SCHWAZZE
Schwazze Announces Fourth Quarter and Full Year 2023 Financial Results
FY 2023 Revenue of $172.4 Million; Income from Operations of $3.3 Million; Adjusted EBITDA of $53.4 Million or 31% of Revenue
Generated $12.2 Million of Operating Cash Flow in FY 2023
DENVER, March 27, 2024 /PRNewswire/ — Medicine Man Technologies, Inc., operating as Schwazze, (OTCQX: SHWZ) (Cboe: SHWZ) (“Schwazze” or the “Company”), today announced financial and operational results for the fourth quarter and full year ended December 31, 2023.
“This past year, the Schwazze team delivered solid top-line growth in two highly competitive markets with 31% adjusted EBITDA margins and improved operating cash flow,” said Forrest Hoffmaster, Interim CEO of Schwazze. “We continued to sharpen our retail strategy while expanding our store footprint by more than 50% to 63 dispensaries across our two markets. Although the Colorado and New Mexico markets were pressured in 2023, we have built a solid foundation with best-in-class service for our patients and customers. Internally, we are also relentlessly focused on maximizing the operating efficiencies of our manufacturing and cultivation facilities to drive higher yields, improved flower quality, and greater output.”
“With strong demand and over 680 recreational retail stores at year-end, the competitive landscape in Colorado is fierce, underscoring the importance of our investments in and attention to elevating the customer experience. We significantly outpaced the market in Q4 on a sequential and year-over-year basis and expect to bolster our growth through improvements in customer acquisition, retention, and loyalty, as well as in the overall retail experience. Additionally, we are beginning to see wholesale pricing stabilize, which we anticipate will continue based on plant counts and ongoing retail pricing pressure.”
“In New Mexico, the proliferation of new licenses has led to increased competition and aggressive pricing strategies from certain players. Cannabis sales in the state were up 18% across a store base that was over 50% higher year-over-year in Q4, leading to lower average revenue per store. While we are beginning to see a slow-down in net new store openings, we anticipate a challenging market ahead. We remain focused on cost optimization and asset utilization while implementing a balanced pricing and promotional strategy to drive traffic into our stores, where we believe we excel in delivering an elevated retail experience. We are committed to fulfilling our promise of being the retailer of choice in New Mexico.”
“Looking ahead, we are optimistic about the regulatory momentum in the industry at large. In the meantime, we will continue to elevate the customer experience, improve our loyalty program, increase our cost efficiencies, and enhance our retail assets. Our team has a demonstrated track record of executing in competitive markets like Colorado and New Mexico where we remain one of the largest operators. We look forward to driving growth and profitability across each of our markets in 2024.”
Fourth Quarter 2023 Financial Summary
|
$ in Thousands USD |
Q4 2023 |
Q3 2023 |
Q4 2022 |
|
Total Revenue |
$43,325 |
$46,747 |
$40,147 |
|
Gross Profit |
$7,034 |
$21,438 |
$21,719 |
|
Adjusted Gross Profit[1] |
$20,180 |
$21,438 |
$21,719 |
|
Operating Expenses |
$23,276 |
$12,514 |
$24,224 |
|
Income (Loss) from Operations |
$(16,242) |
$8,924 |
$(2,505) |
|
Adjusted EBITDA[2] |
$10,953 |
$14,119 |
$13,285 |
|
Operating Cash Flow |
$3,452 |
$6,946 |
$6,260 |
Full Year 2023 Financial Summary
|
$ in Thousands USD |
FY 2023 |
FY 2022 |
|
Total Revenue |
$172,448 |
$159,379 |
|
Gross Profit |
$76,024 |
$80,289 |
|
Adjusted Gross Profit1 |
$89,170 |
$86,830 |
|
Operating Expenses |
$72,735 |
$67,434 |
|
Income from Operations |
$3,289 |
$12,855 |
|
Adjusted EBITDA2 |
$53,412 |
$52,010 |
|
Operating Cash Flow |
$12,201 |
$6,694 |
|
___________________________ |
|
1 Adjusted Gross Profit is a non-GAAP measure as defined by the SEC and represents gross profit excluding non-cash inventory adjustments. The Company uses Adjusted Gross Profit as it believes it better explains the results of its core business. See “ADJUSTED GROSS PROFIT RECONCILIATION (NON-GAAP)” section herein for an explanation and reconciliations of non-GAAP measure used throughout this release. |
|
2 Adjusted EBITDA is a non-GAAP measure as defined by the SEC, and represents earnings before interest, taxes, depreciation, and amortization, adjusted for other income, non-cash share-based compensation, one-time transaction related expenses, or other non-operating costs. The Company uses Adjusted EBITDA as it believes it better explains the results of its core business. See “ADJUSTED EBITDA RECONCILIATION (NON-GAAP)” section herein for an explanation and reconciliations of non-GAAP measure used throughout this release. |
Full Year 2023 Operational Highlights
- Expanded the Company’s retail footprint by more than 50% in New Mexico and Colorado to 63 dispensaries.
- Completed the acquisition of Everest Apothecary, adding 14 dispensaries, one cultivation facility, and one manufacturing plant to the Company’s New Mexico operations.
- Acquired Standing Akimbo, the largest medical cannabis dispensary in Colorado, and opened the Company’s first medical dispensary in Colorado Springs under the Standing Akimbo banner.
- Acquired two Colorado retail dispensaries in Fort Collins and Garden City from Smokey’s.
- Unveiled an enhanced, custom ecommerce platform in New Mexico under the R. Greenleaf banner.
- Increased wholesale penetration in Colorado and New Mexico by over 3x year-over-year to more than 27% total door penetration in both states.
- Grew Lowell Farms pre-roll sales by over 250% in Colorado where it is now the #1 pre-roll in the state. In addition, Lowell is in six of the largest Colorado accounts and will be available for wholesale in New Mexico starting April 1st, 2024.
