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Cirrus Logic Reports Q4 FY19 Revenue of $240.4 Million
Progress on Strategic Initiatives in FY19 Positions Company for
Future Growth
AUSTIN, Texas–(BUSINESS WIRE)–Cirrus Logic, Inc. (Nasdaq: CRUS), a leader in high-performance,
low-power ICs for audio and voice signal processing applications, today
posted on its website at http://investor.cirrus.com
the quarterly Shareholder Letter that contains the complete
financial results for the fourth quarter and full fiscal year 2019,
which ended March 30, 2019, as well as the company’s current business
outlook.
“In FY19 we significantly expanded our penetration of the handset
market, driven by strong demand for our boosted amplifiers,” said Jason
Rhode, president and chief executive officer. “Although smartphone
market headwinds brought challenges this past year, revenue for the
quarter was at the high end of guidance. We are pleased with our
progress in FY19 as we executed on key strategic initiatives and gained
momentum with new product lines, while expanding our customer base.”
Reported Financial Results – Fourth Quarter FY19
- Revenue of $240.4 million;
-
GAAP and non-GAAP gross margin of 51.8 percent and 52 percent,
respectively; -
GAAP operating expenses of $117.5 million and non-GAAP operating
expenses of $102.9 million; and -
GAAP earnings per share of $0.10 and non-GAAP earnings per share of
$0.37.
Reported Financial Results – Full Year FY19
- Revenue of $1.19 billion;
-
GAAP and non-GAAP gross margin of 50.4 percent and 50.5 percent,
respectively; -
GAAP operating expenses of $496.7 million and non-GAAP operating
expenses of $411.9 million; and -
GAAP earnings per share of $1.46 and non-GAAP earnings per share of
$2.64.
A reconciliation of the non-GAAP charges is included in the tables
accompanying this press release.
Business Outlook – First Quarter FY20
- Revenue is expected to range between $200 million and $240 million;
-
GAAP gross margin is expected to be between 49 percent and 51 percent;
and -
Combined GAAP R&D and SG&A expenses are expected to range between $120
million and $126 million, which includes approximately $14 million in
stock-based compensation and $7 million in amortization of acquired
intangibles.
Cirrus Logic will host a live Q&A session at 5 p.m. EDT today to answer
questions related to its financial results and business outlook.
Participants may listen to the conference call on the Cirrus
Logic website. Participants who would like to submit a question to
be addressed during the call are requested to email [email protected].
A replay of the webcast can be accessed on the Cirrus Logic website
approximately two hours following its completion, or by calling (416)
621-4642, or toll-free at (800) 585-8367 (Access Code: 6169247).
Cirrus Logic, Inc.
Cirrus Logic is a leader in high-performance, low-power ICs for audio
and voice signal processing applications. Cirrus Logic’s products span
the entire audio signal chain, from capture to playback, providing
innovative products for the world’s top smartphones, tablets, digital
headsets, wearables and emerging smart home applications. With
headquarters in Austin, Texas, Cirrus Logic is recognized globally for
its award-winning corporate culture. Check us out at www.cirrus.com.
Cirrus Logic and Cirrus are registered trademarks of Cirrus Logic, Inc.
All other company or product names noted herein may be trademarks of
their respective holders.
Use of non-GAAP Financial Information
To supplement Cirrus Logic’s financial statements presented on a GAAP
basis, Cirrus has provided non-GAAP financial information, including
non-GAAP net income, diluted earnings per share, operating income and
profit, operating expenses, gross margin and profit, tax expense and
effective tax rate impact on earnings per share, and effective tax rate.
A reconciliation of the adjustments to GAAP results is included in the
tables below. Non-GAAP financial information is not meant as a
substitute for GAAP results, but is included because management believes
such information is useful to our investors for informational and
comparative purposes. In addition, certain non-GAAP financial
information is used internally by management to evaluate and manage the
company. The non-GAAP financial information used by Cirrus Logic may
differ from that used by other companies. These non-GAAP measures
should be considered in addition to, and not as a substitute for, the
results prepared in accordance with GAAP.
