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News: MediPharm Labs Reports Strong and Profitable Second Quarter Results

MediPharm Labs Corp. (TSX: LABS) (OTCQX: MEDIF) (FSE: MLZ) ("MediPharm Labs" or "Company") is the world's leading provider of research-based Isolation, Seize, Distillation, Purification and Cannabinoid and robust earnings progress for the three and six months ended June 30, 2019, including revenue, EBITDA, internet revenue and earnings per share.

KEY Q2 2019 FOCUS (2)

  • Turnover was $ 31.5. million, up 43% from Q1 2019, reflecting the company's management within the Canadian Kanepi manufacturing business and the addition of latest binding contracts
  • . Gross profit was $ 11.3 million, up 65% from the first quarter of 2019, while gross margin was 36% compared to 31% in Q1 2019, reflecting increased production and production efficiency, which can continue to improve as the company achieves economies of scale
  • EBITDA (1) was $ 7.7 million, 79% greater than Q1 2019, while adjusted EBITDA (1) margin was 24% com internet revenue before taxes of $ 4.1 million in comparison with $ zero.three million internet losses in the first quarter of 2019.
  • $ 75 million in gross proceeds came from oversubscription of 13.5 million widespread shares. at $ 5.55 per share and $ 9.5 million generating inventory options
  • Funding capital raised to build further scale in Canada and Australia to help the company's demonstrable market progress and further diversify its product strains in anticipation of expanded legalization in Canada in the fall of 2019 [19659008] (1) See 'Non-IFRS Measures' on this release.

    (2) The earlier yr shouldn’t be comparable as the company started production in the fourth quarter of 2018.

    "MediPharm Labs made tremendous progress in the second quarter with the growth of all key players," stated Patrick McCutcheon, CEO of MediPharm Labs. “Based mostly on the power of our business model and the effectiveness of our company strategies, we have now turn out to be the first Canadian public mining company to make a profit by investing heavily in our advanced mining and manufacturing platforms to the benefit. realized. The numerous momentum we’ve gained from necessary new buyer and sourcing relationships, and the profitable ramp-up of our Canadian and Australian workplaces will drive progress and added value for the remainder of the yr and a lot further. "

    YOUR YEAR WILL OPERATE 2019 KEY

    • 30. Internet gross sales for the six months ended June 31, 2019 have been $ 53.4 million, gross profit was $ 18.2 million (gross margin 34%), adjusted EBITDA (12) was $ 12.zero million (adjusted EBITDA margin 22%) and internet revenue was $ 1.4 million. $ ($ 0.01 per share and diluted)
    • cash belongings $ 72.7 million at June 30, 2019 in comparison with $ 7.9 million at December 30, 2019
    • secured agreement with Cronos Group on Might 13, 2019 at roughly $ 30 . million cannabis concentrates in 18 months, and with certain renewal and supply choices, probably up to $ 60 million in 24 months
    • Canadian production increased to a mean of 75 million MG of lively cannabinoid element concentrate o Not weekly at finish of June 2019
    • in June 2019 for processing and sales Q3 2019
    • Certified Dried Cannabis to over 23 Well being Canada-compliant licensed producers because the final quarter of 2018 that met MediPharm. Labs Enhanced High quality Management Agreements
    • The annual processing capacity of Canadian dried hashish increased to 300,000 KG. The brand new custom-made, large-scale extraction line, opened later this yr on the company's Barrie, Ontario headquarters, is predicted to increase its annual capacity to over 500,000 KG
    • commencing 25,000 sq. ft for extra licensed area, topic to approval by Well being Canada, which helps refilling, packaging and manufacture of latest products, cannabinoid isolation and specialised analysis and improvement at Barrie, Ontario headquarters
    • acquired a white label contract for at the least 2 million vape pencils obtainable for rs AVA cannabis in Ace Valley, Canada , supplying top quality cannabis nozzles, refill providers and nationwide distribution for a new line of custom-made Ace Valley pencils
    • marked the success of the Company's first international medical cannabis Completion of export of its concentrate to Australia by AusCann, Import / Export Authorization granted by Australian Pharmacovigilance Agency and Well being Canada
    • and manufacturing of almost 10,000 square ft ft. a purpose-built facility southeast of Melbourne, Australia, providing supercritical carbon dioxide remedy of as much as 75,000 kg of dried cannabis per yr, and high-tech secondary processing gear for the production of refined and high focus cannabis distillate
    • cartridge refill manufacturers in Canada
    • Completed on Toronto Inventory Change on July 29, 2019. MediPharm Labs open market ceremony scheduled for Wednesday, August 14, 2019

