MediPharm Labs Reports Second Quarter Results Closing in on Positive Adjusted EBITDA(1) as Gross Profit Continues to Improve
MediPharm Labs Corp. (MEDIF) reported improved financial results for Q2 2024. Net revenue increased 8% year-over-year to $10.3M, the highest in over three years. Gross profit margin improved significantly to 33% from 8.1% in Q2 2023. Adjusted EBITDA loss narrowed to $124K, a 96% improvement from Q2 2023. International revenue represented 44% of total revenue. The company made progress in pharma-quality cannabis innovation, doubling dronabinol sales and launching new products. Operating expenses were reduced by $2M compared to Q2 2023. MediPharm ended the quarter with a cash balance of $16 million and less than $3M in debt. Management expressed optimism about approaching profitability in the second half of 2024.
MediPharm Labs Corp. (MEDIF) ha riportato risultati finanziari migliorati per il secondo trimestre del 2024. Il fatturato netto è aumentato dell'8% rispetto all'anno precedente, raggiungendo i 10,3 milioni di dollari, il valore più alto in oltre tre anni. Il margine di profitto lordo è migliorato notevolmente, salendo al 33% rispetto all'8,1% del secondo trimestre del 2023. La perdita EBITDA rettificata si è ridotta a 124.000 dollari, con un miglioramento del 96% rispetto al secondo trimestre del 2023. Le entrate internazionali hanno rappresentato il 44% del fatturato totale. L'azienda ha fatto progressi nell'innovazione della cannabis di qualità farmaceutica, raddoppiando le vendite di dronabinolo e lanciando nuovi prodotti. Le spese operative sono state ridotte di 2 milioni di dollari rispetto al secondo trimestre del 2023. MediPharm ha chiuso il trimestre con un saldo di cassa di 16 milioni di dollari e meno di 3 milioni di dollari di debito. La direzione ha espresso ottimismo riguardo all'approccio alla redditività nella seconda metà del 2024.
MediPharm Labs Corp. (MEDIF) reportó resultados financieros mejorados para el segundo trimestre de 2024. Los ingresos netos aumentaron un 8% interanual a 10.3 millones de dólares, la cifra más alta en más de tres años. El margen de beneficio bruto mejoró significativamente al 33% desde el 8.1% del segundo trimestre de 2023. La pérdida de EBITDA ajustada se redujo a 124,000 dólares, una mejora del 96% desde el segundo trimestre de 2023. Los ingresos internacionales representaron el 44% del total de ingresos. La empresa avanzó en la innovación de cannabis de calidad farmacéutica, duplicando las ventas de dronabinol y lanzando nuevos productos. Los gastos operativos se redujeron en 2 millones de dólares en comparación con el segundo trimestre de 2023. MediPharm cerró el trimestre con un saldo de caja de 16 millones de dólares y menos de 3 millones de dólares en deuda. La dirección expresó optimismo sobre acercarse a la rentabilidad en la segunda mitad de 2024.
MediPharm Labs Corp.(MEDIF)는 2024년 2분기 재무 결과가 개선되었음을 보고했습니다. 순 수익은 전년 대비 8% 증가하여 1030만 달러에 달했고, 이는 3년 이상 만의 최고치입니다. 매출 총 이익률은 2023년 2분기의 8.1%에서 33%로 크게 개선되었습니다. 조정된 EBITDA 손실은 124,000달러로 줄어들었으며, 이는 2023년 2분기 대비 96% 개선된 수치입니다. 국제 수익은 총 수익의 44%를 차지했습니다. 이 회사는 제약 품질의 대마초 혁신에 있어 진전을 이루었고, 드로나비놀 매출을 두 배로 늘리며 새로운 제품을 출시했습니다. 운영 비용은 2023년 2분기와 비교하여 200만 달러가 줄어들었습니다. MediPharm은 1,600만 달러의 현금 잔고와 300만 달러 미만의 부채로 분기를 마무리했습니다. 경영진은 2024년 하반기 내에 수익성에 접근할 것이라는 긍정적인 전망을 나타냈습니다.
MediPharm Labs Corp. (MEDIF) a rapporté des résultats financiers améliorés pour le deuxième trimestre de 2024. Le revenu net a augmenté de 8 % d'une année sur l'autre, atteignant 10,3 millions de dollars, le montant le plus élevé depuis plus de trois ans. La marge brute de profit a considérablement augmenté, passant de 8,1 % au deuxième trimestre 2023 à 33 %. La perte de l'EBITDA ajusté a été réduite à 124 000 dollars, soit une amélioration de 96 % par rapport au deuxième trimestre 2023. Les revenus internationaux ont représenté 44 % du revenu total. L'entreprise a progressé dans l'innovation du cannabis de qualité pharmaceutique, doublant les ventes de dronabinol et lançant de nouveaux produits. Les dépenses opérationnelles ont été réduites de 2 millions de dollars par rapport au deuxième trimestre 2023. MediPharm a terminé le trimestre avec un solde de trésorerie de 16 millions de dollars et moins de 3 millions de dollars de dette. La direction a exprimé son optimisme quant à l'atteinte de la rentabilité dans la seconde moitié de 2024.