Safe Harbor Statement
Except for historical information contained herein, the matters set
forth in this news release contain forward-looking statements including
our statements about our future growth opportunities, along with
estimates for the first quarter fiscal year 2020 revenue, gross margin,
combined research and development and selling, general and
administrative expense levels, stock compensation expense and
amortization of acquired intangibles. In some cases, forward-looking
statements are identified by words such as “expect,” “anticipate,”
“target,” “project,” “believe,” “goals,” “opportunity,” “estimates,”
“intend,” and variations of these types of words and similar expressions.
In addition, any statements that refer to our plans, expectations,
strategies or other characterizations of future events or circumstances
are forward-looking statements. These forward-looking statements
are based on our current expectations, estimates, and assumptions and
are subject to certain risks and uncertainties that could cause actual
results to differ materially. These risks and uncertainties include, but
are not limited to, the following: the level of orders and shipments
during the first quarter of fiscal year 2020, customer cancellations of
orders, or the failure to place orders consistent with forecasts, along
with the risk factors listed in our Form 10-K for the year ended March
31, 2018 and in our other filings with the Securities and Exchange
Commission, which are available at www.sec.gov.
The foregoing information concerning our business outlook represents our
outlook as of the date of this news release, and we undertake no
obligation to update or revise any forward-looking statements, whether
as a result of new developments or otherwise.
Summary financial data follows:
| CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS | ||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||||
| Mar. 30, | Dec. 29, | Mar. 31, | Mar. 30, | Mar. 31, | ||||||||||||||||||||||
| 2019 | 2018 | 2018 | 2019 | 2018 | ||||||||||||||||||||||
| Q4’19 | Q3’19 | Q4’18 | Q4’19 | Q4’18 | ||||||||||||||||||||||
| Portable products | $ | 207,099 | $ | 288,640 | $ | 262,777 | $ | 1,032,049 | $ | 1,363,876 | ||||||||||||||||
| Non-portable and other products | 33,342 | 35,655 | 40,396 | 153,475 | 168,310 | |||||||||||||||||||||
| Net sales | 240,441 | 324,295 | 303,173 | 1,185,524 | 1,532,186 | |||||||||||||||||||||
| Cost of sales | 115,802 | 161,115 | 150,543 | 588,027 | 771,470 | |||||||||||||||||||||
| Gross profit | 124,639 | 163,180 | 152,630 | 597,497 | 760,716 | |||||||||||||||||||||
| Gross margin | 51.8 | % | 50.3 | % | 50.3 | % | 50.4 | % | 49.6 | % | ||||||||||||||||
| Research and development | 92,251 | 88,575 | 95,556 | 375,139 | 366,444 | |||||||||||||||||||||
| Selling, general and administrative | 30,194 | 30,364 | 36,307 | 126,502 | 131,811 | |||||||||||||||||||||
| Gain on sale of assets | (4,913 | ) | – | – | (4,913 | ) | – | |||||||||||||||||||
| Total operating expenses | 117,532 | 118,939 | 131,863 | 496,728 | 498,255 | |||||||||||||||||||||
| Income from operations | 7,107 | 44,241 | 20,767 | 100,769 | 262,461 | |||||||||||||||||||||
