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PGTI Reports 2019 First Quarter Results
First Quarter Sales Growth of $33 Million Driven by Inclusion of
Western Window Systems and Growth in Legacy New Construction Channel
VENICE, Fla.–(BUSINESS WIRE)–PGT Innovations, Inc. (NYSE: PGTI), a national leader in premium windows
and doors, including impact-resistant products and products designed to
unify indoor/outdoor living spaces, today announced financial results
for its first quarter ended March 30, 2019.
Financial Highlights for First Quarter 2019 versus First Quarter 2018
-
Net sales for the first quarter increased 24 percent, to $174 million,
including $32 million from Western Window Systems - Gross profit grew 37 percent, to $61.3 million
- Net income for the quarter grew 13 percent, to $8.3 million
-
Net income per diluted share was flat at $0.14, and adjusted net
income per diluted share of $0.16, decreased $0.03 from the prior
year; both affected by the higher number of shares outstanding,
resulting from the 2018 equity offering - Adjusted EBITDA grew 30 percent, to $28.3 million
“In the first quarter, PGT Innovations’ significant growth in sales and
EBITDA was driven by the inclusion of Western Window Systems and the
strength in our new construction channel. In our legacy markets, our
corporate builder program grew significantly versus the prior year
quarter as adoption of our impact products continues to accelerate,”
stated Jeff Jackson, President and Chief Executive Officer of PGT
Innovations.
“First quarter sales for Western Window Systems grew versus the
prior-year quarter as its penetration continued to increase in the
indoor/outdoor living market. Integration continues to remain on track,
as expected cost synergies began to be realized in the first quarter and
meaningful progress was achieved in building the infrastructure to begin
selling Western products in our legacy markets,” added Jackson.
“Despite the slight decline in the repair and remodel market overlapping
significant growth in the prior year period, we were able to deliver
solid results in the first quarter of 2019, including the growth of
Western Window Systems’ sales and EBITDA compared to its pre-acquisition
prior year period. As we enter hurricane season, we are reaffirming full
year guidance for 2019,” stated Sherri Baker, Senior Vice President and
Chief Financial Officer of PGT Innovations. “Our balance sheet remained
strong at the end of the first quarter, with cash of $45 million and a
net debt-to-adjusted EBITDA ratio, adjusted for the Western Window
Systems acquisition, of 2.2 times,” concluded Baker.
Conference Call
PGT Innovations will host a conference call on Thursday, May 2, 2019, at
10:30 a.m. The conference call will be available at the same time
through the Investor Relations section of the PGT Innovations, Inc.
website, http://ir.pgtinnovations.com/events.cfm.
To participate in the teleconference, kindly dial into the call a few
minutes before the start time: 888-205-6786 (U.S. and Canada) and
786-789-4840 (U.S.). The conference ID is 987008. Please note that these
are new dial-in phone numbers. A replay of the call will be available
within approximately two hours after the scheduled end of the call on
May 2, 2019, through 1:30 p.m. on May 9, 2019. To access the replay,
dial 888-203-1112 (U.S. and Canada) and 719-457-0820 (U.S.) and refer to
pass code 2132984.
You may also join the conference online by using the following link: https://services.choruscall.com/links/pgti190502D1RN8jkQ.html.
The webcast will also be available through the Investors section of the
PGT Innovations, Inc. website: http://ir.pgtinnovations.com/events.cfm.
About PGT Innovations, Inc.
PGT Innovations manufactures and supplies premium windows and doors. Its
highly-engineered and technically-advanced products can withstand some
of the toughest weather conditions on earth and unify indoor/outdoor
living spaces.
PGT Innovations creates value through deep customer relationships,
understanding the unstated needs of the markets it serves and a drive to
develop category-defining products. PGT Innovations is also the nation’s
largest manufacturer of impact-resistant windows and doors, holds the
leadership position in its primary markets, and is part of the S&P
SmallCap 400 Index.
The PGT Innovations’ family of brands include CGI®, PGT® Custom Windows
& Doors, WinDoor®, Western Window Systems®, CGI Commercial® and
Eze-Breeze®. The Company’s brands, in their respective markets, are a
preferred choice of architects, builders, and homeowners throughout
North America and the Caribbean. The Company’s high-quality products are
available in custom and standard sizes with multiple dimensions that
allow for greater design possibilities in residential, multi-family, and
commercial projects. For additional information, visit www.pgtinnovations.com.
