- Q2’23 revenue increased approximately 17% quarter-over-quarter
to $11.3 million, and approximately 466% year-over-year;
- Mednow patient count increased quarter over quarter, growing by
more than 9% to ~38,000 in Q2’23 versus ~35,000 in Q1’23;
- Adjusted EBITDA improved 32% Y/Y;
- Cash flow from operations improved by 7% Q/Q; achieved
additional cost savings post-Q2’23 to further reduce cash
burn;
- New business partnerships signed, including Mednow’s
partnership with DexCom Inc. (NASDAQ:DXCM)
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 January 31, 2023 (“Q2 2023”). 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, M&A and Partnerships During and
Subsequent to Q2 2023:
- Significant revenue growth. Q2/23 revenue increased
approximately 17% Q/Q to $11.3 million, and approximately 466%
year-over-year
- Patient growth. Mednow patient count increased
quarter-over-quarter, growing by approximately 9% to ~38,000 in
Q2’23 versus ~35,000 in Q1’23
- Mednow has implemented significant cost reductions and
operational streamlining initiatives, aimed at achieving a cash
flow positive status. The company has recently completed the
"build & buy" phase, which has enabled it to establish the core
infrastructure required for its national virtual pharmacy
ambitions. Mednow has also leveraged the insights gained from its
initial time in the market and has refined its strategy to focus on
core business lines and adapting to changing macroeconomic
conditions. These efforts are aimed at driving operational
efficiency and ensuring sustainable growth.
- Total cost base reduced. Total operating costs
(excluding COGS, impairment, share-based compensation and
depreciation) decreased by 6% Q/Q
- People costs reduced. People costs were reduced by
11% Q/Q
- Integration of acquisitions. Cost synergies have been
achieved through the integration of acquisitions. This includes the
consolidation of call centers, pharmacy operations and patient
outreach programs. The resulting merged entities produce more
revenue from cross-selling and have less overall costs for the
Company.
- Core business streamlining. Costs were reduced in
respect of personnel, technology, CAPEX, marketing, and SG&A
due to efficiencies.
- Mednow for Business (“MFB”) continues to drive growth with
partner signings. MFB has demonstrated strong traction, with
access to over 500,000 lives.
- MFB also offers wellness and digital health programs to their
employees, providing a broad spectrum of solutions, including
digital pharmacy, nutritional services, personalized vitamins and
supplements programs, and a wellness store that includes a broad
array of health-related products.
- To-date, MFB has formed strategic channel partner relationships
with DexCom Inc. (NASDAQ: DXCM), PACE Consulting Benefits and
Pensions Ltd., PACE Consulting MGA Services Inc. and Sterling
Capital Brokers. MFB has launched and onboarded over 500 employers,
including, but not limited to Tucows (TSX: TC), Consensus Cloud
Solutions (NASDAQ: CCSI), and Arista Networks (NYSE: ANET).
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.
- Increased demand for Mednow for Doctors. An important
area of demand for Mednow’s virtual pharmacy services is from
physicians and medical clinics who are looking for administrative,
data, clinical, and adherence support. Such collaborations result
in revenues from clinical services such as medication reviews and
dispensing of adherence medication solutions. Mednow drives growth
by leaning into this demand and continues its mission to push
forward innovation in collaborative care.
- Established product-market fit. Mednow has earned and
maintains a perfect 5-star rating on Google. The reviews show that
Mednow is solving real problems and changing what Canadians expect
from their pharmacy. Customer service is our obsession and in a
market as price-regulated as pharmacy, the patient experience makes
the difference. Furthermore Mednow’s growing list of enterprise
clients validates that the company is providing a differentiated
pharmacy experience for users, payors and prescribers.
Key Financials
- Revenue increased by 17% quarter-over-quarter, to $11,346,829
during the three month period ended January 31, 2023, driven
primarily by sales from the Company's Pharmacy operating segment.