| Interest income | 2,248 | 1,740 | 1,378 | 6,960 | 3,609 | |||||||||||||||||||||
| U.K. pension settlement | – | (13,768 | ) | – | (13,768 | ) | – | |||||||||||||||||||
| Other expense | (150 | ) | 101 | (158 | ) | (217 | ) | (971 | ) | |||||||||||||||||
| Income before income taxes | 9,205 | 32,314 | 21,987 | 93,744 | 265,099 | |||||||||||||||||||||
| Provision for income taxes | 3,048 | 2,381 | 9,983 | 3,753 | 103,104 | |||||||||||||||||||||
| Net income | $ | 6,157 | $ | 29,933 | $ | 12,004 | $ | 89,991 | $ | 161,995 | ||||||||||||||||
| Basic earnings per share: | $ | 0.10 | $ | 0.50 | $ | 0.19 | $ | 1.50 | $ | 2.55 | ||||||||||||||||
| Diluted earnings per share: | $ | 0.10 | $ | 0.49 | $ | 0.19 | $ | 1.46 | $ | 2.46 | ||||||||||||||||
| Weighted average number of shares: | ||||||||||||||||||||||||||
| Basic | 59,031 | 59,511 | 62,654 | 60,116 | 63,407 | |||||||||||||||||||||
| Diluted | 60,199 | 60,783 | 64,572 | 61,583 | 65,951 | |||||||||||||||||||||
|
Prepared in accordance with Generally Accepted Accounting |
||||||||||||||||||||||||||
| RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL INFORMATION |
| (unaudited, in thousands, except per share data) |
| (not prepared in accordance with GAAP) |
Non-GAAP financial information is not meant as a substitute for GAAP
results, but is included because management believes such information is
useful to our investors for informational and comparative purposes. In
addition, certain non-GAAP financial information is used internally by
management to evaluate and manage the company. As a note, the non-GAAP
financial information used by Cirrus Logic may differ from that used by
other companies. These non-GAAP measures should be considered in
addition to, and not as a substitute for, the results prepared in
accordance with GAAP.
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||||
| Mar. 30, | Dec. 29, | Mar. 31, | Mar. 30, | Mar. 31, | ||||||||||||||||||||||
| 2019 | 2018 | 2018 | 2019 | 2018 | ||||||||||||||||||||||
| Net Income Reconciliation | Q4’19 | Q3’19 | Q4’18 | Q4’19 | Q4’18 | |||||||||||||||||||||
| GAAP Net Income | $ | 6,157 | $ | 29,933 | $ | 12,004 | $ | 89,991 | $ | 161,995 | ||||||||||||||||
| Amortization of acquisition intangibles | 7,228 | 7,630 | 13,266 | 40,991 | 48,066 | |||||||||||||||||||||
| Stock-based compensation expense | 12,583 | 11,181 | 12,533 | 49,689 | 48,740 | |||||||||||||||||||||
| U.K. pension settlement | – | 13,768 | – | 13,768 | – | |||||||||||||||||||||
| Gain on asset sale | (4,913 | ) | – | – | (4,913 | ) | – | |||||||||||||||||||
| Acquisition-related items | – | – | (279 | ) | – | (4,327 | ) | |||||||||||||||||||
| Adjustment to income taxes | 1,202 | (7,003 | ) | (4,502 | ) | (26,781 | ) | 27,254 | ||||||||||||||||||
| Non-GAAP Net Income | $ | 22,257 | $ | 55,509 | $ | 33,022 | $ | 162,745 | $ | 281,728 | ||||||||||||||||
| Earnings Per Share Reconciliation | ||||||||||||||||||||||||||
| GAAP Diluted earnings per share | $ | 0.10 | $ | 0.49 | $ | 0.19 | $ | 1.46 | $ | 2.46 | ||||||||||||||||
| Effect of Amortization of acquisition intangibles | 0.12 | 0.13 | 0.21 | 0.67 | 0.73 | |||||||||||||||||||||
