- Q3/22 revenue increased over 225% quarter-over-quarter, and
more than 4,800% year-over-year;
- Mednow patient count increased by approximately 20% to ~23,000
in Q3 versus ~19,000 in Q2;
- In the 2022 calendar year, revenue is forecasted to range
between C$42.5M and C$47.5M; approximately C$42M will come from its
pharmacy services, while approximately C$3M will come from doctor
services;
- 2022 gross margin is expected to average approximately 20%,
with 40K - 45K active patients, and a net loss for the year;
- Revenue for the 2023 calendar year is forecasted to range
between C$105M and C$110M, with C$102M from pharmacy services while
C$5M is expected to come from doctor services;
- 2023 gross margin is expected to average 25%, with 110K - 120K
active patients;
- In the 2023 calendar year, Mednow is expected to produce
approximately $5M to $10M in Adjusted EBITDA;
- Revenue is expected to grow 2,400% in 2022 relative to 2021 and
140% in 2023 compared to 2022;
- Founder and Chairman, Ali Reyhany to assume the role as CEO,
taking over for Karim Nassar.
Mednow Inc. (“Mednow'' or the “Company”)
(TSXV:MNOW) (OTCQX:MDNWF), Canada’s on-demand virtual pharmacy, is
pleased to announce it has released its financial results for the
period ending April 30th, 2022 (“Q3 2022”). Mednow’s
Financial Statements and Management, Discussion & Analysis are
available on sedar.com and on the Company’s website,
https://investors.mednow.ca.
Key Milestones During and Subsequent to Q3 2022:
Key Financials
- Revenue increased by 225% quarter-over-quarter, to $6,136,511
during the three months period ended April 30, 2022, driven
primarily by sales from the Company's retail pharmacy operating
segment.
- Retail pharmacies based in British Columbia, Manitoba, Ontario
and Nova Scotia collectively generated revenue of $5,712,574, as
compared to $0 in the prior year comparative period.
- Revenue generated by doctor services was $382,537, as compared
to $0 in the prior year comparative period.
- Revenue was $41,400 from its pharmacy agreement with Mednow
East Inc., as compared to $124,200 of revenue in the prior year
comparative period, which was generated from pharmacy agreements
with Mednow East Inc. and an equal amount with Mednow West.
- Gross margin for the quarter increased 900% year-over-year to
$1,232,876, as compared $124,200 in the prior year comparative
period.
- EBITDA for the quarter was a loss of $5,193,732, as compared to
a loss of $3,359,184 in the prior year comparative period,
representing a decrease in EBITDA of $1,834,548 compared to the
prior comparative period.
- The change is primarily driven by increased corporate costs,
such as increased headcount, technology development and marketing
as the Company has continued to build out its internal teams in
order to scale and grow its businesses.
- Adjusted EBITDA for the quarter was a loss of $4,444,474, as
compared to a loss of $1,882,454 in the prior year comparative
period, representing a decrease in adjusted EBITDA of $2,562,020.
- Adjusted EBITDA has been adjusted for certain items as
explained further below under the heading “Definitions of Certain
Non-IFRS Financial Measures.”
Key Metrics
- On February 24, 2022, Mednow provided annual forecasted growth
figures for the calendar years 2022 and 2023.
- For the calendar year 2022, revenue is forecasted to range
between C$42.5M to C$47.5M. Contributions of approximately C$42M
will come from its pharmacy services, while C$3M will come from
doctor services. The gross margin is expected to average
approximately 20%, with 40,000 – 45,000 active patients, and a net
loss for the year.
- For the calendar year 2023, Mednow is expected to produce
adjusted EBITDA of approximately $5M – $10M. Revenue for 2023 is
forecasted to range between C$105M to C$110M, with C$102M
contributed by pharmacy services and C$5M coming from doctor
services. The gross margin is expected to average 25%, with 110K –
120K active patients.
- Mednow patient count increased significantly quarter over
quarter, growing by approximately 20% to ~23,000 in Q3 versus
~19,000 in Q2.
