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MariMed Reports Second Quarter 2024 Earnings

NORWOOD, Mass., Aug. 07, 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 second quarter ended June 30, 2024.

“With the first half of the year in the books, I’m pleased to say we remain on track to deliver our 2024 financial targets,” said Jon Levine, Chief Executive Officer. “Revenue growth in the second quarter of 2024 was very strong both year-over-year and sequentially, led by another tremendous quarter for our wholesale business. Our retail business also turned the corner, with a 24% increase in transactions year-over-year. While we continue to navigate the growth phase of our life cycle, and our results reflect a corresponding drag on margins and cash flow, we are pleased that we are already seeing margin improvements, particularly in our Illinois dispensaries. We are highly confident we will realize margin expansion and increased cash flow long-term as our new assets deliver their full revenue potential.”

Financial Highlights1

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

  Three months ended
June 30,
  Six months ended
June 30,
 
  2024   2023   2024   2023  
Revenue $ 40.4     $ 36.5     $ 78.4     $ 70.9    
GAAP Gross margin   42 %     45 %     43 %     45 %  
Non-GAAP Gross margin   43 %     46 %     43 %     46 %  
GAAP Net loss $ (1.6 )   $ (0.9 )   $ (2.9 )   $ (1.6 )  
Non-GAAP Net (loss) income $ (0.2 )   $ 0.6     $ (0.8 )   $ 0.9    
Non-GAAP Adjusted EBITDA $ 4.4     $ 6.3     $ 9.0     $ 13.4    
Non-GAAP Adjusted EBITDA margin   11 %     17 %     12 %     19 %  
   
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, August 8, 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: https://app.webinar.net/bWgXr1bNZB4.

SECOND QUARTER 2024 OPERATIONAL HIGHLIGHTS

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

OTHER DEVELOPMENTS

Subsequent to the end of the second quarter, the Company announced the following further developments:

2024 FINANCIAL GUIDANCE

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 requiring regulatory approvals. The Company believes this conservative approach to offering financial targets allows investors and analysts to focus on key operating milestones versus discussions around issues outside the Company’s control. As such, the Company’s full year 2024 financial targets remain at:

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, making operating decisions, and 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 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 income (loss) from operations, determined in accordance with GAAP, excluding the following items:

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, 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 2024, including management’s belief that it will report its fifth 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: ir@marimedinc.com
Phone: (781) 277-0007

Company Contact:
Howard Schacter, Chief Communications Officer
Email: hschacter@marimedinc.com
Phone: (781) 277-0007

MariMed Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
 
   
  June 30,
2024
  December 31,
2023
 
Assets                
Current assets:                
  Cash and cash equivalents $ 10,192     $ 14,645    
  Accounts receivable, net   7,744       7,199    
  Inventory   31,139       25,306    
  Deferred rents receivable   593       630    
  Notes receivable, current portion   52       52    
  Investments, current portion         88    
  Due from related parties   233       105    
  Other current assets   3,101       3,407    
        Total current assets   53,054       51,432    
Property and equipment, net   93,977       89,103    
Intangible assets, net   20,404       17,012    
Goodwill   15,812       11,993    
Investments, net of current portion         221    
Notes receivable, net of current portion   814       814    
Operating lease right-of-use assets   9,219       9,716    
Finance lease right-of-use assets   4,151       3,295    
Other assets   11,103       12,537    
       Total assets $ 208,534     $ 196,123    
                 
Liabilities, mezzanine equity and stockholders’ equity                
Current liabilities:                
  Mortgages and notes payable, current portion $ 3,871     $ 723    
  Accounts payable   11,854       9,001    
  Accrued expenses and other   5,048       3,549    
  Income taxes payable   16,387       14,434    
  Operating lease liabilities, current portion   1,965       1,945    
  Finance lease liabilities, current portion   1,534       1,210    
      Total current liabilities   40,659       30,862    
Mortgages and notes payable, net of current portion   69,504       65,652    
Operating lease liabilities, net of current portion   8,003       8,455    
Finance lease liabilities, net of current portion   2,665       2,140    
Other liabilities   100       100    
      Total liabilities   120,931       107,209    
                 