MediPharm Labs Corp. (MEDIF) berichtete über verbesserte Finanzergebnisse für das zweite Quartal 2024. Der Nettoumsatz stieg im Jahresvergleich um 8 % auf 10,3 Millionen Dollar, das höchste Niveau seit über drei Jahren. Die Bruttogewinnmarge verbesserte sich erheblich auf 33 % von 8,1 % im zweiten Quartal 2023. Der adjustierte EBITDA-Verlust verringerte sich auf 124.000 Dollar, was eine Verbesserung um 96 % im Vergleich zum zweiten Quartal 2023 darstellt. Der internationale Umsatz machte 44 % des Gesamtumsatzes aus. Das Unternehmen machte Fortschritte bei der pharmazeutischen Cannabisinnovation, verdoppelte die Dronabinol-Verkäufe und brachte neue Produkte auf den Markt. Die Betriebskosten wurden im Vergleich zum zweiten Quartal 2023 um 2 Millionen Dollar gesenkt. MediPharm beendete das Quartal mit einem Cash-Bestand von 16 Millionen Dollar und weniger als 3 Millionen Dollar Schulden. Das Management äußerte Optimismus hinsichtlich der angestrebten Rentabilität in der zweiten Hälfte von 2024.
- Net revenue increased 8% year-over-year to $10.3M, highest in over three years
- Gross profit margin improved to 33% from 8.1% in Q2 2023
- Adjusted EBITDA loss narrowed to $124K, a 96% improvement from Q2 2023
- International revenue represented 44% of total revenue
- Dronabinol sales doubled in Q2 2024
- Operating expenses reduced by $2M compared to Q2 2023
- Cash balance of $16 million with less than $3M in debt
- Adjusted EBITDA still negative at -$124K
- Cash burn of approximately $1M in Q2 2024
Key Highlights
- Adjusted EBITDA(1): Negative
$124 K$949 K96% growth versus Adjusted EBITDA(1) for the same quarter in 2023 ("Q2 2023"). - Net Revenue:
$10.3M 8% increase as compared to Q2 2023, and a6% increase as compared to Q1 2024, representing the highest net revenue in over three years. International revenue represented44% of total revenue in Q2 2024. - Gross Profit:
33% in Q2 2024, significantly increased from8.1% in Q2 2023, driven by cost reductions, production efficiencies and favourable product mix with the expansion of international medical revenue. - Cash Balance:
$16 million - Operating Expenses: Reduced by
$2M - Innovation in Pharma Quality Cannabis
- European Union Dronabinol Sales Success: After a strong Q1 2024, MediPharm Labs doubled its dronabinol sales in Q2 2024, achieving total sales of
$1.9M - Licensing Agreement with Remidose Aerosols: The agreement provides exclusive rights to advanced non-combustible cannabis products. This aerosol technology, produced in both spray and inhaler formats, is expected to expand the Company's product offerings in the adult use wellness, Canadian medical cannabis, and international medical cannabis markets.(2)
- Launch of SEDDS Capsules: In partnership with Avicanna, the company successfully manufactured self-emulsifying drug delivery systems (SEDDS) capsules. Distribution is now available for Canadian patients in two formulations.
- Leadership in Australian flower alternatives: As of July 2024, MediPharm Labs holds the third largest market share for GMP vapes in
Australia , both in terms of units sold and patient revenue,(3) just nine months after launching these products.
Operational Highlights
- Streamlined Medical Cannabis Operations: In Q2 2024, MediPharm Labs reduced the scale of its operations at its facility in
Hope, British Columbia (the "Hope Facility") and relocated its direct-to-patient medical sales logistics to its facility inBarrie, Ontario (the "Barrie Facility"). This move is anticipated to streamline operations, deliver cost savings of approximately$1M - EU GMP Inspections: The Landesamt für Arbeitsschutz Verbraucherschutz und Gesundheit ("LAVG"), the health authority of
Brandenburg, Germany , completed inspections of both the Company's facility inNapanee, Ontario and the Barrie Facility in April 2024. EU-GMP certification of both facilities was confirmed and renewed with certificates issued July 1, 2024, which do not expire until July 2027. - DMF Submission for CBD API: In April 2024, MediPharm Labs submitted a Drug Master File ("DMF") for cannabidiol ("CBD") active pharmaceutical ingredients ("API") to Health Canada, allowing current and future pharmaceutical partners to reference MediPharm's CBD API in new and generic drug applications. This complements the DMF filed with the United States Food and Drug Administration in 2021.
