TORONTO, Nov. 28, 2019 /CNW/ - Mimi's Rock Corp.
(TSXV:MIMI) "The Company", an online dietary supplement and
wellness company operating the Dr. Tobias brand, today announced
its financial results for the quarter ended September 30, 2019.
Recent Developments
- On September 5, 2019, the Company
announced it had entered into binding agreements to acquire two
additional businesses. Agreements to acquire All Natural Advice
Ltd. ("All Natural") and Maritime Naturals Ltd. ("Maritime
Naturals") are expected to be completed shortly. All Natural is the
#1 Skin Care Seller on Amazon Canada for the past 4 years. Mimi's
Rock will acquire all of the issued and outstanding shares of each
of All Natural and Maritime Naturals for an aggregate purchase
price of approximately $9.6 million.
The acquisition of these accretive businesses will add
approximately $5.5 million of
combined revenue and $1.6 million of
EBITDA. Closing for both acquisitions is scheduled for December 10, 2019.
- On September 24, 2019, the
Company announced (further to the joint venture announcement of
July 8, 2019) the execution of a
definitive agreement with three-time world heavyweight champion
Lennox Lewis to develop and
commercialize a new line of branded nutritional supplements. The
co-branded supplements will focus on men's health and wellness and
will feature products such as a Men's Multipack Vitamin. Products
will be sold exclusively online.
- On November 13, 2019, the Company
announced the launch of its Dr. Tobias line of dietary supplements
in Canada. Initially, Dr Tobias
will be launching the brand's top-rated Omega 3 Fish Oil, known to
support cardiovascular health, cognitive health and brain function,
and its Multivitamin, a product which promotes eye, skin, membrane,
and immune function and fosters strong bones and teeth. These
product launches have been made available on Amazon.ca and on the
e-commerce platform drtobias.com.
- On November 27, 2019, the Company
announced that the TSX Venture Exchange has accepted the Company's
notice to implement a normal course issuer bid ("NCIB") to
purchase, for cancellation, up to 3,029,109 of its common shares,
representing approximately 10% of the Company's "public float".
Management of the Company believes that the Shares have been
trading in a price range which does not adequately reflect their
value and that the purchase of the Shares under the NCIB is in the
best interests of the Company, a desirable use of its available
cash, and will enhance shareholder value in general.
Dave Kohler, CEO of Mimi's Rock
commented, "We are excited to be launching multiple new products
and categories in new markets. These, coupled with the
pending acquisition of All Natural and Maritime Naturals, give us
access to new revenue streams and offer diversification from the
single-market roots of the organization. As we continue to
execute our strategies, these markets should contribute
significantly to our growth.'
Results of Operations
For the three months ended September 30,
2019, the Company incurred a net loss of $243,156 compared to a net loss of $759,537 for the three months ended September 30, 2018. For the three months
ended September 30, 2019, EBITDA was
$626,540, compared to EBITDA of
$216,887 for the three months ended
September 30, 2018. Adjusted
EBITDA, which excludes non-cash share based compensation expense,
investment income, listing expenses and acquisition costs, was
$902,776, compared to Adjusted EBITDA
of $1,530,973 for the same period in
the prior year. For the nine months ended September 30, 2019, the Company incurred a net
loss of $1,091,290 ($0.03 per share), compared to a net loss of
$759,537 ($0.05 per share) for the nine month period ended
September 30, 2018. EBITDA for
the nine months ended September 30,
2019 was $2,184,461, compared
to $216,887 EBITDA for the same
period in the prior year. Adjusted EBITDA was $3,603,413 for the nine months ended September 30, 2019, compared to $1,530,973 for the same period in 2018.
The Company reported a net loss for the three and nine months
ended September 30, 2019 primarily
due to one-time costs related to its reverse takeover and public
listing expenses as part of the Qualifying Transaction completed in
May 2019, as well as non-cash
share-based compensation expense. Tax expense in the nine
month period was also higher than normal due to derecognition of
tax loss carryforwards in Germany
as a result of the reverse acquisition.
Revenues for the three months ended September 30, 2019 were $8,755,114 compared to revenues of $8,522,950 for the three month period ended
September 30, 2018. Revenues
represent sales of nutraceutical products in the U.S. market. Gross
margin for the three months ended September
30, 2019 was $6,114,962 (70%)
compared to $5,553,930 (65%) for the
three month period ended September
30, 2018. Gross margin ratios have improved over the
comparative period as the Company works with its supplier to obtain
better pricing and efficiencies. Revenues were $27,692,245 for the nine months ended
September 30, 2019 compared to
revenues of $8,522,950 for the nine
months ended September 30,
2018. Revenues reported in the current and prior year
primarily represent revenues from the DTI business, which began to
accrue to the Company from July 13,
2018, the date of acquisition. Revenues from the core
business have remained strong with some seasonality. The
Company has begun to add additional sales channels through the
launch of its own e-commerce site and sales to other e-commerce
outlets. Going forward, growth is expected to come from
launch of product sales in additional geographic regions as well as
other online portals.