| Effect of Stock-based compensation expense | 0.21 | 0.18 | 0.19 | 0.81 | 0.74 | |||||||||||||||||||||
| Effect of U.K. pension settlement | – | 0.23 | – | 0.22 | – | |||||||||||||||||||||
| Effect of Gain on asset sale | (0.08 | ) | – | – | (0.08 | ) | – | |||||||||||||||||||
| Effect of Acquisition-related items | – | – | – | – | (0.07 | ) | ||||||||||||||||||||
| Effect of Adjustment to income taxes | 0.02 | (0.12 | ) | (0.08 | ) | (0.44 | ) | 0.41 | ||||||||||||||||||
| Non-GAAP Diluted earnings per share | $ | 0.37 | $ | 0.91 | $ | 0.51 | $ | 2.64 | $ | 4.27 | ||||||||||||||||
| Operating Income Reconciliation | ||||||||||||||||||||||||||
| GAAP Operating Income | $ | 7,107 | $ | 44,241 | $ | 20,767 | $ | 100,769 | $ | 262,461 | ||||||||||||||||
| GAAP Operating Profit | 3 | % | 14 | % | 7 | % | 8 | % | 17 | % | ||||||||||||||||
| Amortization of acquisition intangibles | 7,228 | 7,630 | 13,266 | 40,991 | 48,066 | |||||||||||||||||||||
| Stock-based compensation expense – COGS | 288 | 220 | 422 | 877 | 1,474 | |||||||||||||||||||||
| Stock-based compensation expense – R&D | 8,270 | 6,761 | 6,847 | 29,115 | 26,136 | |||||||||||||||||||||
| Stock-based compensation expense – SG&A | 4,025 | 4,200 | 5,264 | 19,697 | 21,130 | |||||||||||||||||||||
| Gain on asset sale | (4,913 | ) | – | – | (4,913 | ) | – | |||||||||||||||||||
| Acquisition-related items | – | – | (279 | ) | – | (4,327 | ) | |||||||||||||||||||
| Non-GAAP Operating Income | $ | 22,005 | $ | 63,052 | $ | 46,287 | $ | 186,536 | $ | 354,940 | ||||||||||||||||
| Non-GAAP Operating Profit | 9 | % | 19 | % | 15 | % | 16 | % | 23 | % | ||||||||||||||||
| Operating Expense Reconciliation | ||||||||||||||||||||||||||
| GAAP Operating Expenses | $ | 117,532 | $ | 118,939 | $ | 131,863 | $ | 496,728 | $ | 498,255 | ||||||||||||||||
| Amortization of acquisition intangibles | (7,228 | ) | (7,630 | ) | (13,266 | ) | (40,991 | ) | (48,066 | ) | ||||||||||||||||
| Stock-based compensation expense – R&D | (8,270 | ) | (6,761 | ) | (6,847 | ) | (29,115 | ) | (26,136 | ) | ||||||||||||||||
| Stock-based compensation expense – SG&A | (4,025 | ) | (4,200 | ) | (5,264 | ) | (19,697 | ) | (21,130 | ) | ||||||||||||||||
| Gain on asset sale | 4,913 | – | – | 4,913 | – | |||||||||||||||||||||
| Acquisition-related items | – | – | 279 | – | 4,327 | |||||||||||||||||||||
| Non-GAAP Operating Expenses | $ | 102,922 | $ | 100,348 | $ | 106,765 | $ | 411,838 | $ | 407,250 | ||||||||||||||||
| Gross Margin/Profit Reconciliation | ||||||||||||||||||||||||||
| GAAP Gross Profit | $ | 124,639 | $ | 163,180 | $ | 152,630 | $ | 597,497 | $ | 760,716 | ||||||||||||||||
| GAAP Gross Margin | 51.8 | % | 50.3 | % | 50.3 | % | 50.4 | % | 49.6 | % | ||||||||||||||||
| Stock-based compensation expense – COGS | 288 | 220 | 422 | 877 | 1,474 | |||||||||||||||||||||
| Non-GAAP Gross Profit | $ | 124,927 | $ | 163,400 | $ | 153,052 | $ | 598,374 | $ | 762,190 | ||||||||||||||||
| Non-GAAP Gross Margin | 52.0 | % | 50.4 | % | 50.5 | % | 50.5 | % | 49.7 | % | ||||||||||||||||
| Effective Tax Rate Reconciliation | ||||||||||||||||||||||||||
| GAAP Tax Expense | $ | 3,048 | $ | 2,381 | $ | 9,983 | $ | 3,753 | $ | 103,104 | ||||||||||||||||
