Else Nutrition

MariMed Reports Fourth Quarter and Full Year 2023 Earnings

06 March 2024

NORWOOD, Mass., March 06, 2024 (GLOBE NEWSWIRE) -- 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 fourth quarter and year ended December 31, 2023.

“I am pleased to report another year of strong operational and financial performance,” said Jon Levine, Chief Executive Officer. “We had a record year with respect to revenue generation, particularly in wholesale, new asset openings, and leveraging our balance sheet strength to secure capital. We reported double-digit revenue growth for the sixth consecutive year and positive adjusted EBITDA for the fourth consecutive year. I believe MariMed stands alone among cannabis companies for the longevity of delivering these strong financial results. We anticipate continuing this track record as the commencement of wholesale operations in Illinois is contributing to a solid start in 2024, positioning us for outsized, long-term growth.”

Financial Highlights1

The following table summarizes the Company's consolidated financial highlights (in millions, except percentage amounts):

 Three months ended
December 31,
 Year ended
December 31,
  2023   2022   2023   2022 
Revenue$38.9  $35.8  $148.6  $134.0 
GAAP Gross margin 45%  44%  44%  48%
Non-GAAP Gross margin 46%  45%  45%  48%
GAAP Net (loss) income$(10.1) $4.8  $(16.0) $13.6 
Non-GAAP Net income (loss)$1.4  $5.2  $(0.8) $22.2 
Non-GAAP Adjusted EBITDA$5.2  $4.5  $24.7  $32.4 
Non-GAAP Adjusted EBITDA margin 14%  13%  17%  24%
                

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.

CONFERENCE CALL

MariMed management will host a conference call on Thursday, March 7, 2024 at 8:00 a.m. Eastern time, to discuss these results. The conference call may be accessed through MariMed’s Investor Relations website, or by clicking the following link: MRMD Q432 Earnings Call.

FOURTH QUARTER 2023 OPERATIONAL HIGHLIGHTS

During the fourth quarter, the Company announced the following developments in the implementation of its strategic growth plan:

  • October 11: MariMed announced the opening of Thrive Dispensary in Casey, Illinois, marking the fifth dispensary it owns or manages in that state, and the 12th dispensary it owns or manages across its five-state footprint. In response to the state’s request to open as soon as possible, the Company began operating the dispensary from a temporary mobile facility until regulatory approval for a permanent brick-and-mortar facility is received.
  • November 20: The Company announced a $58.7 million debt refinancing, lowering the Company's weighted average cost of debt to an industry low 8%. Highlights of the deal include a 10-year term with a fixed 8.4% interest rate for the first five years, and interest-only payments for the initial 12 months. Principal payments calculated on a 20-year amortization schedule will begin in the 13th month and continue for the life of the loan. There are no pre-payment penalties. The deal resulted in ZERO dilution to shareholders - no new equity was issued.
  • December 4: MariMed announced commencement of operations at its new processing facility in Mt. Vernon, Illinois. The state-of-the-art facility contains an extraction lab to produce concentrates and a production kitchen for the manufacture of edibles and other derivative products. Later that month, MariMed's began selling its branded products through the Company's five Thrive Dispensary locations in the state, and began state-wide wholesale operations in January, 2024. The co-located cultivation facility is currently under construction and is expected to be completed in 2024.

OTHER DEVELOPMENTS
Subsequent to the end of the fourth quarter, the Company announced the following developments:

  • February 26: MariMed received Certificate of Occupancy from the Illinois Cannabis Control Commission to commence operations in its permanent brick-and-mortar facility for its Casey, Illinois adult-use dispensary. The Company anticipates transitioning from its temporary facility at the same location and commencing operations in the new facility during the first quarter of 2024.

  • March 6: MariMed announced expanded Maryland footprint with pending dispensary acquisition in Upper Marlboro. On February 1st, the Company entered into a definitive agreement to acquire the operating assets of Our Community Wellness & Compassionate Care Center, Inc, a medical licensed dispensary operator located in Upper Marlboro, Maryland. Total considerations were $5.25 million for the acquisition, which is subject to approval by the Maryland Cannabis Administration (“MCA”), will provide the Company with its second owned dispensary in Maryland. Upon MCA approval of the license transfer, MariMed will apply for an adult-use dispensary license to commence recreational dispensary sales.