Leadership Transition
- The Company is pleased to announce that Ali Reyhany, the
Company’s current director, President and Chairman of the board,
has been selected to replace Karim Nassar, as Chief Executive
Officer effective June 15. As the Company’s founder and architect
of its culture, the Company’s board of directors believes Mr.
Reyhany is singularly qualified to serve as Chief Executive
Officer.
- The Company thanks Mr. Nassar for his contributions to the
Company and wishes him the best on his future endeavors.
Operational Milestones
- At the end of January, Mednow received approval from the
Ontario College of Pharmacists for its new flagship fulfillment
center in Toronto. The site boasts 20,000 square feet of space,
with room for further expansion and growth.
- This location houses a secured floor for the pharmacy, the
Mednow online shop, the customer support centre, and the automation
and technology to support and optimize Mednow’s PillSmartTM and
nutraceutical offerings.
- Separately, this location houses the Toronto corporate office
and the logistics command center for the entire Company.
- Mednow expects to have the capability to deliver across Canada
when it anticipates launching its (i) Montreal, Quebec and (ii)
Calgary, Alberta fulfillment centres this summer.
Mednow For Business (MFB)
MFB has demonstrated strong traction already, with access to
over 500,000 lives. MFB is an enterprise pharmacy solution suited
to employers to better manage their drug benefit expenditure, which
normally represents up to 80% of the total benefits expenditure
made by employers. In addition, MFB also offers wellness and
digital health programs to their employees, which includes a broad
spectrum of solutions including digital pharmacy, nutritional
services, personalized vitamins and supplements programs, and a
wellness store which includes a broad array of health-related
products.
To date, MFB has formed strategic channel partner relationships
with PACE Consulting Benefits and Pensions Ltd., PACE Consulting
MGA Services Inc. and Sterling Capital Brokers. MFB has launched
and onboarded over 30 employers, which equates to approximately
3,500 corporate users on the Mednow pharmacy platform, including,
but not limited to Tucows, Consensus Cloud Solutions, and Arista
Networks. Furthermore, MFB has a healthy pipeline of groups which
is expected to be launched in the coming months, and is working
with multiple net new partners.
Marketing and Customer Service
To date, Mednow has achieved a perfect 5.0 rating on Google.
Although in the early stages of scaling, this reinforces to Mednow
that its product offering and customer service so far resonates
with Canadians, and that there is product market fit. With that
established, Mednow is about to embark on an integrated awareness
and conversion-focused national marketing campaign. This first for
the Company will include TV, out-of-home (billboards), digital and
social media. Additionally, in early March 2022, Mednow launched an
enhanced version of its web application that improves user
experience, supports scalability and security which is also
available from the Apple and Android app stores.
2022 Awards
- On January 26th, 2022, Mednow was awarded the 2022 Best
WorkplaceTM – Start-ups. In a year where many employers experienced
high levels of employee turnover, dubbed by some as “The Great
Resignation” Mednow was able to grow its employee base by more than
three times to approximately 60 employees since its initial public
offering in March 2021.
- On March 8, 2022, International Women’s Day, Mednow was named
on the Great Place to Work® 2022 Best Workplaces for Women list.
The list was created following a thorough and independent analysis
conducted by Great Place to Work®. This includes direct feedback
from employees of hundreds of various organizations surveyed by
Great Place to Work®.
Summary of Financial Results
Below is a summary of each operating segment's performance for
the three month period ended April 30, 2022 and 2021.
Three months ended April
30,
2022
2021
Retail Pharmacies
Doctor Services
Mednow Inc.
Total
Mednow Inc.
Revenue
$ 5,712,574
$ 382,537
$ 41,400
$ 6,136,511
$ 124,200
Other amounts in loss
6,228,690
452,385
5,129,998
11,811,073
3,528,328
Net loss
$ (516,116)
$ (69,848)
$ (5,088,598)
$ (5,674,562)
$ (3,404,128)
Source: Mednow’s MD&A as of
June 15, 2022
Normal Course Issuer Bid Update
As at April 30, 2022, the Company purchased and canceled a life
to date total of 309,100 common shares for $865,955 of cash
consideration. The life to date weighted average cost of the
canceled shares totaled $455,233 resulting in a loss on
cancellation of $410,822 allocated to the deficit. During the
period ended April 30, 2022, the Company did not purchase and
cancel common shares.
