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Globalstar Announces First Quarter 2019 Results
COVINGTON, La.–(BUSINESS WIRE)–lt;a href=”https://twitter.com/search?q=%24GSAT&src=ctag” target=”_blank”gt;$GSATlt;/agt;–Globalstar, Inc. (NYSE American: GSAT) today announced its financial
results for the quarter ended March 31, 2019.
Dave Kagan, Chief Executive Officer, commented, “We continued to
penetrate the commercial IoT market during the first quarter, evidenced
by a 16% increase in this subscriber base which has grown to over
390,000 customers at the end of the quarter. While our newest
solar-powered IoT device drove the growth, sales of our legacy devices,
which more than doubled from the prior year’s first quarter, also
contributed meaningfully to a strong increase in total revenue. The
success across our product portfolio demonstrates our ability to address
various use cases and applications that are required by our customers in
the rapidly growing IoT market. We have a robust pipeline of small bit
data solutions that align well with our satellite network. During the
first quarter, our elevated operating expenses reflected our investment
in this area of the business with many of our current initiatives
focused on expanding our IoT products and technology. Our traction to
date is an excellent indication that this focus is well-founded as we
continue to support growth through development efforts.”
Kagan continued, “Our strategy at Globalstar has been and remains to
maximize utilization of our unique combination of satellite assets and
terrestrial spectrum rights. We are continuously evaluating
opportunities to do just that, exploring new products, solutions,
distribution agreements, wholesale arrangements, licensing agreements
and partnerships. We also remain focused on strengthening our balance
sheet to best position us to capitalize on these opportunities.”
OPERATIONAL HIGHLIGHTS
Spectrum Update
The first Band 53 industrial user terminals were received from certain
of our partners, including Nokia and Airspan and terrestrial trials are
ongoing. We are continuing the pursuit of regulatory approvals around
the world and have added terrestrial authorizations for our S-band
spectrum licenses in several African nations, including one in March for
approximately 30 million POPs. We also continue to make progress toward
authorizations in additional geographies.
Financing Update
Together with our financial advisors, we are exploring various financing
alternatives to address our funding requirements for June 2019 and
future periods, including, but not limited to, a financing and an
amendment to our existing debt obligations. We intend to complete this
process in a manner that is in the best interest of our Company and its
shareholders, while taking into account the requirements of our senior
lenders.
FINANCIAL REVIEW
Revenue
Total revenue for the first quarter of 2019 increased $1.3 million, or
5%, from the first quarter of 2018 due to a $1.2 million increase in
revenue generated from subscriber equipment sales and a $0.1 million
increase in service revenue.
Success in the simplex (“Commercial IoT”) market contributed $1.8
million to the increase in total revenue during the first quarter. In
March 2018, we launched SmartOne Solar, our most successful product
introduction to date measured by the number of units sold in the first
year following launch. Sales of SmartOne Solar devices represented
nearly 70% of the $1.2 million increase in Commercial IoT equipment
revenue. As the total addressable market expands, we continue to see
demand from both current and prospective customers. In addition to
leveraging our existing network of value-added resellers, we have also
recently completed our own back office solution allowing our sales team
to sell direct to end users. The $0.6 million increase in service
revenue generated by Commercial IoT customers was driven by higher ARPU
and 16% growth in average subscribers, with Commercial IoT subscribers
now representing over 50% of total subscribers.
Duplex service revenue decreased 2%, while SPOT service revenue
increased 1%, each due to lower average subscribers offset by higher
ARPU. Lower activations over the last twelve months, compared to the
prior year period, contributed to a 13% and 2% decline in average Duplex
and SPOT subscribers, respectively. Duplex and SPOT ARPU increased 13%
and 3%, respectively, due to the impact of price increases initiated
over the past several quarters as well as subscribers activating on rate
plans higher than our previous blended ARPU. Finally, a $0.5 million
decline in other service revenue resulted primarily from lower revenue
recognized from engineering service contracts during the first quarter
of 2019 compared to the same quarter in 2018 due to the inherently
episodic nature of government contracts.
Revenue generated from subscriber equipment sales for Duplex and SPOT
products was also generally flat quarter over quarter with Duplex down
$0.2 million and SPOT up $0.1 million. While a higher volume of sales of
the products launched in 2018 (Sat-Fi2TM and SPOT XTM)
increased subscriber equipment revenue during the first quarter of 2019,
lower selling prices and volume of legacy Duplex and SPOT products
declined, offsetting the contribution from new product sales.
Operating Loss
Operating loss increased $5.4 million during the first quarter of 2019.
This increase was due to higher operating expenses of $6.7 million,
offset partially by a $1.3 million increase in total revenue (for
reasons previously discussed). Contributing to the increase in operating
expenses was a $4.6 million increase in depreciation, amortization and
accretion expense resulting from upgraded ground infrastructure placed
into service during 2018. The cost of subscriber equipment sales
increased $1.0 million, consistent with the increase in equipment
revenue. Additionally, marketing, general and administrative (MG&A) and
cost of services increased $0.3 million and $0.8 million, respectively.