Forward-Looking Statements
Statements in this press release regarding our business that are not
historical facts are “forward-looking statements” that involve risks and
uncertainties which could cause actual results to differ materially from
those contained in the forward-looking statements. Such forward-looking
statements generally can be identified by the use of forward-looking
terminology, such as “may,” “expect,” “expectations,” “outlook,”
“forecast,” “guidance,” “intend,” “believe,” “could,” “project,”
“estimate,” “anticipate,” “should,” “plan” and similar terminology.
These risks and uncertainties include factors such as:
-
adverse changes in new home starts and home repair and remodeling
trends, especially in the state of Florida, where the substantial
portion of our sales are currently generated, and in the western
United States, where the substantial portion of the sales of Western
Window Systems’ operations are generated, and in the U.S. generally; -
macroeconomic conditions in Florida, where the substantial portion of
our sales are generated, and in California, Texas, Arizona, Nevada,
Colorado, Oregon, Washington and Hawaii, where the substantial portion
of the sales of Western Window Systems are currently generated, and in
the U.S. generally; -
our level of indebtedness, which increased in connection with our
acquisition of Western Window Systems; -
the effects of increased expenses or unanticipated liabilities
incurred as a result of, or due to activities related to, the Western
Window Systems acquisition; -
the risk that the anticipated cost savings, synergies, revenue
enhancement strategies and other benefits expected from the Western
Window Systems acquisition may not be fully realized or may take
longer to realize than expected or that our actual integration costs
may exceed our estimates; -
raw material prices, especially for aluminum, glass and vinyl,
including, price increases due to the implementation of tariffs and
other trade-related restrictions; -
our dependence on a limited number of suppliers for certain of our key
materials; -
sales fluctuations to and changes in our relationships with key
customers; -
increases in bad debt owed to us by our customers in the event of a
downturn in the home repair and remodeling or new home construction
channels in our core markets and our inability to collect such debt; -
in addition to the Western Window Systems acquisition, our ability to
successfully integrate businesses we may acquire, or that any business
we acquire may not perform as we expected at the time we acquired it; -
increases in transportation costs, including due to increases in fuel
prices; -
our dependence on our impact-resistant product lines and contemporary
indoor/outdoor window and door systems, and on consumer preferences
for those types and styles of products; - product liability and warranty claims brought against us;
-
federal, state and local laws and regulations, including unfavorable
changes in local building codes and environmental and energy code
regulations; -
our dependence on our limited number of geographically concentrated
manufacturing facilities; -
risks associated with our information technology systems, including
cybersecurity-related risks, such as unauthorized intrusions into our
systems by “hackers” and theft of data and information from our
systems, and the risks that our information technology systems do not
function as intended or experience temporary or long-term failures to
perform as intended; and -
the risks and uncertainties discussed under Part I, Item 1A, “Risk
Factors” in the Company’s Annual Report on Form 10-K for the year
ended December 29, 2018.
Statements in this press release that are forward-looking statements
include, without limitation, our expectations regarding: (1) demand for
our products going forward, including the demand for our
impact-resistant products and the products of Western Window Systems;
(2) our ability to gain market share in 2019 and beyond; (3) the
Company’s ability to continue to grow its sales and earnings in 2019 and
going forward; (4) our ability to position ourselves as a national
leader in the premium window and door market, and our performance in
that market; (5) our integration of Western Windows Systems and
achievement of synergies related thereto; and (6) our financial and
operational performance for our 2019 fiscal year, including our 2019
fiscal year outlook reaffirmed and set forth in this press release. You
are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this press release.
Except as required by law, the Company undertakes no obligation to
update these forward-looking statements to reflect subsequent events or
circumstances from the date of this press release.
Use of Non-GAAP Financial Measures
This press release and the financial schedules include financial
measures and terms not calculated in accordance with U.S. generally
accepted accounting principles (GAAP). We believe that presentation of
non-GAAP measures such as adjusted net income, adjusted net income per
share, and adjusted EBITDA provides investors and analysts with an
alternative method for assessing our operating results in a manner that
enables investors and analysts to more thoroughly evaluate our current
performance compared to past performance. We also believe these non-GAAP
measures provide investors with a better baseline for assessing our
future earnings potential. The non-GAAP measures included in this press
release are provided to give investors access to types of measures that
we use in analyzing our results.
Adjusted net income consists of GAAP net income adjusted for the items
included in the accompanying reconciliation. Adjusted net income per
share consists of GAAP net income per share adjusted for the items
included in the accompanying reconciliation. We believe these measures
enable investors and analysts to more thoroughly evaluate our current
performance as compared to the past performance and provide a better
baseline for assessing the Company’s future earnings potential. However,
these measures do not provide a complete picture of our operations.