- Pharmacies based in British Columbia, Manitoba, Ontario and
Nova Scotia collectively generated revenue of $10,839,642, as
compared to $1,405,559 in the prior year’s comparative period.
- Revenue generated by doctor services was $472,146 as compared
to $536,266 in the prior year’s comparative period.
- Gross margin for the quarter increased approximately 253%
year-over-year to $1,249,746, as compared to $354,297 in the prior
year’s comparative period.
- EBITDA for the period was a loss of $3,404,704, as compared to
a loss of $5,438,633 in the prior year’s comparative period,
representing an increase in EBITDA of $2,033,929 compared to the
prior comparative period.
- The change is primarily due to the increase in gross profit,
resulting from higher revenues during the period, and a decrease in
share-based compensation expenses, partially offset against general
and administrative expenses, which are corporate costs, such as
increased headcount, technology and marketing expenses.
- EBITDA is a non-IFRS financial measure and has been adjusted
for certain items. Refer to the disclosure under the heading
“Definitions of Certain Non-IFRS Financial Measures” for more
information on this non-IFRS financial measure.
- Adjusted EBITDA for the quarter was a loss of $2,811,808, as
compared to a loss of $4,162,058 in the prior year comparative
period, representing a increase in adjusted EBITDA of $1,350,250.
- Adjusted EBITDA is a non-IFRS financial measure and has been
adjusted for certain items. Refer to the disclosure under the
heading “Definitions of Certain Non-IFRS Financial Measures” for
more information on this non-IFRS financial measure. The
composition of Adjusted EBITDA has changed from the comparative
period to the current period discussed herein, as explained further
under the heading “Definitions of Certain Non-IFRS Financial
Measures - Reconciliation of Non-IFRS Financial Measures.”
Summary of Financial Results
Below is a summary of each operating segment's performance for
the three-month period ended January 31, 2023 and 2022.
For the three months ended
January 31,
2023
Pharmacies
Doctor Services
Mednow Inc.
Total
Revenue
$
10,839,642
$
472,146
$
35,041
$
11,346,829
Cost of sales
9,747,421
349,662
—
10,097,083
General and administrative
1,894,716
330,485
1,803,949
4,029,150
Share based compensation
—
—
324,097
324,097
Marketing and sales
6,497
6,616
122,159
135,272
Depreciation
363,896
6,496
314,443
684,835
Income tax expense
26,685
—
—
26,685
Other amounts in loss
276,343
810
16,352
293,505
Net loss
$
(1,475,916
)
$
(221,923
)
$
(2,545,959
)
$
(4,243,798
)
For the three months ended
January 31,
2022
Pharmacies
Doctor Services
Mednow Inc.
Total
Revenue
$
1,405,559
$
536,266
$
62,100
$
2,003,925
Cost of sales
1,250,018
399,610
—
1,649,628
General and administrative
464,140
242,001
3,478,296
4,184,437
Share based compensation
—
—
1,086,293
1,086,293
Marketing and sales
—
907
490,955
491,862
Depreciation
88,263
7,293
167,770
263,326
Income tax expense
—
—
—
—
Other amounts in loss
10,767
268
30,707
41,742
Net loss
$
(407,629
)
$
(113,813
)
$
(5,191,921
)
$
(5,713,363
)
Source: Mednow’s MD&A as of
March 31, 2023
RECONCILIATIONS OF NON-IFRS
MEASURES
Three months ended January
31,
Six months ended January
31,
2023
2022
2023
2022
Net loss and comprehensive loss
for the period
$
(4,243,798
)
$
(5,713,363
)
$
(8,834,769
)
$
(10,514,372
)
Interest expense
127,574
11,404
226,886
14,683
Depreciation and amortization
684,835
263,326
1,386,513
398,383
Current income tax expense
26,685
—
87,385
—
EBITDA¹
$
(3,404,704
)
$
(5,438,633
)
$
(7,133,985
)
$
(10,101,306
)
Loss on investment in equity
securities
—
60,442
—
89,166
Share-based compensation
324,097
1,086,293
679,117
2,565,822
Acquisition costs
11,400
129,840
11,400
217,492
Severance expenses
74,000
—
224,000
—
Loss on disposal of assets and
leases
183,399
—
183,399
—
Adjusted EBITDA¹
$
(2,811,808
)
$
(4,162,058
)
$
(6,036,069
)
$
(7,228,826
)
¹ EBITDA and Adjusted EBITDA are
non-IFRS financial measures and have been discussed in the section
Definitions of Non-IFRS Financial Measures.
