NORWOOD, Mass., May 08, 2023 — MariMed Inc. (“MariMed” or the “Company”) (CSE: MRMD) (OTCQX: MRMD), a leading multi-state cannabis operator focused on improving lives every day, today announced its financial results for the first quarter ended March 31, 2023.
“I am pleased to report another solid quarter,” said Jon Levine, Chief Executive Officer. “We reported our 13th consecutive quarter of positive adjusted EBITDA, and we expect to generate our fourth consecutive year of positive operating cash flow. MariMed is one of the only companies in the cannabis industry to report positive cash flows and positive EBITDA over this extended period of time.”
The following table summarizes the Company’s consolidated financial highlights (in millions, except percentage amounts):
|Three months ended
|GAAP Gross margin||45||%||54||%|
|Non-GAAP Gross margin||46||%||54||%|
|GAAP Net (loss) income||$||(0.7||)||$||4.2|
|Non-GAAP Net income||$||0.3||$||6.9|
|Non-GAAP Adjusted EBITDA||$||7.1||$||10.4|
|Non-GAAP Adjusted EBITDA margin||21||%||33||%|
1 See the reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures and additional information about non-GAAP measures in the section entitled “Discussion of Non-GAAP Financial Measures” below and in the financials information included herewith.
The conference call may be accessed through MariMed’s Investor Relations website, or by clicking the following link: MRMD Q123 Earnings Call.
FIRST QUARTER 2023 OPERATIONAL HIGHLIGHTS
During the first quarter, the Company announced the following developments in the implementation of its strategic growth plan:
- January 24: Closed a $35 million senior secured credit facility with a $30 million draw down at close and the ability to draw up to an additional $5 million through June 2023. The facility has a three-year maturity and bears interest at a rate of prime plus 5.75%. Funds are expected to be used for capital expenditures, other corporate expenses, and acquisitions.
- March 13: Closed the acquisition of the operating assets of Ermont, Inc., pursuant to which the Company obtained a vertical cannabis operation in Quincy, MA and rebranded the retail operation to Panacea Wellness Dispensary. MariMed intends to expand the dispensary to accommodate adult use sales, which the company has applied for with the State Cannabis Commission.
OTHER BUSINESS DEVELOPMENTS
Subsequent to the end of the first quarter, the Company announced the following business developments:
- April 4: The Maryland Medical Cannabis Commission issued approval to once again manufacture and sell high-dose edibles. The Company plans to add 40mg products across its entire edibles portfolio including Betty’s Eddies and Bubby’s Baked.
- April 25: Opened an adult-use Panacea Wellness Dispensary in Beverly, Massachusetts, marking the Company’s third operational dispensary in the state, and the tenth dispensary it owns or manages. The Company plans to obtain a license for medical sales at this location.
“Our financial results for the first quarter were very strong and we are maintaining our positive outlook and guidance for 2023,” said Susan Villare, Chief Financial Officer. “We continue to execute on our plan to improve efficiencies and we were pleased to report a sequential improvement in our non-GAAP gross margins of 100 basis point and a 58% increase in our adjusted EBITDA. Our balance sheet remains conservatively leveraged and our ability to generate positive cash flows from operations remains a core strength of the Company.”
2023 FINANCIAL GUIDANCE
MariMed remains committed to its proven strategic growth plan and continues to operate some of the best facilities in the cannabis industry. The Company’s guidance for full year 2023 is unchanged:
- Revenue of at least $150 million;
- Gross margin in line with full year 2022, which was about 48%;
- Non-GAAP Adjusted EBITDA of at least $35 million;
- Capital expenditures of $30 million.
DISCUSSION OF NON-GAAP FINANCIAL MEASURES
MariMed’s management uses several different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of its business, and making operating decisions, planning and forecasting future periods. The Company has provided in this release several non-GAAP financial measures: Non-GAAP Gross margin, Non-GAAP Net income (loss), Non-GAAP EBITDA, Non-GAAP Adjusted EBITDA, Non-GAAP EBITDA margin and non-GAAP Adjusted EBITDA margin, as supplements to Revenue, Gross margin, Net income (loss) and other financial measures prepared in accordance with GAAP.
Management believes these non-GAAP financial measures are useful in reviewing and assessing the performance of the Company, and when planning and forecasting future periods, as they provide meaningful operating results by excluding the effects of expenses that are not reflective of its operating business performance. In addition, the Company’s management uses these non-GAAP financial measures to understand and compare operating results across accounting periods and for financial and operational decision-making. The presentation of these non-GAAP measures is not intended to be considered in isolation or as a substitute for the financial information prepared in accordance with GAAP.
Management believes that investors and analysts benefit from considering non-GAAP financial measures in assessing the Company’s financial results and its ongoing business, as it allows for meaningful comparisons and analysis of trends in the business. In particular, non-GAAP adjusted EBITDA is used by many investors and analysts themselves, along with other metrics, to compare financial results across accounting periods and to those of peer companies.
As there are no standardized methods of calculating non-GAAP financial measures, the Company’s calculations may differ from those used by analysts, investors and other companies, even those within the cannabis industry, and therefore may not be directly comparable to similarly titled measures used by others.
Management defines non-GAAP Adjusted EBITDA as net income, determined in accordance with GAAP, excluding the following items:
- interest income and interest expense;
- income taxes;
- depreciation of fixed assets;
- amortization of acquired intangible assets;
- Impairment or write-downs of intangible assets;
- stock-based compensation;
- legal settlements;
- acquisition-related and other;
- other income and other expense;
- and discontinued operations.
For further information, please refer to the publicly available financial filings available on MariMed’s Investor Relations website, as filed with the U.S. Securities and Exchange Commission, or as filed with the Canadian securities regulatory authorities on the SEDAR website.
MariMed Inc., a multi-state cannabis operator, is dedicated to improving lives every day through its high-quality products, its actions, and its values. The Company develops, owns, and manages seed to sale state-licensed cannabis facilities, which are models of excellence in horticultural principles, cannabis cultivation, cannabis-infused products, and dispensary operations. MariMed has an experienced management team that has produced consistent growth and success for the Company and its managed business units. Proprietary formulations created by the Company’s technicians are embedded in its top-selling and award-winning products and brands, including Betty’s Eddies, Nature’s Heritage, InHouse, Bubby’s Baked, K Fusion, Kalm Fusion, and Vibations: High + Energy. For additional information, visit www.marimedinc.com.