MediPharm Labs Reports Third Quarter Results
MediPharm Labs reported Q3 2024 financial results showing significant improvements. Net revenue reached $9.8M, a 15% increase from Q3 2023, with international medical cannabis revenue growing 37% and representing 36% of total revenue. Gross profit margin improved to 32%, up 29% from Q3 2023. The company completed its final $2.2M convertible debt payment, becoming debt-free with $13M cash balance. Adjusted EBITDA improved to negative $743K from negative $2.4M in Q3 2023. Notable growth was seen in German Beacon branded medical sales ($400K in Q3) and Australian wholesale sales ($2.5M in Q3).
MediPharm Labs ha riportato i risultati finanziari del terzo trimestre 2024 mostrando miglioramenti significativi. I ricavi netti hanno raggiunto $9.8M, con un incremento del 15% rispetto al terzo trimestre 2023, mentre i ricavi internazionali dalla cannabis medica sono aumentati del 37%, rappresentando il 36% del fatturato totale. Il margine di profitto lordo è migliorato al 32%, in aumento del 29% rispetto al terzo trimestre 2023. L'azienda ha completato il suo ultimo pagamento di $2.2M di debito convertibile, diventando priva di debiti con un saldo di cassa di $13M. L'EBITDA rettificato è migliorato a un negativo di $743K rispetto a un negativo di $2.4M nel terzo trimestre 2023. Una crescita notevole è stata registrata nelle vendite mediche con il marchio Beacon in Germania ($400K nel terzo trimestre) e nelle vendite all'ingrosso in Australia ($2.5M nel terzo trimestre).
MediPharm Labs informó resultados financieros del tercer trimestre de 2024 mostrando mejoras significativas. Los ingresos netos alcanzaron $9.8M, un aumento del 15% en comparación con el tercer trimestre de 2023, con los ingresos internacionales por cannabis medicinal creciendo un 37% y representando el 36% de los ingresos totales. El margen de beneficio bruto mejoró al 32%, un aumento del 29% desde el tercer trimestre de 2023. La compañía completó su último pago de deuda convertible de $2.2M, quedando libre de deudas con un saldo de caja de $13M. El EBITDA ajustado mejoró a un negativo de $743K desde un negativo de $2.4M en el tercer trimestre de 2023. Se observó un crecimiento notable en las ventas médicas de la marca Beacon en Alemania ($400K en el tercer trimestre) y en las ventas al por mayor en Australia ($2.5M en el tercer trimestre).
MediPharm Labs가 2024년 3분기 재무 실적을 보고하며 중요한 개선 사항을 보여주었습니다. 순수익은 $9.8M에 달하며, 2023년 3분기 대비 15% 증가했으며, 국제 의료용 대마초 수익은 37% 증가하여 총 수익의 36%를 차지합니다. 총 이익률은 32%로 개선되어 2023년 3분기 대비 29% 증가했습니다. 이 회사는 마지막 $2.2M의 전환사채 지급을 완료하고 부채가 없는 상태가 되었으며 $13M의 현금 잔고를 보유하고 있습니다. 조정된 EBITDA는 2023년 3분기의 -$2.4M에서 -$743K로 개선되었습니다. 독일에서의 Beacon 브랜드 의료 판매($400K, 3분기)와 호주 도매 판매($2.5M, 3분기)에서 주목할 만한 성장이 있었습니다.
MediPharm Labs a rapporté des résultats financiers pour le troisième trimestre 2024 montrant des améliorations significatives. Le chiffre d'affaires net a atteint $9.8M, soit une augmentation de 15% par rapport au troisième trimestre 2023, avec des revenus provenant du cannabis médical international en hausse de 37%, représentant 36% du chiffre d'affaires total. La marge brute a été améliorée à 32%, en hausse de 29% par rapport au troisième trimestre 2023. L'entreprise a terminé son dernier paiement de dette convertible de $2.2M, devenant sans dette avec un solde de trésorerie de $13M. L'EBITDA ajusté s'est amélioré à un négatif de $743K comparé à un négatif de $2.4M au troisième trimestre 2023. Une croissance notable a été observée dans les ventes médicales sous la marque Beacon en Allemagne ($400K au troisième trimestre) et dans les ventes en gros en Australie ($2.5M au troisième trimestre).