DEFINITIONS OF CERTAIN NON-IFRS FINANCIAL
MEASURES
This press release discloses certain non-IFRS financial measures
which are defined below (including non-IFRS financial measures for
prior year comparative periods). 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, and 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, acquisition
costs incurred, asset impairment charges, the fair value
remeasurement of the note receivable from Doko and severance
expenses. 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.
Reconciliation of Non-IFRS Financial Measures
The most directly comparable financial measure to EBITDA and
Adjusted EBITDA that is disclosed in the Company’s financial
statements is net loss and comprehensive loss. 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 net interest expenses, which primarily includes interest
expense on the Company's credit facility and interest expense and
interest income 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 asset impairment charges recorded by the Company as part of
its annual impairment test of goodwill and intangible assets.
- The fair value remeasurement of the promissory note with
Doko.
- The severance expenses incurred by the Company.
The composition of Adjusted EBITDA has changed from prior
comparative periods disclosed herein. Information on the reason for
the change is incorporated by reference to the Company’s Management
Discussion and Analysis (“MD&A”) for the three month period
ended October 31, 2022. The information can be found in the
MD&A under the heading “Definition of Certain Non-IFRS
Financial Measures - Reconciliation of Non-IFRS Financial
Measures.” The Company’s MD&A is available on SEDAR at
www.sedar.com under the Company’s profile.
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 (TSXV: MNOW) (OTCQX:MDNWF) is a healthcare technology
company offering virtual access with a high-standard of care.
Designed with accessibility and quality of care in mind, Mednow
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, doctor
consultations, a user-friendly interface for easy upload, transfer,
and refill of prescriptions, access to healthcare professionals
through an intuitive chat experience and the specialized PillSmart™
system that packages prescriptions in easy-to-use daily dose packs,
each labeled with the date and time of the next dose.
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 Statements:
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, that Mednow expects operate in regions in
Canada other than BC and ON by way of Preferred Pharmacy Partners
and franchisees; that Mednow expects to collect technology fees
from participating pharmacies in its preferred pharmacy network,
MFB has a pipeline of groups which are expected to be launched in
the coming months and that Mednow Pharmacists are expected to
perform an in-home medication review and medication cabinet cleanup
for eligible housebound patients under the Ontario Drug benefits
program 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 Mednow will operate in
regions in Canada other than BC and ON by way of Preferred Pharmacy
Partners and franchisees; Mednow will collect technology fees from
participating pharmacies in its preferred pharmacy network, MFB has
a pipeline of groups which will be launched in the coming months
and Mednow Pharmacists will perform an in-home medication review
and medication cabinet cleanup for eligible housebound patients
under the Ontario Drug Benefits Program.
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 that Mednow will not operate in
regions in Canada other than BC and ON by ways of Preferred
Pharmacy Partners and franchise or at all; Mednow will not be
successful in collecting technology fees from participating
pharmacies in its preferred pharmacy network, MFB’s pipeline of
groups will not be successfully launched in the coming months or at
all, Mednow Pharmacists will not perform an in-home medication
review and medication cabinet cleanup under the Ontario Drug
Benefits Program 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/20230331005107/en/
Investor Relations: Lorraine
Cardenas ir@mednow.ca 1.855.686.6300
Mednow (TSXV:MNOW)
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