease portfolio, which will be recaptured
and transferred to redevelopment when the appropriate entitlements,
permits and approvals have been secured.
Balance Sheet
In connection with the adoption of the new lease accounting standard, on
January 1, 2019, the Company recognized operating lease right-of-use
assets of $25.6 million (net of deferred rent expense) and operating
lease liabilities of $26.1 million.
As of March 31, 2019, the Company had $415.0 million of outstanding
indebtedness with a weighted average interest rate of 5.2%. The
Company’s indebtedness consisted of $90.0 million in aggregate
borrowings under its credit agreement and an aggregate principal amount
of $325.0 million of senior unsecured notes. Total cash and cash
equivalents were $19.1 million as of March 31, 2019.
2019 Guidance
The Company reaffirms its 2019 AFFO guidance at a range of $1.71 to
$1.75 per diluted share. The Company’s guidance does not assume any
potential future acquisitions or capital markets activities. The
guidance is based on current plans and assumptions and is subject to
risks and uncertainties more fully described in this press release and
the Company’s periodic reports filed with the Securities and Exchange
Commission.
Conference Call Information
Getty Realty Corp. will host a conference call and webcast on Wednesday,
May 1, 2019, at 8:30 a.m. EDT. To participate in the call, please dial
(800) 289-0438, or (323) 794-2423 for international participants, ten
minutes before the scheduled start. Participants may also access the
call via live webcast by visiting the investors section of the Company’s
website at ir.gettyrealty.com.
A replay will be available on Wednesday, May 1, 2019, beginning at 11:30
a.m. EDT through 11:59 p.m. EDT, Wednesday, May 8, 2019. To access the
replay, please dial (844) 512-2921, or (412) 317-6671 for international
participants, and reference pass code 7172224.
About Getty Realty Corp.
Getty Realty Corp. is the leading publicly-traded real estate investment
trust in the United States specializing in the ownership, leasing and
financing of convenience store and gasoline station properties. As of
March 31, 2019, the Company owned 859 properties and leased 73
properties from third-party landlords in 30 states across the United
States and Washington, D.C.
Non-GAAP Financial Measures
In addition to measurements defined by accounting principles generally
accepted in the United States of America (“GAAP”), the Company also
focuses on Funds From Operations (“FFO”) and Adjusted Funds From
Operations (“AFFO”) to measure its performance. FFO and AFFO are
generally considered by analysts and investors to be appropriate
supplemental non-GAAP measures of the performance of REITs. FFO and AFFO
are not in accordance with, or a substitute for, measures prepared in
accordance with GAAP. In addition, FFO and AFFO are not based on any
comprehensive set of accounting rules or principles. Neither FFO nor
AFFO represent cash generated from operating activities calculated in
accordance with GAAP and therefore these measures should not be
considered an alternative for GAAP net earnings or as a measure of
liquidity. These measures should only be used to evaluate the Company’s
performance in conjunction with corresponding GAAP measures.
FFO is defined by the National Association of Real Estate Investment
Trusts as GAAP net earnings before depreciation and amortization of real
estate assets, gains or losses on dispositions of real estate,
impairment charges and cumulative effect of accounting change. The
Company’s definition of AFFO is defined as FFO less (i) Revenue
Recognition Adjustments (net of allowances), (ii) non-cash changes in
environmental estimates, (iii) non-cash environmental accretion expense,
(iv) environmental litigation accruals, (v) insurance reimbursements,
(vi) legal settlements and judgments, (vii) acquisition costs expensed
and (viii) other unusual items that are not reflective of the Company’s
core operating performance. Other REITs may use definitions of FFO
and/or AFFO that are different than the Company’s and, accordingly, may
not be comparable.
FFO excludes various items such as depreciation and amortization of real
estate assets, gains or losses on dispositions of real estate and
impairment charges. In the Company’s case, however, GAAP net earnings
and FFO typically include the impact of revenue recognition adjustments
comprised of deferred rental revenue (straight-line rental revenue), the
net amortization of above-market and below-market leases, adjustments
recorded for recognition of rental income recognized from direct
financing leases on revenues from rental properties and the amortization
of deferred lease incentives, as offset by the impact of related
collection reserves. Deferred rental revenue results primarily from
fixed rental increases scheduled under certain leases with the Company’s
tenants. In accordance with GAAP, the aggregate minimum rent due over
the current term of these leases is recognized on a straight-line basis
rather than when payment is contractually due. The present value of the
difference between the fair market rent and the contractual rent for
in-place leases at the time properties are acquired is amortized into
revenue from rental properties over the remaining lives of the in-place
leases. Income from direct financing leases is recognized over the lease
terms using the effective interest method, which produces a constant
periodic rate of return on the net investments in the leased properties.
