MediPharm Labs Corp a pharmaceutical company specialized in precision-based cannabinoids, today announced its financial results for the three months ended September 30, 2022.
Strong Revenue Growth
Streamlining and Focusing Operations to Achieve Cost Savings
Innovation and New Product Launches Drive Revenue Growth
Continued Progress Towards Leadership in the Emerging Cannabis-Based Drug Opportunity
Further Expansion of International Medical Business
Solid balance sheet, materially debt free, outright ownership of key assets
David Pidduck, CEO, MediPharm Labs commented, “When we reported Q2 earnings I articulated our intention to immediately focus on efficiency, capacity utilization and a re-allocation of capital toward core opportunities, as the path to accelerating revenue growth and achieving profitability at MediPharm. In Q3, we continued to make progress against these objectives. We grew sales on a sequential basis, reduced working capital, and will begin realizing meaningful operating cost benefits from our recent restructuring and the sale of our Australian operations during Q4.
Mr. Pidduck, continued, “The opportunity for MediPharm remains unchanged. The international pharma-cannabinoid space is evolving rapidly with many clinical trials underway; and our organization is one of only a few internationally that has the sophistication, licensing, pipeline, and experience to execute on it. We are working with global pharma companies and leading research organizations to include MediPharm APIs as part of their trial processes. From an M&A perspective, we see opportunities coming out of the liquidity challenges for some of peers. We are patiently but actively reviewing potential transactions both in Canada and internationally and continue to be confident that we will be able to find and execute on deals that leverage our asset base and drive both short- and long-term returns for shareholders”.
Greg Hunter, CFO, MediPharm Labs added, “In Q3 MediPharm continued to make progress improving both revenue and adjusted EBITDA on a sequential and year over year basis as we continue our path towards profitability. We completed the implementation of a restructuring plan and the sale of our Australian facility which will reduce expenses by approximately $7M on an annualized basis. Cash burn reduced relative to prior quarters to $2.5M in Q3 as we continue to focus on reducing working capital and driving efficiencies. MediPharm is virtually free of material debt and ended the quarter with $19.5M of cash which does not include the $6.4M received in early October for the sale of our Australian facility. Given the strength of our balance sheet relative to our peers we are very well positioned as we look at the M&A landscape with a focus on transformation opportunities”.
Q3 2022 – Financial Summary
September |
September 30, |
June 30, 2022 |
||
$’000s |
$’000s |
$’000s |
||
Revenue |
7,262 |
5,401 |
4,362 |
|
Gross profit |
(1,190) |
(1,860) |
(532) |
|
Adjusted Gross Profit1 |
(762) |
(1,354) |
(47) |
|
Net loss |
(7,930) |
(7,356) |
(8,987) |
|
Adjusted EBITDA1 |
(4,974) |
(6,518) |
(6,345) |
|
MediPharm will host a conference call and webcast to discuss the Company’s financial results and outlook.
Date: November 14, 2022 | Time: 8:30 a.m. ET
Conference ID: 4921762
Participant Dial-in: 1 (888) 330-2454 / International number: 1 (240) 789-2714
(Participants are asked to dial in approximately 15 minutes before the start of the call)
An audio webcast will be available in the Events section of the MediPharm website https://www.medipharmlabs.com/investors
For those who are unable to participate on the live conference call or webcast, a replay will be available approximately one hour after completion of the call.
Adjusted EBITDA and adjusted Gross Profit are not recognized performance measures under IFRS, do not have a standardized meaning and therefore may not be comparable to similar measures presented by other issuers. Adjusted EBITDA and adjusted Gross Profit are included as a supplemental disclosure because Management believes that such measurement provides a better assessment of the Company’s operations on a continuing basis by eliminating certain non-cash charges and charges or gains that are non-recurring. Adjusted EBITDA is defined as net loss excluding interest, taxes, depreciation and amortization expense, interest income and expense, finance fees, gain in revaluation of derivative liabilities, taxes, impairment losses on inventory, write down of deposits and share-based compensation. Adjusted EBITDA has limitations as an analytical tool as it does not include depreciation and amortization expense, interest income and expense, taxes, share-based compensation, and transaction fees. 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. The most directly comparable measure to Adjusted EBITDA calculated in accordance with IFRS is operating income (loss). The above is a reconciliation of the Company’s operating loss to Adjusted EBITDA. See “Reconciliation of non-IFRS measures” in the Company’s Management’s Discussion and Analysis for the period ended December 31, 2021, for additional information. Adjusted gross profit is defined as gross profit/(loss) excluding the adjustments for accelerated depreciation, write down of non-current deposits and write down of inventory. Adjusted gross profit is a useful measure as it represents gross profit for management purposes based on costs to manufacture, package and ship inventory sold, exclusive of any impairments due to changes in internal or external influences.
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 North America to hold a domestic Good Manufacturing Licence for the extraction of natural cannabinoids. The Company carries out its operations in compliance with all applicable laws in the countries in which it operates.