| GAAP Effective Tax Rate | 33.1 | % | 7.4 | % | 45.4 | % | 4.0 | % | 38.9 | % | ||||||||||||||||
| Adjustments to income taxes | (1,202 | ) | 7,003 | 4,502 | 26,781 | (27,254 | ) | |||||||||||||||||||
| Non-GAAP Tax Expense | $ | 1,846 | $ | 9,384 | $ | 14,485 | $ | 30,534 | $ | 75,850 | ||||||||||||||||
| Non-GAAP Effective Tax Rate | 7.7 | % | 14.5 | % | 30.5 | % | 15.8 | % | 21.2 | % | ||||||||||||||||
| Tax Impact to EPS Reconciliation | ||||||||||||||||||||||||||
| GAAP Tax Expense | $ | 0.05 | $ | 0.04 | $ | 0.15 | $ | 0.06 | $ | 1.56 | ||||||||||||||||
| Adjustments to income taxes | (0.02 | ) | 0.12 | 0.08 | 0.44 | (0.41 | ) | |||||||||||||||||||
| Non-GAAP Tax Expense | $ | 0.03 | $ | 0.16 | $ | 0.23 | $ | 0.50 | $ | 1.15 | ||||||||||||||||
| CONSOLIDATED CONDENSED BALANCE SHEET | ||||||||||||||||
| unaudited; in thousands | ||||||||||||||||
| Mar. 30, | Dec. 29, | Mar. 31, | ||||||||||||||
| 2019 | 2018 | 2018 | ||||||||||||||
| ASSETS | ||||||||||||||||
| Current assets | ||||||||||||||||
| Cash and cash equivalents | $ | 216,172 | $ | 219,319 | $ | 235,604 | ||||||||||
| Marketable securities | 70,183 | 59,793 | 26,397 | |||||||||||||
| Accounts receivable, net | 120,656 | 142,135 | 100,801 | |||||||||||||
| Inventories | 164,733 | 167,879 | 205,760 | |||||||||||||
| Other current assets | 53,239 | 51,151 | 45,112 | |||||||||||||
| Total current Assets | 624,983 | 640,277 | 613,674 | |||||||||||||
| Long-term marketable securities | 158,968 | 165,063 | 172,499 | |||||||||||||
| Property and equipment, net | 186,185 | 191,324 | 191,154 | |||||||||||||
| Intangibles, net | 67,847 | 76,389 | 111,547 | |||||||||||||
| Goodwill | 286,241 | 286,678 | 288,718 | |||||||||||||
| Deferred tax asset | 8,727 | 13,131 | 14,716 | |||||||||||||
| Other assets | 19,689 | 24,003 | 37,809 | |||||||||||||
| Total assets | $ | 1,352,640 | $ | 1,396,865 | $ | 1,430,117 | ||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||
| Current liabilities | ||||||||||||||||
| Accounts payable | $ | 48,398 | $ | 108,022 | $ | 69,850 | ||||||||||
| Accrued salaries and benefits | 29,289 | 23,566 | 35,721 | |||||||||||||
| Other accrued liabilities | 37,853 | 38,175 | 34,638 | |||||||||||||
| Total current liabilities | 115,540 | 169,763 | 140,209 | |||||||||||||
| Non-current income taxes | 78,309 | 78,532 | 92,753 | |||||||||||||
| Other long-term liabilities | 18,551 | 18,769 | 35,427 | |||||||||||||
| Stockholders’ equity: | ||||||||||||||||
| Capital stock | 1,363,736 | 1,349,941 | 1,312,434 | |||||||||||||
| Accumulated deficit | (222,430 | ) | (217,871 | ) | (139,345 | ) | ||||||||||
| Accumulated other comprehensive income (loss) | (1,066 | ) | (2,269 | ) | (11,361 | ) | ||||||||||
| Total stockholders’ equity | 1,140,240 | 1,129,801 | 1,161,728 | |||||||||||||
| Total liabilities and stockholders’ equity | $ | 1,352,640 | $ | 1,396,865 | $ | 1,430,117 | ||||||||||
|
Prepared in accordance with Generally Accepted Accounting Principles |
||||||||||||||||
Contacts
Investor Contact:
Thurman K. Case
Chief Financial
Officer
Cirrus Logic, Inc.
(512) 851-4125
[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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