Commitments and contingencies                
                 
Mezzanine equity                
Series B convertible preferred stock   14,725       14,725    
Series C convertible preferred stock   4,275       4,275    
      Total mezzanine equity   19,000       19,000    
Stockholders’ equity                
Common stock   380       375    
Additional paid-in capital   172,842       171,144    
Accumulated deficit   (102,904 )     (99,955 )  
Noncontrolling interests   (1,715 )     (1,650 )  
      Total stockholders’ equity   68,603       69,914    
           Total liabilities, mezzanine equity and stockholders’ equity $ 208,534     $ 196,123    
   
MariMed Inc.
Condensed Consolidated Statements of Operations
(in thousands, except percentages and per share amounts)
(unaudited)
 
   
  Three months ended
June 30,
  Six months ended
June 30,
 
  2024   2023   2024   2023  
                                 
Revenue $ 40,438     $ 36,519     $ 78,371     $ 70,899    
Cost of revenue   23,529       20,143       44,990       39,135    
Gross profit   16,909       16,376       33,381       31,764    
                                 
Gross margin   41.8 %     44.8 %     42.6 %     44.8 %  
                                 
Operating expenses:                                
Personnel   6,958       5,619       13,423       10,275    
Marketing and promotion   1,856       1,666       3,618       2,812    
General and administrative   6,804       5,080       12,944       9,385    
Acquisition-related and other   350       425       434       615    
Bad debt   (15 )     39       (15 )     (5 )  
      Total operating expenses   15,953       12,829       30,404       23,082    
                                 
Income from operations   956       3,547       2,977       8,682    
                                 
Interest and other (expense) income:                                
Interest expense   (1,724 )     (2,640 )     (3,353 )     (5,145 )  
Interest income   25       115       51       214    
Other expense, net   (30 )     (10 )     (50 )     (910 )  
      Total interest and other expense, net   (1,729 )     (2,535 )     (3,352 )     (5,841 )  
                                 
(Loss) income before income taxes   (773 )     1,012       (375 )     2,841    
Provision for income taxes   866       1,947       2,556       4,440    
                                 
Net loss   (1,639 )     (935 )     (2,931 )     (1,599 )  
Less: Net income attributable to noncontrolling
interests
  12       23       18       4    
Net loss attributable to common stockholders $ (1,651 )   $ (958 )   $ (2,949 )   $ (1,603 )  
                                 
Net loss per share attributable to common
stockholders:
                               
Basic $ (0.00 )   $ (0.00 )   $ (0.01 )   $ (0.00 )  
Diluted $ (0.00 )   $ (0.00 )   $ (0.01 )   $ (0.00 )  
                                 
Weighted average common shares outstanding:                                
Basic   379,514       361,261       377,362       352,079    
Diluted   379,514       361,261       377,362       352,079    
   
MariMed Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
 
   
  Six months ended
June 30,
 
  2024   2023  
Cash flows from operating activities:                
Net loss attributable to common stockholders $ (2,949 )   $ (1,603 )  
Net income attributable to noncontrolling interests   18       4    
Adjustments to reconcile net loss to cash provided by operating activities:                
 Depreciation and amortization of property and equipment   3,946       2,247    
 Amortization of intangible assets   1,183       1,337    
 Stock-based compensation   492       505    
 Amortization of warrants issued to as payment for services received   218          
 Amortization of original debt issuance discount         131    
 Amortization of debt discount   175       1,607    
 Amortization of debt issuance costs   37          
 Payment-in-kind interest   69       299    
 Bad debt income   (15 )     (5 )  
 Obligations settled with common stock   2       461    
 Write-off of disposed assets   36       906    
 Gain on finance lease adjustment         (13 )  
 Loss on changes in fair value of investments   144       30    
 Changes in operating assets and liabilities:                
      Accounts receivable, net   (530 )     (1,449 )  
      Deferred rents receivable   37       37    
      Inventory   (5,833 )     (5,309 )  
      Other current assets   930       (1,497 )  
      Other assets   1,919       359    
      Accounts payable   3,607       1,138    
      Accrued expenses and other   955       (535 )  
      Income taxes payable   1,954       (1,874 )  
           Net cash provided by (used in) operating activities   6,395       (3,224 )  
                 