Adjusted EBITDA consists of net income, adjusted for the items included
in the accompanying reconciliation. We believe that adjusted EBITDA
provides useful information to investors and analysts about the
Company’s performance because they eliminate the effects of
period-to-period changes in taxes, costs associated with capital
investments and interest expense. Adjusted EBITDA does not give effect
to the cash the Company must use to service its debt or pay its income
taxes and thus does not reflect the actual funds generated from
operations or available for capital investments.
Our calculation of adjusted net income, adjusted net income per share,
and adjusted EBITDA are not necessarily comparable to calculations
performed by other companies and reported as similarly titled measures.
These non-GAAP measures should be considered in addition to results
prepared in accordance with GAAP but should not be considered a
substitute for or superior to GAAP measures. Schedules that reconcile
adjusted net income, adjusted net income per share, and adjusted EBITDA
to GAAP net income are included in the financial schedules accompanying
this release.
Adjusted EBITDA as used in the calculation of the net debt-to-Adjusted
EBITDA ratio, consists of our adjusted EBITDA as described above, but
for the trailing twelve-month period, adjusted pursuant to the covenants
contained in the 2016 Credit Agreement due 2022 for the acquisition of
Western Window Systems.
PGT INNOVATIONS, INC. | ||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
(unaudited – in thousands, except per share amounts) | ||||
Three Months Ended | ||||
March 30, | March 31, | |||
2019 | 2018 | |||
Net sales | $ 173,737 | $ 140,253 | ||
Cost of sales | 112,467 | 95,480 | ||
Gross profit | 61,270 | 44,773 | ||
Selling, general and administrative expenses | 44,014 | 28,657 | ||
Income from operations | 17,256 | 16,116 | ||
Interest expense, net | 6,714 | 4,043 | ||
Debt extinguishment costs | – | 3,079 | ||
Income before income taxes | 10,542 | 8,994 | ||
Income tax expense | 2,285 | 1,654 | ||
Net income | $ 8,257 | $ 7,340 | ||
Basic net income per common share | $ 0.14 | $ 0.15 | ||
Diluted net income per common share | $ 0.14 | $ 0.14 | ||
Weighted average common shares outstanding: | ||||
Basic | 58,134 | 49,858 | ||
Diluted | 59,220 | 51,998 |
PGT INNOVATIONS, INC. | |||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
(unaudited – in thousands) | |||||
March 30, | December 29, | ||||
2019 | 2018 | ||||
ASSETS | |||||
Current assets: | |||||
Cash and cash equivalents | $ 44,936 | $ 52,650 | |||
Accounts receivable, net | 76,035 | 80,717 | |||
Inventories | 47,962 | 44,666 | |||
Contract assets, net | 9,375 | 6,757 | |||
Prepaid expenses and other current assets | 15,812 | 10,771 | |||
Total current assets | 194,120 | 195,561 | |||
Property, plant and equipment, net | 120,238 | 115,707 | |||
Operating lease right-of-use asset, net | 29,568 | – | |||
Intangible assets, net | 267,803 | 271,818 | |||
Goodwill | 277,827 | 277,827 | |||
Other assets, net | 1,192 | 1,240 | |||
Total assets | $ 890,748 | $ 862,153 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||
Current liabilities: | |||||
Accounts payable and accrued expenses | $ 56,963 | $ 68,557 | |||
Current portion of long-term debt | 87 | 163 | |||
Current portion of operating lease liability | 7,016 | – | |||
Total current liabilities | 64,066 | 68,720 | |||
Long-term debt, less current portion | 367,041 | 366,614 | |||
Operating lease liability, less current portion | 25,510 | – | |||
Deferred income taxes, net | 23,144 | 22,758 | |||
Other liabilities | 15,139 | 18,517 | |||
Total liabilities | 494,900 | 476,609 | |||
Total shareholders’ equity | 395,848 | 385,544 | |||
Total liabilities and shareholders’ equity | $ 890,748 | $ 862,153 |
PGT INNOVATIONS, INC. | ||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO THEIR GAAP EQUIVALENTS |
||||
(unaudited – in thousands, except per share amounts and percentages) |
||||
Three Months Ended | ||||
March 30, | March 31, | |||
2019 | 2018 | |||
Reconciliation to Adjusted Net Income and | ||||
Adjusted Net Income per share (1): | ||||
Net income | $ 8,257 | $ 7,340 | ||
Reconciling items: | ||||
Product line transition costs (2) | 641 | – | ||
Acquisition costs (3) | 650 | – | ||
Debt extinguishment costs (4) | – | 3,079 | ||
Facility and equipment relocation costs (5) | – | 435 | ||
Tax effect of reconciling items | (332) | (906) | ||
Adjusted net income | $ 9,216 | $ 9,948 | ||
Weighted-average diluted shares | 59,220 | 51,998 | ||
Adjusted net income per share – diluted | $0.16 | $0.19 | ||
Reconciliation to Adjusted EBITDA (1): | ||||
Depreciation and amortization expense | $ 8,512 | $ 4,620 | ||
Interest expense, net | 6,714 | 4,043 | ||