Stock Option Grant
The Company amended its current stock option plan to replace the
previous rolling stock option plan (the “Old Plan”) with a
20% fixed stock option plan (the “New Plan”). Under the New
Plan, the Company may issue up to an aggregate total of 4,372,132
stock options to purchase common shares in the capital of the
Company.
The Company approved the grant of a total of 315,000 Options to
certain officers, directors, employees and consultants of the
Company pursuant to the New Plan. Subject to the policies of the
TSX Venture Exchange (the “TSXV”) and the terms and
conditions of the New Plan, the Options will have an exercise price
equal to Mednow’s closing share price on June 14, 2022, and shall
expire five years from the date of grant and shall vest over four
years.
CORPORATE UPDATE OF FINANCIAL PERFORMANCE
The Company provided a corporate update on February 24, 2022, on
its calendar 2022 and 2023 financial objectives. Pursuant to the
update, the Company forecasts to generate annual revenue between
the range of $42.5 million to $47.5 million for the calendar 2022
year, which comprises the months from January to December 2022. The
Company projects $42 million of revenue from the retail pharmacy
business segment, and $3 million from the doctor services operating
segment. The Company forecasts to have 40,000 to 45,000 active
patients by the end of the 2022 calendar year. The Company
forecasts gross margin of approximately 20% and a net loss for the
year.
For the 2023 calendar year, comprising the months from January
to December 2023, the Company forecasts annual revenue between the
range of $105 million to $110 million, with $102 million of revenue
from the retail pharmacy operating segment, and $5 million from the
doctor services operating segment. The Company forecasts to have
110,000 to 120,000 active patients by the end of the 2023 calendar
year. The Company forecasts gross margin of approximately 25% and
Adjusted EBITDA in the range of $5 million to $10 million. The
Company plans to open retail pharmacies in Alberta and Quebec later
this year.
The Company's calendar 2022 results for the period ended April
30, 2022, are summarized below. The Company had 23,000 active
patients at the end of April 2022.
For the period January - April
2022 (unaudited)
Revenue
$ 7,094,007
Cost of Sales
5,713,361
Gross margin %
19%
Other costs
8,839,229
Net Loss
(7,458,583)
EBITDA1
(6,860,389)
Adjusted EBITDA1
(5,679,244)
1 EBITDA and Adjusted EBITDA has
been discussed in the section Definitions of Non-IFRS Financial
Measures.
As of the date of the report, June 14, 2022, management has
assessed that the Company is on track to meet the 2022 calendar
year objectives and financial forecast above, and the Company
confirms that there are no material differences in the underlying
assumptions and factors that were used to develop the Company's
forecast.
RECONCILIATIONS OF NON-IFRS
MEASURES
For the period January - April
2022 (unaudited)
Net loss and comprehensive loss
for the period
$ (7,458,583)
Interest expense
49,103
Depreciation and amortization
683,444
Deferred tax recovery
(134,353)
EBITDA1
$ (6,860,389)
Loss on investment in equity
securities
44,455
Share-based compensation
979,074
Acquisition costs
157,616
Adjusted EBITDA1
$ (5,679,244)
1 EBITDA and Adjusted EBITDA has
been discussed in the section Definitions of Non-IFRS Financial
Measures.
DEFINITIONS OF CERTAIN NON-IFRS FINANCIAL MEASURES
This Press Release uses certain non-IFRS financial measures
which are defined below. Non-IFRS financial measures are not
standardized financial measures under IFRS. As such, these measures
may not be comparable to similar financial measures that are
disclosed by other companies. These measures include “EBITDA” and
“Adjusted EBITDA”. These measures are provided as additional
information that is disclosed to provide further insight into the
Company's results of operations from management's perspective.
These measures should not be reviewed and assessed as a substitute
for financial information reported under IFRS. A reconciliation of
the non-IFRS measures to the IFRS measure is in the section
"Selected Financial Information".
