Mednow Beats Guidance & Achieves Record Q3 2022 Financial Results with 225% Q/Q Revenue Growth and 4,800% Y/Y Revenue Growth and Appoints Ali Reyhany CEO
Mednow reported a remarkable Q3/22 revenue increase of 225% quarter-over-quarter, reaching $6.14M, and over 4,800% year-over-year. The patient count also rose by 20% to approximately 23,000. Revenue forecasts for 2022 are set between C$42.5M to C$47.5M, with expectations for 2023 at C$105M to C$110M. The gross margin is projected to improve from 20% in 2022 to 25% in 2023. Moreover, Ali Reyhany will succeed Karim Nassar as CEO starting June 15, 2022.
- Q3/22 revenue increased by 225% quarter-over-quarter.
- Patient count grew by 20% to ~23,000 in Q3.
- 2023 revenue forecast of C$105M to C$110M, a 140% increase from 2022.
- Gross margin expected to improve to 25% in 2023.
- Q3/22 EBITDA loss of $5.19M, up from $3.36M in Q3/21.
- Continued net losses projected despite revenue growth.
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Q3/22 revenue increased over
225% quarter-over-quarter, and more than 4,800% year-over-year; -
Mednow patient count increased by approximately20% to ~23,000 in Q3 versus ~19,000 in Q2; -
In the 2022 calendar year, revenue is forecasted to range between
C and$42.5M C ; approximately$47.5M C will come from its pharmacy services, while approximately$42M C will come from doctor services;$3M -
2022 gross margin is expected to average approximately
20% , with 40K - 45K active patients, and a net loss for the year; -
Revenue for the 2023 calendar year is forecasted to range between
C and$105M C , with$110M C from pharmacy services while$102M C is expected to come from doctor services;$5M -
2023 gross margin is expected to average
25% , with 110K - 120K active patients; -
In the 2023 calendar year,
Mednow is expected to produce approximately to$5M in Adjusted EBITDA;$10M -
Revenue is expected to grow 2,
400% in 2022 relative to 2021 and140% in 2023 compared to 2022; -
Founder and Chairman,
Ali Reyhany to assume the role as CEO, taking over forKarim Nassar .
Key Milestones During and Subsequent to Q3 2022:
Key Financials
-
Revenue increased by
225% quarter-over-quarter, to during the three months period ended$6,136,511 April 30, 2022 , driven primarily by sales from the Company's retail pharmacy operating segment.-
Retail pharmacies based in
British Columbia ,Manitoba ,Ontario andNova Scotia collectively generated revenue of , as compared to$5,712,574 in the prior year comparative period.$0 -
Revenue generated by doctor services was
, as compared to$382,537 in the prior year comparative period.$0 -
Revenue was
from its pharmacy agreement with$41,400 Mednow East Inc. , as compared to of revenue in the prior year comparative period, which was generated from pharmacy agreements with$124,200 Mednow East Inc. and an equal amount with Mednow West.
-
Retail pharmacies based in
-
Gross margin for the quarter increased
900% year-over-year to , as compared$1,232,876 in the prior year comparative period.$124,200 -
EBITDA for the quarter was a loss of
, as compared to a loss of$5,193,732 in the prior year comparative period, representing a decrease in EBITDA of$3,359,184 compared to the prior comparative period.$1,834,548 - The change is primarily driven by increased corporate costs, such as increased headcount, technology development and marketing as the Company has continued to build out its internal teams in order to scale and grow its businesses.
-
Adjusted EBITDA for the quarter was a loss of
, as compared to a loss of$4,444,474 in the prior year comparative period, representing a decrease in adjusted EBITDA of$1,882,454 .$2,562,020 - Adjusted EBITDA has been adjusted for certain items as explained further below under the heading “Definitions of Certain Non-IFRS Financial Measures.”
Key Metrics
-
On
February 24, 2022 ,Mednow provided annual forecasted growth figures for the calendar years 2022 and 2023.-
For the calendar year 2022, revenue is forecasted to range between
C to$42.5M C . Contributions of approximately$47.5M C will come from its pharmacy services, while$42M C will come from doctor services. The gross margin is expected to average approximately$3M 20% , with 40,000 – 45,000 active patients, and a net loss for the year. -
For the calendar year 2023,
Mednow is expected to produce adjusted EBITDA of approximately –$5M . Revenue for 2023 is forecasted to range between$10M C to$105M C , with$110M C contributed by pharmacy services and$102M C coming from doctor services. The gross margin is expected to average$5M 25% , with 110K – 120K active patients.