Income tax expense | 2,285 | 1,654 | ||
Reversal of tax effect of reconciling items for | ||||
adjusted net income above | 332 | 906 | ||
Stock-based compensation expense | 1,198 | 514 | ||
Adjusted EBITDA | $ 28,257 | $ 21,685 | ||
Adjusted EBITDA as percentage of net sales | 16.3% | 15.5% | ||
Net debt-to-Adjusted EBITDA ratio as adjusted for Western Window |
2.2x |
(1) The Company’s non-GAAP financial measures were explained in its Form 8-K filed May 2, 2019. |
(2) Represents costs relating to product line transitions, classified within cost of sales for the three months ended March 30, 2019. |
(3) Represents costs relating to the Western Window Systems acquisition, classified within selling, general and administrative expenses for the three months ended March 30, 2019. |
(4) Represents debt extinguishment costs for the three months |
(5) Represents costs associated with planned relocation of the CGI Windows & Doors manufacturing operations to its new facility in Miami, FL, and costs associated with machinery and equipment relocations within our glass plant operations in Venice, FL as the result of our planned disposal of certain glass manufacturing assets to Cardinal Glass Industries. Of the $435 thousand, $416 thousand is classified within cost of sales during the three months ended March 31, 2018, with the remainder classified within selling, general and administrative expenses. |
(6) Calculated in accordance with the covenants pursuant to the |
Contacts
Investor Relations:
Sherri Baker, 941-480-1600
Senior
Vice President and CFO
[email protected]
Media Relations:
Brent Boydston, 941-480-1600
Senior
Vice President, Corporate Sales and Marketing
[email protected]
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Cannabis
Rubicon Organics Reports Q1 2024 Financial Results
SCHWAZZE
Schwazze Announces First Quarter 2024 Financial Results
Schwazze Management to Host Conference Call Today at 5:00 p.m. Eastern Time
DENVER, May 15, 2024 /PRNewswire/ — Medicine Man Technologies, Inc., operating as Schwazze, (OTCQX: SHWZ) (Cboe CA: SHWZ) (“Schwazze” or the “Company”), today announced financial and operational results for the first quarter ended March 31, 2024.
“We delivered another period of revenue growth in Q1 as we further refined our retail strategy while contending with the prolonged competitive challenges in Colorado and New Mexico,” said Forrest Hoffmaster, Interim CEO of Schwazze. “Throughout the quarter, we continued to sharpen our pricing and promotional efforts while enhancing the in-store experience, widening assortment, improving in-stock position, and advancing our loyalty program to attract and retain new customers. We also strengthened our wholesale business with quarter-over-quarter growth, while surpassing 30% total door penetration across both states.”
“The Colorado market remains highly competitive with more than 680 active recreational licenses, underscoring the importance of delivering an exceptional customer experience and fully integrated retail support program. Although retail pricing has recently stabilized, Colorado sales in Q1 were down 10% year-over-year due to lower volumes. Nonetheless, we significantly outpaced the market as our sales were up 9%, demonstrating the effectiveness of our operating playbook to compete in challenging environments. We expect to continue driving improvements in customer acquisition, retention, and loyalty as we further increase market share in the state.”
“In New Mexico, the proliferation of new licenses continued to outpace state cannabis sales as store count in Q1 increased 31% year-over-year while the market grew only 13%. In addition to pricing and promotional efforts, we’ve focused on driving traffic into our stores by expanding assortment with high quality flower and delivering an elevated customer experience. The New Mexico regulatory body has also increased its license enforcement efforts in recent months, contributing to more than 70 store closures and a 33% sequential decrease in net new store openings in the first quarter. We will continue to support the New Mexico Cannabis Control Division as it develops its regulatory framework.”
“Over the past four years we have rapidly scaled our footprint through 13 acquisitions, building a leading retail presence in both Colorado and New Mexico. We are beginning to see positive momentum from our pricing and promotional strategy and will remain focused on driving operating efficiencies while further optimizing our assets as we consolidate cultivation facilities and eliminate underperforming stores that do not meet our high-margin thresholds. We believe these initiatives, coupled with our operating playbook and strict cost controls, will enable us to return to stronger levels of profitability moving forward.”