    SHORT-TERM CATALISTS

    1. extended new customer agreements in course of

      1. hashish discs
      2. Launch of manufacturing and improve in capability at quarries in Canada and Australia
      3. eva legalization with oxidizing, topical, and edible products in the fall of 2019, which can considerably improve the demonstrable market for cannabis derivatives
      4. New Greater Margin Product Improvement: Mushy Gel Covers and Evaporator Cartridges
      5. Hold on with Worldwide Progress Technique: Medi. cannabis manufacturing plant; the anticipated EU GMP certification for the Barrie plant; and an assessment of partnership alternatives to intervene in jurisdictions in Europe, Latin America, the Caribbean, and South Africa

      main occasions in the economic abstract

      three months ended
      June 30, 2019
    2. three months ended
      March 31, 2019 ] Three months ended
      December 31, 2018 000,000 000,000 000,000 turnover 31,472 [19659041] 21,950 10,198 [19659039] gross revenue 11,311 6,862 three,967 gross margin 36% 31% 39% internet revenue. / (loss) earlier than taxes 4,083 (325) (three,542) adjusted EBITDA (1) 7700 4,310 2,129 adjusted EBITDA margin [19659041] 24% 20% 21%

      Adjusted EBITDA and Operating Profit / (Loss) as Reported. June 31, 19659063 March December [19659070] [19659067] 2019 2019 2018 $ 000,000 $ 000,000 $ 000,000 Adjusted EBITDA reconciliation . (Losses) / Operating revenue – reported four,227 (152 ) (three,366 ) add / subtract: share-based compensation expense 2,742 3,972 738 depreciation 731 490 527 without transaction charge – – 4,230 adjusted EBITDA 7,700 four,310 2,129

      Firm update

      • On April 30, 2019, a medical professional and medical researcher was appointed Dr. Paul Tam as the brand new unbiased director of the board. By way of greater than three many years of medical research and medical follow, Dr. Paul Tam is a globally acknowledged skilled in nephrology. He additionally brings experience working for leadership pharmaceutical corporations
      • . The corporate appointed the previous Johnson & Johnson Group. Chief Product Officer, Braden Fenske as Chief Technique Officer April 29, 2019. Mr. Fenske is chargeable for promoting the corporate's strategic business initiatives in partnership with company executives and operational teams across the company
      • . As well as, the corporate will announce a planned retirement. its CEO, David Mayers. Because of this improve in administration capability, Mr. Mayers' beforehand held duties are shared between President Keith Strachan, Government Vice President Kirk Binns and Chief Strategy Officer Braden Fenske, as well as other points of manufacturing administration. As members of our rising group of over 180 researchers, researchers, professionals and technicians
      • As a part of the Company's ongoing coverage of encouraging worker incentives via inventory options, the Company granted 1,851,700 choices to new and present tenants at a subscription worth. placed on trading on August 13, 2019. Dr. Paul Tam was granted 300,000 such choices. Every grant shall have a period of five years, ending on 13 August 2024, and shall be paid in five equal installments, the first of which shall be made instantly in four further installments, payable on the date six, twelve, eighteen and twenty-four months. Stock choices have been granted to company administrators, officers, staff and consultancy companies and are topic to applicable regulatory approvals.

      Q2 CONFERENCE CALL AND WEBCAST

      On Tuesday, August 13, the corporate will maintain a convention call and voice message. , 2019 9:30 a.m. Japanese Time to discuss its results and outlook. Individuals are asked to call approximately 10 minutes earlier than the decision begins with one of the following numbers: Toll-free: 877-791-0216 Worldwide: 647-689-5661.

      The audio webcast is on the market on the Events part of the MediPharm Labs Investor Relations website at https://ir.medipharmlabs.com/news-events or by visiting the next hyperlink: https://event.on24.com/wcc / r / 2061708 / FA5DDF7A03088FC1E7183DBBA763DEB7

      For many who can’t participate in a reside convention call and webcast, the replay is obtainable approximately one hour after the decision ends: Toll-free: 800-585-8367 International: 416 4642. See Conference ID: 2783678

      NON-IFRS MEASURES

      Adjusted EBITDA isn’t a acknowledged performance measurement beneath IFRS, doesn’t have a standardized which means, and subsequently is probably not corresponding to comparable measures reported by other issuers. Adjusted EBITDA is included in the supplementary statement as a result of administration believes that such measurement offers a better estimate of the company's operations by constantly eliminating certain non-cash funds and non-recurring charges or income. Adjusted EBITDA is outlined as internet loss, internet of curiosity, taxes, depreciation and share-based compensation. Adjusted EBITDA has limitations as an analytical software as a result of it excludes depreciation and interest bills, interest revenue and expense, taxes, share-based compensation and transaction fees. Due to these limitations, adjusted EBITDA should not be thought-about as the only measure of an entity's operations, nor ought to it’s remoted from, or as an alternative to, the corporate's IFRS outcomes. Probably the most comparable measure calculated in accordance with IFRS, adjusted for EBITDA, is the operating end result (loss). The above is a reconciliation of the company's operating loss to adjusted EBITDA. For extra details about the dialogue and analysis of the Firm's administration for the three-month and six-month durations ended June 30, 2019, see “Reconciliation of Non-IFRS Measures”.