- Grew sales with Wana, our fan-favorite gummies brand, by 48% in New Mexico where it is now in 130 doors with eight of the top ten accounts in the state.
Fourth Quarter 2023 Financial Results
Total revenue in the fourth quarter of 2023 increased 8% to $43.3 million compared to $40.1 million for the same quarter last year. The increase was primarily due to growth from new stores compared to the prior year period and increased wholesale revenue, partially offset by pricing pressure from the proliferation of new licenses in New Mexico.
Gross profit for the fourth quarter of 2023 was $7.0 million or 16.2% of total revenue, compared to $21.7 million or 54.1% of total revenue for the same quarter last year. The decrease in gross margin was primarily driven by 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. Adjusted gross profit, which excludes non-cash inventory adjustments, for the fourth quarter of 2023 was $20.2 million or 46.6% of revenue.
Operating expenses for the fourth quarter of 2023 were $23.3 million compared to $24.2 million for the same quarter last year. The decrease was primarily due to a lower impairment charge in the fourth quarter of 2023. This was partially offset by an increase in four-wall SG&A expenses associated with the 22 additional stores in Colorado and New Mexico that are still ramping, as well as greater salaries and stock-based compensation.
Loss from operations for the fourth quarter of 2023 was $16.2 million compared to $2.5 million in the same quarter last year. The decrease was driven by the aforementioned lower gross profit, primarily related to the non-cash inventory adjustment. Net loss was $33.9 million for the fourth quarter of 2023 compared to $27.3 million for the same quarter last year.
Adjusted EBITDA for the fourth quarter of 2023 was $11.0 million or 25.3% of revenue, compared to $13.3 million or 33.1% of revenue for the same quarter last year. The decrease in Adjusted EBITDA margin was primarily driven by higher operating expenses associated with the 22 additional stores that are still ramping.
As of December 31, 2023, cash and cash equivalents were $19.2 million compared to $38.9 million on December 31, 2022. Total debt as of December 31, 2023, was $156.8 million compared to $127.8 million on December 31, 2022.
Conference Call
The Company will conduct a conference call today, March 27, 2024, at 5:00 p.m. Eastern time to discuss its results for the fourth quarter and full year ended December 31, 2023.
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, March 27, 2024
Time: 5:00 p.m. Eastern time
Toll-free dial-in: (888) 664-6383
International dial-in: (416) 764-8650
Conference ID: 38840334
Webcast: SHWZ Q4 & FY 2023 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: 840334
If you have any difficulty registering or connecting with the conference call, please contact Elevate IR at (720) 330-2829.
Schwazze (OTCQX: SHWZ) (Cboe: 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/.
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 STATEMENTS OF COMPREHENSIVE INCOME AND (LOSS)
For the Periods Ended December 31, 2023 and 2022
Expressed in U.S. Dollars
|
For the Three Months Ended |
For the Twelve Months Ended |
||||||||||
|
December 31, |
December 31, |
||||||||||
|
2023 |
2022 |
2023 |
2022 |
||||||||
|
(Unaudited) |
(Unaudited) |
(Audited) |
(Audited) |
||||||||
|
Operating Revenues |
|||||||||||
|
Retail |
$ |
39,592,779 |
$ |
36,868,429 |
$ |
155,463,816 |
$ |
141,254,893 |
|||
|
Wholesale |
3,730,749 |
3,158,670 |
16,765,425 |
17,819,938 |
|||||||
|
Other |
1,287 |
120,188 |
218,545 |
304,388 |
|||||||
|
Total Revenue |
43,324,815 |
40,147,287 |
172,447,786 |
159,379,219 |
|||||||
|
Total Cost of Goods & Services |
36,291,059 |
18,428,528 |
96,424,150 |
79,090,461 |
|||||||
|
Gross Profit |
7,033,756 |
21,718,759 |
76,023,636 |
80,288,758 |
|||||||
|
Operating Expenses |
|||||||||||
|
Selling, General and Administrative Expenses |
10,848,029 |
8,922,627 |
39,916,518 |
29,036,962 |
|||||||
|
Professional Services |
1,115,457 |
1,112,975 |
3,558,501 |
6,722,554 |
|||||||
|
Loss on Impairment |
1,810,890 |
8,011,405 |
1,801,740 |
8,011,405 |
|||||||
|
Salaries |
6,561,800 |
5,292,996 |
23,883,354 |
20,990,290 |
|||||||
|
Stock Based Compensation |
2,952,669 |
883,890 |
3,574,831 |
2,672,713 |
|||||||
|
Total Operating Expenses |
23,288,845 |
24,223,893 |
72,734,944 |
67,433,924 |
|||||||
|
Income from Operations |
(16,255,089) |
(2,505,134) |
3,288,692 |
12,854,834 |
|||||||
|
Other Income (Expense) |
|||||||||||
|
Interest Expense, net |
(8,112,391) |
(6,827,557) |
(32,069,082) |
