Mimi’s Rock Corp. (TSXV:MIMI) (OTCQB:MIMNF) (the “Company”), an online dietary supplement and wellness company, today announced its financial results for the three months ended June 30, 2020.
- $10.9 million revenue – Highest to date
- $1.6 million EBITDA – Highest to date
- $0.9 million after-tax net income
“The second quarter of 2020 financial results reflect the continued evolution of our business” said David Kohler, CEO. “Our positioning in the marketplace combined with our new product offerings, have resulted in our best results to date—and we are proud of what we have accomplished. We have seen that the COVID-19 virus has further accelerated consumer interest in shopping online. We are excited about the implications and expect growth to continue.”
Results of Operations for the Three Months Ended June 30, 2020
Net income for the second quarter of 2020 was $928,165 compared to a net loss of $1,240,051 in the same period in 2019. EBITDA for the second quarter of 2020 was $1,584,184, compared to EBITDA of $460,008 for the same period in 2019. Adjusted EBITDA (which excludes non-cash share-based compensation expenses, listing fees, foreign exchange gains (losses) and investment income) for the second quarter of 2020 was $1,573,165, ahead of the Adjusted EBITDA of $1,382,117 reported for the same period in 2019.
Consolidated revenues for the second quarter of 2020 were $10,943,137, up 25% from revenues of $8,770,904 in the same period in 2019. Revenues were $10,943,137 for the three months ended June 30, 2020 compared to revenues of $8,770,904 for the period ended June 30, 2019. Revenues in the comparative 2019 period represent revenues from the DTI business only as the skin care businesses, All Natural and Maritime Naturals, were acquired in December 2019.
DTI, the core dietary supplements business, saw an improvement in its financial performance in the second quarter of 2020, indicating that it has completed its recovery from a difficult fourth quarter of 2019. Management expects the revenues of this business to experience some fluctuation on a quarter-to-quarter basis, but ultimately continue to grow throughout 2020 with the launch of new complementary products and expansion into additional geographic territories. Also, revenues from the skin care businesses are expected to continue to grow as the products enter the U.S. market.
Selling and Marketing Expense
The Company incurred selling and marketing expenses of $4,788,764, or approximately 43.8% of revenue, for the second quarter of 2020, compared to $3,523,242, or 40.2% of revenue, for the same period in 2019. In the 2019 period, management consciously scaled back online advertising to evaluate returns on investment. In Q2 2020, the level of online advertising was increased as management had become confident that its refined marketing strategy was gaining traction in the marketplace.
General and Administrative Expense
General and administrative expenses for the three months ended June 30, 2020 were $1,272,825, compared to $1,302,960 for the same period in 2019. General and administrative expenses consist primarily of salaries and benefits, professional fees, occupancy costs and insurance. General and administrative expenses are relatively comparable to the same period in 2019 due to the fact that staff and operational costs are relatively stable. General and administrative expenses are expected to remain relatively fixed for foreseeable future periods.
Interest Expense and Financing Costs
Interest and financing costs of $180,991 were incurred during the three months ended June 30, 2020, compared to $533,475 for the three months ended June 30, 2019. Interest and financing expenses have decreased significantly in 2020 periods compared to 2019 primarily due to renegotiations of the senior debt facility as well as lower interest rates and non-cash charges related to amortization of finance costs incurred in securing the 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.
This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects”, or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or describes a “goal”, or variation of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. The forward- looking statements in this press release include, but are not limited to, statements regarding the impact of the COVID-19 pandemic on the business and operations of the Company, the Company’s expected revenues, the expected increase in quarterly revenues and Adjusted EBITDA. Please refer to the Company’s 2019 Annual Financial Statements and MD&A for more details on the Company’s calculation of EBITDA and Adjusted EBITDA.
All forward-looking statements reflect the Company’s beliefs and assumptions based on information available at the time the statements were made. Actual results or events may differ from those predicted in these forward-looking statements. All of the Company’s forward-looking statements are qualified by the assumptions that are stated or inherent in such forward-looking statements, including the assumptions listed below. Although the Company believes that these assumptions are reasonable, this list is not exhaustive of factors that may affect any of the forward-looking statements.
Forward-looking statements involve known and unknown risks, future events, conditions, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, prediction, projection, forecast, performance or achievements expressed or implied by the forward-looking statements, including risks relating to: the Company’s reliance on strength of reputation and brands, third-party manufacturing, transportation and distribution, the Company’s ability to protect its intellectual property, the Company’s reliance on e-commerce sites, disruption or breaches in information technology systems, the successful integration subsequent to acquisitions, litigation, volatility in the market price, the inability to successfully implement growth strategy on a timely basis, difficulty expanding sales in targeted international markets, changes in general economic conditions, the Company’s ability to service its debt obligations, management of growth, reliance on management, conflicts of interest, local and foreign tax matters, liquidity, currency and other financial risks, potential product liability or other regulatory claims, product recalls, the need to develop and innovate products, changes in legal and regulatory standards, competition, operating risk and insurance coverage, natural disasters, unusual weather and geo-political events, the effect of COVID-19 on operations and other risks relating to the business and industry of the Company that are detailed from time to time in the Company’s filings with the Canadian provincial securities regulators.
Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking 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. All forward-looking information contained in this press release is given as of the date hereof and is based upon the opinions and estimates of management and information available to management as at the date hereof. The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events, or otherwise, except in accordance with applicable securities laws.