$MRMD: Earnings 8/7/2024
MRMD: MariMed Inc. (Balance Sheet Summary)
Current Assets: Increased from $51,432,000 in 2023 to $53,054,000 in 2024, indicating a stronger short-term financial position.
Cash and Cash Equivalents: $10,192,000 (2024) compared to $14,645,000 (2023), a decrease but still maintaining significant liquidity.
Accounts Receivable, Net: Improved slightly from $7,199,000 to $7,744,000 suggesting better collection from customers.
Inventory: Increased from $25,306,000 to $31,139,000 indicating growth in production and product availability.
Non-Current Assets: Grew from $144,691,000 in 2023 to $155,480,000 in 2024, reflecting investment in long-term growth.
Property and Equipment, Net: Increased to $93,977,000 from $89,103,000 showing investment in physical assets.
Intangible Assets, Net: Increased from $17,012,000 to $20,404,000 reflecting growth in intangible value.
Goodwill: Increased from $11,993,000 to $15,812,000 indicating potential acquisitions or value addition.
Finance Lease Right-of-Use Assets: Increased from $3,295,000 to $4,151,000 suggesting expanded leasing activities.
Total Assets: Increased to $208,534,000 in 2024 from $196,123,000 in 2023, indicating overall growth.
Accounts Payable: Increased from $9,001,000 to $11,854,000 showing more operational activity.
Non-Current Liabilities: Increased slightly from $76,347,000 to $80,272,000 indicating more long-term obligations but manageable.
Positives:
1. Total Assets Growth: Significant increase in total assets from $196,123,000 to $208,534,000 reflecting overall growth.
2. Inventory Growth: Increase in inventory to $31,139,000 indicating higher production capacity.
3. Investment in Property and Equipment: Increase to $93,977,000 showing commitment to expanding physical infrastructure.
4. Intangible Assets and Goodwill: Growth in intangible assets and goodwill, suggesting value creation and potential acquisitions.
5. Increased Paid-In Capital: Increase in additional paid-in capital, reflecting investor confidence and additional equity financing.
These points indicate a positive trajectory with investments in assets and infrastructure that suggest growth and expansion potential.
Six months ended June 30:
• 2024:
o Revenue: $78,371,000
o Cost of Revenue: $44,990,000
o Gross Profit: $33,381,000
o Gross Margin: 42.6%
o Operating Expenses: $30,404,000
o Income from Operations: $2,977,000
Positives:
Revenue Growth:
Three months ended June 30: Revenue increased from $36,519,000 in 2023 to $40,438,000 in 2024.
Six months ended June 30: Revenue increased from $70,899,000 in 2023 to $78,371,000 in 2024.
Gross Profit Increase:
Three months ended June 30: Gross profit increased from $16,376,000 in 2023 to $16,909,000 in 2024.
Six months ended June 30: Gross profit increased from $31,764,000 in 2023 to $33,381,000 in 2024.
Improvement in Operating Income:
Three months ended June 30: Despite an increase in operating expenses, the company maintained positive income from operations ($956,000 in 2024).
Six months ended June 30: Income from operations was $2,977,000 in 2024, indicating effective cost management despite higher operating expenses.
Reduction in Interest Expense:
Three months ended June 30: Interest expense decreased from $2,640,000 in 2023 to $1,724,000 in 2024.
Six months ended June 30: Interest expense decreased from $5,145,000 in 2023 to $3,353,000 in 2024.
Cash Flows from Investing Activities:
• 2024:
o Purchases of property and equipment: $8,336,000
o Business acquisitions, net of cash acquired: $4,250,000
o Purchases of cannabis licenses: $623,000
o Proceeds from notes receivable: $13,000
o Net cash used in investing activities: $13,809,000
Cash Flows from Financing Activities:
• 2024:
o Proceeds from Construction to Permanent Commercial Real Estate Mortgage Loan: $2,948,000
o Proceeds from mortgages: $1,163,000
o Principal payments of finance leases: $676,000
o Distributions: $83,000
o Net cash provided by financing activities: $2,961,000
Positives:
1. Positive Cash Flow from Operating Activities:
o 2024: $6,395,000 indicating the company is generating cash from its core operations.
2. Strong Depreciation and Amortization Contributions:
o Significant amounts for depreciation and amortization ($3,946,000 and $1,183,000 in 2024) demonstrate substantial investment in assets and intangible resources.
3. Increased Cash Flow from Financing Activities:
o 2024: Positive net cash provided by financing activities ($2,961,000), showing successful financing strategies, including new mortgage loans and managing finance leases.
4. Investment in Growth:
o Continued investment in property, equipment, and business acquisitions, reflecting the company's commitment to growth and expansion.
5. Reduction in Cash Outflows from Investing Activities:
o Despite significant outflows, the company is strategically investing in key areas such as property, equipment, and licenses.
These points indicate that MariMed Inc. is focusing on operational efficiency, strategic investments, and effective financing to support its growth trajectory.
