IRVINE, Calif.--(BUSINESS WIRE)--ManifestSeven Holdings Corporation (formerly P&P Ventures Inc.) ("M7" or the "Company") (CSE: MSVN), California's first integrated omnichannel platform for legal cannabis, today announced its financial results for the three and nine months ended August 31, 2020. The results follow last month's listing ("Listing") of the Company's common shares on the Canadian Securities Exchange. All financial information in this press release is provided in U.S. dollars unless otherwise indicated.
"We are happy to announce our third quarter financial results, which demonstrate the strides M7 continues to make in positioning itself in California as the first integrated omnichannel platform for legal cannabis," said Sturges Karban, M7's Chief Executive Officer and Director. "I am particularly proud of our team for continuing to drive growth despite the extraordinary adversity and uncertainty that M7—like many businesses across all sectors around the world—has confronted during the last several months."
- Revenue for the three and nine months ended August 31, 2020 increased 64% and 96% year-over-year to $4.7 million and $13.8 million, respectively.
- Revenue from cannabis distribution, delivery, and dispensary operations, the Company's core operating segment, for the nine months ended August 31, 2020 increased 217% year-over-year to $9.3 million.
- The Company generated record revenue of $3.5 million from ongoing cannabis operations for the three months ended August 31, 2020, an increase of 94% year-over-year and 30% sequentially.
- Gross margin for the nine months ended August 31, 2020 was 31% of revenue, up from 30% of revenue year-over-year, while gross margin from cannabis operations for the nine months ended August 31, 2020 was 30% of revenue, up from 17% year-over-year.
- Adjusted EBITDA loss for the three months ended August 31, 2020 decreased 69% year-over-year and 8% sequentially to ($1.3) million.
- Net loss from operations for the three months ended August 31, 2020 decreased 59% year-over-year and 8% sequentially to ($1.9) million.
- The Company's cannabis operations generated significant growth both year-over-year and sequentially, with M7's core operating segment representing 68% of total revenue for the nine months ended August 31, 2020, up from 44% for the same period in 2019, and a record 75% of total revenue for the three months ended August 31, 2020.
- M7 continued to expand its coverage of California to keep up with the growing demand for its cannabis distribution services. The number of licensees serviced by the Company's distribution division totaling 270 as of August 31, 2020, up 315% year-over-year and 29% sequentially.
- M7's retail customer base in core markets throughout California continued to expand rapidly. The number of unique customers served by the Company's Weden-branded dispensary and delivery operations during the three months ended August 31, 2020 increased 133% year-over-year.
- M7 continued to implement the strategic cost reduction program, initiated in the second quarter of 2020, targeting non-core operations of the Company, resulting in a 42% year-over-year and 17% sequential reduction in operating expenses and continuing to advance the Company on its pathway to net profitability.
"These results demonstrate that we can accomplish both missions and validates the notion that fiscal discipline does not necessarily come at the expense of revenue growth," said Pierre Rouleau, M7’s Chief Operating Officer. "In the face of circumstantial challenges as wide-ranging as the continued COVID-19 pandemic and unexpected as wildfires of unprecedented scale breaking out across the western United States, M7 has determinedly persevered, without wavering or faltering, to deliver on its core operational mandates."
"We have governed the company under two strategic imperatives, and we will continue to do so for the foreseeable future to ensure that we unlock the full extent of M7's underlying growth potential," added Mr. Karban. "First, we are laser-focused on maintaining M7's established trend of driving steady, healthy, and organic growth on the top line; second, we are committed to progressing the company along a well-defined pathway to profitability until we have achieved the ultimate objective of sustained, consolidated operational self-funding."
ManifestSeven is the first integrated omnichannel platform for legal cannabis, merging compliant distribution with a retail superhighway. M7, headquartered in Irvine, California, services the needs of lawful operators across the supply chain, from the cultivator to the consumer, through an expansive network of four facilities stretching from the San Francisco Bay Area to San Diego. M7 further augments its business-to-business value proposition with a growing portfolio of owned and operated retail operations located in major metro markets, including brick-and-mortar dispensaries, local on-demand delivery services, e-commerce, and subscription offerings.
NON-IFRS FINANCIAL MEASURES:
Adjusted EBITDA is a financial measure that is not defined under IFRS. M7 defines Adjusted EBITDA as net income (loss), or "earnings", before interest, income tax, depreciation and amortization, stock-based compensation (including, but not limited to, non-cash transactional expenses associated with the Listing), and accretion expense, changes in fair value of derivative liabilities, gains and losses on investments and securities, and one-time charges related to acquisition and financing related costs. M7 believes Adjusted EBITDA to be a useful measure of the financial performance of the Company, as it provides more meaningful operating results by excluding the effects of expenses that are not reflective of operating business performance. This supplemental non-IFRS financial measure should not be considered superior to, as a substitute for or as an alternative to, and should only be considered in conjunction with, the IFRS financial measures presented herein.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS:
This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only the Company's beliefs and assumptions regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of the Company's control. This forward-looking information is based on certain assumptions made by management and other factors used by management in developing such information. The forward-looking information and forward-looking statements contained herein may include, but are not limited to, expectations regarding the timing and results of the Company's operations, continued cost-cutting efforts, and other considerations that could impact achieving positive Adjusted EBITDA. Although the Company believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements. Factors that could cause the actual results to differ materially from those in forward-looking statements include, regulatory actions, market prices, and continued availability of capital and financing, and general economic, market or business conditions. The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and the Company does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws. All subsequent written and oral forward-looking information and statements attributable to the Company or persons acting on its behalf are expressly qualified in its entirety by this notice.
The securities of the Company referred to in this press release 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. Accordingly, the securities of the Company may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws or pursuant to an exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws. This press release does not constitute an offer to sell or a solicitation of any offer to buy any securities of the Company in any jurisdiction in which such offer, solicitation or sale would be unlawful.