MJardin Group Announces First Quarter 2019 Financial Results and Conference Call
DENVER and TORONTO, May 30, 2019 (GLOBE NEWSWIRE) — MJardin Group, Inc. (“MJardin” or “the Company”) (CSE: MJAR) (OTCQX: MJARF), a leader in premium cannabis production, today announced its financial and operating results for the quarter ending March 31, 2019. All amounts are expressed in Canadian dollars unless otherwise indicated.
- Generated revenues of $10.9 million;
- Increased monthly production at the Brampton, Ontario facility “WILL” by 50% to a run-rate of approximately 700 kg of dried flower;
- Continued retrofit of remaining nine grow rooms at WILL, construction to be completed by the third quarter and revised production estimates to approximately 2,200 kg of dried flower annually;
- Completed first harvest at Halifax, Nova Scotia facility “AMI”, fully propagated all grow rooms and remain on track to have AMI at full harvest levels by the fourth quarter of 2019;
- Completed previously announced definitive agreement with Rama First Nation for the development of a cultivation, extraction and retail facility located adjacent to Casino Rama;
- Company began publicly trading on the OTC under ticker symbol MJARF.
- On April 22, 2019 the Company announced the acquisition of Carson City Agency Solutions dba Cannabella (“Cannabella”) a leading Nevada producer of edible products with distribution throughout the state.
- On May 28, 2019 MJardin completed construction of the Company’s 76% owned “GRO” cultivation facility in Dunnville, Ontario. Additionally, the Company submitted the Evidence of Readiness (EOR) package to Health Canada for the purposes of receiving a Cultivation and Processing Licence.
- On May 29, 2019 amended the terms of the Company’s existing loan with the senior lender to remove the callable feature and convert into a term loan, this enables MJardin to simplify the Company’s capital structure and fully focus on executing the operational plan.
“Our Q1 results reflect the successful implementation of our operating plans. We refocused our priorities back to what we do best: grow high yield premium products,” commented Adrian Montgomery, Chairman and Interim CEO. “We made considerable progress towards the completion of our build outs and expansion of our U.S. and Canadian facilities, committed to smart and strategic growth decisions, and utilized the impressive industry talent we have on our team to improve our earnings and bolster our capital position. In Q2 we will start recognizing the benefits of the SG&A cost-cutting initiatives we started at the end of Q1. We will continue to develop and build demand for our premium product lines and evaluate more tuck-in opportunities where we can confidently and responsibly deploy smart capital.”
First Quarter Financial Summary
EBITDA, Adjusted EBITDA and Adjusted Net Loss from Operations are non-IFRS measures that the Company uses to assess its operating performance.
EBITDA is defined as [net earnings (loss) before net finance costs, income tax expense (benefit) and depreciation and amortization expense].
Adjusted EBITDA is defined as EBITDA adjusted to exclude: Impairment, settlements, stock-based compensation, advisory fees and listing expenses, loss on foreign exchange and loss from equity investments.
Adjusted Net Loss from Operations is defined as operating income (loss) adjusted to exclude share-based compensation.
The Company uses these non-IFRS measures to provide investors and others with supplemental measures of its operating performance. The Company believes these non-IFRS measures are important supplemental measures of operating performance because they eliminate items that have less bearing on the Company’s operating performance and thus highlight trends in its core business that may not otherwise be apparent when relying solely on IFRS financial measures. The Company also believes that securities analysts, investors and other interested parties frequently use these non-IFRS measures in the evaluation of issuers, many of which present similar metrics when reporting their results. As other companies may calculate these non-IFRS measures differently than the Company, these metrics may not be comparable to similarly titled measures reported by other companies.
Revenues increased $4.1 million to $10.9 million from the same period a year ago, an increase of approximately 60%.
MJardin continued to see improvements in the sales of Cannabis from its WILL facility, recording $1.1 million in sales in the first quarter with a $0.8 million fair value adjustment to inventory.
The Company’s Colorado operations continue to provide consistent revenues, generating $8.9 million in sales.
Gross Profit (Loss)
Due to higher revenues, gross profit for the three months ended March 31, 2019 was $4.1 million compared to $2.8 million for the prior year comparable period, an increase of $1.03 million or 43%. With a total of three grow rooms completed at WILL, and further expansion underway, and the expected receipt of sale and cultivation licenses at AMI and GRO respectively, the Company expects to generate a steady increase in gross profit throughout the remainder of 2019.
General and administrative expenses as well as payroll increased primarily due to the previously disclosed GrowForce Holdings Ltd. acquisition. The Company underwent corporate cost-cutting measures late in the first quarter of 2019 and the resulting expected annual SG&A and Payroll expense run rate is approximately $12.1 million.
Adjusted EBITDA loss was $3.2 million compared to an adjusted EBITDA of $0.5 million for the prior year comparable period. The decrease was driven primarily by the larger SG&A and Payroll expenses associated with the GrowForce Holdings transaction. Adjusted EBITDA is not reflective of cost saving initiatives implemented late in the first quarter and contains several one-time cash items, including, legal fees and transaction break-fees.
The Company will host a conference call today at 10 a.m. ET. Adrian Montgomery, Chairman and Interim CEO, and Chris Seto, CFO, will discuss the Company’s financial performance for the period ended March 31, 2019.
To access the call, please dial 1-800-458-4121 or 1-323-794-2093. A replay of the conference call will be available from 1 p.m. ET on May 30, 2019, until 11:59 p.m. ET, June 13, 2019. To access the replay, call 1-844-512-2921 or 1-412-317-6671, followed by passcode 6223360.
A webcast link to the call is also available at the following URL: http://public.viavid.com/index.php?id=134637
About MJardin Group
MJardin is a cannabis management platform with extensive experience in cultivation, processing, distribution and retail. For over 10 years, MJardin has refined cultivation methodologies, developed state of the art facilities and implemented vertical integration for and on behalf of license owners. MJardin is based in Denver, Colorado and Toronto, Canada. For more information, please visit www.mjardin.com
The CSE has not in any way passed upon the merits of and has neither approved nor disapproved the contents of this news release.
This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.