Medmen Enterprises (CSE: MMEN) filed its first quarter 2020 financials these evening, revealing revenues of US$43.9 million for the period ended September 28, 2019, short of analyst estimates of $47.7 million for the quarter. Net loss for the quarter came in at $82.6 million.
Medmen posted a gross profit of $21.8 million before the impact of fair value adjustments. After biological adjustments, the firm posted a gross profit of $17.2 million. Expenses for the quarter however totaled $66.1 million, or 150% of revenues during the quarter. General and administrative expenses alone came in at $49.0 million, or 111% of quarterly revenues. Sales and marketing accounts for $5.7 million during the quarter.
Medmen recently made an announcement that it is currently in the process of significantly reducing its selling, general, and administrative expenses to under $85 million per year. That baseline, for which the run rate is expected to arrive by the end of 2020, currently appears to be a long shot based on the current quarter accounting for 64% of that annual target.
Moving towards the cash flow statement, Medmen spent $43.9 million in operating activities, while generating $7.3 million in investing activities and $45.1 in financing activities. The firms cash position increased from $33.7 million to $42.2 million during the quarter as a result.
Inventories during the quarter rose to $40.4 million from $29.1 million, while biological assets decreased to $2.7 million from $3.0 million. In terms of current assets, the largest increase was for that of assets held for sale, which now total $8.4 million.
Accounts payable increased to $53.8 million during the quarter, from $49.7 million in the current quarter. Income taxes payable also increased significantly, from $16.8 million to $24.4 million. Current portion of lease liabilities increased the most dramatically in terms of current liabilities, from $2.5 million to $17.5 million. Notes payable was the most significant decrease, from $20.2 million to $13.1 million.\
Medmen currently has a working capital of $9.4 million.
Always notable for Medmen Enterprises is the related party transactions during the quarter. For the period 13 week period ended September 28, 2019, total key management compensation came in at $3.4 million, of which $2.1 million was in the form of share based compensation for executives, $0.4 million in the form of share compensation for directors, and $0.8 million for short-term employee benefits, including salaries and fees.
Medmen Enterprises closed today’s session at $0.64 on the CSE.
Information for this briefing was found via Sedar and MedMen Enterprises. The author has no 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.
