Medipharm Labs Reports Q4 Revenues Of $6.1 Million, Net Loss Of $30.9 Million

Medipharm Labs (TSX: LABS) this morning reported its fourth quarter financial results for 2020. Revenues for the quarter amounted to $6.1 million, a 22% increase on a quarter over quarter basis, while posting a net loss of $30.9 million. For the full fiscal year, revenues amounted to $36.0 million, with the firm posting a net loss of $72.1 million for the year.

When it comes to the financial results for the quarter, numbers seem to go from bad to worse. While the company reported a revenue increase of 22% quarter over quarter from $4.9 million to $6.1 million, revenues declined 81% year over year from Q4 2019’s revenue figure of $32.4 million – which is also nearly the entire revenues reported for 2020. Gross profits meanwhile crated to negative $24.7 million for the quarter.

Gross profits were terrible as a result of a number of “one-time” items, including $10.7 million in inventory writedowns, a $5.6 million depreciation hit on equipment, and a $1.6 million write down on non-current deposits. Before this, the quarter still saw negative gross profits of $6.8 million. Adjusted EBITDA for the quarter came in at -$8.8 million.

The full fiscal year did not fair much better at all, with revenues amounting to $36.0 million for the year, a 72.1% decline from the $129.3 million recognized in 2019. Gross profits for the year meanwhile amounted to $44.0 million, or -122% gross margins. Adjusted EBITDA meanwhile was -$23.9 million for the year, as compared to $24.7 million in 2019.

In terms of an operating loss, the fourth quarter recorded a total operating loss of $29.4 million following the negative gross profits of $24.7 million. The loss was pushed deeper in the red as a result of general and administrative expenses of $5.2 million for the quarter, as well as marketing and selling expenses of $1.3 million, which alone amount to more than the revenues generated in the quarter. The company did however see a reversal in share based compensation of $2.4 million as a result of 1.3 million stock options being cancelled. This loss then widened to a net loss of $30.9 million following finance expenses of $4.7 million, which was slightly offset by unrealized gains on derivatives of $3.1 million.

Looking to the balance sheet, the firms cash position declined from $36.5 million to $19.9 million, while trade and other receivables climbed from $25.2 million to $29.6 million. Inventories meanwhile declined from $31.7 million to $22.1 million, primarily a result of that large impairment. Total current assets overall declined from $101.0 million to $81.5 million.

Trade and other payables climbed significantly during the quarter, jumping from $6.0 million to $14.8 million, while loans and borrowings stayed relatively flat at $7.7 million. A new line item also appeared under current liabilities referred to as current employee benefit obligations, which sits at $1.5 million, as compared to nil previously. Total current liabilities overall climbed from $14.7 million to $24.2 million.

Medipharm Labs last traded at $0.455 on the TSX.

.Information for this briefing was found via Sedar and Medipharm Labs. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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