Revenue of $10.8 Million, an Increase of 11% over Q1 2024
87% Growth in International Medical Cannabis Revenue, Forming 55% of Total Revenue
Gross Profit of $4.2 million, or 39% of Total Revenue, Improved Significantly over Q1 2024
Management to Host Conference Call / Webcast on May 14, 2025 at 10:00 am ET
TORONTO, May 14, 2025 /PRNewswire/ - MediPharm Labs Corp. (TSX: LABS) (OTCQB: MEDIF) (FSE: MLZ) ("MediPharm", "MediPharm Labs" or the "Company") a pharmaceutical company specialized in precision-based cannabinoids, announces financial results for the three months ended March 31, 2025 ("Q1 2025").
MediPharm has achieved new milestones in the Company's transformative path to profitability, reporting positive Q1 2025 Adjusted EBITDA(1) and 87% year-over-year growth in international medical revenue.
David Pidduck, CEO, MediPharm Labs comments, "We are pleased that our strategy and our vision in growing MediPharm Labs is working, resulting in positive Adjusted EBITDA in Q1 2025. This is an important milestone and demonstrates the significant strides made to transform the organization and establish MediPharm's position as a global leader in pharma-quality cannabinoid, medical and wellness products."(1)
Greg Hunter, CFO, MediPharm Labs added, "Over the past three years, we've demonstrated consistent revenue growth, implemented strategic cost reductions and expanded margins —all of which have contributed to this important positive Adjusted EBITDA achievement. As we move forward, management remains focused and relentless in driving further revenue growth and continuing to streamline expenses to enhance our profitability profile and strengthen our financial position." (1)
Q1 2025 Financial Highlights
During Q1 2025, the Company's revenue of $10.8M increased $1.0M or 11% versus the three months ended March 31, 2024 ("Q1 2024"), largely driven by the increased revenues generated by sales of flower and dronabinol in our international business (see Figure 1).
The Company's Q1 2025 gross profit was $4.2M or 38.7% of total revenue and improved significantly versus the Q1 2024 gross profit margin of 27.4% due to increased sales volume, product mix and expense reductions. Management continues to focus on efficiencies to drive gross profit (see Figure 2).
Operating expenses (general administrative expenses, marketing and selling expenses, and R&D expenses) for Q1 2025 was $4.4M and has decreased $1.3M versus prior year. In addition, Q1 2025 operating expenses decreased $0.8M or 15% versus the three months ended December 31st, 2024 ("Q4 2024"). Management continues to focus on expense reduction opportunities.
For Q1 2025, the Company's Adjusted EBITDA(1) was $0.1M and improved $1.1M or 115% versus Q1 2024. This improvement in Adjusted EBITDA(1) is driven by revenue growth, the improvement in gross profit and the reduction of operating expenses. Q1 2025 Adjusted EBITDA(1) improved $0.2M versus Q4 2024 driven by increased gross profit and continued expense reductions (see Figure 3).
Opex includes general administrative expense, marketing and selling expenses and R&D expenses.
2)
Adjusted EBITDA is a non-IFRS measure. See "Non-IFRS Measures".
Strong Balance Sheet – Virtually Debt-Free
The Company is virtually debt-free and had a cash balance of $8.4M at the end of Q1 2025. Contrary to many other cannabis companies, MediPharm is also up-to-date on cannabis excise duties and accounts payable. MediPharm is monetizing non-core assets to invest in growth, including the previously announced sale of its Hope facility for $4.5M, which is anticipated to close within the second quarter of 2025(2), subject to customary closing conditions and receipt of all necessary approvals, as applicable.
This financial position is expected to provide MediPharm with stability to execute on its short-term sales plans and provides the balance sheet strength to support the Company's long-term growth strategy including selective mergers and acquisitions.(2) This balance sheet strength puts MediPharm in a favourable position relative to many of its peer group who are largely burdened with excessive debt, unpaid excise duties, and significantly stretched accounts payables.