The amortization of deferred lease incentives represents the Company’s
funding commitment in certain leases, which deferred expense is
recognized on a straight-line basis as a reduction of rental revenue.
GAAP net earnings and FFO include non-cash changes in environmental
estimates and environmental accretion expense, which do not impact the
Company’s recurring cash flow. GAAP net earnings and FFO also include
environmental litigation accruals, insurance reimbursements, and legal
settlements and judgments, which items are not indicative of the
Company’s core operating performance. GAAP net earnings and FFO from
time to time may also include acquisition costs expensed and other
unusual items that are not reflective of the Company’s core operating
performance. Acquisition costs are expensed, generally in the period
when properties are acquired and are not reflective of our core
operating performance.
The Company pays particular attention to AFFO, as the Company believes
it best represents its core operating performance. In the Company’s
view, AFFO provides a more accurate depiction than FFO of its core
operating performance. By providing AFFO, the Company believes that it
is presenting useful information that assists analysts and investors to
better assess its core operating performance. Further, the Company
believes that AFFO is useful in comparing the sustainability of its core
operating performance with the sustainability of the core operating
performance of other real estate companies.
Forward-Looking Statements
CERTAIN STATEMENTS CONTAINED HEREIN MAY CONSTITUTE “FORWARD-LOOKING
STATEMENTS” WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995. WHEN THE WORDS “BELIEVES,” “EXPECTS,” “PLANS,”
“PROJECTS,” “ESTIMATES,” “ANTICIPATES,” “PREDICTS” AND SIMILAR
EXPRESSIONS ARE USED, THEY IDENTIFY FORWARD-LOOKING STATEMENTS. THESE
FORWARD-LOOKING STATEMENTS ARE BASED ON MANAGEMENT’S CURRENT BELIEFS AND
ASSUMPTIONS AND INFORMATION CURRENTLY AVAILABLE TO MANAGEMENT AND
INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH
MAY CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY
TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR
ACHIEVEMENTS EXPRESSED OR IMPLIED BY THESE FORWARD-LOOKING STATEMENTS.
EXAMPLES OF FORWARD-LOOKING STATEMENTS INCLUDE, BUT ARE NOT LIMITED TO,
THOSE REGARDING THE COMPANY’S 2019 AFFO PER SHARE GUIDANCE, THOSE MADE
BY MR. CONSTANT, STATEMENTS REGARDING THE RECAPTURE AND TRANSFER OF
CERTAIN NET LEASE RETAIL PROPERTIES, AND STATEMENTS REGARDING THE
ABILITY TO OBTAIN APPROPRIATE PERMITS AND APPROVALS.
INFORMATION CONCERNING FACTORS THAT COULD CAUSE THE COMPANY’S ACTUAL
RESULTS TO DIFFER MATERIALLY FROM THESE FORWARD-LOOKING STATEMENTS CAN
BE FOUND IN THE COMPANY’S PERIODIC REPORTS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION. THE COMPANY UNDERTAKES NO OBLIGATION TO PUBLICLY
RELEASE REVISIONS TO THESE FORWARD-LOOKING STATEMENTS TO REFLECT FUTURE
EVENTS OR CIRCUMSTANCES OR REFLECT THE OCCURRENCE OF UNANTICIPATED
EVENTS.
|
GETTY REALTY CORP. CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands, except per share amounts) |
||||||||
|
March 31, |
December 31, |
|||||||
| ASSETS | ||||||||
| Real estate: | ||||||||
| Land | $ | 630,653 | $ | 631,185 | ||||
| Buildings and improvements | 406,812 | 409,753 | ||||||
| Construction in progress | 2,023 | 2,168 | ||||||
| 1,039,488 | 1,043,106 | |||||||
| Less accumulated depreciation and amortization | (154,132 | ) | (150,691 | ) | ||||
| Real estate held for use, net | 885,356 | 892,415 | ||||||
| Real estate held for sale, net | 630 | — | ||||||
| Real estate, net | 885,986 | 892,415 | ||||||
| Investment in direct financing leases, net | 85,066 | 85,892 | ||||||
| Notes and mortgages receivable | 32,015 | 33,519 | ||||||
| Cash and cash equivalents | 19,145 | 46,892 | ||||||
| Restricted cash | 1,938 | 1,850 | ||||||
| Deferred rent receivable | 38,676 | 37,722 | ||||||
|
Accounts receivable, net of allowance of $1,950 and $2,094, respectively |
1,522 | 3,008 | ||||||
| Right-of-use assets – operating | 24,649 | — | ||||||
| Right-of-use assets – finance | 1,156 | — | ||||||