EBITDA and Adjusted EBITDA
EBITDA represents net loss and comprehensive loss for the period
before interest expense, income taxes, depreciation and
amortization expenses. Adjusted EBITDA represents net loss and
comprehensive loss for the period before interest expense, income
taxes, depreciation and amortization expenses, loss on investment
in equity securities, share-based compensation expense, and
acquisition costs. These adjustments to calculate the non-IFRS
measures of EBITDA and Adjusted EBITDA are for items that are not
necessarily reflective of the Company’s underlying operating
performance. As there is no generally accepted or standard method
of calculating EBITDA, these measures are not necessarily
comparable to similarly titled measures reported by other issuers.
EBITDA and Adjusted EBITDA are presented as management believes it
is a useful indicator of the Company’s relative financial
performance. These measures should not be considered by an investor
as an alternative to net income or other IFRS financial measures as
determined in accordance with IFRS.
The Company presents EBITDA and Adjusted EBITDA to indicate
ongoing financial performance from period to period, including
comparative prior year periods. The Company has disclosed certain
non-IFRS measures on this report, including the disclosure of
non-IFRS financial measures for prior year comparative periods.
Reconciliation of Non-IFRS Financial Measures
The following are reconciliations of net loss and comprehensive
loss to EBITDA. The adjustments include:
- The amortization and depreciation expenses of intangible
assets, fixed assets, and the right-of-use assets of the
Company.
- The interest expenses, which primarily includes interest
expense on the Company's credit facility and interest expense
recorded in accordance with IFRS 16.
- The underlying income taxes recorded.
The following are reconciliations of EBITDA to Adjusted EBITDA.
The adjustments include:
- The loss on investment in equity securities in connection with
the Company's investment in Life Support.
- The share-based compensation expense recorded by the Company in
connection with the stock option plan.
- The acquisition costs incurred by the Company.
The exclusion of certain items in calculating the non-IFRS
measures does not imply that they are non-recurring, infrequent,
unusual or not useful to investors.
About Mednow Inc.
Mednow is a healthcare technology company offering virtual
access with a high standard of care. Designed with accessibility
and quality of care in mind, Mednow.ca provides virtual pharmacy
and telemedicine services as well as doctor home visits through an
interdisciplinary approach to healthcare that is focused on the
patient experience. Mednow’s services include free at-home delivery
of medications, a user-friendly interface for easy upload,
transfer, and refill of prescriptions, access to healthcare
professionals through an intuitive chat experience, a specialized
PillSmart™ system that packages prescriptions and vitamins by date
and time, and doctor consultations.
To learn more, follow Mednow on Facebook, Twitter, LinkedIn, and
Instagram, or visit our website at www.mednow.ca/.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Cautionary Note Regarding Forward-Looking Information
This release includes certain statements and information that
may constitute forward-looking information within the meaning of
applicable Canadian securities laws. All statements in this news
release, other than statements of historical facts, including
statements regarding future estimates, plans, objectives, timing,
assumptions or expectations of future performance, including
without limitation, the Company’s expectation that during the next
12 months, the Company will build and open retail pharmacies in the
provinces of Alberta and Quebec, the Company’s expectation that it
will have national delivery capabilities in summer 2022, the
Company’s expectation that its marketing campaign will include TV
commercials, social media marketing campaigns directed at consumers
along with billboard campaigns, the Company’s expectation that in
2022 the Company’s revenue will range between C$42.5M and C$47.5M
and that approximately C$42M will come from its pharmacy services,
while approximately C$3M will come from doctor services, the
Company’s expectation that the Company’s 2022 gross margin will
average approximately 20%, with 40,000 to 45,000 active users, and
be a net loss for the year, the Company’s expectation that revenue
for the 2023 calendar year will range between C$105M and C$110M,
the Company’s expectation that the Company’s 2023 gross margin will
average approximately 25%, with 110,000 to 120,000 active users,
the Company’s expectation that it will produce adjusted EBITDA of
approximately $5M to $10M in the 2023 calendar year, and the
Company’s expectation that revenue will grow 2,400% in 2022
relative to 2021 and 140% in 2023 from 2022 are forward-looking
statement and contains forward-looking information.