(30,139,645) |
|||||||
|
Unrealized Gain (Loss) on Derivative Liabilities |
1,384,228 |
(9,690,200) |
15,870,233 |
18,414,760 |
|||||||
|
Other Loss |
68,400 |
3,736 |
68,400 |
24,136 |
|||||||
|
Loss on Business Disposition |
(1,968,807) |
(4,684,366) |
(1,968,807) |
(4,684,366) |
|||||||
|
Unrealized Gain (Loss) on Investments |
– |
3,083 |
1,816 |
(39,270) |
|||||||
|
Total Other Income (Expense) |
(8,628,570) |
(21,195,304) |
(18,097,441) |
(16,424,385) |
|||||||
|
Pre-Tax Net Income (Loss) |
(24,883,659) |
(23,700,438) |
(14,808,749) |
(3,569,551) |
|||||||
|
Provision for Income Taxes |
4,494,049 |
3,638,695 |
19,740,595 |
14,898,064 |
|||||||
|
Net Income (Loss) |
$ |
(29,377,708) |
$ |
(27,339,133) |
$ |
(34,549,344) |
$ |
(18,467,615) |
|||
|
Less: Accumulated Preferred Stock Dividends for the Period |
(1,541,341) |
(2,508,677) |
(8,154,993) |
(7,802,809) |
|||||||
|
Net Income (Loss) Attributable to Common Stockholders |
$ |
(30,919,049) |
$ |
(29,847,810) |
$ |
(42,704,337) |
$ |
(26,270,424) |
|||
|
Earnings (Loss) per Share Attributable to Common Stockholders |
|||||||||||
|
Basic Earnings (Loss) per Share |
$ |
(0.43) |
$ |
(0.57) |
$ |
(0.66) |
$ |
(0.49) |
|||
|
Diluted Earnings (Loss) per Share |
$ |
(0.43) |
$ |
(0.57) |
$ |
(0.66) |
$ |
(0.49) |
|||
|
Weighted Average Number of Shares Outstanding – Basic |
71,680,200 |
53,637,003 |
64,535,245 |
53,637,003 |
|||||||
|
Weighted Average Number of Shares Outstanding – Diluted |
71,680,200 |
53,637,003 |
64,535,245 |
53,637,003 |
|||||||
|
Comprehensive Income (Loss) |
$ |
(29,377,708) |
$ |
(27,339,133) |
$ |
(34,549,344) |
$ |
(18,467,615) |
|||
MEDICINE MAN TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Periods Ended December 31, 2023 and 2022
Expressed in U.S. Dollars
|
For the Twelve Months Ended |
||||||
|
December 31, |
||||||
|
2023 |
2022 |
|||||
|
(Audited) |
(Audited) |
|||||
|
Cash Flows from Operating Activities: |
||||||
|
Net Income (Loss) for the Period |
$ |
(34,549,344) |
$ |
(18,467,615) |
||
|
Adjustments to Reconcile Net Income (Loss) to Cash for Operating Activities |
||||||
|
Depreciation & Amortization |
20,933,541 |
10,660,172 |
||||
|
Non-Cash Interest Expense |
4,024,604 |
4,118,391 |
||||
|
Impairment of Goodwill |
1,801,740 |
8,011,405 |
||||
|
Non-Cash Lease Expense |
7,648,531 |
3,910,679 |
||||
|
Deferred Taxes |
(2,090,967) |
502,070 |
||||
|
Loss on Disposition of Business Units |
1,968,807 |
4,684,369 |
||||
|
Change in Derivative Liabilities |
(15,870,233) |
(18,414,760) |
||||
|
Amortization of Debt Issuance Costs |
1,686,049 |
1,686,048 |
||||
|
Amortization of Debt Discount |
8,523,493 |
7,484,613 |
||||
|
(Gain) Loss on Investments, net |
(1,816) |
39,270 |
||||
|
Stock Based Compensation |
3,590,473 |
812,073 |
||||
|
Changes in Operating Assets & Liabilities (net of Acquired Amounts): |
||||||
|
Accounts Receivable |
927,259 |
(105,185) |
||||
|
Inventory |
4,571,069 |
789,399 |
||||
|
Prepaid Expenses & Other Current Assets |
1,579,349 |
(2,770,179) |
||||
|
Other Assets |
263,419 |
(248,682) |
||||
|
Change in Operating Lease Liabilities |
(7,498,128) |
(13,113,041) |
||||
|
Accounts Payable & Other Liabilities |
(3,241,850) |
11,845,245 |
||||
|
Income Taxes Payable |
17,934,967 |
5,270,074 |
||||
|
Net Cash Provided by (Used in) Operating Activities |
12,200,963 |
6,694,346 |
||||
|
Cash Flows from Investing Activities: |
||||||
|
Collection of Notes Receivable |
11,944 |
– |
||||
|
Cash Consideration for Acquisition of Business, net of Cash Acquired |
(15,834,378) |
(58,981,226) |
||||
|
Purchase of Fixed Assets |
(7,865,654) |
(14,007,892) |
||||
|
Purchase of Intangible Assets |
(2,750,000) |
– |
||||
|
Investment in Private Entity |
– |
(2,000,000) |
||||
|
Net Cash Provided by (Used in) Investing Activities |
(26,438,088) |
(74,989,118) |
||||
|
Cash Flows from Financing Activities: |
||||||
|
Payment on Notes Payable |
(5,354,218) |
(134,498) |
||||
|
Proceeds from Issuance of Common Stock |
– |
978,308 |
||||
|
Payment for Statutory Withholdings on RSU |
(108,978) |
– |
||||
|
Net Cash Provided by (Used in) Financing Activities |
(5,463,196) |
843,810 |
||||
|
Net (Decrease) in Cash & Cash Equivalents |
(19,700,321) |
(67,450,962) |
||||
|
Cash & Cash Equivalents at Beginning of Period |
38,949,253 |
106,400,216 |
||||
|
Cash & Cash Equivalents at End of Period |
$ |
19,248,932 |
$ |
38,949,253 |
||
|
Supplemental Disclosure of Cash Flow Information: |
||||||
|
Cash Paid for Interest |
$ |
17,896,954 |
$ |
15,243,990 |
||
|
Cash Paid for Income Taxes |
5,000,000 |
12,340,000 |
||||
MEDICINE MAN TECHNOLOGIES, INC.