Positives:
1. Positive Adjusted EBITDA:
o Three months ended June 30, 2024: Adjusted EBITDA is $4,371, ,000 showing positive earnings before interest, taxes, depreciation, and amortization adjustments.
o Six months ended June 30, 2024: Adjusted EBITDA is $9,032, ,000 indicating strong operational performance.
2. Improvement in Non-GAAP Gross Margin:
o Three months ended June 30, 2024: Non-GAAP Gross Margin improved to 42.9% from GAAP Gross Margin of 41.8%.
o Six months ended June 30, 2024: Non-GAAP Gross Margin increased to 43.3% from GAAP Gross Margin of 42.6%.
3. Reduced Non-GAAP Net Loss:
o Three months ended June 30, 2024: Non-GAAP Net Loss is significantly lower at $(232,000) compared to GAAP Net Loss of $(1,639,000).
o Six months ended June 30, 2024: Non-GAAP Net Loss is $(822,000), substantially less than GAAP Net Loss of $(2,931,000).
4. Consistent Adjustments for Amortization and Stock-Based Compensation:
o Adjustments for amortization of acquired intangible assets and stock-based compensation provide a clearer picture of the company's operational performance by excluding non-cash expenses.
5. Maintained Positive EBITDA Margins:
o Despite the lower GAAP income, MariMed has maintained positive Adjusted EBITDA margins (10.8% for the three months and 11.5% for the six months ended June 30, 2024), indicating operational efficiency.
These points highlight MariMed Inc.'s operational strengths, including strong Adjusted EBITDA, improved non-GAAP gross margins, and a significantly reduced non-GAAP net loss.
Six months ended June 30: 2024
o Product revenue - retail: $45,969,000
o Product revenue - wholesale: $30,373,000
o Total product revenue: $76,342,000
o Other revenue: $2,029,000
o Total revenue: $78,371,000
Positives:
1. Strong Growth in Wholesale Revenue:
o Six months ended June 30, 2024: Wholesale revenue grew substantially by 41.9% to $30,373,000 from $21,407,000 in 2023.
2. Overall Revenue Growth:
o Six months ended June 30, 2024: Total revenue increased by 10.5% to $78,371,000 from $70,899,000 in 2023.
3. Stable Retail Revenue:
o Despite a slight decrease, retail revenue remains a significant portion of the total revenue, contributing to a balanced revenue stream.
o Six months ended June 30, 2024: Retail revenue was $45,969,000 compared to $47,519,000 in 2023, showing resilience.
4. Increase in Other Revenue:
o Six months ended June 30, 2024: Other revenue increased slightly to $2,029,000 from $1,973,000 in 2023, demonstrating growth in additional revenue streams.
These points highlight MariMed Inc.'s robust performance in increasing wholesale revenue and overall revenue growth, which are positive indicators of the company's expanding market presence and operational efficiency.
Balance Sheet Summary:
• Total Assets increased from $196.1M to $208.5M, showing overall growth.
•Current Assets grew to $53.1M from $51.4M, with significant liquidity in cash ($10.2M).
•Non-Current Assets rose to $155.5M from $144.7M, driven by investments in property, equipment, and intangibles.
•Total Liabilities increased to $120.9M from $107.2M, reflecting higher short-term and long-term obligations but manageable within the asset growth.
Stockholders’ Equity remains strong at $68.6M despite a slight decrease from $69.9M.
Positives:
1. Asset Growth: Significant increase to $208.5M.
2. Inventory Increase: Reflects higher production capacity.
3. Investment in Infrastructure: Increased property and equipment investment to $94M.
4. Intangible Assets Growth: Indicates value creation and potential acquisitions.
5. Stable Financing: Consistent mezzanine financing at $19M.
Revenue Growth:
o Q2: Up from $36.5M (2023) to $40.4M (2024).
o 6 Months: Up from $70.9M (2023) to $78.4M (2024).
Gross Profit Increase:
o Q2: Up from $16.4M to $16.9M
o 6 Months: Up from $31.8M to $33.4M
Operating Income:
o Q2: Positive at $956K despite higher operating expenses.
o 6 Months: Positive at $3M
Interest Expense Reduction:
o Q2: Down from $2.6M to $1.7M
o 6 Months: Down from $5.1M to $3.4M
Positives:
1. Revenue and Gross Profit Growth: Consistent increase in revenue and gross profit.
2. Positive Operating Income: Indicates effective cost management.
3. Reduced Interest Expenses: Lower financial costs improve net loss figures.
Statements of Cash Flows Summary:
• Positive Cash Flow from Operations: $6.4M in 2024, showing strong core operations.
• Investing in Growth: Continued investment in property, equipment, and business acquisitions.
• Effective Financing: Positive net cash from financing activities at $3M.
Positives:
1. Operational Cash Generation: Strong positive cash flow from operations.
2. Strategic Investments: Significant investments in assets and growth initiatives.
3. Effective Financing Strategy: Positive financing activities support growth.
MariMed Inc. demonstrates robust growth in assets, revenue, and operational efficiency, with strategic investments and effective financing supporting its positive trajectory.
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