International Medical Cannabis Revenue Growth of 87% vs. Prior Year
International medical revenue increased from $3.2M in Q1 2024 to $5.9M in Q1 2025, driven largely by increased international flower and German dronabinol sales. This 87% year-over-year growth occurred across multiple product groups and geographies including Germany, Australia and the United Kingdom.
The international medical business represented 55% of total revenue in Q1 2025 versus 33% in prior year.
In January, 2025 the Company announced a commercial agreement with Laboratório Teuto, a leading pharmaceutical manufacturer and marketer in Brazil.
Upcoming Annual and Special Meeting of Shareholders
On May 13, 2025, the Company filed its Management Information Circular and proxy materials (the "Meeting Materials") for its upcoming Annual and Special Meeting of Shareholders, scheduled for June 16, 2025. The Meeting Materials will be sent to shareholders in the coming days, and are available on the SEDAR+ website at www.sedarplus.ca and on the Company's website.
MediPharm's Board of Directors recommends that shareholders vote through the GREEN proxy in support of the Company's nominees for the Board of Directors and other resolutions.
Shareholders are encouraged to visit www.medipharmlabsagm.com for a letter from our Chairman of the Board to Shareholders and up-to-date information on matters relating to the Annual and Special Meeting, including voting instructions, and updates on the campaign recently launched by a dissident shareholder.
Q1 2025 Financial Results Conference Call / Webcast MediPharm's executive management team will also host a conference call and webcast on Wednesday, May 14, 2025 at 10:00 am (Eastern time) to discuss the Company's financial results. The conference call dial in details are as follows:
North America Toll-Free: (888) 330-2454 International: +1 (240) 789-2714 Conference ID: 4921762 #
Participants are asked to dial in approximately 15 minutes before the start of the call.
A webcast will be available by visiting the following link here.
For those who are unable to participate on the live conference call or webcast, a replay will be available at https://www.medipharmlabs.com/investors approximately one day after completion of the call.
(1) This is a non-IFRS reporting measure. See "Non-IFRS Measures" below.
(2) This is a forward-looking statement and based on a number of assumptions. See "Cautionary Note Regarding Forward-Looking Information" below.
About MediPharm Labs Founded in 2015, MediPharm Labs specializes in the development and manufacture of purified, pharmaceutical-quality cannabis concentrates, active pharmaceutical ingredients (API) and advanced derivative products utilizing a GMP-certified facility with ISO standard-built clean rooms. MediPharm Labs has invested in an expert, research driven team, state-of-the-art technology, downstream purification methodologies and purpose-built facilities for delivery of pure, trusted and precision-dosed cannabis products for its customers. MediPharm Labs develops, formulates, processes, packages and distributes cannabis and advanced cannabinoid-based products to domestic and international medical markets.
In 2021, MediPharm Labs received a Pharmaceutical Drug Establishment Licence from Health Canada, becoming the only company in North America to hold a domestic Good Manufacturing Licence for the extraction of natural cannabinoids. The Company carries out its operations in compliance with all applicable laws in the countries in which it operates.
In 2023, MediPharm acquired VIVO Cannabis Inc. which expanded MediPharm's reach to medical patients in Canada via Canna Farms medical ecommerce platform, and in Australia and Germany through Beacon Medical PTY and Beacon Medical GMBH. This acquisition also included Harvest Medical Clinics in Canada which provides medical cannabis patients with Physician consultations for medical cannabis education and prescriptions.
(1) This is a non-IFRS reporting measure. See "Non-IFRS Measures" below.
(2) This is a forward-looking statement and based on a number of assumptions. See "Cautionary Note Regarding Forward-Looking Information" below.