First Quarter 2024 Financial Summary
$ in Thousands USD |
Q1 2024 |
Q4 2023 |
Q1 2023 |
Total Revenue |
$41,601 |
$43,325 |
$40,001 |
Gross Profit |
$17,934 |
$7,034[1] |
$21,849 |
Operating Expenses |
$20,643 |
$23,276 |
$16,199 |
Income (Loss) from Operations |
$(2,709) |
$(16,242) |
$5,650 |
Adjusted EBITDA[2] |
$7,341 |
$10,953 |
$14,525 |
Operating Cash Flow |
$(3,700) |
$3,452 |
$(880) |
Recent Highlights
- Announced the grand opening of a medical and recreational dispensary in March under the Everest Apothecary banner in Las Cruces, New Mexico, increasing the Company’s retail footprint to 34 stores across the state.
- Increased wholesale penetration in the first quarter to more than 30% of total doors in Colorado and New Mexico.
- Lowell Herb Co. pre-roll sales increased more than 3x quarter-over-quarter in Colorado, where it continues to be the #1 pre-roll in the state.
- Wana gummy sales up more than 2x quarter-over-quarter in New Mexico.
First Quarter 2024 Financial Results
Total revenue in the first quarter of 2024 increased 4% to $41.6 million compared to $40.0 million for the same quarter last year. The increase was primarily due to growth from new stores compared to the prior year period, partially offset by continued pricing pressure and the proliferation of new licenses in New Mexico.
Gross profit for the first quarter of 2024 was $17.9 million or 43.1% of total revenue, compared to $21.8 million or 54.6% of total revenue for the same quarter last year. The decrease in gross margin was primarily driven by the aforementioned pricing pressure in New Mexico, as well as higher medical sales mix in Colorado.
____________________________ |
1 Q4 2023 Gross Profit includes one-time, non-cash inventory adjustments of approximately $13.1 million comprised of $3.1 million of product consolidation, obsolescence, and shrinkage expenses, $4.3 million of net realizable value adjustments, and $5.8 million of fair value adjustments on acquired inventory in New Mexico in 2023. |
Operating expenses for the first quarter of 2024 were $20.6 million compared to $16.2 million for the same quarter last year. The year-ago period benefitted from a payroll tax credit of $3.9M. The remaining increase was primarily driven by personnel expenses and four-wall SG&A costs associated with 21 additional stores in Colorado and New Mexico that are still ramping.
Loss from operations for the first quarter of 2024 was $2.7 million compared to income from operations of $5.6 million in the same quarter last year. Net loss was $16.1 million for the first quarter of 2024 compared to net income of $1.7 million for the same quarter last year.
Adjusted EBITDA for the first quarter of 2024 was $7.3 million compared to $14.5 million for the same quarter last year. The decrease in Adjusted EBITDA was primarily driven by lower gross margin and higher operating expenses associated with the 21 additional stores that are still ramping.
As of March 31, 2024, cash and cash equivalents were $13.2 million compared to $19.2 million on December 31, 2023. Total debt as of March 31, 2024, was $159.7 million compared to $156.8 million on December 31, 2023.
Conference Call
The Company will conduct a conference call today, May 15, 2024, at 5:00 p.m. Eastern time to discuss its results for the first quarter ended March 31, 2024.
Schwazze management will host the conference call, followed by a question-and-answer period. Interested parties may submit questions to the Company prior to the call by emailing [email protected].
Date: Wednesday, May 15, 2024
Time: 5:00 p.m. Eastern time
Toll-free dial-in: (888) 664-6383
International dial-in: (416) 764-8650
Conference ID: 84167910
Webcast: SHWZ Q1 2024 Earnings Call
The conference call will also be broadcast live and available for replay on the investor relations section of the Company’s website at https://ir.schwazze.com.
Toll-free replay number: (888) 390-0541
International replay number: (416) 764-8677
Replay ID: 167910
If you have any difficulty registering or connecting with the conference call, please contact Elevate IR at (720) 330-2829.
About Schwazze
Schwazze (OTCQX: SHWZ) (Cboe CA: SHWZ) is building a premier vertically integrated regional cannabis company with assets in Colorado and New Mexico and will continue to explore taking its operating system to other states where it can develop a differentiated regional leadership position. Schwazze is the parent company of a portfolio of leading cannabis businesses and brands spanning seed to sale.
Schwazze is anchored by a high-performance culture that combines customer-centric thinking and data science to test, measure, and drive decisions and outcomes. The Company’s leadership team has deep expertise in retailing, wholesaling, and building consumer brands at Fortune 500 companies as well as in the cannabis sector.