ADJUSTED EBITDA RECONCILIATION (NON-GAAP)
For the Periods Ended December 31, 2023 and 2022
Expressed in U.S. Dollars
|
For the Three Months Ended |
For the Twelve Months Ended |
||||||||||
|
December 31, |
December 31, |
||||||||||
|
2023 |
2022 |
2023 |
2022 |
||||||||
|
Net Income (Loss) |
$ |
(29,364,680) |
$ |
(27,339,133) |
$ |
(34,549,344) |
$ |
(18,467,615) |
|||
|
Interest Expense, net |
8,112,391 |
6,827,557 |
32,069,082 |
30,139,645 |
|||||||
|
Provision for Income Taxes |
4,494,049 |
3,638,695 |
19,740,595 |
14,898,064 |
|||||||
|
Other (Income) Expense, net of Interest Expense |
516,180 |
14,367,747 |
(13,971,641) |
(13,715,260) |
|||||||
|
Depreciation & Amortization |
3,162,425 |
3,701,128 |
18,970,960 |
12,524,677 |
|||||||
|
Earnings Before Interest, Taxes, Depreciation and |
|||||||||||
|
Amortization (EBITDA) (non-GAAP) |
$ |
(13,079,635) |
$ |
1,195,994 |
$ |
22,259,652 |
$ |
25,379,511 |
|||
|
Non-Cash Stock Compensation |
1,597,157 |
883,890 |
2,219,319 |
2,672,713 |
|||||||
|
Deal Related Expenses |
2,196,733 |
1,914,820 |
5,528,048 |
6,822,111 |
|||||||
|
Capital Raise Related Expenses |
1,779 |
(257,271) |
38,559 |
533,958 |
|||||||
|
Inventory Adjustment to Fair Market Value for |
|||||||||||
|
Purchase Accounting |
5,792,488 |
– |
5,792,488 |
6,541,651 |
|||||||
|
One-Time Inventory Impairment |
7,353,972 |
– |
7,353,972 |
– |
|||||||
|
One-Time Goodwill Impairment |
1,801,740 |
8,011,405 |
1,801,740 |
8,011,405 |
|||||||
|
Severance |
111,752 |
263,374 |
537,584 |
334,910 |
|||||||
|
Retention Program Expenses |
– |
– |
505,655 |
– |
|||||||
|
Employee Relocation Expenses |
5,065 |
(3,750) |
70,107 |
15,360 |
|||||||
|
Pre-Operating & Dark Carry Expenses |
2,663,824 |
1,027,738 |
2,663,824 |
1,027,738 |
|||||||
|
One-Time Legal Settlements |
1,204,058 |
440,000 |
1,204,058 |
440,000 |
|||||||
|
Other Non-Recurring Items |
1,304,501 |
(191,674) |
3,436,773 |
230,858 |
|||||||
|
Adjusted EBITDA (non-GAAP) |
$ |
10,953,434 |
$ |
13,284,526 |
$ |
53,411,779 |
$ |
52,010,215 |
|||
|
Revenue |
43,324,815 |
40,147,287 |
172,447,786 |
159,379,219 |
|||||||
|
Adjusted EBITDA Percent |
25.3 % |
33.1 % |
31.0 % |
32.6 % |
|||||||
View original content:https://www.prnewswire.co.uk/news-releases/schwazze-announces-fourth-quarter-and-full-year-2023-financial-results-302101678.html
SCHWAZZE
Schwazze Sets Fourth Quarter and Full Year 2023 Conference Call for March 27, 2024 at 5:00 p.m. ET
DENVER, March 12, 2024 /PRNewswire/ — Medicine Man Technologies, Inc., operating as Schwazze, (OTCQX: SHWZ) (Cboe: SHWZ) (“Schwazze” or the “Company”), will host a conference call on Wednesday, March 27, 2024 at 5:00 p.m. Eastern time to discuss its financial and operational results for the fourth quarter and full year ended December 31, 2023. The Company’s results will be reported in a press release prior to the call.
The Schwazze management team 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, March 27, 2024
Time: 5:00 p.m. Eastern time
Toll-free dial-in: (888) 664-6383
International dial-in: (416) 764-8650
Conference ID: 38840334
Webcast: SHWZ Q4 & FY 2023 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: 840334
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: SHWZ) is building a premier vertically integrated regional cannabis company with assets in Colorado and New Mexico and will continue to take 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 http://www.schwazze.com/.
Investor Relations Contact
Sean Mansouri, CFA or Aaron D’Souza
Elevate IR
(720) 330-2829
[email protected]
View original content:https://www.prnewswire.co.uk/news-releases/schwazze-sets-fourth-quarter-and-full-year-2023-conference-call-for-march-27-2024-at-500-pm-et-302087204.html
DENVER, Feb. 23, 2024 /PRNewswire/ — Medicine Man Technologies, Inc., operating as Schwazze, (OTCQX: SHWZ) (NEO: SHWZ) (“Schwazze” or the “Company”), today announced that Forrest Hoffmaster, the Company’s Chief Financial Officer, has been appointed to the additional role of interim Chief Executive Officer (“CEO”). This follows Nirup Krishnamurthy’s resignation as CEO and as a member of the Board of Directors (“Board”), effective February 20, 2024, due to personal reasons.
Mr. Hoffmaster, who joined the Company in January 2023, brings over 30 years of executive experience in finance and operations for both public and private companies. Prior to Schwazze, Mr. Hoffmaster served as CEO of New Seasons Market, a specialty gourmet food retailer, where he navigated the company through one of the most disruptive periods in the retail grocery industry. Under his leadership, Mr. Hoffmaster implemented a focused growth and cost optimization program, enabling the company to grow EBITDA by over 30% in two years. Prior to New Seasons Market, Forrest held leadership positions with other leading grocers including Whole Foods Market and H-E-B.
“Forrest is well-positioned to seamlessly step in and lead the Company’s day-to-day operations as we conduct our search for a permanent successor,” said Justin Dye, Chairman of the Board. “With Forrest’s proven track record and deep retail expertise, we plan to continue leveraging our operating playbook to drive strong Adjusted EBITDA margins and consistent cash flow generation. On behalf of the Board, I’d like to wish Nirup the best in his future endeavors.”