MediPharm Labs hat die finanziellen Ergebnisse des dritten Quartals 2024 veröffentlicht, die signifikante Verbesserungen zeigen. Der Nettoumsatz erreichte $9.8M, was einem Anstieg von 15% im Vergleich zum dritten Quartal 2023 entspricht, während die internationalen Einnahmen aus medizinischem Cannabis um 37% wuchsen und 36% des Gesamterlöses ausmachten. Die Bruttogewinnmarge verbesserte sich auf 32%, ein Anstieg von 29% im Vergleich zum dritten Quartal 2023. Das Unternehmen hat die letzte Zahlung von $2.2M für wandelbare Schulden abgeschlossen und ist nun schuldenfrei mit einem Kassenbestand von $13M. Das bereinigte EBITDA verbesserte sich auf -$743K von -$2.4M im dritten Quartal 2023. Ein bemerkenswerter Anstieg wurde bei den medizinischen Verkäufen der Marke Beacon in Deutschland ($400K im 3. Quartal) und im Großhandel in Australien ($2.5M im 3. Quartal) verzeichnet.
- Net revenue increased 15% year-over-year to $9.8M
- International medical cannabis revenue grew 37% vs Q3 2023
- Gross profit margin improved to 32%, up 29% from Q3 2023
- Adjusted EBITDA improved significantly from -$2.4M to -$743K
- Company became debt-free after final $2.2M convertible debt payment
- Strong cash position of $13M at quarter end
- Australian wholesale sales reached record $2.5M in Q3
- Adjusted EBITDA remains negative at -$743K
- Sequential revenue decline from $10.35M in Q2 to $9.8M in Q3
Strong Growth in International GMP Medical Markets
Key Highlights
- Adjusted EBITDA(1): Negative
$743 K$2.4M - Net Revenue:
$9.8M in Q3 2024, a15% increase as compared to Q3 2023. International medical cannabis revenue grew37% versus Q3 2023 and represented36% of revenues in the quarter. Canadian medical and business to business sales represented46% of total revenue in Q3 2024. - Gross Profit:
32% in Q3 2024, a29% improvement from Q3 2023, driven by cost reductions, production efficiencies and favourable product mix. - Final Convertible Debt Payment:
$2.2M - Cash Balance:
$13 million at the end of Q3 2024.
Growth in International GMP Sales
- Refresh of Beacon Branded Flower in Germany: Beacon branded medical sales of
$400 K$135 kGermany and Beacon branded assets fromAustralia to further build brand equity and exert better control of growth opportunities - Continued Success in
Australia :$2.5M Australia in Q3 2024 was the best quarter sales since acquiring Beacon Medical Australia PTY Ltd. ("Beacon Medical Australia") in the second quarter of 2023. The growth was driven by the addition of new high potency flower stock keeping units ("SKUs") and the recent new launches of Good Manufacturing Practices ("GMP") oils, vapes and live resin vape cartridges. - Future International Growth Opportunities: MediPharm has additional commitments for sales into new international markets and is currently completing certain international regulatory registrations.(2) Late-stage regulatory registrations include
UK ,Brazil andNew Zealand . Early to mid-stage regulatory registrations includeFrance ,Spain ,Poland andSwitzerland . These markets vary in size, however MediPharm is well positioned with plans to sell higher value GMP products, like cannabis oil and dronabinol, given its history and expertise in supplying GMP compliant products.(2)
Commercial Highlights
- Product Launches: MediPharm continued to build on its product innovations in Q3 2024, commercializing 11 unique SKUs, four of which were live resin GMP vapes for the Australian medical market. Overcoming the many challenges, whether regulatory, validation or stability associated with a new international GMP SKU like live resin allows for a competitive moat in this emerging global concentrate category.
- Domestic Medical: Completing the relocation of medical sales and distribution from
Hope, BC toBarrie, ON has resulted in cost savings and better service for our patients. This also allows for the future sale of the facility inHope, BC (the "Hope Facility").(2) Product mix on this ecommerce platform continues to grow with 24 new SKUs onboarded in Q3 2024.(2) - Harvest Medicine Cannabis Clinics: Harvest Medicine Inc. ("Harvest Medicine") cannabis clinic sales remain consistent even as the number of new medical cannabis patients in
Canada declines. This shows that Harvest Medicine is successful with patient retention including with the important Veteran patients, even as other companies exit the clinic business. After achieving further efficiencies in clinic operations this stand-alone business unit now enjoys net positive cash flow from operations.
Management Commentary
David Pidduck, CEO, MediPharm Labs commented, "MediPharm accomplished several important milestones in Q3 that will position us well for profitability in 2025. MediPharm has successfully diversified its business. As a global GMP player, our international sales grew
We have a strong presence in the Canadian medical channel, and growing B2B sales. Additionally, MediPharm continues to launch new products and build on our very broad product line in the Canadian adult use and wellness channel. This diversity has contributed to our balance sheet strength and our ability to capitalize on future growth opportunities in various countries, product categories, and channels."