2024 FINANCIAL TARGETS

MariMed's full year 2024 financial targets are based on organic growth of its existing operating assets and do not include new revenue-generating projects such as commencing adult-use sales in Ohio, opening the new processing facility in Missouri, opening the new dispensary in Maryland, or acquiring other operating assets or licenses. The Company believes this more conservative approach to offering financial targets will allow investors and analysts to focus on key operating milestones versus discussions about issues outside the Company's control such as construction or regulatory delays. As such, the Company's full year 2024 financial targets are:

  • Revenue growth of 5% to 7%;
  • Non-GAAP Adjusted EBITDA growth of 0% to 2%; and
  • Capital expenditures of $10 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 Adjusted EBITDA and non-GAAP Adjusted EBITDA margin, as supplements to Revenue, Gross margin, Net (loss) income 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 income from operations, determined in accordance with GAAP, excluding the following items:

  • depreciation of fixed assets;
  • amortization of acquired intangible assets;
  • Impairment or write-downs of intangible assets;
  • stock-based compensation;
  • legal settlements; and
  • acquisition-related and other expenses.

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.

ABOUT MARIMED

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, which are trademarks of MariMed Inc. For additional information, visit www.marimedinc.com.

IMPORTANT CAUTION REGARDING FORWARD-LOOKING STATEMENTS:

The information in this release contains “forward-looking” statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, which are subject to several risks and uncertainties.   All statements other than statements of historical facts contained in this release, including without limitation statements regarding projected financial results for 2023, including management’s belief that it will have its fourth consecutive year of positive operating cash flow, anticipated openings of dispensaries and facilities, timing of regulatory approvals, plans and objectives of management for future operations, are forward-looking statements.   Without limiting the foregoing, the words “anticipates”, “believes”, “estimates”, “expects”, “expectations”, “intends”, “may”, “plans”, and other similar language, whether in the negative or affirmative, are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

Forward-looking statements are based on our current beliefs and assumptions regarding our business, timing of regulatory approvals, the ability to obtain new licenses, business prospects and strategic growth plan, and other future conditions.   Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict.   Our actual results may differ materially from those contemplated in these forward-looking statements due to various risks, uncertainties, and other important factors, including, among others, reductions in customer spending, our ability to recruit and retain key personnel, and disruptions from the integration efforts of acquired companies.

These factors are not intended to be an all-encompassing list of risks and uncertainties that may affect our business and results of operations.   These statements are not a guarantee of future performance and involve risk and uncertainties that are difficult to predict, including, among other factors, changes in demand for the Company’s services and products, changes in the law and its enforcement, and changes in the economic environment. Additional information regarding these and other factors can be found in our reports filed with the U.S. Securities and Exchange Commission.   In providing these forward-looking statements, the Company expressly disclaims any obligation to update these statements publicly or otherwise, whether as a result of new information, future events or otherwise, except as required by law.

All trademarks and service marks are the property of their respective owners.

For More Information Contact:

Investor Relations:
Steve West, Vice President, Investor Relations
Email: This email address is being protected from spambots. You need JavaScript enabled to view it. 
Phone: (781) 277-0007

Company Contact:
Howard Schacter, Chief Communications Officer
Email: This email address is being protected from spambots. You need JavaScript enabled to view it. 
Phone: (781) 277-0007

 

MariMed Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)

 December 31,
  2023   2022 
Assets   
Current assets:   
Cash and cash equivalents$14,645  $9,737 
Accounts receivable, net 7,199   4,157 
Inventory 25,306   19,477 
Deferred rents receivable 630   704 
Notes receivable, current portion 52   2,637 
Investments, current portion 88   123 
Due from related parties 105   29 
Other current assets 3,407   7,282 
Total current assets 51,432   44,146 
Property and equipment, net 89,103   71,641 
Intangible assets, net 17,012   14,201 
Goodwill 11,993   8,079 
Investments, net of current portion 221    
Notes receivable, net of current portion 814   7,467 
Operating lease right-of-use assets 9,716   4,931 
Finance lease right-of-use assets 3,295   713 
Other assets 12,537   1,024 
Total assets$196,123  $152,202 
    
