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As TheCannalysts were engaged by WeedMD to consult on preparation, format and content of Management Discussion and Analysis (although not for the previous four Q’s) we will not be providing any narrative to the Quarter in Pictures, and we will stand down from preparing “Structure & Current State” until such time as they are no longer a client OR until we believe we have put enough distance between engagement and analysis so as not to impact analysis. The peer comparisons and tables kind of speak for themselves.
The following is data pulled from Weed MD financials and those of their peers. (Math not analysis.)
Ohh.. and I asked a question on the conference call on how they grade themselves on integrating Starseed acquisition against the expectations, for those that are interested.
Income Statement Drivers & Breakeven: Trend
Ohhh, that 1% GM really makes breakeven skyrocket.
Table 1: Revenue by Segment
NOTE: As Adult Use and Wholesale Revenue was not broken out, I imputed the Wholesale revenue by multiplying Average Selling Price by Grams sold. On the CC it was indicated that ASP does not include extracts. Not sure if grams sold does or not. Adult Use was the remaining non-Direct to Customer Revenue less imputed Wholesale.
Income Statement Drivers & Breakeven: Peer
Gross Margin: Peer & Trend
Gross Margin includes an inventory impairment of $1.2 million. If that was backed out GM would have been $1.3 million or 21%.
Gross Margin: Larger Peer Base
SGA & SBC as % of Sales: Trend
Note: I move interest expense to Other income to maintain peer comparability.
Selling expense $0.5 million versus $0.2 million last Q.
G&A expenses $4.8 million versus $4.6 million last Q.
SBC $1.3 million versus $0.2 million last Q.
Depreciation $0.8 million versus $0.4 million last Q.
Total Opex $7.5 million versus $5.4 million last Q.
SGA & SBC as % of Sales: Peer
+Net Operating Profit Sales Breakeven divided by Current Quarterly Sales: Peer
NOP without IFRS voodoo was -$7.4 million versus -$6.3 million last Q.
Other Income: This Q $3.9 million last Q $1.0 million
- Covid grants this Q $2.4 million last Q $1.5 million
- Other Income this Q $2.3 million from recovery of previously written off A/R, versus last Q $0.7 million
- Finance expense -$0,8 million versus last Q -$1.2 million
Net income this Q $8.6 million versus -$8.9 million last Q.
+EBITDA Sales Breakeven divided by Current Quarterly Sales: Peer
EBITDA Trend and Peer
Note: I note they did not adjust for impairment to inventory of $1.2 million.
“Gas in the Tank”- Trend
Inventory is $42 million + $7.5 million QoQ. Finished Goods inventory exceeds sales at $30 million versus $6.3 million in sales.
Next Q will have outdoor harvest.
Cash vs Debt
Cash increased by $30 million from the $30 million term debt from Liuna.
Accounts Payable are $8 million a decrease of $3 million
The preceding is the opinion of the author and is in no way intended to be a recommendation to buy or sell any security or derivative. The author does not have a position in WMD and will not start one in the next five days.
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