Schwazze (OTCQX: SHWZ) (NEO: SHWZ) is building a premier vertically integrated regional cannabis company with assets in Colorado and New Mexico and will continue to take 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/.
This press release contains “forward-looking statements.” 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. 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]
View original content:https://www.prnewswire.co.uk/news-releases/schwazze-appoints-forrest-hoffmaster-as-interim-chief-executive-officer-302069402.html
Q3 Revenue of $46.7 Million; Income from Operations of $8.9 Million; Adjusted EBITDA of $14.1 Million or 30% of Revenue
Generated $6.9 Million of Operating Cash Flow
DENVER, Nov. 14, 2023 /PRNewswire/ — Medicine Man Technologies, Inc., operating as Schwazze, (OTCQX: SHWZ) (NEO: SHWZ) (“Schwazze” or the “Company”), today announced financial and operational results for the third quarter ended September 30, 2023.
Third Quarter 2023 Summary
|
For the Three Months Ended |
|||
|
$ in Thousands USD |
September 30, |
June 30, |
September 30, |
|
Total Revenue |
$46,747 |
$42,375 |
$43,191 |
|
Gross Profit |
$21,438 |
$24,519 |
$22,476 |
|
Operating Expenses |
$12,514 |
$19,562 |
$11,361 |
|
Income from Operations |
$8,924 |
$4,957 |
$11,115 |
|
Adjusted EBITDA[1] |
$14,119 |
$13,814 |
$15,860 |
|
Operating Cash Flow |
$6,946 |
$2,683 |
$10,298 |
Management Commentary
“We continued to increase our retail footprint during the quarter to a total of 63 stores in Colorado and New Mexico, while further integrating our recently-acquired assets in both states,” said Nirup Krishnamurthy, CEO of Schwazze. “We also generated a 41% increase in our wholesale business year-over-year as we are gaining momentum in New Mexico and improved penetration in Colorado. When looking at wholesale penetration, Schwazze now sells into 7 of the 10 largest operators in Colorado and New Mexico with its expanding product portfolio.
|
_____________________________ |
|
1 Adjusted EBITDA is a non-GAAP measure as defined by the SEC, and represents earnings before interest, taxes, depreciation, and amortization, adjusted for other income, non-cash share-based compensation, one-time transaction related expenses, or other non-operating costs. The Company uses Adjusted EBITDA as it believes it better explains the results of its core business. See “ADJUSTED EBITDA RECONCILIATION (NON-GAAP)” section herein for an explanation and reconciliations of non-GAAP measure used throughout this release. |
“In Colorado, we have increased efforts to expand our reach to medical patients through the Standing Akimbo banner with new presence in Colorado Springs and Fort Collins. We also opened a new Starbuds store in Lakewood in August and are seeing promising early results. Alongside new store openings, we are currently remodeling and/or relocating certain stores to further enhance the customer experience.
“In New Mexico, cannabis operators are navigating increased competition as a result of new licenses. While legal cannabis sales in the state were up 19% year-over-year in Q3, total store count was up 76%, leading to lower revenue on a per store basis. In response to these market dynamics, we are strategically investing in the retail experience and remain committed to attracting and retaining our customers and patients there. Our strategy is to first, further integrate the Everest assets while refining assortment, in-stock position and standard costs from a combined integrated supply chain. Second, invest in our leading retail position by bringing new products to our shelves while sharpening pricing and promotional efforts. Third, support the state as it implements cannabis regulation and enforcement to heighten testing and safety standards. And finally, continue to expand our wholesale business in the state.
“As we look to 2024, our strategy remains unchanged: leverage our operating playbook and further integrate our acquired assets to drive customer acquisition and sales across our expanded footprint. We will continue to evaluate opportunities that can enhance our geographic footprint and brand portfolio.”
Recent Highlights
- Launched Colorado’s first “store-within-a-store” concept, combining a Star Buds recreational dispensary with the Standing Akimbo medical banner.
- Announced the grand opening of a medical and recreational dispensary under the R. Greenleaf banner in Hobbs, NM, increasing the Company’s New Mexico retail footprint to 33 stores.
- Third quarter ecommerce transactions in New Mexico and Colorado increased a collective 28% compared to the second quarter of 2023.
- Third quarter customer loyalty members increased 16% compared to the second quarter of 2023 with New Mexico loyalty member penetration growing to 78% of total customers.
- Lowell Farms premium pre-roll brand, licensed by the Company, is now in over 130 doors and the #2 pre-roll in Colorado.
Third Quarter 2023 Financial Results
Total revenue in the third quarter of 2023 increased 8% to $46.7 million compared to $43.2 million for the same quarter last year. The increase was primarily due to growth from new stores compared to the prior year period and increased wholesale revenue, partially offset by pricing pressure from the proliferation of new licenses in New Mexico.
Gross profit for the third quarter of 2023 was $21.4 million or 45.9% of total revenue, compared to $22.5 million or 52.0% of total revenue for the same quarter last year. The decrease in gross margin was primarily driven by a year-to-date true-up expense reclassification from SG&A into cost of goods sold, as well as increased lower margin medical sales mix in Colorado and lower initial gross margin from the Company’s acquisition of Everest Apothecary’s inventory. This was partially offset by improvements to product mix across the Company’s retail footprint.
Operating expenses for the third quarter of 2023 were $12.5 million compared to $11.4 million for the same quarter last year. The increase was primarily due to four-wall SG&A increases associated with 28 additional stores in Colorado and New Mexico that are still ramping.
Income from operations for the third quarter of 2023 was $8.9 million compared to $11.1 million in the same quarter last year. Net loss was $0.3 million compared to net income of $1.8 million for the third quarter of 2022.
Adjusted EBITDA for the third quarter of 2023 was $14.1 million or 30.2% of revenue, compared to $15.9 million or 36.7% of revenue for the same quarter last year. The decrease in Adjusted EBITDA margin was primarily driven by lower gross margin and the higher four-wall SG&A associated with new stores that are still ramping.