-
For the calendar year 2022, revenue is forecasted to range between
-
Mednow patient count increased significantly quarter over quarter, growing by approximately20% to ~23,000 in Q3 versus ~19,000 in Q2.
Leadership Transition
-
The Company is pleased to announce that Ali Reyhany, the Company’s current director, President and Chairman of the board, has been selected to replace
Karim Nassar , as Chief Executive Officer effectiveJune 15 . As the Company’s founder and architect of its culture, the Company’s board of directors believes Mr. Reyhany is singularly qualified to serve as Chief Executive Officer. -
The Company thanks
Mr. Nassar for his contributions to the Company and wishes him the best on his future endeavors.
Operational Milestones
-
At the end of January,
Mednow received approval from theOntario College of Pharmacists for its new flagship fulfillment center inToronto . The site boasts 20,000 square feet of space, with room for further expansion and growth.-
This location houses a secured floor for the pharmacy, the
Mednow online shop, the customer support centre, and the automation and technology to support and optimize Mednow’s PillSmartTM and nutraceutical offerings. -
Separately, this location houses the
Toronto corporate office and the logistics command center for the entire Company.
-
This location houses a secured floor for the pharmacy, the
-
Mednow expects to have the capability to deliver acrossCanada when it anticipates launching its (i)Montreal, Quebec and (ii)Calgary, Alberta fulfillment centres this summer.
Mednow For Business (MFB)
MFB has demonstrated strong traction already, with access to over 500,000 lives. MFB is an enterprise pharmacy solution suited to employers to better manage their drug benefit expenditure, which normally represents up to
To date, MFB has formed strategic channel partner relationships with
Marketing and Customer Service
To date,
2022 Awards
-
On
January 26th, 2022 ,Mednow was awarded the 2022 Best WorkplaceTM – Start-ups. In a year where many employers experienced high levels of employee turnover, dubbed by some as “The Great Resignation”Mednow was able to grow its employee base by more than three times to approximately 60 employees since its initial public offering inMarch 2021 . -
On
March 8, 2022 , International Women’s Day,Mednow was named on theGreat Place to Work® 2022 Best Workplaces for Women list. The list was created following a thorough and independent analysis conducted byGreat Place to Work®. This includes direct feedback from employees of hundreds of various organizations surveyed byGreat Place to Work®.
Summary of Financial Results
Below is a summary of each operating segment's performance for the three month period ended
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Three months ended |
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2022 |
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2021 |
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Retail Pharmacies |
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Doctor Services |
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Total |
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|
Revenue |
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|
|
|
|
|
|
|
|
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Other amounts in loss |
|
6,228,690 |
|
452,385 |
|
5,129,998 |
|
11,811,073 |
|
3,528,328 |
Net loss |
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Source: Mednow’s MD&A as of |
Normal Course Issuer Bid Update
As at
Stock Option Grant
The Company amended its current stock option plan to replace the previous rolling stock option plan (the “Old Plan”) with a
The Company approved the grant of a total of 315,000 Options to certain officers, directors, employees and consultants of the Company pursuant to the New Plan. Subject to the policies of the
CORPORATE UPDATE OF FINANCIAL PERFORMANCE
The Company provided a corporate update on
For the 2023 calendar year, comprising the months from January to
The Company's calendar 2022 results for the period ended
|
For the period January - |
Revenue |
|
Cost of Sales |
5,713,361 |
Gross margin % |
|
Other costs |
8,839,229 |
Net Loss |
(7,458,583) |
EBITDA1 |
(6,860,389) |
Adjusted EBITDA1 |
(5,679,244) |
1 EBITDA and Adjusted EBITDA has been discussed in the section Definitions of Non-IFRS Financial Measures. |
As of the date of the report,
RECONCILIATIONS OF NON-IFRS MEASURES |
|
|
For the period January - |
Net loss and comprehensive loss for the period |
|
Interest expense |
49,103 |
Depreciation and amortization |
683,444 |
Deferred tax recovery |
(134,353) |
EBITDA1 |
|
Loss on investment in equity securities |
44,455 |
Share-based compensation |
979,074 |
Acquisition costs |
157,616 |
Adjusted EBITDA1 |
|
1 EBITDA and Adjusted EBITDA has been discussed in the section Definitions of Non-IFRS Financial Measures. |
DEFINITIONS OF CERTAIN NON-IFRS FINANCIAL MEASURES
This Press Release uses certain non-IFRS financial measures which are defined below. Non-IFRS financial measures are not standardized financial measures under IFRS. As such, these measures may not be comparable to similar financial measures that are disclosed by other companies. These measures include “EBITDA” and “Adjusted EBITDA”. These measures are provided as additional information that is disclosed to provide further insight into the Company's results of operations from management's perspective. These measures should not be reviewed and assessed as a substitute for financial information reported under IFRS. A reconciliation of the non-IFRS measures to the IFRS measure is in the section "Selected Financial Information".
