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 and nine months ended September 30, 2020 .
- $9.8 million of revenue and $1.2 million of EBITDA in Q3 2020
- YTD 2020 revenues $31.2 million ; up from $27.7M same period last year
"We are pleased to report strong Q3 2020 results, which saw us grow our revenue by 12% over the same quarter last year, despite the fact that Amazon's Prime Day event shifted out of the quarter this year, into Q4 2020. Even without the expected boost from Prime Day, we saw an EBITDA lift of 29% over Q3 2019. We look forward to a strong Q4 2020, which will for the first time include both the Prime Day and Black Friday/Cyber Monday events" said David Kohler , CEO.
Net Income and EBITDA for the Three Months Ended September 30, 2020
For the three months ended September 30, 2020 , the Company earned net income of $545,612 ( $0.01 earnings per share), compared to a net loss of $243,156 ( $0.00 per share) for the three months ended September 30 , 2019. For the three months ended September 30, 2020 , EBITDA was $1,242,935 , compared to $626,540 for the same period in 2019. Adjusted EBITDA, which excludes non-cash share-based compensation expense, listing expenses, foreign exchange gain (loss) and investment income, was $1,165,758 for the three months ended September 30, 2020 , compared to Adjusted EBITDA of $902,776 for the same three-month period in 2019.
Third quarter 2020 performance was muted somewhat by Amazon's decision to delay the Prime Day event period to the fourth quarter this year as opposed to its traditional third quarter event timeline. Results for the comparative third quarter in 2019 include the Prime Day event as it typically occurs in July. The Company's skin care businesses, All Natural and Maritime Naturals generally performed well, as we had expected.
Revenues and Gross Profit
Revenues were $9,774,906 for the three months ended September 30, 2020 , compared to revenues of $8,755,114 for the three-month period ended September 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. As a significant portion of the Company's sales are generated through the Amazon marketplace, the Amazon Prime Day sales event, typically held in July, is generally the Company's best sales week of the year. As a result of complications surrounding COVID-19, Amazon made the decision to move Prime Day 2020 to October. As such, revenues for DTI in Q3 2020 were impacted due to lower promotional activity and some customers delaying purchases. Despite these effects, consolidated revenues increased approximately $1 million above the same period in 2019, due to the addition of the acquired skin care businesses. While unexpected events related to the pandemic have caused the fluctuation in sales revenues on a period-over-period basis, improvement in both the DTI and skincare businesses are anticipated in Q4 2020 and beyond.
Gross profit for the three months ended September 30, 2020 was $6,874,719 (70.3%) compared to $6,114,962 (69.8%) for the three-month period ended September 30 , 2019. Gross profit improved in the third quarter but the profit margin fell slightly on a year-over-year basis, primarily due to a one-time adjustment to margins on skincare inventory acquired. Overall profit margins are expected to improve slightly going forward.
Selling and Marketing Expense
The Company incurred selling and marketing expenses of $4,476,833 , or approximately 45.8% of revenue, for the three months ended September 30, 2020 , compared to $4,014,971 , or 45.9% of revenue, for the three months ended September 30 , 2019. The Company continues to strive to optimize advertising spend relative to revenue. Ongoing events continually influence ad spend strategy and efficient strategies directly impact bottom line performance. While savings can be enjoyed short term with lower promotional spend, sales momentum is also an important factor in online sales. The most effective online ad strategies combine an efficient maintenance spend to keep repeat customers while investing strategically to attract new ones and gain greater overall brand awareness.
Selling 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, All Natural and Maritime Naturals brands, and other promotional and awareness initiatives. The Company will continue to actively monitor its selling and marketing expenses, particularly direct advertising expenses, and expects that these expenses will begin to stabilize in relation to sales revenues going forward.
General and Administrative Expense
General and administrative expenses for the three months ended September 30, 2020 were $1,232,128 , compared to $1,197,215 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 on an absolute basis for the foreseeable future.
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 which market and sells its products under the Dr. Tobias, All Natural Advice and Maritime Naturals brand names. The Dr. Tobias brand features over 30 products, including the top-selling Colon 14 -Day Cleanse and the #1 selling Omega 3 Fish Oil on Amazon.com. All Natural Advice and Maritime Naturals products focus on skin and beauty care. Products sold under the All Natural and Maritime Naturals brand names are made in Canada and registered with Health Canada and under the EU Cosmetics Act. All Natural Advice has been featured on BNN as a top selling skincare brand in Canada , and has been rated the #1 Beauty Brand on Amazon Canada for the past four years.
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.
SOURCE Mimi's Rock Corp.
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