As of September 30, 2023, cash and cash equivalents were $19.6 million compared to $38.9 million on December 31, 2022, while operating working capital decreased by $3.5 million to $0.6 million during this period. Total debt as of September 30, 2023, was $155.1 million compared to $127.8 million on December 31, 2022.
Schwazze CFO Forrest Hoffmaster added, “As we focus on revenue growth, customer acquisition and generating positive cash flow, we are also making steady progress on integrating our recent acquisitions to drive operational efficiencies and cost synergies at scale. In addition, we are in the process of optimizing our inventory through an ERP implementation across our cultivation and manufacturing facilities, which we expect will lead to one-time inventory valuation adjustments as we close out the year. These initiatives will enable us to recognize further improvements across our business as we continue to deepen our presence in the markets we serve.”
Conference Call
The Company will conduct a conference call today, November 14, 2023, at 5:00 p.m. Eastern time to discuss its results for the third quarter ended September 30, 2023.
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: Tuesday, November 14, 2023
Time: 5:00 p.m. Eastern time
Toll-free dial-in: (888) 664-6383
International dial-in: (416) 764-8650
Conference ID: 64450430
Webcast: SHWZ Q3 2023 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: 450430
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) (NEO: SHWZ) is building a premier vertically integrated regional cannabis company with assets in Colorado and New Mexico and will continue to take 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.” 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. 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.
|
MEDICINE MAN TECHNOLOGIES, INC. |
|||||
|
Expressed in U.S. Dollars |
|||||
|
September 30, |
December 31, |
||||
|
2023 |
2022 |
||||
|
(Unaudited) |
(Audited) |
||||
|
ASSETS |
|||||
|
Current Assets |
|||||
|
Cash & Cash Equivalents |
$ |
19,624,615 |
$ |
38,949,253 |
|
|
Accounts Receivable, net of Allowance for Doubtful Accounts |
5,049,869 |
4,471,978 |
|||
|
Inventory |
32,767,841 |
22,554,182 |
|||
|
Notes Receivable – Current, net |
– |
11,944 |
|||
|
Marketable Securities, net of Unrealized Loss of $1,816 and Loss of $39,270, respectively |
456,099 |
454,283 |
|||
|
Prepaid Expenses & Other Current Assets |
6,485,896 |
5,293,393 |
|||
|
Total Current Assets |
64,384,320 |
71,735,033 |
|||
|
Non-Current Assets |
|||||
|
Fixed Assets, net Accumulated Depreciation of $8,065,794 and $4,899,977, respectively |
32,139,192 |
27,089,026 |
|||
|
Investments |
2,000,000 |
2,000,000 |
|||
|
Goodwill |
76,578,654 |
94,605,301 |
|||
|
Intangible Assets, net Accumulated Amortization of $28,828,713 and $16,290,862, respectively |
168,822,669 |
107,726,718 |
|||
|
Note Receivable – Non-Current, net |
1,313 |
– |
|||
|
Deferred Tax Assets, net |
50,467 |
– |
|||
|
Other Non-Current Assets |
1,298,950 |
1,527,256 |
|||
|
Operating Lease Right of Use Assets |
25,315,122 |
18,199,399 |
|||
|
Total Non-Current Assets |
306,206,367 |
251,147,700 |
|||
|
Total Assets |
$ |
370,590,687 |
$ |
322,882,733 |
|
|
LIABILITIES & STOCKHOLDERS’ EQUITY |
|||||
|
Current Liabilities |
|||||
|
Accounts Payable |
$ |
11,665,499 |
$ |
10,701,281 |
|
|
Accounts Payable – Related Party |
22,073 |
22,380 |
|||
|
Accrued Expenses |
9,430,875 |
7,462,290 |
|||
|
Derivative Liabilities |
2,022,248 |
16,508,253 |
|||
|
Lease Liabilities – Current |
4,721,713 |
3,139,289 |
|||
|
Current Portion of Long Term Debt |
4,250,000 |
2,250,000 |
|||
|
Income Taxes Payable |
18,283,784 |
7,297,815 |
|||
|
Total Current Liabilities |
50,396,192 |
47,381,308 |
|||
|
Non-Current Liabilities |
|||||
|
Long Term Debt, net of Debt Discount & Issuance Costs |
150,878,200 |
125,521,520 |
|||
|
Lease Liabilities – Non-Current |
23,525,633 |
17,314,464 |
|||
|
Deferred Income Taxes, net |
– |
502,070 |
|||
|
Total Non-Current Liabilities |
174,403,833 |
143,338,054 |
|||
|
Total Liabilities |
$ |
224,800,025 |
$ |
190,719,362 |
|
|
Stockholders’ Equity |
|||||
|
Preferred Stock, $0.001 Par Value. 10,000,000 Shares Authorized; 86,494 Shares Issued and |
|||||
|
86,994 Shares Outstanding as of September 30, 2023 and 86,994 Shares Issued and 86,994 Shares |
|||||
|
Outstanding as of December 31, 2022. |
87 |
87 |
|||
|