EBITDA and Adjusted EBITDA
EBITDA represents net loss and comprehensive loss for the period before interest expense, income taxes, depreciation and amortization expenses. Adjusted EBITDA represents net loss and comprehensive loss for the period before interest expense, income taxes, depreciation and amortization expenses, loss on investment in equity securities, share-based compensation expense, and acquisition costs. These adjustments to calculate the non-IFRS measures of EBITDA and Adjusted EBITDA are for items that are not necessarily reflective of the Company’s underlying operating performance. As there is no generally accepted or standard method of calculating EBITDA, these measures are not necessarily comparable to similarly titled measures reported by other issuers. EBITDA and Adjusted EBITDA are presented as management believes it is a useful indicator of the Company’s relative financial performance. These measures should not be considered by an investor as an alternative to net income or other IFRS financial measures as determined in accordance with IFRS.
The Company presents EBITDA and Adjusted EBITDA to indicate ongoing financial performance from period to period, including comparative prior year periods. The Company has disclosed certain non-IFRS measures on this report, including the disclosure of non-IFRS financial measures for prior year comparative periods.
Reconciliation of Non-IFRS Financial Measures
The following are reconciliations of net loss and comprehensive loss to EBITDA. The adjustments include:
- The amortization and depreciation expenses of intangible assets, fixed assets, and the right-of-use assets of the Company.
- The interest expenses, which primarily includes interest expense on the Company's credit facility and interest expense recorded in accordance with IFRS 16.
- The underlying income taxes recorded.
The following are reconciliations of EBITDA to Adjusted EBITDA. The adjustments include:
- The loss on investment in equity securities in connection with the Company's investment in Life Support.
- The share-based compensation expense recorded by the Company in connection with the stock option plan.
- The acquisition costs incurred by the Company.
The exclusion of certain items in calculating the non-IFRS measures does not imply that they are non-recurring, infrequent, unusual or not useful to investors.
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Cautionary Note Regarding Forward-Looking Information
This release includes certain statements and information that may constitute forward-looking information within the meaning of applicable Canadian securities laws. All statements in this news release, other than statements of historical facts, including statements regarding future estimates, plans, objectives, timing, assumptions or expectations of future performance, including without limitation, the Company’s expectation that during the next 12 months, the Company will build and open retail pharmacies in the provinces of
Generally, forward-looking statements and information can be identified by the use of forward-looking terminology such as “intends” or “anticipates”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “should”, “would” or “occur”. Forward-looking statements are based on certain material assumptions and analysis made by the Company and the opinions and estimates of management as of the date of this press release, including that the Company will be successful in the deployment of its resources and personnel, the Company’s marketing campaign will include TV commercials, social media marketing campaigns directed at consumers along with billboard campaigns, that during the next 12 months, the Company will build and open retail pharmacies in the provinces of
These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements or forward-looking information. Important factors that may cause actual results to vary, include, without limitation, changes in market conditions, fluctuations in the currency markets, changes in national and local governments, legislation, taxation, controls, regulations, and political or economic developments in
Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and forward-looking information. Readers are cautioned that reliance on such information may not be appropriate for other purposes. The Company does not undertake to update any forward-looking statement, forward-looking information or financial out-look that are incorporated by reference herein, except in accordance with applicable securities laws.
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1.855.686.6300
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