LOS ANGELES & IRVINE, Calif.–(BUSINESS WIRE)–ManifestSeven (“M7” or “the Company”), California’s first integrated omnichannel platform for legal cannabis, today announced its financial results for the second quarter ended May 31, 2020. The results follow the Company’s receipt last month of conditional approval for the listing of its common shares on the Canadian Securities Exchange (“CSE”). All financial information in this press release is provided in U.S. dollars unless otherwise indicated.
- Revenue increased 116% year-over-year and 23% sequentially to $5.0 million.
- Gross profit increased 216% year-over-year and 40% sequentially to $1.8 million.
- Gross margin was 35.1% of revenue, up from 24.0% of revenue for the second quarter ended May 31, 2019, and 30.8% of revenue for the first quarter ended February 29, 2020.
- Net loss decreased 64% year-over-year and 79% sequentially to ($1.1) million.
- The Company achieved robust growth across all of its core operating segments, demonstrating growing demand for M7’s distribution, delivery, and retail services despite the impact of COVID-19.
- M7 significantly expanded the scope of its distribution coverage of California, with the number of licensed retailer accounts serviced by the Company’s distribution division totaling 211 as of May 31, 2020.
- The Company increased its retail presence in core markets throughout California, with the number of customers in California serviced by M7’s delivery and retail division increasing 268% year-over-year.
- M7 successfully implemented a targeted cost reduction program focused on non-core assets and operations without materially impacting its ability to generate revenue, resulting in a 31% sequential reduction in operating expenses and advancing the Company on its pathway to net profitability.
“We embarked upon a new quarter just as the COVID-19 crisis began to express itself around the world and seemingly without any warning, bringing with it an unprecedented operating environment and capital markets landscape,” said Sturges Karban, M7’s Chief Executive Officer. “We focused our efforts during the quarter primarily on two core missions: preserving our longstanding trend of sequential top-line growth, while also aligning our cost structure to accelerate the Company’s efforts to achieve net profitability.”
Mr. Karban added, “We are proud to announce that, as borne out by this quarter’s financial results, we have successfully delivered on both of these critical objectives as we look toward our impending public listing on the CSE later this summer. In particular, we achieved significant growth in our delivery operations during this three-month period, as consumers adjusted their buying behavior to comply with statewide shelter-in-place orders, resulting in the acquisition of a considerable number of new customers who discovered and utilized our delivery services during the COVID-19 crisis for the first time.”
“While the extraordinary global events that shaped the first half of this calendar year have presented new and unexpected challenges, it is impossible to ignore how the same events have also energized and validated the cannabis industry at large, for example, by reminding legislators at every level that legal cannabis constitutes a growing force within state and local economies, a robust engine for legitimate job creation, and a product category that will sustain consumer demand even in the face of the most economically constraining contexts. In many ways, COVID-19 has proven that legal cannabis is here to stay—and, after successfully persevering through the last several months, so is M7,” concluded Mr. Karban.
Summary Financial Results:
Three Months Ended
Net Income (Loss)
ManifestSeven is the first integrated omnichannel platform for legal cannabis, merging compliant distribution with a retail superhighway. M7, with offices in Commerce and 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.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS:
This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. 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. 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. 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.