Liabilities, mezzanine equity and stockholders’ equity   
Current liabilities:   
Mortgages and notes payable, current portion$723  $3,774 
Accounts payable 9,001   6,626 
Accrued expenses and other 3,549   3,091 
Income taxes payable 14,434   11,489 
Operating lease liabilities, current portion 1,945   1,273 
Finance lease liabilities, current portion 1,210   237 
Total current liabilities 30,862   26,490 
Mortgages and notes payable, net of current portion 65,652   25,943 
Operating lease liabilities, net of current portion 8,455   4,173 
Finance lease liabilities, net of current portion 2,140   461 
Other liabilities 100   100 
Total liabilities 107,209   57,167 
    
Commitments and contingencies   
    
Mezzanine equity:   
Series B convertible preferred stock 14,725   14,725 
Series C convertible preferred stock 4,275   23,000 
Total mezzanine equity 19,000   37,725 
    
Stockholders’ equity:   
Common stock 375   341 
Common stock subscribed but not issued    39 
Additional paid-in capital 171,144   142,365 
Accumulated deficit (99,955)  (83,924)
Noncontrolling interests (1,650)  (1,511)
Total stockholders’ equity 69,914   57,310 
Total liabilities, mezzanine equity, and stockholders’ equity$196,123  $152,202 
    

MariMed Inc.
Condensed Consolidated Statements of Operations
(in thousands, except percentages and per share amounts)
(unaudited)

 Three months ended Year ended
 December 31, December 31,
  2023   2022   2023   2022 
        
Revenue$38,899  $35,830  $148,598  $134,010 
Cost of revenue 21,582   20,018   82,679   70,053 
Gross profit 17,317   15,812   65,919   63,957 
        
Gross margin 44.5%  44.1%  44.4%  47.7%
        
Operating expenses:       
Personnel 6,421   4,234   22,612   14,404 
Marketing and promotion 1,580   882   5,977   3,736 
General and administrative 6,612   3,845   22,132   20,735 
Acquisition-related and other 48   64   695   961 
Bad debt 245   3,698   118   3,752 
Total operating expenses 14,906   12,723   51,534   43,588 
        
Income from operations 2,411   3,089   14,385   20,369 
        
Interest and other (expense) income:       
Interest expense (1,558)  (422)  (9,185)  (1,693)
Interest income 27   239   270   959 
Loss on extinguishment of debt (10,431)     (10,431)   
Other expense, net (79)  (151)  (1,635)  (127)
Total interest and other expense, net (12,041)  (334)  (20,981)  (861)
        
(Loss) income before income taxes (9,630)  2,755   (6,596)  19,508 
Provision (benefit) for income taxes 509   (2,000)  9,411   5,894 
        
Net (loss) income (10,139)  4,755   (16,007)  13,614 
Less: Net income attributable to noncontrolling interests 30   4   24   146 
Net (loss) income attributable to common stockholders$(10,169) $4,751  $(16,031) $13,468 
        
Net (loss) income per share attributable to common stockholders:       
Basic$(0.03) $0.01  $(0.04) $0.04 
Diluted$(0.03) $0.01  $(0.04) $0.04 
        
Weighted average common shares outstanding:       
Basic 376,006   339,436   363,403   337,697 
Diluted 376,006   381,858   363,403   380,289 
                

MariMed Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)

 Year ended
 December 31,
  2023   2022 
Cash flows from operating activities:   
Net (loss) income attributable to common stockholders$(16,031) $13,468 
Net income attributable to noncontrolling interests 24   146 
Adjustments to reconcile net (loss) income to net cash provided by operating activities:   
Depreciation and amortization of property and equipment 5,549   3,432 
Amortization of intangible assets 3,025   1,282 
Stock-based compensation 1,020   6,338 
Amortization of original debt issuance discount 232    
Amortization of debt discount 2,851    
Payment-in-kind interest 366    
Bad debt expense 118   3,752 
Obligations settled with common stock 465   696 
Write-off of disposed assets 906    
Gain on finance lease adjustment (31)   
Write-down of prepaid purchase consideration 200    
Loss on extinguishment of debt 10,431    
Loss on changes in fair value of investments 76   1,082 
Other investment income    (954)
Changes in operating assets and liabilities:   
Accounts receivable, net (3,160)  (6,902)
Inventory (5,829)  (5,383)
Deferred rents receivable 74   132 
Other current assets 4,500   (5,219)
Other assets (356)  (126)
Accounts payable 2,375   1,027 
Accrued expenses and other (1,840)  (482)
Income taxes payable 2,945   (4,978)
Net cash provided by operating activities 7,910   7,311 
    