The Company continues to adapt and further its brand
strategy. Online advertising in the period was increased with
a focus on brand awareness and customer loyalty. Sales from its own
e-commerce site, drtobias.com, as well through additional online
retail outlets continued to grow, however, a majority of revenue
continues to be generated on the Amazon.com platform.
The Company incurred selling and marketing expenses of
$4,014,971, or approximately 46% of
revenue, for the three months ended September 30, 2019, compared to $3,300,945, or 39% of revenue, for the three
months ended September 30,
2018. Advertising spend in the third quarter of 2019
was increased with a deliberate focus on attracting longer term
repeat customers. While the brand continues to generate
strong repeat sales, investments are also being made attract
new-to-brand customers. While this type of ad spend does not
necessarily translate to immediate revenue, it is important to the
overall brand growth strategy. Sales and marketing expenses
for the period consist primarily of fulfillment costs related to
delivering products to customers, direct online advertising
placements, costs related to marketing the Dr. Tobias brand and
other promotional and awareness initiatives. The Company will
continue to actively monitor its selling and marketing expenses,
particularly those directly related to advertising and expects that
these will vary in relation to sales revenues going forward as
advertising spend is optimized relative to competitive
conditions.
General and administrative expenses for the three months ended
September 30, 2019 were $1,197,215, compared to $722,012 for the same period in 2018.
General and administrative expenses consist primarily of salaries
and benefits, professional fees, occupancy costs and
insurance. General and administrative expenses in the
2019 period are higher than the same period in 2018 primarily due
to higher overall staff levels and considerably more operational
activity. Share based compensation expense for the three
months ended September 30, 2019 was
$123,747 compared to $326,685 for the three months ended September 30, 2018. Share based
compensation expense in 2018 was considerably higher due to initial
vesting of original employee grants. Share based compensation
expense relates to awards under the Company's incentive stock
option plan and is based on the estimated number of awards that
will eventually vest using the Black-Scholes option pricing
model.
On May 27, 2019, the Company
completed its Qualifying Transaction pursuant to an amalgamation
agreement between the Company and Mimi's Rock Inc. The
Qualifying Transaction constituted a reverse take-over ("RTO") for
accounting purposes, as former MRI shareholders hold a majority of
outstanding shares in the Company, the Board of Directors is
comprised of MRI Board members and the senior management of MRI
became senior management of the Company. Listing expenses related
to the acquisition and reverse takeover transaction were
$786,138, compared to $nil for the
same period in the prior year. Listing expenses consist
primarily of legal, accounting and other professional fees
associated with the reverse takeover and amalgamation, as well as
non-cash costs related to equity instruments issued for the
acquisition.
Interest and financing costs of $426,409 were incurred during the three months
ended September 30, 2019, compared to
$447,076 for the three months ended
September 30, 2018. Interest
and financing expenses in the 2019 period include approximately
$183,543 (2018: $137,106) in non-cash charges related to
amortization of expenses incurred in securing the Company's senior
secured loan.
Neither the 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 news release.
About Mimi's Rock Corp.:
Mimi's Rock Corp. is an online dietary supplement and wellness
company operating under the Dr. Tobias brand. The brand features
over 30 products including the top selling colon cleansing product
and the #1 selling Omega 3 Fish Oil on Amazon.com. Mimi's Rock
currently serves customers in the United
States and has rapid growth plans to expand into other
markets. For more information, visit
https://mimisrock.com.
Forward-Looking Information
This news release includes "forward-looking information," as
such term is defined in applicable securities laws. Forward-looking
information includes, without limitation, Mimi's Rock Corp.'s
business and business results, goals or outlook, risks associated
with financial results and stability, development projects such as
those referenced herein, sales to foreign jurisdictions,
engineering and construction, production (including control over
costs, quality, quantity and timeliness of delivery), foreign
currency and exchange rates, maintaining adequate working capital
and raising further capital on acceptable terms or at all, and
other similar statements concerning anticipated future events,
conditions or results that are not historical facts. These
statements reflect management's current estimates, beliefs,
intentions and expectations; they are not guarantees of future
performance. The Company cautions that all forward looking
information is inherently uncertain and that actual performance may
be affected by a number of material factors, many of which are
beyond the Company's control. Accordingly, actual future events,
conditions and results may differ materially from the estimates,
beliefs, intentions and expectations expressed or implied in the
forward-looking information. All statements are made as of the date
of this news release and represent the Company's judgement as of
the date of this new release, and the Company is under no
obligation to update or alter any forward-looking information.
Please visit www.mimisrock.com or www.sedar.com for recent
Mimi's Rock Corp. filings.
SOURCE Mimi's Rock Inc.