TORONTO–(BUSINESS WIRE)–DionyMed
Brands Inc. (“DionyMed”, “DYME” or “Company”) (CSE: DYME) (OTC:
DYMEF), a multi-state cannabis brands, distribution and
direct-to-consumer delivery platform, announced today the following
financial and operational update for its first fiscal quarter of 2019.
First Quarter 2019 Financial Highlights
-
Record setting preliminary gross revenue of US$14.2 million,
representing 155% growth over the fourth quarter of 2018, from
distribution and direct-to-consumer sales of house and third-party
brands. -
Gross margins expanded to 45%, or approximately US$6.4 million, from
36%, or approximately US$2.0 million, representing 25% growth from
gross margins realized in the fourth quarter of 2018, due to an
increase in the share of house brand products sold and
direct-to-consumer delivery. -
The Company continues to improve its gross margins and platform
efficiency to reduce costs and improve its EBITDA. -
An additional US$5.0 million wholesale value of product was delivered
through the Company’s wholesale logistics business for third-party
brands. The wholesale logistics business recognizes net revenue rather
than the full wholesale value of product distributed by the Company.
Total combined gross sales of product from the Company were US$19.2
million.
First Quarter 2019 Operational Highlights
Expansion of DYME’s Award Winning Cannabis Brands Portfolio
-
DYME house brand “Winberry Farms” exceeded US$1.0 million of wholesale
revenue during the month of March. -
DYME house brand “Gardener’s” was launched in Oregon, expanding house
brand sales outside of California. -
Launched twelve CBD-focused products under DYME’s award-winning brand,
Winberry Farms. -
DYME house brands represented more than 50% of wholesale distribution
revenue in March accelerating product sales margin expansion.
Expansion of “Chill”, DYME’s Direct-To-Consumer Delivery Platform
-
DYME expanded the “Chill” Bay Area delivery territory to include San
Francisco, Hayward, Fremont and Cupertino in response to favorable
changes in California’s direct-to-consumer regulations. -
Enhanced the Chill product offering adding more than 150 SKUs,
including products from award winning brands, like Winberry Farms,
Gardener’s, Dosist, Kiva, Canndescent, Plus Products and PAX. -
Relaunched the Chill online user experience driving new user adoption,
revenue growth and margin expansion.
Expansion into New Markets
-
Announced a strategic product manufacturing and distribution
partnership with Acres Cannabis, which, was recently acquired by
Curaleaf. As a result, DYME brands are now available in select
cannabis retail dispensaries in Las Vegas, Nevada. -
Signed a binding term sheet to acquire a 1.83 acre Los Angeles
cannabis campus with 80,000 sq ft that includes 80,000 sq ft of retail
dispensary storefront, distribution, manufacturing space and
direct-to-consumer fulfillment. The transaction is scheduled to close
on May 31, 2018 with a combination of equity and real estate
financing, as previously disclosed. -
Signed a definitive agreement to acquire Pioneer Valley Extracts, LLC,
a licensed product manufacturer in Massachusetts. The transaction was
done with equity and nominal cash, as previously disclosed.
Edward Fields, CEO of DionyMed, stated, “We are pleased to report our
progress in the first quarter of 2019, demonstrating the success of our
wholesale distribution and direct-to-consumer platform strategy. DYME’s
award winning house brands have become one of the industry’s fastest
growing cannabis product portfolios driving increased sales and
accelerating margin expansion. Chill, DYME’s direct-to-consumer delivery
offering, is experiencing explosive growth following the relaunch of the
online ecommerce website with a record setting performance during 4/20
and thousands of new customers.”
Fields concluded, “Moving forward in 2019, we will continue to scale our
business through focused execution, accretive inorganic growth and the
infrastructure buildout required by our market leading scale. As
favorable direct-to-consumer regulations in California and across the
U.S. expand, we look forward to bringing our award-winning brands,
market leading ecommerce technology and logistics to consumers
throughout California and beyond.”
Effective December 5, 2018, when the Company announced the exercise of
its option to acquire all the shares of Hometown Heart (the “Hometown
Shares”) and the subsequent completion of the acquisition on
December 13, 2018, the Company transferred all of the Hometown Shares to
a single individual who was a former owner of shares of Hometown in
consideration for the grant of an irrevocable option (the “Option”)
to re-acquire the Hometown Shares for a nominal amount following the
receipt of all required regulatory approvals. In connection with the
foregoing, the Company’s subsidiary Herban Industries, Inc. (“Herban”)
and Hometown Heart entered into a Master Services Agreement pursuant
to which Herban exercises control over Hometown Heart and
provides Hometown Heart with management, labor administration,
marketing, branding, professional, banking, record-keeping, intellectual
property, governance, and other support services. The Company has
consolidated the accounts of Hometown Heart in its consolidated
financial accounts since December 13, 2018 as a result of the Master
Services Agreement and the Option.