- New High Potency Medical Cannabis Products in
Germany : In July 2024, the Company began delivering new high potency medical cannabis flower branded under Beacon Medical GmbH to distribution partners inGermany , complementing existing sales as the market grows due to favourable regulatory changes.
Management Commentary
David Pidduck, CEO, MediPharm Labs commented, "We are very pleased with our Q2 results, showcasing substantial improvements in both revenue and profitability. The strategic initiatives implemented, including cost reductions and operational efficiencies, are yielding positive results. We are particularly encouraged by the continued growth in our international sales and the progress in innovation of non-combustible cannabis formats."
Greg Hunter, CFO, MediPharm Labs added, "Q2 2024 was a major step in the right direction towards profitability and becoming cash flow positive. Our revenue and Adjusted EBITDA(1) were both the highest in over three years and Q2 put MediPharm on the verge of profitability. Revenue was
Financial Summary
Three months ended | |||||
30-Jun-24 | 31-Mar-24 | 31-Dec-23 | 30-Sep-23 | 30-Jun-23 | |
$'000s | $'000s | $'000s | $'000s | $'000s | |
Revenue | 10,350 | 9,771 | 9,131 | 8,505 | 9,583 |
Gross profit | 3,418 | 2,651 | 2,196 | 2,417 | 855 |
Opex(1) | (5,382) | (5,648) | (5,020) | (6,050) | (7,516) |
Adjusted EBITDA (2) | (124) | (949) | (1,579) | (2,346) | (3,191) |
(1) | Opex includes general administrative expense, marketing and selling expenses and R&D expenses. |
(2) | Adjusted EBITDA is a non-IFRS measure. See "Non-IFRS Measures". |
Q2 2024 Financial Results Conference Call
MediPharm's executive management team will also host a conference call and audio webcast on Wednesday, August 14, 2024 at 8:30 a.m. (Eastern time) to discuss the Company's financial results for Q2 2024.
Conference Call:
North America Toll-Free: (888) 330-2454
International Toll: +1(240) 789-2714
Conference ID: 4921762
Participants are asked to dial in approximately 15 minutes before the start of the call.
Audio Webcast:
An audio webcast will be available by visiting the following link here.
For those who are unable to participate on the live conference call or webcast, a replay will be available at https://www.medipharmlabs.com/investors approximately one day after completion of the call.
About MediPharm Labs
Founded in 2015, MediPharm Labs specializes in the development and manufacture of purified, pharmaceutical-quality cannabis concentrates, active pharmaceutical ingredients (API) and advanced derivative products utilizing a Good Manufacturing Practices certified facility with ISO standard-built clean rooms. MediPharm Labs has invested in an expert, research driven team, state-of-the-art technology, downstream purification methodologies and purpose built facilities with five primary extraction lines for delivery of pure, trusted and precision-dosed cannabis products for its customers. Through its wholesale and white label platforms, MediPharm Labs formulates, develops (including through sensory testing), processes, packages and distributes cannabis extracts and advanced cannabinoid-based products to domestic and international markets.
In 2021, MediPharm Labs received a Pharmaceutical Drug Establishment Licence from Health Canada, becoming the only company in
In 2023, MediPharm acquired VIVO Cannabis Inc. which expanded MediPharm's reach to medical patients in Canada via Canna Farms medical ecommerce platform, and in Australia and Germany through Beacon Medical PTY and Beacon Medical GMBH. This acquisition also included Harvest Medical Clinics in Canada which provides medical cannabis patients with Physician consultations for medical cannabis education and prescriptions.
