MedMen Reports First Quarter 2021 Financial Outcomes
- Very first quarter earnings of $35.6 million, up 31% from the previous quarter
- Gross margin enhanced from 40% to 47% sequentially and retail gross margin enhanced from 49% to 54% sequentially
- Lowered overall SG&An expenditures by 21% sequentially and business SG&A by 29% sequentially
- Safe funding dedications of over $20 million throughout the quarter
- Called Tracy McCourt, previously in a senior management function at Zappos, as Chief Earnings Officer
LOS ANGELES, December 07, 2020–( ORGANIZATION WIRE)– MedMen Enterprises Inc. (” MedMen” or the “Business”) (CSE: MMEN) (OTCQX: MMNFF), a marijuana merchant with operations throughout the U.S., today launched its combined monetary outcomes for its very first quarter financial 2021 ended September 26, 2020. All monetary details in this news release is reported in U.S. dollars, unless otherwise shown.
This previous quarter was a transformational one for the Business as we grew earnings, enhanced success throughout our retail footprint and enhanced our balance sheet.
MedMen Interim Ceo Tom Lynch
With the strength of our group and assistance of our capital partners, we lead schedule with regard to our turn-around strategy. As we get closer to accomplishing company-wide success, we stay dedicated to growing the MedMen brand name and preserving our position as the leading marijuana merchant in the U.S.
Very First Quarter Financial Emphasizes:
- Earnings 1: Net earnings throughout MedMen’s operations in California, Nevada, New York City, Illinois and Florida was $35.6 million for the very first quarter, up 31% sequentially.
- Gross Margin 2: Company-wide gross margin rate was 47% in the very first quarter compared to 40% in the previous quarter. Retail gross margin rate was 54% in the very first quarter compared to 51% in the previous quarter.
- SG&An Expenditures: General and administrative costs of $31.9 million in the very first quarter, a 21% decline from the previous quarter and 47% decline from the very same duration in 2015.
- Business SG&A 2: Business SG&An amounted to $10.3 million in the very first quarter, a 29% decline from the previous quarter and 66% decline from the very same duration in 2015, representing around $80 million in annualized expense savings compared to in 2015.
- Bottom Line from Continuing Operations: Bottom line from continuing operations was $30.2 million compared to a bottom line of $83.4 in the very same duration in 2015.
- Changed EBITDA 2: Changed EBITDA from continuing operations was a loss of $11.7 million for the very first quarter compared to a loss of $23.3 million in the previous quarter.
- Retail Adjusted EBITDA 2: Retail adjusted EBITDA margin was 19% for the very first quarter compared to 1% in the previous quarter.
( 1) Throughout the quarter, the Business performed conclusive arrangements to offer its store in Evanston, Illinois. As an outcome, the Business acknowledged a partial quarter of earnings. On October 15, 2020, the Business pre-announced $37.4 countless very first quarter earnings, that included a complete quarter of Evanston earnings.
( 2) Retail gross margin, business SG&A, changed EBITDA and retail adjusted EBITDA margin are non-GAAP monetary procedures as explained listed below.
Since September 26, 2020, the Business had overall properties of $534.2 million, consisting of money and money equivalents of $10.3 million.
Throughout the very first quarter, the Business revealed an overall of $20.0 million in funding dedications. On November 2, 2020, the funding dedications were upsized to $25.7 million. On July 3, 2020, the Business likewise revealed it got $10.0 countless earnings through the sale of its Evanston store.
Capital Markets and Funding:
- Lending Institution and Property Manager Assistance Arrangement: On July 3, 2020, the Business revealed the execution of conclusive arrangements with specific lending institutions, consisting of Gotham Green Partners, Steady Roadway Capital and affiliates, and the Business’s most substantial proprietor, Treehouse Property Financial Investment Trust. In aggregate, the Business delayed around $32 million in money dedications throughout financial 2021 as an outcome of the arrangements.
- Senior Safe Convertible Funding: Throughout the very first quarter, the Business closed on $5.0 million in extra gross earnings under its senior protected convertible financial obligation center led by funds connected with Gotham Green Partners.
- Senior Safe Term Loan: Throughout the very first quarter, the Business closed on $3.0 million in extra gross earnings under its senior protected term loan with funds handled by Steady Roadway Capital and its affiliates.
- Unsecured Convertible Center: Throughout the very first quarter, the Business participated in a $10.0 million unsecured convertible debenture center with specific institutional financiers.
- Sale of Evanston Store: On July 1, 2020, the Business performed conclusive arrangements to offer its Evanston store for overall factor to consider of $20.0 million. Throughout the very first quarter, the Business got $10.0 countless the overall factor to consider.
Operations by Market:
- California: California retail earnings throughout 11 shop places amounted to $20.7 million for the very first quarter, a 34% boost from the previous quarter.
- Nevada: The Business’s 3 places in Nevada, which were momentarily closed in the previous quarter, were open for the whole very first quarter, resulting in a 192% consecutive boost in earnings.
- Florida: On July 30, 2020, the Business opened its Coral Shores shop, its 4th retail place in the state. The Business anticipates to have 8 shops open in the state by the end of calendar 2021.
- Illinois: The Business’s flagship shop in Oak Park was the greatest earnings shop in the Business’s nationwide portfolio. The Business is examining websites for a 2nd place in the state.
- Massachusetts: The Business anticipates to open 2 shops in Massachusetts throughout financial 2021. The Business was approved a provisionary adult-used license for both of its proposed flagship retail places near Fenway Park and Newton.
- New York City: The Business runs 4 medical dispensaries in the state, with a flagship place on Fifth Opportunity near Bryant Park.
