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MedMen Reports 55% Year-Over-Year Quarterly Revenue Growth and Second Consecutive

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Company Continues to Execute Against MedMen 2.0 Growth Plan, Fueled by Recent Capital Infusion and Partnerships with Tilray and Serruya Private Equity

Q4 2021 Highlights

  • Fourth quarter revenue was $42.0 million, up 55.4% year-over-year and up 18.5% from the previous quarter

  • Subsequent to quarter end, Company announced transformative capital raise and restructuring of senior secured convertible note facility

LOS ANGELES, September 23, 2021–(BUSINESS WIRE)–MedMen Enterprises Inc. (“MedMen” or the “Company“) (CSE: MMEN) (OTCQX: MMNFF), a premier cannabis retailer with operations across the United States, today released its consolidated financial results for its fourth quarter of 2021 and for the fiscal year ended June 26, 2021. All financial information in this press release is reported in U.S. dollars, unless otherwise indicated.

“The past quarter was pivotal for MedMen, defined by increased sales and EBITDA profitability at our retail stores, as well as our cultivation and manufacturing facilities,” said Tom Lynch, Chairman and Chief Executive Officer of MedMen. “We set a new record for quarterly revenue at MedMen, driven by broad-based increases in traffic and frequency of transactions across nearly all of our retail locations. Strength in California accelerated during the quarter, with revenue up 24.4% sequentially. Additionally, our improved operating results have helped us shore up our balance sheet and attract strong partners in Tilray and Serruya. As previously announced, we amended the terms of our secured debt to extend the maturity to 2028, reduced restrictive covenants and eliminated cash debt service requirements. Additionally, we added $100.0 million of new capital subsequent to the end of the fourth quarter via private placement.”

Continued Lynch, “MedMen’s mission is to be the best-in-class cannabis retailer, and we are positioning ourselves to achieve this goal through focus, experience, improved financials and continuing to deliver the industry’s premier in-store experience. Over the next several quarters, we plan to both accelerate our growth and improve EBITDA profitability as we leverage our national brand recognition into opening new stores in Florida, California, Massachusetts, Arizona and Illinois.”

Fourth Quarter Financial Highlights:

  • Revenue 1: Net revenue across MedMen’s continuing operations in California, Nevada, Illinois, Arizona and Florida was $42.0 million for the fourth quarter, up 55.4% year-over-year and 18.5% sequentially, reflective of Arizona’s return to continuing operations.

  • Gross Margin Rate and Retail Gross Margin Rate 2: Company-wide Gross Margin Rate was 46.9% in the fourth quarter, compared to 40.5% in the previous quarter, driven by the Company’s increased gross margin at its cultivation and manufacturing facilities. Retail Gross Margin Rate was 54.9% in the fourth quarter, compared to 55.6% in the previous quarter.

  • SG&A Expenses: General and administrative expenses were $33.5 million in the fourth quarter, a 13.7% decrease from the same period last year.

  • Corporate SG&A 2: Corporate SG&A excluding store pre-opening costs totaled $12.1 million in the fourth quarter, a 9.7% increase from the previous quarter. The $12.1 million in the fourth quarter marks a 19.1% decrease from the same period last year.

  • Net Loss: Net loss was $46.2 million compared to a net loss of $9.7 million in the previous quarter, which prior quarter included a $32.7 million tax provision benefit.

  • Retail Adjusted EBITDA Margin Rate2: Retail Adjusted EBITDA Margin Rate from continuing operations was 22.0% for the fourth quarter.

Full Year 2021 Financial Highlights:

  • Revenue 1: Net revenue across MedMen’s continuing operations in California, Nevada, Illinois, Arizona and Florida was $145.1 million for fiscal year 2021, down 6.6% from the prior year, reflecting the impact of COVID-19, particularly during the first half of the fiscal year and in the Las Vegas and California markets.

  • Gross Margin Rate and Retail Gross Margin Rate2: Company-wide gross margin rate was 46.4% in fiscal year 2021 compared to 35.6% in the previous year, driven by a focus on retail optimization and improvements in supply chain, cultivation and manufacturing facilities. Retail gross margin rate was 54.7% for fiscal year 2021 compared to 49.6% in the previous year.

  • SG&A Expenses: General and administrative expenses totaled $125.7 million in fiscal 2021, a 38.2% decrease from the previous year.

  • Corporate SG&A 2: Corporate SG&A excluding store pre-opening costs totaled $42.6 million in fiscal year 2021, a 52.0% decrease from the previous year total of $88.8 million.

  • Net Loss: Net loss was $157.6 million for fiscal year 2021 compared to a net loss of $526.5 million in the previous year, which prior year included an impairment charge of $246.7 million.

  • Retail Adjusted EBITDA Margin Rate2: Retail Adjusted EBITDA Margin Rate from continuing operations was 20.0% for fiscal year 2021.

(1)

The Company executed definitive investment agreements to complete a majority investment in New York, subject to regulatory approval. New York operations are classified as discontinued operations. Arizona was reclassified to continuing operations during the fourth quarter.

(2)

Retail Gross Margin Rate, Corporate SG&A and Retail Adjusted EBITDA Margin are non-GAAP financial measures as described below.

Balance Sheet:

As of June 26, 2021, the Company had total assets of $472.5 million, including cash and cash equivalents of $11.9 million.

Capital Markets and Financing:

  • Equity Private Placements: During the fourth quarter, the Company raised…



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2021-09-23 20:01:00

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