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MedMen Reports 55% YoY Increase In Q4 2021 Revenue, Continues To Execute Its 2.0 Growth Plan After Partnering With Tilray And Serruya Private Equity

Cannabis retailer MedMen Enterprises Inc.

Benzinga · 09/24/2021 08:23

Cannabis retailer MedMen Enterprises Inc. (CSE:MMEN) (OTCQX:MMNFF) reported its consolidated financial results Thursday for its fourth quarter and for the fiscal year ended June 26, revealing a 55.4% year-over-year and 18.5% sequential increase in revenue to $42 million in the last three months of 2021.

Tom Lynch, chairman and CEO of MedMen, said that the Los Angeles-based company "set a new record for quarterly revenue at MedMen, driven by broad-based increases in traffic and frequency of transactions across nearly all of our retail locations."

Over the quarter, MedMed managed to raise $10 million in additional gross proceeds via a private placement transaction with an institutional investor.

In August, the company revealed it had secured $100 million in financing through a private placement of its units. Investors, led by Serruya Private Equity, agreed to purchase $100 million of the Los Angeles-based company's units at a purchase price of $0.24 per unit.

Concurrently, MedMen disclosed that Tilray, Inc. (NASDAQ:TLRY) acquired the majority of its's outstanding senior secured convertible notes that were initially held by certain funds affiliated with Gotham Green Partners LLC (GGP) and others.

Q4 2021 Financial Highlights

  • Company-wide gross margin rate, a non-GAAP financial measure, totaled 46.9% compared to 40.5% in the previous period. The growth was mainly driven by the company's increased gross margin at its cultivation and manufacturing facilities.
  • The retail gross margin rate was 54.9% versus 55.6% in the previous quarter.
  • General and administrative expenses amounted to $33.5 million, representing a 13.7% decrease from the same period last year.
  • Corporate selling,  general and administrative expenses, a non-GAAP financial measure, excluding store pre-opening costs, totaled $12.1 million, up by 9.7% from the previous quarter and down by 19.1% from the same period last year.
  • Net loss was $46.2 million compared to a net loss of $9.7 million in the previous quarter, which prior quarter included a $32.7 million tax provision benefit.
  • Retail Adjusted EBITDA margin rate from continuing operations, a non-GAAP financial measure, was 22% for the period.

Full-Year 2021 Financial Highlights

  • Net revenue across the company's continuing operations in California, Nevada, Illinois, Arizona
  • and Florida was $145.1 million, down 6.6% from the prior year, reflecting the impact of COVID-19.
  • Company-wide gross margin rate, a non-GAAP financial measure, was 46.4% compared to 35.6% in the previous year.
  • The retail gross margin rate was 54.7% versus 49.6% in the previous year.
  • General and administrative expenses totaled $125.7 million, representing a 38.2% decrease from the previous year.
  • Corporate selling, general and administrative expenses, a non-GAAP financial measure, excluding store pre-opening costs, totaled $42.6 million, down by 52.% from the previous year's total of $88.8 million.
  • Net loss totaled $157.6 million versus a net loss of $526.5 million in the previous year, which included an impairment charge of $246.7 million.
  • Retail Adjusted EBITDA margin rate from continuing operations, a non-GAAP financial measure, was 20% for the fiscal year 2021.
  • As of June 26, MedMen had total assets of $472.5 million, including cash and cash equivalents of $11.9 million.

Price Action

MedMen's shares traded 8.51% higher at $0.325 per share after the market close on Thursday.

Photo: Courtesy of Austin Distel on Unsplash