Management and Directors:
- On August 4, 2020, the Business revealed the consultation of Al Harrington to its Board of Directors. Mr. Harrington is the creator of Viola, Inc., a premium marijuana business, and the creator of Harrington Health, a producing business of non-psychoactive cannabinoid items. Prior to his entry into the marijuana market, Mr. Harrington was an expert basketball gamer for 16 seasons in the NBA.
- On November 11, 2020, the Business revealed the election of Tom Lynch to its Board of Directors. Mr. Lynch is presently functioning as Interim Ceo of the Business.
- Chief Earnings Officer: On December 3, 2020, the Business called Tracy McCourt to the brand-new function of Chief Earnings Officer to lead the omni-channel marketing method in addition to the Business’s purchasing, retailing and service intelligence efforts. A leader and leader in consumer experience management for over twenty years, McCourt has actually established in-store and online sales, item and marketing methods for leading brand names consisting of Skechers, Think, Murad, Frederick’s of Hollywood, and most just recently Zappos.com.
- Funding Dedication: On November 2, 2020, the Business revealed the funding dedication formerly revealed on September 16, 2020, was increased from $20.7 million to $25.7 million as an outcome of an upsizing of the senior protected term loan led by Steady Roadway Capital.
- Yearly General Fulfilling: The Business revealed the outcomes of its yearly conference hung on November 10, 2020. The Business’s investors enacted favor of the following: (1) setting the variety of Board of Directors of the Business at 7, based on allowed boosts, (2) choosing Benjamin Rose, Niki Christoff, Mel Elias, Al Harrington, Tom Lynch, Errol Schweizer and Cameron Smith as Directors, and (3) re-appointing MNP LLC as the auditors of the Business for the taking place year
Non-GAAP Financial Details:
This news release consists of specific non-GAAP monetary procedures as specified by the SEC. Management thinks that these non-GAAP monetary procedures evaluate the Business’s continuous service in a way that enables significant contrasts and analysis of patterns in business, as they assist in comparing monetary outcomes throughout accounting durations and to those of peer business. These non-GAAP monetary procedures omit specific product non-cash products and specific other modifications the Business thinks are not reflective of its continuous operations and efficiency. Management utilizes non-GAAP monetary procedures, in addition to GAAP monetary procedures, to comprehend and compare operating outcomes throughout accounting durations, for monetary and functional decision-making, for preparation and forecasting functions and to examine the Business’s monetary efficiency. Management thinks that these non-GAAP monetary procedures boost financiers’ understanding of the Business’s monetary and running efficiency from duration to duration, make it possible for financiers to examine the Business’s operating outcomes and future potential customers in the very same way as management Reconciliations of these non-GAAP monetary procedures to the most straight similar monetary procedure computed, and provided in accordance with GAAP are consisted of in the monetary schedules connected to this news release. This details must be thought about as additional in nature and not as a replacement for, or exceptional to, any procedure of efficiency prepared in accordance with GAAP.
Retail Gross Margin Rate: Retail Gross Margin (Non-GAAP) divided by Retail Earnings (Non-GAAP). Retail Gross Margin Rate (Non-GAAP) is fixed up to combined gross margin rate as follows: combined earnings less non-retail earnings lowered by combined expense of products offered less non-retail expense of products offered, divided by combined earnings less non-retail earnings. Retail Earnings is combined earnings less non-retail earnings, such as growing and production earnings. These non-GAAP procedures supply a standalone basis of the Business’s efficiency as a marijuana merchant in the U.S. thinking about the Business’s long-lasting practicality is associated with money streams supplied by or utilized in retail operations.
EBITDA from Continuing Operations: Bottom Line from Continuing Operations (GAAP) changed for interest and funding expenses, earnings taxes, devaluation, and amortization. This non-GAAP procedure represents the Business’s existing operating success and capability to create capital.
Retail Adjusted EBITDA: Retail EBITDA Margin (Non-GAAP) less regional marijuana and import tax taxes, circulation costs, and stock modifications. This non-GAAP procedure offers a standalone basis of the Business’s efficiency as a marijuana merchant in the U.S. thinking about the Business’s long-lasting practicality is associated with money streams supplied by or utilized in retail operations.
Changed EBITDA from Continuing Operations: EBITDA from Continuing Operations (Non-GAAP) changed for deal expenses, reorganizing expenses, share-based settlement, and other non-cash operating expense, such as modifications in reasonable worth of acquired liabilities and latent modifications in reasonable worth of financial investments. This non-GAAP procedure represents the Business’s existing operating success and capability to create capital omitting non-recurring, irregular or one-time expenses in order enhance comparability.
Business SG&A: Offering, basic and administrative costs associated with the Business’s business functions. This non-GAAP procedure represents scalable expenses that are not straight associated with the Business’s retail operations.
A live audio webcast of the call will be readily available on the Occasions and Discussions area of MedMen’s site at: https://investors.medmen.com/events-and-presentations/default.aspx and will be archived for replay.
Toll Free Dial-In Number: (844) 559-7829
International Dial-In Number: (647) 689-5387
Conference ID: 7547827
MedMen is a marijuana merchant with flagship places in California, Nevada, Illinois, Florida, and New York City. MedMen uses a robust choice of top quality items, consisting of MedMen-owned brand names [statemade], LuxLyte, and MedMen Red through its premium retailers, exclusive shipment service, in addition to curbside and in-store choice up. MedMen Buds, the Business’s commitment program, offers unique access to promos, item drops and material. MedMen thinks that a world where marijuana is legal and controlled is much safer, much healthier and better. Discover more about MedMen and The MedMen Structure at www.medmen.com.
Initial news release
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