Greg Hunter, CFO, MediPharm Labs added, "Q3 2024 was a major step in the right direction towards profitability. Paying off our debt and rationalizing facilities, pursuing cost efficiencies while growing our higher margin international revenues are all critical elements to position us for long term sustainable growth.
Our strong balance sheet makes us an ideal partner for corporate development opportunities as we continue to see consolidation in the industry globally."
Financial Summary
Three months ended | |||||
30-Sep- | 30-Jun- | 31-Mar- | 31-Dec- | 30-Sep- | |
$'000s | $'000s | $'000s | $'000s | $'000s | |
Revenue | 9,798 | 10,350 | 9,771 | 9,131 | 8,505 |
Gross profit | 3,120 | 3,418 | 2,651 | 2,196 | 2,417 |
Opex (1) | (5,442) | (5,382) | (5,648) | (5,020) | (6,050) |
Adjusted EBITDA (2) | (743) | (124) | (949) | (1,579) | (2,346) |
(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". |
Q3 2024 Financial Results and Business Results
MediPharm's executive management team has prepared an updated company presentation to share select highlights from the Company's Q3 2024 and some strategic growth perspectives. The presentation will be available on MediPharm's website, in the Investor section.
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 GMP 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 Australia and Beacon Medical Germany 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. |
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, restructuring related severance expense, government grants including rent and wage subsidies, transaction fees, unusual write down of inventory, impairment of fixed assets and intangibles, impairment loss on assets held for sale, impairment of receivables, share-based compensation, fair value adjustments to biological assets and inventory. 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 | ||||
September | June | March | December | |
$'000s | $'000s | $'000s | $'000s | |
Net operating loss | (2,708) | (2,573) | (3,725) | (2,935) |
Adjusted for: | - | - | - | - |
Share-based compensation expense | 160 | 576 | 895 | 306 |
Depreciation and amortization | 518 | 731 | 790 | 717 |
Restructuring related severance expenses | 87 | 305 | 755 | 335 |
Impairment loss on remeasurement of assets held for sale | 113 | 77 | - | 23 |
Gain on disposition of assets | - | (20) | (276) | (174) |
Early lease termination cost | - | - | 44 | - |
Incremental cost of cannabis inventory acquired in a business combination (1) | 110 | 162 | 327 | 372 |
Terminal costs for closed facility (2) | - | 95 | 323 | - |
One-off derecognition of liabilities | - | - | (130) | - |
Write down of inventories (3) | 27 | 60 | - | - |
Fair value adjustments in gross profit | 519 | 170 | 48 | (223) |
HST reassessment (4) | 153 | 240 | - | - |
Payroll tax assessment | - | 42 | - | - |
Miscellaneous | - | 11 | - | - |
Transaction costs (5) | 278 | - | - | - |
Adjusted EBITDA | (743) | (124) | (949) | (1,579) |
(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. |
(5) | This includes non-recurring fees, expenses associated with the evaluation of potential mergers and acquisitions, and fees related to reorganization of legal entities. |
Three months ended | ||||
September | June | March | December | |
$'000s | $'000s | $'000s | $'000s | |
Net operating loss | (4,355) | (7,629) | (3,333) | (6,390) |
Adjusted for: | ||||
Share-based compensation expense | 386 | 588 | 747 | 1,390 |
Depreciation and amortization | 617 | 692 | 490 | 540 |
Restructuring related severance expenses | 273 | 1,695 | - | - |
Impairment loss on remeasurement of assets held for sale | 17 | - | - | 13 |
Transaction costs (4) | 46 | 304 | 533 | 813 |
Recovery of impaired receivables (1) | - | (464) | (1,546) | - |
Write down of inventories (2) | 168 | 1,036 | - | - |
Incremental cost of cannabis inventory acquired in a business combination (3) | 2,055 | - | - | - |
Fair value adjustments in gross profit | (1,553) | 588 | - | - |
Other tax recovery | - | (1) | - | - |
Miscellaneous | - | - | 19 | - |
Adjusted EBITDA | (2,346) | (3,191) | (3,090) | (3,634) |
(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. |
(3) | 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. |
(4) | This includes non-recurring fees and expenses associated with the evaluation of potential mergers and acquisitions. |
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; intended expansions, exports, distributions and GMP certifications; the potential sale of the Hope Facility; the Company's ability to use its experience in
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SOURCE MediPharm Labs Corp.
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