Medicine Man Technologies, Inc. was Schwazze’s former operating trade name. The corporate entity continues to be named Medicine Man Technologies, Inc. Schwazze derives its name from the pruning technique of a cannabis plant to enhance plant structure and promote healthy growth. To learn more about Schwazze, visit https://schwazze.com/.
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include financial outlooks; any projections of net sales, earnings, or other financial items; any statements of the strategies, plans and objectives of our management team for future operations; expectations in connection with the Company’s previously announced business plans; any statements regarding future economic conditions or performance; and statements regarding the intent, belief or current expectations of our management team. Such statements may be preceded by the words “may,” “will,” “could,” “would,” “should,” “expect,” “intends,” “plans,” “strategy,” “prospects,” “anticipate,” “believe,” “approximately,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” or the negative of these terms or other words of similar meaning in connection with a discussion of future events or future operating or financial performance, although the absence of these words does not necessarily mean that a statement is not forward-looking. We have based our forward-looking statements on management’s current expectations and assumptions about future events and trends affecting our business and industry. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. Therefore, forward-looking statements are not guarantees of future events or performance, are based on certain assumptions, and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company’s control and cannot be predicted or quantified. Consequently, actual events and results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, risks and uncertainties associated with (i) regulatory limitations on our products and services and the uncertainty in the application of federal, state, and local laws to our business, and any changes in such laws; (ii) our ability to manufacture our products and product candidates on a commercial scale on our own or in collaboration with third parties; (iii) our ability to identify, consummate, and integrate anticipated acquisitions; (iv) general industry and economic conditions; (v) our ability to access adequate capital upon terms and conditions that are acceptable to us; (vi) our ability to pay interest and principal on outstanding debt when due; (vii) volatility in credit and market conditions; (viii) the loss of one or more key executives or other key employees; and (ix) other risks and uncertainties related to the cannabis market and our business strategy. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company’s filings with the Securities and Exchange Commission (SEC), including the Company’s Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. Investors and security holders are urged to read these documents free of charge on the SEC’s website at http://www.sec.gov. The Company assumes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise except as required by law.
Investor Relations Contact
Sean Mansouri, CFA or Aaron D’Souza
Elevate IR
(720) 330-2829
[email protected]
MEDICINE MAN TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
For the Periods Ended March 31, 2024 and December 31, 2023
Expressed in U.S. Dollars
March 31, |
December 31, |
||||
2024 |
2023 |
||||
ASSETS
|
|||||
Current Assets |
|||||
Cash & Cash Equivalents |
$ |
13,151,317 |
$ |
19,248,932 |
|
Accounts Receivable, net of Allowance for Doubtful Accounts |
3,356,032 |
4,261,159 |
|||
Inventory |
26,382,184 |
25,787,793 |
|||
Marketable Securities, net of Unrealized Loss of $347,516 and Loss of $1,816, respectively |
108,583 |
456,099 |
|||
Prepaid Expenses & Other Current Assets |
3,502,310 |
3,914,064 |
|||
Total Current Assets |
46,500,426 |
53,668,047 |
|||
Non-Current Assets |
|||||
Fixed Assets, net Accumulated Depreciation of $10,061,700 and $8,741,782, respectively |