Cash flows from investing activities:                
Purchases of property and equipment   (8,336 )     (8,786 )  
Business acquisitions, net of cash acquired   (4,250 )     (2,987 )  
Advances toward future business acquisitions   (485 )     (250 )  
Purchases of cannabis licenses   (623 )     (601 )  
Issuance of notes receivable         (879 )  
Proceeds from notes receivable   13       87    
Due from related party   (128 )     (6 )  
          Net cash used in investing activities   (13,809 )     (13,422 )  
                 
Cash flows from financing activities:                
Proceeds from term loan         29,100    
Proceeds from Construction to Permanent Commercial Real Estate
Mortgage Loan
  2,948          
Proceeds from mortgages   1,163          
Principal payments of term loan         (600 )  
Principal payments of mortgages   (138 )     (404 )  
Repayment and retirement of mortgages         (778 )  
Principal payments of promissory notes   (253 )     (25 )  
Repayment and retirement of promissory notes         (5,503 )  
Proceeds from exercise of stock options         35    
Principal payments of finance leases   (676 )     (200 )  
Distributions   (83 )     (81 )  
  Net cash provided by financing activities   2,961       21,544    
                 
Net increase in cash and cash equivalents   (4,453 )     4,898    
Cash and equivalents, beginning of year   14,645       9,737    
Cash and cash equivalents, end of period $ 10,192     $ 14,635    
   
MariMed Inc.
Reconciliation of Non-GAAP and GAAP Financial Measures
(in thousands, except percentages)
(unaudited)
 
   
  Three months ended
June 30,
  Six months ended
June 30,
 
   2024     2023     2024     2023   
Non-GAAP Adjusted EBITDA                                
GAAP Income from operations $ 956     $ 3,547     $ 2,977     $ 8,682    
Depreciation and amortization of property and
equipment
  2,008       1,261       3,946       2,247    
Amortization of acquired intangible assets   809       780       1,183       1,337    
Stock-based compensation   248       299       492       505    
Acquisition-related and other   350       425       434       615    
Adjusted EBITDA $ 4,371     $ 6,312     $ 9,032     $ 13,386    
                                 
Non-GAAP Adjusted EBITDA Margin (Non-
GAAP adjusted EBITDA as a percentage of
revenue)
                               
GAAP Income from operations   2.4 %     9.7 %     3.8 %     12.2 %  
Depreciation and amortization of property and
equipment
  4.9 %     3.5 %     5.0 %     3.2 %  
Amortization of acquired intangible assets   2.0 %     2.1 %     1.5 %     1.9 %  
Stock-based compensation   0.6 %     0.8 %     0.6 %     0.7 %  
Acquisition-related and other   0.9 %     1.2 %     0.6 %     0.9 %  
Adjusted EBITDA margin   10.8 %     17.3 %     11.5 %     18.9 %  
   
GAAP Gross margin 41.8 %   44.8 %   42.6 %   44.8 %  
Amortization of acquired intangible assets 1.1 %   1.2 %   0.7 %   1.0 %  
Non-GAAP Gross margin 42.9 %   46.0 %   43.3 %   45.8 %  
   
GAAP Net loss $ (1,639 )   $ (935 )   $ (2,931 )   $ (1,599 )  
Amortization of acquired intangible assets   809       780       1,183       1,337    
Stock-based compensation   248       299       492       505    
Acquisition-related and other   350       425       434       615    
Non-GAAP Net (loss) income $ (232 )   $ 569     $ (822 )   $ 858    
   
MariMed Inc.
Supplemental Information
Revenue Components
(in thousands)
(unaudited)
 
   
  Three months ended
June 30,
  Six months ended
June 30,
 
  2024   2023   2024   2023  
Product revenue:                        
Product revenue – retail $ 23,623   $ 24,336   $ 45,969   $ 47,519  
Product revenue – wholesale   15,868     11,031     30,373     21,407  
  Total product revenue   39,491     35,367     76,342     68,926  
Other revenue   947     1,152     2,029     1,973  
       Total revenue $ 40,438   $ 36,519   $ 78,371   $ 70,899  


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