Notes:
(1) | This is a non-IFRS reporting measure. See "Non-IFRS Measures" below. |
(2) | This is a forward-looking statement and based on a number of assumptions. See "Cautionary Note Regarding Forward-Looking Information" below. |
(3) | According to industry data aggregated by NostraData PTY. |
Non-IFRS Measures
This press release contains references to "Adjusted EBITDA", which is a non-IFRS financial measure. Management believes that this supplementary non-IFRS financial measure provides useful additional information related to the operating results of the Company. This non-IFRS financial measure is not recognized under IFRS and, accordingly, users are cautioned that this measure should not be construed as an alternative to net income (loss) and gross profit determined in accordance with IFRS as measures of profitability or as alternatives to the Company's IFRS-based Financial Statements. The non-IFRS measure presented may not be comparable to similar measures presented by other issuers. Adjusted EBITDA is a measure of the Company's overall financial performance and is used as an alternative to earnings or income in some circumstances. Adjusted EBITDA is essentially net income (loss) with interest, taxes, depreciation and amortization, non-cash adjustments and other unusual or non-recurring items added back. Adjusted EBITDA has limitations as an analytical tool as it does not include depreciation and amortization expense, interest income and expense, finance fees, gain in revaluation of derivative liabilities, taxes, government grants including rent and wage subsidies, one-off transactions, impairment losses on inventory and on fixed assets and intangibles, write down of deposits and share-based compensation. Because of these limitations, Adjusted EBITDA should not be considered as the sole measure of the Company's performance and should not be considered in isolation from, or as a substitute for, analysis of the Company's results as reported under IFRS. Adjusted EBITDA, as used within the Company's disclosure, may not be directly comparable to Adjusted EBITDA used by other reporting issuers. Adjusted EBITDA does not have a standardized meaning and the Company's method of calculating such non-IFRS measure may not be comparable to calculations used by other companies bearing the same description.
The following tables reconcile the Company's net operating income (loss) (as reported) and Adjusted EBITDA for the past eight quarters:
Three months ended | ||||
June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | |
$'000s | $'000s | $'000s | $'000s | |
Net operating loss | (2,573) | (3,725) | (2,935) | (4,355) |
Adjusted for: | - | - | - | |
Share-based compensation expense | 576 | 895 | 306 | 386 |
Depreciation and amortization | 731 | 790 | 717 | 617 |
Restructuring related severance expenses | 305 | 755 | 335 | 273 |
Impairment loss on remeasurement of assets held for sale | 77 | - | 23 | 17 |
Transaction fees for mergers and acquisitions | - | - | - | 46 |
Gain on disposition of assets | (20) | (276) | (174) | - |
Early lease termination cost | - | 44 | - | - |
Incremental cost of cannabis inventory acquired in a business combination (1) | 162 | 327 | 372 | 2,055 |
Terminal costs for closed facility (2) | 95 | 323 | - | - |
One-off derecognition of liabilities | - | (130) | - | - |
Write down of inventories (3) | 60 | - | - | 168 |
Fair value adjustments in gross profit | 170 | 48 | (223) | (1,553) |
HST reassessment (4) | 240 | - | - | - |
Payroll tax assessment | 42 | - | - | - |
Miscellaneous | 11 | - | - | - |
Adjusted EBITDA | (124) | (949) | (1,579) | (2,346) |
(1) | Incremental cost of cannabis inventory acquired in a business combination represents the fair value realized on sale of cannabis inventory acquired in a business combination. |
(2) | This relates to employee compensation for terminated employees and write downs of the carrying value of inventory at the Hope Facility. |
(3) | This adjustment is for unusual inventory write-downs only and not the total value of inventory written down. |
(4) | This relates to a liability recognized in connection with a notice of reassessment issued by the tax authorities. |
Three months ended | ||||
June 30, 2023 | March 31, 2023 | December 31, 2022 | September 30, 2022 | |
$'000s | $'000s | $'000s | $'000s | |
Net operating loss | (7,629) | (3,333) | (6,390) | (8,046) |
Adjusted for: | ||||
Share-based compensation expense | 588 | 747 | 1,390 | 161 |
Depreciation and amortization | 692 | 490 | 540 | 754 |
Restructuring related severance expenses | 1,695 | - | - | - |
Impairment loss on remeasurement of assets held for sale | - | - | 13 | 68 |
Transaction fees for mergers and acquisitions | 304 | 533 | 813 | 185 |
Recovery of impaired receivables (1) | (464) | (1,546) | - | - |
Write down of inventories (2) | 1,036 | - | - | 428 |
Impairment loss on remeasurement of disposal group | - | - | - | 1,476 |
Fair value adjustments in gross profit | 588 | - | - | - |
Other tax recovery | (1) | - | - | - |
Miscellaneous | - | 19 | - | - |
Adjusted EBITDA | (3,191) | (3,090) | (3,634) | (4,974) |
(1) | This relates to the reversal of a former impairment of a long outstanding receivable. |
(2) | This adjustment is for unusual inventory write-downs only and not the total value of inventory written down. |
Cautionary Note Regarding Forward-Looking Information
This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate to, among other things, statements regarding: the Company's progress toward profitability; the impact of the licensing agreement with Remidose Aerosols on the Company's product offerings in the adult use wellness, Canadian medical cannabis, and international medical cannabis markets; the anticipated impact of the Company's reduction in operations at the Hope Facility and relocation of its direct-to-patient medical sales logistics to the Barrie Facility; the potential sale of the Hope Facility; market growth in
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SOURCE MediPharm Labs Corp.
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