Common Stock, $0.001 Par Value. 250,000,000 Shares Authorized; 72,607,621 Shares Issued |
|||||
|
and 72,591,605 Shares Outstanding as of September 30, 2023 and 56,352,545 Shares Issued |
|||||
|
and 55,212,547 Shares Outstanding as of December 31, 2022. |
72,607 |
56,353 |
|||
|
Additional Paid-In Capital |
199,177,342 |
180,381,641 |
|||
|
Accumulated Deficit |
(51,426,247) |
(46,241,583) |
|||
|
Common Stock Held in Treasury, at Cost, 920,150 Shares Held as of September 30, 2023 and |
|||||
|
920,150 Shares Held as of December 31, 2022. |
(2,033,127) |
(2,033,127) |
|||
|
Total Stockholders’ Equity |
145,790,662 |
132,163,371 |
|||
|
Total Liabilities & Stockholders’ Equity |
$ |
370,590,687 |
$ |
322,882,733 |
|
|
MEDICINE MAN TECHNOLOGIES, INC. |
|||||||||||
|
For the Three Months Ended |
For the Nine Months Ended |
||||||||||
|
September 30, |
September 30, |
||||||||||
|
2023 |
2022 |
2023 |
2022 |
||||||||
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
||||||||
|
Operating Revenues |
|||||||||||
|
Retail |
$ |
41,951,969 |
$ |
39,759,734 |
$ |
115,871,037 |
$ |
104,386,464 |
|||
|
Wholesale |
4,701,268 |
3,335,252 |
13,034,676 |
14,661,268 |
|||||||
|
Other |
93,698 |
96,000 |
217,258 |
184,200 |
|||||||
|
Total Revenue |
46,746,935 |
43,190,986 |
129,122,971 |
119,231,932 |
|||||||
|
Total Cost of Goods & Services |
25,308,972 |
20,715,192 |
60,133,091 |
60,661,933 |
|||||||
|
Gross Profit |
21,437,963 |
22,475,794 |
68,989,880 |
58,569,999 |
|||||||
|
Operating Expenses |
|||||||||||
|
Selling, General and Administrative Expenses |
9,639,268 |
6,594,311 |
28,693,517 |
20,114,335 |
|||||||
|
Professional Services |
767,822 |
1,507,149 |
2,443,046 |
5,609,579 |
|||||||
|
Salaries |
4,545,439 |
3,159,578 |
17,700,403 |
15,697,294 |
|||||||
|
Stock Based Compensation |
(2,438,073) |
99,898 |
622,162 |
1,788,823 |
|||||||
|
Total Operating Expenses |
12,514,456 |
11,360,936 |
49,459,128 |
43,210,031 |
|||||||
|
Income from Operations |
8,923,507 |
11,114,858 |
19,530,752 |
15,359,968 |
|||||||
|
Other Income (Expense) |
|||||||||||
|
Interest Expense, net |
(8,320,397) |
(8,500,235) |
(23,956,691) |
(23,312,088) |
|||||||
|
Unrealized Gain (Loss) on Derivative Liabilities |
4,516,237 |
4,816,668 |
14,486,005 |
28,104,960 |
|||||||
|
Other Loss |
– |
– |
– |
20,400 |
|||||||
|
Unrealized Gain (Loss) on Investments |
– |
(28,541) |
1,816 |
(42,353) |
|||||||
|
Total Other Income (Expense) |
(3,804,160) |
(3,712,108) |
(9,468,870) |
4,770,919 |
|||||||
|
Pre-Tax Net Income (Loss) |
5,119,347 |
7,402,750 |
10,061,882 |
20,130,887 |
|||||||
|
Provision for Income Taxes |
5,441,809 |
5,593,513 |
15,246,546 |
11,259,369 |
|||||||
|
Net Income (Loss) |
$ |
(322,462) |
$ |
1,809,237 |
$ |
(5,184,664) |
$ |
8,871,518 |
|||
|
Less: Accumulated Preferred Stock Dividends for the Period |
(1,547,369) |
(1,784,113) |
(5,930,646) |
(5,294,132) |
|||||||
|
Net Income (Loss) Attributable to Common Stockholders |
$ |
(1,869,831) |
$ |
25,124 |
$ |
(11,115,310) |
$ |
3,577,386 |
|||
|
Earnings (Loss) per Share Attributable to Common Stockholders |
|||||||||||
|
Basic Earnings (Loss) per Share |
$ |
(0.02) |
$ |
– |
$ |
(0.14) |
$ |
0.07 |
|||
|
Diluted Earnings (Loss) per Share |
$ |
(0.03) |
$ |
– |
$ |
(0.14) |
$ |
0.03 |
|||
|
Weighted Average Number of Shares Outstanding – Basic |
87,202,537 |
51,232,943 |
78,635,841 |
50,615,437 |
|||||||
|
Weighted Average Number of Shares Outstanding – Diluted |
87,202,537 |
137,954,532 |
78,635,841 |
137,337,027 |
|||||||
|
Comprehensive Income (Loss) |
$ |
(322,462) |
$ |
1,809,237 |
$ |
(5,184,664) |
$ |
8,871,518 |
|||
|
MEDICINE MAN TECHNOLOGIES, INC. |
|||||
|
For the Nine Months Ended |
|||||
|
September 30, |
|||||
|
2023 |
2022 |
||||
|
(Unaudited) |
(Unaudited) |
||||
|
Cash Flows from Operating Activities: |
|||||
|
Net Income (Loss) for the Period |
$ |
(5,184,664) |
$ |
8,871,518 |
|
|
Adjustments to Reconcile Net Income (Loss) to Cash for Operating Activities |
|||||
|
Depreciation & Amortization |
15,703,668 |
8,329,767 |
|||
|
Non-Cash Interest Expense |
3,003,386 |
3,137,021 |
|||
|
Non-Cash Lease Expense |
5,756,492 |
3,910,679 |
|||
|
Deferred Taxes |
(552,537) |
– |
|||
|
Change in Derivative Liabilities |
(14,486,005) |
(28,104,960) |
|||
|
Amortization of Debt Issuance Costs |
1,264,537 |
1,264,538 |
|||
|
Amortization of Debt Discount |
6,269,584 |
5,505,420 |
|||
|
(Gain) Loss on Investments, net |
(1,816) |
42,353 |