31,326,000 |
31,113,630 |
|||
Investments |
2,000,000 |
2,000,000 |
|||
Investments Held for Sale |
– |
202,111 |
|||
Goodwill |
67,492,705 |
67,499,199 |
|||
Intangible Assets, net Accumulated Amortization of $36,483,160 and $32,706,765, respectively |
162,391,482 |
166,167,877 |
|||
Other Non-Current Assets |
1,328,187 |
1,263,837 |
|||
Operating Lease Right of Use Assets |
34,575,832 |
34,233,142 |
|||
Deferred Tax Assets, net |
992,144 |
1,996,489 |
|||
Total Non-Current Assets |
300,106,350 |
304,476,285 |
|||
Total Assets |
$ |
346,606,776 |
$ |
358,144,332 |
|
LIABILITIES & STOCKHOLDERS’ EQUITY
|
|||||
Current Liabilities |
|||||
Accounts Payable |
$ |
9,443,233 |
$ |
13,341,561 |
|
Accrued Expenses |
8,106,618 |
7,774,691 |
|||
Derivative Liabilities |
1,319,845 |
638,020 |
|||
Lease Liabilities – Current |
5,186,316 |
4,922,724 |
|||
Current Portion of Long Term Debt |
29,579,713 |
3,547,011 |
|||
Income Taxes Payable |
28,235,039 |
25,232,782 |
|||
Total Current Liabilities |
81,870,764 |
55,456,789 |
|||
Non-Current Liabilities |
|||||
Long Term Debt, net of Debt Discount & Issuance Costs |
130,120,753 |
153,262,203 |
|||
Lease Liabilities – Non-Current |
30,735,072 |
30,133,452 |
|||
Total Non-Current Liabilities |
160,855,825 |
183,395,655 |
|||
Total Liabilities |
$ |
242,726,589 |
$ |
238,852,444 |
|
Stockholders’ Equity |
|||||
Preferred Stock, $0.001 Par Value. 10,000,000 Shares Authorized; 82,185 Shares Issued and |
|||||
82,185 Outstanding as of March 31, 2024 and 85,534 Shares Issued and 85,534 Outstanding as of |
|||||
December 31, 2023. |
82 |
86 |
|||
Common Stock, $0.001 Par Value. 250,000,000 Shares Authorized; 79,168,539 Shares Issued |
|||||
and 78,248,389 Shares Outstanding as of March 31, 2024 and 74,888,392 Shares Issued |
|||||
and 73,968,242 Shares Outstanding as of December 31, 2023. |
79,169 |
74,888 |
|||
Additional Paid-In Capital |
202,677,665 |
202,040,968 |
|||
Accumulated Deficit |
(96,843,602) |
(80,790,927) |
|||
Common Stock Held in Treasury, at Cost, 920,150 Shares Held as of March 31, 2024 and |
|||||
920,150 Shares Held as of December 31, 2023. |
(2,033,127) |
(2,033,127) |
|||
Total Stockholders’ Equity |
103,880,187 |
119,291,888 |
|||
Total Liabilities & Stockholders’ Equity |
$ |
346,606,776 |
$ |
358,144,332 |
MEDICINE MAN TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME AND (LOSS)
For the Periods Ended March 31, 2024 and 2023
Expressed in U.S. Dollars
For the Three Months Ended |
|||||
March 31, |
|||||
2024 |
2023 |
||||
(Unaudited) |
(Unaudited) |
||||
Operating Revenues |
|||||
Retail |
$ |
37,633,252 |
$ |
35,820,111 |
|
Wholesale |
3,898,320 |
4,058,925 |
|||
Other |
69,421 |
121,900 |
|||
Total Revenue |
41,600,993 |
40,000,936 |
|||
Total Cost of Goods & Services |
23,667,319 |
18,152,163 |
|||
Gross Profit |
17,933,674 |
21,848,773 |
|||
Operating Expenses |
|||||
Selling, General and Administrative Expenses |
11,835,818 |
10,100,934 |
|||
Professional Services |
1,671,881 |
1,187,364 |
|||
Salaries |
6,880,988 |
4,695,971 |
|||
Stock Based Compensation |
253,916 |
214,544 |
|||
Total Operating Expenses |
20,642,603 |
16,198,813 |
|||
Income from Operations |
(2,708,929) |
5,649,960 |
|||
Other Income (Expense) |
|||||
Interest Expense, net |
(8,307,369) |
(7,745,854) |
|||
Unrealized Gain (Loss) on Derivative Liabilities |
(681,825) |
8,501,685 |
|||
Other Loss |
10,500 |
– |
|||
Loss on Investment |
(33,382) |
– |
|||
Unrealized Gain on Investment |
(347,516) |
1,816 |
|||
Total Other Income (Expense) |
(9,359,592) |
757,647 |
|||
Pre-Tax Net Income (Loss) |
(12,068,521) |
6,407,607 |
|||
Provision for Income Taxes |
3,984,154 |
4,662,178 |
|||
Net Income (Loss) |
$ |
(16,052,675) |
$ |
1,745,429 |
|
Less: Accumulated Preferred Stock Dividends for the Period |
(2,155,259) |
(2,029,394) |
|||
Net Income (Loss) Attributable to Common Stockholders |
$ |
(18,207,934) |
$ |
(283,965) |
|
Earnings (Loss) per Share Attributable to Common Stockholders |
|||||