Generally, forward-looking statements and information can be
identified by the use of forward-looking terminology such as
“intends” or “anticipates”, or variations of such words and phrases
or statements that certain actions, events or results “may”,
“could”, “should”, “would” or “occur”. Forward-looking statements
are based on certain material assumptions and analysis made by the
Company and the opinions and estimates of management as of the date
of this press release, including that the Company will be
successful in the deployment of its resources and personnel, the
Company’s marketing campaign will include TV commercials, social
media marketing campaigns directed at consumers along with
billboard campaigns, that during the next 12 months, the Company
will build and open retail pharmacies in the provinces of Alberta
and Quebec, the Company will have national delivery capabilities in
summer 2022, the Company’s operations will not be adversely
impacted by COVID-19, the availability of financing, the cost of
planned expansion, third party contractors and supplies and
governmental and other approvals required to conduct the Company’s
planned activities will be available on reasonable terms and in a
timely manner and that general business and economic conditions
will not change in a material adverse manner, the Company will be
successful in its targeted marketing campaigns and advertising
initiatives that will allow the Company to grow its active patients
to 40,000 to 45,000 active users in calendar 2022 and 110,000 to
120,000 active patients in calendar 2023, the Company will be
successful in growing its active users to its estimated target
range in calendar 2022 and calendar 2023, which will allow the
Company to generate between C$42.5 million and C$47.5 million of
revenue, average gross margin of 20% and a net loss in calendar
2022, and between C$105 million and C$110 million of revenue,
average gross margin of 25% and adjusted EBITDA in the range of $5
million to $10 million in its calendar 2023 year, the Company will
be able to continue to buy medications and other goods at
reasonable prices and underlying purchase terms to achieve its
expected gross margin in calendar 2022 and calendar 2023, the
Company will be able to control operating costs to be able to
achieve its target and forecasted earnings and adjusted EBITDA, the
Company’s web and mobile application will be able to support a
higher number of patients and users who will use the application to
transact with the Company, and the Company will be successful in
its strategic objectives, including the integration of existing
business acquisitions and the pursuit of other investments and
acquisitions.
These forward-looking statements are subject to known and
unknown risks, uncertainties and other factors that may cause the
actual results, level of activity, performance or achievements of
the Company to be materially different from those expressed or
implied by such forward-looking statements or forward-looking
information. Important factors that may cause actual results to
vary, include, without limitation, changes in market conditions,
fluctuations in the currency markets, changes in national and local
governments, legislation, taxation, controls, regulations, and
political or economic developments in Canada or other countries in
which the Company may carry on business in the future; risks
relating to the credit worthiness or financial condition of
suppliers and other parties with whom the Company does business;
inadequate insurance or inability to obtain insurance to cover
these risks; availability and increasing costs associated with
operational inputs and labor; business opportunities that may be
presented to, or pursued by the Company; the Company’s ability to
successfully integrate acquisitions; the ongoing economic impacts
of the COVID 19 pandemic and the war in eastern Europe, and the
risk factors discussed or referred to in the Company’s disclosure
documents under the Company’s profile at www.sedar.com.
Although management of the Company has attempted to identify
important factors that could cause actual results to differ
materially from those contained in forward-looking statements or
forward-looking information, there may be other factors that cause
results not to be as anticipated, estimated or intended. There can
be no assurance that such statements will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not
place undue reliance on forward-looking statements and
forward-looking information. Readers are cautioned that reliance on
such information may not be appropriate for other purposes. The
Company does not undertake to update any forward-looking statement,
forward-looking information or financial out-look that are
incorporated by reference herein, except in accordance with
applicable securities laws.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220615005430/en/
Investor Relations: Benjamin
Ferdinand, Chief Financial Officer ir@mednow.ca 1.855.686.6300
Mednow (TSXV:MNOW)
Historical Stock Chart
From Mar 2024 to Apr 2024
Mednow (TSXV:MNOW)
Historical Stock Chart
From Apr 2023 to Apr 2024