|||
|
Stock Based Compensation |
835,347 |
811,897 |
|||
|
Changes in Operating Assets & Liabilities (net of Acquired Amounts): |
|||||
|
Accounts Receivable |
206,179 |
(1,100,055) |
|||
|
Inventory |
(4,883,659) |
2,898,959 |
|||
|
Prepaid Expenses & Other Current Assets |
(1,192,503) |
(3,377,844) |
|||
|
Other Assets |
228,306 |
(179,072) |
|||
|
Change in Operating Lease Liabilities |
(5,078,622) |
(11,938,634) |
|||
|
Accounts Payable & Other Liabilities |
(4,124,458) |
8,802,231 |
|||
|
Income Taxes Payable |
10,985,969 |
1,560,630 |
|||
|
Net Cash Provided by (Used in) Operating Activities |
8,749,202 |
434,448 |
|||
|
Cash Flows from Investing Activities: |
|||||
|
Collection of Notes Receivable |
10,631 |
– |
|||
|
Cash Consideration for Acquisition of Business, net of Cash Acquired |
(15,813,028) |
(56,875,923) |
|||
|
Purchase of Fixed Assets |
(6,766,759) |
(12,511,389) |
|||
|
Purchase of Intangible Assets |
(2,700,000) |
(2,825) |
|||
|
Net Cash Provided by (Used in) Investing Activities |
(25,269,156) |
(69,390,137) |
|||
|
Cash Flows from Financing Activities: |
|||||
|
Payment on Notes Payable |
(3,488,302) |
– |
|||
|
Proceeds from Issuance of Common Stock, net of Issuance Costs |
683,618 |
1,280,660 |
|||
|
Net Cash Provided by (Used in) Financing Activities |
(2,804,684) |
1,280,660 |
|||
|
Net (Decrease) in Cash & Cash Equivalents |
(19,324,638) |
(67,675,029) |
|||
|
Cash & Cash Equivalents at Beginning of Period |
38,949,253 |
106,400,216 |
|||
|
Cash & Cash Equivalents at End of Period |
$ |
19,624,615 |
$ |
38,725,187 |
|
|
Supplemental Disclosure of Cash Flow Information: |
|||||
|
Cash Paid for Interest |
$ |
13,271,618 |
$ |
13,239,685 |
|
|
Cash Paid for Income Taxes |
5,000,000 |
9,840,000 |
|||
|
MEDICINE MAN TECHNOLOGIES, INC. |
|||||||||||
|
For the Three Months Ended |
For the Nine Months Ended |
||||||||||
|
September 30, |
September 30, |
||||||||||
|
2023 |
2022 |
2023 |
2022 |
||||||||
|
Net Income (Loss) |
$ |
(322,462) |
$ |
1,809,237 |
$ |
(5,184,664) |
$ |
8,871,518 |
|||
|
Interest Expense, net |
8,320,397 |
8,500,235 |
23,956,691 |
23,312,088 |
|||||||
|
Provision for Income Taxes |
5,441,809 |
5,593,513 |
15,246,546 |
11,259,369 |
|||||||
|
Other (Income) Expense, net of Interest Expense |
(4,516,237) |
(4,788,127) |
(14,487,821) |
(28,083,007) |
|||||||
|
Depreciation & Amortization |
5,330,529 |
3,322,150 |
15,808,535 |
8,823,549 |
|||||||
|
Earnings Before Interest, Taxes, Depreciation and |
|||||||||||
|
Amortization (EBITDA) (non-GAAP) |
$ |
14,254,036 |
$ |
14,437,008 |
$ |
35,339,287 |
$ |
24,183,517 |
|||
|
Non-Cash Stock Compensation |
(2,438,073) |
99,898 |
622,162 |
1,788,823 |
|||||||
|
Deal Related Expenses |
1,401,795 |
993,828 |
3,331,315 |
4,907,291 |
|||||||
|
Capital Raise Related Expenses |
1,712 |
185,597 |
36,780 |
791,229 |
|||||||
|
Inventory Adjustment to Fair Market Value for |
|||||||||||
|
Purchase Accounting |
– |
34,604 |
– |
6,541,651 |
|||||||
|
Severance |
121,715 |
22,434 |
425,832 |
71,536 |
|||||||
|
Retention Program Expenses |
110,023 |
– |
505,655 |
– |
|||||||
|
Employee Relocation Expenses |
12,867 |
– |
65,042 |
19,110 |
|||||||
|
Other Non-Recurring Items |
655,244 |
87,097 |
2,132,272 |
422,532 |
|||||||
|
Adjusted EBITDA (non-GAAP) |
$ |
14,119,319 |
$ |
15,860,466 |
$ |
42,458,345 |
$ |
38,725,689 |
|||
|
Revenue |
46,746,935 |
43,190,986 |
129,122,971 |
119,231,932 |
|||||||
|
Adjusted EBITDA Percent |
30.2 % |
36.7 % |
32.9 % |
32.5 % |
|||||||
|
MEDICINE MAN TECHNOLOGIES, INC. |
|||||
|
September 30, |
December 31, |
||||
|
2023 |
2022 |
||||
|
Current Assets |
$ |
64,384,320 |
$ |
71,735,033 |
|
|
Less: Cash & Cash Equivalents |
(19,624,615) |
(38,949,253) |
|||
|
Adjusted Current Assets (non-GAAP) |
44,759,705 |
32,785,780 |
|||
|
Current Liabilities |
$ |
50,396,192 |
$ |
47,381,308 |
|
|
Less: Derivative Liabilities |
(2,022,248) |
(16,508,253) |
|||
|
Less: Current Portion of Long Term Debt |
(4,250,000) |
(2,250,000) |
|||
|
Adjusted Current Liabilities (non-GAAP) |
44,123,944 |
28,623,055 |
|||
|
Operating Working Capital (non-GAAP) |
$ |
635,761 |
$ |
4,162,725 |
|
Investor Relations Contact, Sean Mansouri, CFA or Aaron D’Souza, Elevate IR, (720) 330-2829, ir@schwazze.com
View original content:https://www.prnewswire.co.uk/news-releases/schwazze-announces-third-quarter-2023-financial-results-301988067.html
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