Basic Earnings (Loss) per Share |
$ |
(0.24) |
$ |
(0.01) |
|
Diluted Earnings (Loss) per Share |
$ |
(0.24) |
$ |
(0.06) |
|
Weighted Average Number of Shares Outstanding – Basic |
76,006,932 |
55,835,501 |
|||
Weighted Average Number of Shares Outstanding – Diluted |
76,006,932 |
101,608,278 |
|||
Comprehensive Income (Loss) |
$ |
(16,052,675) |
$ |
1,745,429 |
MEDICINE MAN TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Periods Ended March 31, 2024 and 2023
Expressed in U.S. Dollars
For the Three Months Ended |
|||||
March 31, |
|||||
2024 |
2023 |
||||
(Unaudited) |
(Unaudited) |
||||
Cash Flows from Operating Activities: |
|||||
Net Income (Loss) for the Period |
$ |
(16,052,675) |
$ |
1,745,429 |
|
Adjustments to Reconcile Net Income (Loss) to Cash for Operating Activities |
|||||
Depreciation & Amortization |
5,096,314 |
6,151,395 |
|||
Non-Cash Interest Expense |
1,031,431 |
991,184 |
|||
Non-Cash Lease Expense |
2,871,226 |
2,251,459 |
|||
Deferred Taxes |
1,004,345 |
(637,225) |
|||
Loss on Investment |
202,111 |
– |
|||
Change in Derivative Liabilities |
681,825 |
(8,501,685) |
|||
Amortization of Debt Issuance Costs |
421,512 |
421,513 |
|||
Amortization of Debt Discount |
2,303,246 |
1,999,933 |
|||
(Gain) Loss on Investments, net |
347,516 |
(1,816) |
|||
Stock Based Compensation |
640,974 |
214,544 |
|||
Changes in Operating Assets & Liabilities (net of Acquired Amounts): |
|||||
Accounts Receivable |
905,127 |
(118,181) |
|||
Inventory |
(587,900) |
(3,023,251) |
|||
Prepaid Expenses & Other Current Assets |
411,754 |
(3,036,801) |
|||
Other Assets |
(64,350) |
360,674 |
|||
Change in Operating Lease Liabilities |
(2,348,703) |
(1,531,765) |
|||
Accounts Payable & Other Liabilities |
(3,566,401) |
(3,464,671) |
|||
Income Taxes Payable |
3,002,257 |
5,299,403 |
|||
Net Cash Provided by (Used in) Operating Activities |
(3,700,390) |
(879,861) |
|||
Cash Flows from Investing Activities: |
|||||
Collection of Notes Receivable |
– |
10,631 |
|||
Purchase of Fixed Assets |
(1,532,287) |
(2,913,394) |
|||
Net Cash Provided by (Used in) Investing Activities |
(1,532,287) |
(2,902,763) |
|||
Cash Flows from Financing Activities: |
|||||
Payment on Notes Payable |
(864,938) |
– |
|||
Net Cash Provided by (Used in) Financing Activities |
(864,938) |
– |
|||
Net (Decrease) in Cash & Cash Equivalents |
(6,097,615) |
(3,782,624) |
|||
Cash & Cash Equivalents at Beginning of Period |
19,248,932 |
38,949,253 |
|||
Cash & Cash Equivalents at End of Period |
$ |
13,151,317 |
$ |
35,166,628 |
|
Supplemental Disclosure of Cash Flow Information: |
|||||
Cash Paid for Interest |
$ |
4,515,205 |
$ |
6,540,748 |
MEDICINE MAN TECHNOLOGIES, INC.
ADJUSTED EBITDA RECONCILIATION (NON-GAAP)
For the Periods Ended March 31, 2024 and 2023
Expressed in U.S. Dollars
For the Three Months Ended |
|||||
March 31, |
|||||
2024 |
2023 |
||||
Net Income (Loss) |
$ |
(16,052,675) |
$ |
1,745,429 |
|
Interest Expense, net |
8,307,369 |
7,745,854 |
|||
Provision for Income Taxes |
3,984,154 |
4,662,178 |
|||
Other (Income) Expense, net of Interest Expense |
1,052,223 |
(8,503,501) |
|||
Depreciation & Amortization |
5,618,834 |
6,612,814 |
|||
Earnings Before Interest, Taxes, Depreciation and |
|||||
Amortization (EBITDA) (non-GAAP) |
$ |
2,909,905 |
$ |
12,262,774 |
|
Non-Cash Stock Compensation |
253,916 |
214,544 |
|||
Deal Related Expenses |
637,761 |
1,195,802 |
|||
Capital Raise Related Expenses |
20,760 |
35,068 |
|||
Severance |
484,561 |
118,436 |
|||
Retention Program Expenses |
807,500 |
280,632 |
|||
Pre-Operating & Dark Carry Expenses |
1,053,837 |
391,917 |
|||
One-Time Legal Settlements |
417,653 |
– |
|||
Other Non-Recurring Items |
754,751 |
25,707 |
|||
Adjusted EBITDA (non-GAAP) |
$ |
7,340,644 |
$ |
14,524,880 |
|
Revenue |
41,600,993 |
40,000,936 |
|||
Adjusted EBITDA Percent |
17.6 % |
36.3 % |
View original content:https://www.prnewswire.co.uk/news-releases/schwazze-announces-first-quarter-2024-financial-results-302146858.html
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