Higher cost of services was driven by an increase in R&D costs, which
were focused primarily on the development of Commercial IoT products and
derivatives of our existing Sat-Fi2TM Duplex device as well
as lower capitalized labor in the first quarter of 2019 due to the
timing and scope of capital projects. Contributing to the increase in
MG&A costs during the first quarter of 2019 was a $0.6 million write-off
of an aged receivable from one of our independent gateway operators
(IGO), which was determined to be uncollectible. Increases in occupancy
and subscriber acquisition costs were offset by lower consultant and
adviser costs during the quarter.
Net Income
Net income decreased $62.1 million during the first quarter of 2019 due
primarily to a lower non-cash derivative gain of $51.9 million. Changes
in the Company’s stock price and volatility assumptions were the primary
drivers of the derivative adjustments recorded during the respective
quarters. An increase in operating loss of $5.4 million (as discussed
above) as well as a $5.5 million increase in interest expense resulting
from lower capitalized interest recorded during the quarter also
contributed to the decline in net income.
Adjusted EBITDA
Adjusted EBITDA decreased slightly to $7.2 million during the first
quarter of 2019 compared to $7.5 million during the first quarter of
2018. A $1.6 million increase in total operating expenses (excluding
EBITDA adjustments) was offset partially by a $1.3 million increase in
total revenue.
CONFERENCE CALL
The Company will conduct an investor conference call on May 2, 2019 at
8:30 a.m. ET to discuss its first quarter 2019 financial results.
Details are as follows: | ||||
Conference Call: |
8:30 a.m. ET |
|||
Audio Replay: |
A replay of the earnings call will be available for a limited time and can be heard after 11:00 a.m. ET on May 2, 2019. Dial: 1 (888) 843-7419 (US and Canada), 1 (630) 652-3042 (International) and pass code 4850 9813#. |
|||
About Globalstar, Inc.
Globalstar is a leading provider of customizable satellite IoT solutions
for customers around the world in industries such as government, oil and
gas, emergency management, transportation, maritime and outdoor
recreation. As a pioneer of mobile satellite voice and data services,
Globalstar allows businesses to streamline operations via the Globalstar
Satellite Network by connecting people to their devices, supplying
personal safety and communication and automating data to more easily
monitor and manage mobile assets. The Company’s product portfolio
includes the industry-acclaimed SmartOne asset tracking products,
Commercial IoT satellite transmitters and Duplex satellite data modems,
the innovative Sat-Fi2 satellite wireless IP hotspot and the SPOT®
product line of personal safety, asset and communication devices, all
offered with a variety of data service plans. Learn more at
Globalstar.com
Note that all SPOT products described in this press release are the
products of SPOT LLC, a subsidiary of Globalstar, which is not
affiliated in any manner with Spot Image of Toulouse, France or Spot
Image Corporation of Chantilly, Virginia.
Safe Harbor Language for Globalstar Releases
This press release contains certain statements that are “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are based on
current expectations and assumptions that are subject to risks and
uncertainties which may cause actual results to differ materially from
the forward-looking statements. Forward-looking statements, such as the
statements regarding our expectations with respect to the pursuit of
terrestrial spectrum authorities globally, future increases in our
revenue and profitability and other statements contained in this release
regarding matters that are not historical facts, involve predictions.
Any forward-looking statements made in this press release are believed
to be accurate as of the date made and are not guarantees of future
performance. Actual results or developments may differ materially from
the expectations expressed or implied in the forward-looking statements,
and we undertake no obligation to update any such statements. Additional
information on factors that could influence our financial results is
included in our filings with the Securities and Exchange Commission,
including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q
and Current Reports on Form 8-K.
GLOBALSTAR, INC. | |||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||
(In thousands, except per share data) |
|||||||||||
(Unaudited) |
|||||||||||
Three Months Ended |
|||||||||||
2019 | 2018 | ||||||||||
Revenue: | |||||||||||
Service revenue | $ | 26,119 | $ | 26,010 | |||||||
Subscriber equipment sales | 3,959 | 2,739 | |||||||||
Total revenue | 30,078 | 28,749 | |||||||||
Operating expenses: | |||||||||||
Cost of services (exclusive of depreciation, amortization, and |
9,853 | 9,029 | |||||||||
Cost of subscriber equipment sales | 3,149 | 2,172 | |||||||||
Marketing, general and administrative | 11,606 | 11,275 | |||||||||
Depreciation, amortization, and accretion | 23,801 | 19,231 | |||||||||
Total operating expenses | 48,409 | 41,707 | |||||||||
Operating loss | (18,331 | ) | (12,958 | ) | |||||||
Other income (expense): | |||||||||||
Interest income and expense, net of amounts capitalized | (12,870 | ) | (7,353 | ) | |||||||
Derivative gain | 57,008 | 108,944 | |||||||||
Other | (9 | ) | (662 | ) | |||||||
Total other income (expense) | 44,129 | 100,929 | |||||||||
Income before income taxes | 25,798 | 87,971 | |||||||||
Income tax expense | 27 | 41 | |||||||||
Net income | $ | 25,771 | $ | 87,930 | |||||||
Net income per common share: | |||||||||||
Basic | $ | 0.02 | $ | 0.07 | |||||||
Diluted | 0.02 | 0.06 | |||||||||
Weighted-average shares outstanding: | |||||||||||
Basic | 1,448,318 | 1,262,336 | |||||||||
Diluted | 1,632,257 | 1,437,328 | |||||||||
GLOBALSTAR, INC. | |||||||||||
RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP ADJUSTED EBITDA |
|||||||||||
(In thousands) |
|||||||||||
(Unaudited) |
|||||||||||
Three Months Ended | |||||||||||
March 31, | |||||||||||
2019 | 2018 | ||||||||||
Net income | $ | 25,771 | $ | 87,930 | |||||||
Interest income and expense, net | 12,870 | 7,353 | |||||||||
Derivative gain | (57,008 | ) | (108,944 | ) | |||||||
Income tax expense | 27 | 41 | |||||||||
Depreciation, amortization, and accretion | 23,801 | 19,231 | |||||||||
EBITDA | 5,461 | 5,611 | |||||||||
Non-cash compensation | 1,448 | 1,276 | |||||||||
Foreign exchange and other | (255 | ) | 595 | ||||||||
Bad debt reserve of aged IGO receivable | 593 | — | |||||||||
Adjusted EBITDA (1) | $ | 7,247 | $ | 7,482 | |||||||
(1) EBITDA represents earnings before interest, income taxes,
depreciation, amortization, accretion and derivative (gains)/losses.