All financial disclosures in this press release are preliminary and
subject to change upon the financial statements for the quarter ended
March 31, 2019 being finalized and filed. Annual revenue run-rates
assume that revenues being annualized are representative and will be
achieved in future periods.
To be added to the DionyMed e-mail distribution list, please e-mail [email protected]
with DionyMed in the subject line.
About DionyMed
Founded in 2017, DionyMed is a multi-state cannabis brands platform,
supporting cultivators, manufacturers and award-winning brands in the
medical and adult-use cannabis markets. DionyMed sells branded products
in every category from flower to vape cartridges, concentrates and
edibles. DionyMed serves cannabis consumers through retail dispensary
distribution and direct-to-consumer fulfillment with its growing
portfolio of award-winning brands. Learn more at dionymed.com and
follow @DYME_Inc on Twitter and LinkedIn.
Forward-Looking Information and Statements
This news release contains certain “forward-looking information”
within the meaning of applicable Canadian securities legislation and may
also contain statements that may constitute “forward-looking statements”
within the meaning of the safe harbor provisions of the United States
Private Securities Litigation Reform Act of 1995. Such forward-looking
information and forward-looking statements are not representative of
historical facts or information or current condition, but instead
represent only the Company’s beliefs regarding future events, plans or
objectives, many of which, by their nature, are inherently uncertain and
outside of the Company’s control. Generally, such forward-looking
information or forward-looking statements can be identified by the use
of forward-looking terminology such as “plans”, “expects” or “does not
expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”,
“intends”, “anticipates” or “does not anticipate”, or “believes”, or
variations of such words and phrases or may contain statements that
certain actions, events or results “may”, “could”, “would”, “might” or
“will be taken”, “will continue”, “will occur” or “will be achieved” and
include, without limitation, statements with respect to growth of the
Chill platform, the expansion of the Company’s US operational footprint
and product portfolio, annualized revenues, the expansion of the
Company’s opportunities in new markets and statements that imply that
pending acquisitions will be completed and provide benefits to the
Company and its business and statements with respect to future growth of
the Company.
In connection with the forward-looking information and
forward-looking statements contained in this press release, the Company
has made certain assumptions, including but not limited to: the growth
rate of the Chill delivery platform staying the same or increasing, the
market for cannabis continuing to grow and expand geographically, future
revenues being at least as high as current revenues, and the Company
continuing to identify and successfully acquire brands, assets and
businesses that will advance its business objectives .
By identifying such information and statements in this manner, the
Company is alerting the reader that such information and 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 information and statements, including but
not limited to: the Company not having the requisite borrowing base or
not being able to satisfy the conditions for future draws under, or not
being able to make future draws under, the credit facility, there not
being future commitments from existing or future lenders for the full
amount of the credit facility, material changes in the Company’s
business plan, there being material fluctuations in the Company’s share
price and certain other risk factors set out in the Listing Statement of
the Company available on the Company’s profile on SEDAR at www.sedar.com.
Although the Company believes that the assumptions and factors used
in preparing, and the expectations contained in, the forward-looking
information and statements are reasonable, undue reliance should not be
placed on such information and statements, and no assurance or guarantee
can be given that such forward-looking information and statements will
prove to be accurate, as actual results and future events could differ
materially from those anticipated in such information and statements.
The forward-looking information and forward-looking statements contained
in this press release are made as of the date of this press release, and
the Company does not undertake to update any forward-looking information
and/or forward-looking statements that are contained or referenced
herein, except in accordance with applicable securities laws. All
subsequent written and oral forward- looking information and statements
attributable to the Company or persons acting on its behalf is expressly
qualified in its entirety by this notice.
Contacts
Edward Fields, CEO
[email protected]
669-232-5270
Peter Kampian, CFO
[email protected]
647-948-8387
Investor Contacts:
Phil Carlson / Erika Kay
KCSA
Strategic Communications
Phone: (212) 896-1233
Email: [email protected]
/ [email protected]
Media Contacts:
Kate Tumino / Tony Forde
KCSA Strategic
Communications
212-896-1252 / 347-487-6218
[email protected]
/ [email protected]