| Prepaid expenses and other assets | 57,339 | 57,877 | ||||||
| Total assets | $ | 1,147,492 | $ | 1,159,175 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Liabilities: | ||||||||
| Borrowings under credit agreement, net | $ | 87,433 | $ | 117,227 | ||||
| Senior unsecured notes, net | 324,438 | 324,409 | ||||||
| Environmental remediation obligations | 59,250 | 59,821 | ||||||
| Dividends payable | 14,555 | 14,495 | ||||||
| Lease liability – operating | 25,201 | — | ||||||
| Lease liability – finance | 4,606 | — | ||||||
| Accounts payable and accrued liabilities | 53,774 | 62,059 | ||||||
| Total liabilities | 569,257 | 578,011 | ||||||
| Commitments and contingencies | — | — | ||||||
| Stockholders’ equity: | ||||||||
|
Preferred stock, $0.01 par value; 20,000,000 shares authorized; unissued |
— | — | ||||||
|
Common stock, $0.01 par value; 100,000,000 shares authorized; |
409 | 409 | ||||||
| Additional paid-in capital | 638,877 | 638,178 | ||||||
| Dividends paid in excess of earnings | (61,051 | ) | (57,423 | ) | ||||
| Total stockholders’ equity | 578,235 | 581,164 | ||||||
| Total liabilities and stockholders’ equity | $ | 1,147,492 | $ | 1,159,175 | ||||
|
GETTY REALTY CORP. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except per share amounts) |
||||||||
|
Three Months Ended |
||||||||
| 2019 | 2018 | |||||||
| Revenues: | ||||||||
| Revenues from rental properties | $ | 33,287 | $ | 31,352 | ||||
| Interest on notes and mortgages receivable | 762 | 764 | ||||||
| Total revenues | 34,049 | 32,116 | ||||||
| Operating expenses: | ||||||||
| Property costs | 5,495 | 4,935 | ||||||
| Impairments | 771 | 2,817 | ||||||
| Environmental | 903 | 987 | ||||||
| General and administrative | 3,977 | 3,587 | ||||||
| Allowance for uncollectible accounts | 85 | 126 | ||||||
| Depreciation and amortization | 6,099 | 5,594 | ||||||
| Total operating expenses | 17,330 | 18,046 | ||||||
| Gain (loss) on dispositions of real estate | (51 | ) | 649 | |||||
| Operating income | 16,668 | 14,719 | ||||||
| Other income (expense), net | 205 | 363 | ||||||
| Interest expense | (5,946 | ) | (5,050 | ) | ||||
| Net earnings | $ | 10,927 | $ | 10,032 | ||||
| Basic earnings per common share: | ||||||||
| Net earnings | $ | 0.26 | $ | 0.25 | ||||
| Diluted earnings per common share: | ||||||||
| Net earnings | $ | 0.26 | $ | 0.25 | ||||
| Weighted average common shares outstanding: | ||||||||
| Basic | 40,873 | 39,710 | ||||||
| Diluted | 40,891 | 39,712 | ||||||
|
GETTY REALTY CORP. RECONCILIATION OF NET EARNINGS TO FUNDS FROM OPERATIONS AND ADJUSTED FUNDS FROM OPERATIONS (Unaudited) (in thousands, except per share amounts) |
||||||||
|
Three Months Ended |
||||||||
| 2019 | 2018 | |||||||
| Net earnings | $ | 10,927 | $ | 10,032 | ||||
| Depreciation and amortization of real estate assets | 6,099 | 5,594 | ||||||
| (Gain) loss on dispositions of real estate | 51 | (649 | ) | |||||
| Impairments | 771 | 2,817 | ||||||
| Funds from operations | 17,848 | 17,794 | ||||||
| Revenue recognition adjustments | (379 | ) | (782 | ) | ||||
| Changes in environmental estimates | (341 | ) | (512 | ) | ||||
| Accretion expense | 538 | 691 | ||||||
| Environmental litigation accruals | 45 | — | ||||||
| Insurance reimbursements | (191 | ) | (215 | ) | ||||
| Legal settlements and judgments | — | (147 | ) | |||||
| Adjusted funds from operations | $ | 17,520 | $ | 16,829 | ||||
| Basic per share amounts: | ||||||||
| Earnings per share | $ | 0.26 | $ | 0.25 | ||||
| Funds from operations per share | 0.43 | 0.44 | ||||||
| Adjusted funds from operations per share | $ | 0.42 | $ | 0.42 | ||||
| Diluted per share amounts: | ||||||||
| Earnings per share | $ | 0.26 | $ | 0.25 | ||||
| Funds from operations per share | 0.43 | 0.44 | ||||||
| Adjusted funds from operations per share | $ | 0.42 | $ | 0.42 | ||||
| Weighted average common shares outstanding: | ||||||||
| Basic | 40,873 | 39,710 | ||||||
| Diluted | 40,891 | 39,712 | ||||||
Contacts
Danion Fielding
Chief Financial Officer
(516) 478-5400
Investor Relations
(516) 478-5418
[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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