Adjusted EBITDA excludes non-cash compensation expense, reduction in the
value of assets, foreign exchange (gains)/losses and certain other
non-recurring charges as applicable. Management uses Adjusted EBITDA in
order to manage the Company’s business and to compare its results more
closely to the results of its peers. EBITDA and Adjusted EBITDA do not
represent and should not be considered as alternatives to GAAP
measurements, such as net income/(loss). These terms, as defined by us,
may not be comparable to similarly titled measures used by other
companies.
The Company uses Adjusted EBITDA as a supplemental measurement of its
operating performance. The Company believes it best reflects changes
across time in the Company’s performance, including the effects of
pricing, cost control and other operational decisions. The Company’s
management uses Adjusted EBITDA for planning purposes, including the
preparation of its annual operating budget. The Company believes that
Adjusted EBITDA also is useful to investors because it is frequently
used by securities analysts, investors and other interested parties in
their evaluation of companies in similar industries. As indicated,
Adjusted EBITDA does not include interest expense on borrowed money or
depreciation expense on our capital assets or the payment of income
taxes, which are necessary elements of the Company’s operations. Because
Adjusted EBITDA does not account for these expenses, its utility as a
measure of the Company’s operating performance has material limitations.
Because of these limitations, the Company’s management does not view
Adjusted EBITDA in isolation and also uses other measurements, such as
revenue and operating profit, to measure operating performance.
GLOBALSTAR, INC. | |||||||||||||||||
SCHEDULE OF SELECTED OPERATING METRICS | |||||||||||||||||
(In thousands, except subscriber and ARPU data) |
|||||||||||||||||
(Unaudited) |
|||||||||||||||||
Three Months Ended | |||||||||||||||||
March 31, | |||||||||||||||||
2019 | 2018 | ||||||||||||||||
Service | Equipment | Service | Equipment | ||||||||||||||
Revenue | |||||||||||||||||
Duplex | $ | 8,645 | $ | 251 | $ | 8,783 | $ | 431 | |||||||||
SPOT | 13,095 | 1,591 | 12,962 | 1,474 | |||||||||||||
Commercial IoT | 3,698 | 2,072 | 3,089 | 833 | |||||||||||||
IGO | 166 | — | 209 | — | |||||||||||||
Other | 515 | 45 | 967 | 1 | |||||||||||||
$ | 26,119 | $ | 3,959 | $ | 26,010 | $ | 2,739 | ||||||||||
Average Subscribers | |||||||||||||||||
Duplex | 59,978 | 69,033 | |||||||||||||||
SPOT | 288,840 | 293,561 | |||||||||||||||
Commercial IoT | 384,673 | 332,813 | |||||||||||||||
IGO | 27,017 | 31,200 | |||||||||||||||
ARPU (1) | |||||||||||||||||
Duplex | $ | 48.05 | $ | 42.41 | |||||||||||||
SPOT | 15.11 | 14.72 | |||||||||||||||
Commercial IoT | 3.20 | 3.09 | |||||||||||||||
IGO | 2.05 | 2.23 | |||||||||||||||
(1) Average monthly revenue per user (ARPU) measures service revenues
per month divided by the average number of subscribers during that
month. Average monthly revenue per user as so defined may not be similar
to average monthly revenue per unit as defined by other companies in the
Company’s industry, is not a measurement under GAAP and should be
considered in addition to, but not as a substitute for, the information
contained in the Company’s statement of operations. The Company believes
that average monthly revenue per user provides useful information
concerning the appeal of its rate plans and service offerings and its
performance in attracting and retaining high value customers.
Contacts
Investor Contact Information:
Marcy O’Leary
[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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