Cash flows from investing activities:   
Purchases of property and equipment (20,130)  (12,140)
Business acquisitions, net of cash acquired (2,987)  (12,847)
Advances toward future business acquisitions (1,125)  (800)
Purchases of investments (261)   
Purchases of cannabis licenses (626)  (601)
Issuance of notes receivable (879)   
Proceeds from notes receivable 99   173 
Due from related parties (76)  (29)
Net cash used in investing activities (25,985)  (26,244)
    
Cash flows from financing activities:   
Proceeds from term loan 29,100    
Proceeds from Construction to Permanent Commercial Real Estate Mortgage Loan 53,618    
Proceeds from mortgages    3,000 
Payment of third-party debt issuance costs in connection with debt (3,339)   
Principal payments of term loan (1,800)   
Repayment and retirement of term loan, including paid-in-kind interest (28,541)   
Payment of penalties on early retirement of debt (4,251)   
Principal payments of mortgages (585)  (945)
Repayment and retirement of mortgages (12,595)   
Principal payments of promissory notes (2,370)  (592)
Repayment and retirement of promissory notes (5,503)   
Proceeds from exercise of stock options 109   10 
Principal payments of finance leases (702)  (227)
Redemption of minority interests    (2,000)
Distributions (158)  (259)
Net cash provided by (used in) financing activities 22,983   (1,013)
    
Net increase (decrease) to cash and cash equivalents 4,908   (19,946)
Cash and cash equivalents at beginning of year 9,737   29,683 
Cash and cash equivalents at end of year$14,645  $9,737 
        

MariMed Inc.
Reconciliation of Non-GAAP and GAAP Financial Measures
(in thousands, except percentages)
(unaudited)

 Three months ended Year ended
 December 31, December 31,
  2023   2022   2023   2022 
Non-GAAP Adjusted EBITDA       
GAAP Income from operations$2,411  $3,089  $14,385  $20,369 
Depreciation and amortization of property and equipment 1,711   963   5,549   3,432 
Amortization of acquired intangible assets 844   428   3,025   1,282 
Stock-based compensation 219   (58)  1,020   6,338 
Acquisition-related and other 48   64   695   961 
Adjusted EBITDA$5,233  $4,486  $24,674  $32,382 
        
Non-GAAP Adjusted EBITDA Margin (Non-GAAP adjusted EBITDA as a percentage of revenue)       
GAAP Income from operations 6.2%  8.6%  9.7%  15.2%
Depreciation and amortization of property and equipment 4.4%  2.7%  3.7%  2.6%
Amortization of acquired intangible assets 2.2%  1.2%  2.0%  1.0%
Stock-based compensation 0.6%  (0.2%)  0.7%  4.7%
Acquisition-related and other 0.1%  0.2%  0.5%  0.7%
Adjusted EBITDA margin 13.5%  12.5%  16.6%  24.2%

 

GAAP Gross margin 44.5%  44.1%  44.4%  47.7%
Amortization of acquired intangible assets 1.1%  0.5%  1.0%  0.4%
Non-GAAP Gross margin 45.6%  44.6%  45.4%  48.1%

 

GAAP Net (loss) income$(10,139) $4,755  $(16,007) $13,614
Stock-based compensation 219   (58)  1,020   6,338
Amortization of acquired intangible assets 844   428   3,025   1,282
Acquisition-related and other 48   64   695   961
Loss on extinguishment of debt 10,431      10,431   
Non-GAAP Net income (loss)$1,403  $5,189  $(836) $22,195
               

MariMed Inc.
Supplemental Information
Revenue Components
(in thousands)
(unaudited)

 Three months ended Year ended
 December 31, December 31,
  2023  2022  2023  2022
Product revenue:       
Product revenue - retail 23,877  24,715  95,517  92,836
Product revenue - wholesale 13,738  9,836  48,788  32,865
Total product revenue 37,615  34,551  144,305  125,701
Other revenue 1,284  1,279  4,293  8,309
  Total revenue$38,899 $35,830 $148,598 $134,010

 


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