Non-IFRS Measures
This press release contains references to "Adjusted EBITDA", which is a non-IFRS financial measure. Management believes that this supplementary non-IFRS financial measure provides useful additional information related to the operating results of the Company. This non-IFRS financial measure is not recognized under IFRS and, accordingly, users are cautioned that this measure should not be construed as an alternative to net income (loss) and gross profit determined in accordance with IFRS as measures of profitability or as alternatives to the Company's IFRS-based Financial Statements. The non-IFRS measure presented may not be comparable to similar measures presented by other issuers. Adjusted EBITDA is a measure of the Company's overall financial performance and is used as an alternative to earnings or income in some circumstances. Adjusted EBITDA is essentially net income (loss) with interest, taxes, depreciation and amortization, non-cash adjustments and other unusual or non-recurring items added back. Adjusted EBITDA has limitations as an analytical tool as it does not include depreciation and amortization expense, interest income and expense, finance fees, gain in revaluation of derivative liabilities, taxes, government grants including rent and wage subsidies, one-off transactions, impairment losses on inventory and on fixed assets and intangibles, write down of deposits and share-based compensation. Because of these limitations, Adjusted EBITDA should not be considered as the sole measure of the Company's performance and should not be considered in isolation from, or as a substitute for, analysis of the Company's results as reported under IFRS. Adjusted EBITDA, as used within the Company's disclosure, may not be directly comparable to Adjusted EBITDA used by other reporting issuers. Adjusted EBITDA does not have a standardized meaning and the Company's method of calculating such non-IFRS measure may not be comparable to calculations used by other companies bearing the same description.
The following table reconciles the Company's net operating income (loss) (as reported) and Adjusted EBITDA for the periods presented:
Three months ended
31-Mar-25
31-Dec-24
30-Sep-24
30-Jun-24
$'000s
$'000s
$'000s
$'000s
Net operating loss
(441)
(1,803)
(2,708)
(2,573)
Adjusted for:
Share-based compensation expense
437
227
160
576
Depreciation and amortization
425
563
518
731
Restructuring related severance expenses
-
80
87
305
Impairment loss on remeasurement of assets held for sale
-
-
113
77
Gain on disposition of assets
-
-
-
(20)
Early lease termination cost
-
70
-
-
Incremental cost of cannabis inventory acquired in a business combination (1)
20
251
110
162
Terminal costs for closed facility (2)
-
-
-
95
Write down of inventories (3)
10
27
60
Fair value adjustments in gross profit
(46)
(53)
519
170
Indirect tax reassessments (4)
524
-
153
240
Payroll tax assessment
-
-
42
Miscellaneous
(28)
150
-
11
Transaction costs (5)
(750)
409
278
-
Adjusted EBITDA
141
(96)
(743)
(124)
(1)
This represents the fair value realized on sale of cannabis inventory acquired in a business combination.
(2)
This relates to employee compensation for terminated employees and write downs of the carrying value of inventory at the Hope facility.
(3)
This adjustment is for unusual inventory write-downs only and not the total value of inventory written down.
(4)
This relates to liabilities recognized in connection with notices of reassessment related to prior periods issued by the tax authorities.
(5)
This includes non-recurring fees, expenses associated with the evaluation of potential mergers and acquisitions, fees related to reorganization of legal entities. This also includes fees and non-refundable deposits related to the proposed sale of the Napanee facility, which was terminated in January 2025.
Cautionary Note Regarding Forward-Looking Information
This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward- ") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate to, among other things, statements regarding: the Company's path towards profitability; the Company's positioning as one of the global leaders in certain cannabinoid products; management's ability to further drive revenue grown and streamline expenses; the timing of closing of the sale of the Hope facility; the stability of the Company's financial position; and the Company's ability to complete mergers and acquisitions transactions and meet its long-term goals for growth. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; the inability of MediPharm to obtain adequate financing; the delay or failure to receive regulatory approvals; and other factors discussed in MediPharm's filings, available on the SEDAR+ website at www.sedarplus.ca. 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 the forward-looking statements and information contained in this news release. Except as required by law, MediPharm assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change.
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