Medmen Entprs B Sub Vtg

Good day and thank you for standing by. Welcome to the MedMen fourth quarter fiscal 2021 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Mr. Rhys Fulgham, Chief Financial Officer. Please go ahead.

Thank you. Good afternoon and welcome everyone. Today, I am joined by our CEO, Tom Lynch, and COO, Tim Bossidy. On today's call, management will provide prepared remarks, and then we will open the call to your questions. Earlier today, we issued a press release announcing fourth quarter and full year fiscal 2021 results for the period ending June 26, 2021. The press release, along with our financial statements and MD&A, are available on the company's website and filed on both EDGAR and SEDAR. Before we begin, I'd like to remind you that the comments on today's call will include looking statements, which by their nature involve estimates, projections, goals, forecasts, and assumptions, and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. Forward-looking statements relate to, among other things, the business and operations of MedMed, our plans for new stores, our financial, operational, and strategic expectations, and our expectations as to future sources of funding. These forward-looking statements speak only as of the date of this conference call and should not be relied upon as predictions of future events. Additional information about the material factors and assumptions forming the basis of the forward-looking statements and risk factors are provided in the press release and in the company's reports filed with the United States Securities and Exchange Commission and Canadian securities regulators. During today's conference call, MedMen will refer to certain non-GAAP measures that do not have any standardized meaning prescribed by GAAP, such as EBITDA, Retail Adjusted EBITDA, and Corporate SG&A, which are defined in the earnings press release we issued earlier today. Reconciliations to GAAP measures are contained in the press release. Please note, all financial information is provided in U.S. dollars unless otherwise indicated. Now, with that, I'd like to turn the call over to Tom.

Thank you, everyone, for joining us this afternoon. We will provide another update on the company's turnaround progress, including execution on our transition to growth and plans to drive future growth. the recently announced transactions with Soraya and Tilray, as well as our financial performance for the fourth quarter in the fiscal year 2021. The past quarter was a pivotal one for MedMen. When we joined MedMen 18 months ago, we set out to stabilize this company and return it back to a growth trajectory that aligns the power of the brand, which we believe is the leading retail cannabis brand in North America. We've done that. We've drastically improved our expense structure, generated momentum in quarterly sales, and have now posted positive retail-adjusted EBITDA for four consecutive quarters. Looking ahead, we plan to accelerate our growth and push towards company-wide profitability in the coming quarters as we leverage our national brand recognition to drive new store growth in Florida, California, Massachusetts, Arizona, and Let's now review highlights from the fourth quarter and fiscal 2021 results. Revenue trends during the fourth quarter continued to show sequential growth coming in at $42 million for quarterly revenue at Bed-Bed. This increased 18.5% sequentially from the third quarter's $35.4 million. It was up 55.4% year over year. The sales increase was driven by frequency of transactions and greater traffic and was broad-based, with all states other than Illinois posting positive sequential sales growth. While our full-year fiscal 21 performance showed a slight revenue decline to $145.1 million versus $155.3 million from the prior year, COVID had a profound impact on our results, particularly during the first half of the fiscal year. And we have ended the year in a much better place as pandemic restrictions moderated during the last two quarters. Profitability metrics reflect a dramatic turnaround for the company. The fiscal year retail adjusted EBITDA increasing to 28.1 million from 5.9 million a year ago. Company-wide EBITDA for fiscal 21 improved by 25.7 million year over year. This is especially exciting in context of where we started. We think taking a moment to reflect on this adds significant credibility to us saying, first, we needed to focus on a turnaround and profitability reset, and now we can turn to growth, and we have the platform to do it. In Q2 2020, the last reported quarter before we started, total, inclusive of New York, adjusted EBITDA was approximately negative $34 million. This quarter, there was also a one-time inventory adjustment ad back of approximately $11 million in operations. Without that one-time ad back, quarterly adjusted EBITDA would have been approximately a $45 million loss off a revenue base of $48 million. The annualized difference between that and this quarter's total adjusted EBITDA is over $140 million. Let me repeat that. annualized adjusted EBITDA of over 140 million. We think that context is incredibly important because it scales how much work needed to be done and where all management focus needed to be. At the same time, we were over levered and undercapitalized and needed to work to transform the balance sheet. Also, we're in a pandemic with severely restricted capacity in California and Nevada. And at one point, a number of our stores had to close completely due to looting and damage. This operational progress has allowed us to attract strong partners to reshape our balance sheet. The amendment and extension of our debt, along with the $100 million equity investment, gives us the flexibility and firepower to match our revenue trajectory to our operational expertise and renowned brand. With the transfer of a large portion of our notes by Gotham to Tilray and the agreement to amend and extend our convertible notes, We have refocused covenants, which were previously an administrative burden and cost driver, to reflect the fact Bedman is a high-potential and high-growth company. We have also extended the debt maturity by seven years and eliminated cash-paid debt service, allowing us to prioritize new market opportunities and existing operations over near-term balance sheet management. The $100 million equity investment led by Soraya Private Equity will allow BedBed to expand its operations in key markets, including California, Florida, Arizona, Illinois, and Massachusetts, and identify and accelerate further growth opportunities across the United States. We have significant opportunities for growth in all of our key markets, and this fresh capital allows us to capitalize on these opportunities and execute on our growth plans. The two transactions together have also allowed us to remove the going concern risk language for our most recently reported financial filings. We continued to see progress on profitability during the quarter, in addition to the full year, as we posted our fourth consecutive quarter of positive cash flow after tax across our retail footprint. We measured this by retail adjusted EBITDA, which was $8.9 million during the fourth quarter, up 8.6% from the third quarter, and compared to negative $200,000 in the comparable period last year. This represents an annualized improvement of $37 million. On the expense side, corporate SG&A grew about half the rate of sales growth, increasing 9.7% sequentially to $12.1 million. As a reminder, at its peak, the company's corporate SG&A was approximately $160 million annually. Importantly, corporate SG&A was not up because we felt we had to scale headcount for additional growth, but was predominantly due to a one-time bonus reversal benefit of $1.2 million we took in Q3. We're excited about our forthcoming growth prospects. With 14 new store openings planned in key markets, In addition to our recently opened Orlando store, our current plans include two new stores in California over the next six months, nine new stores in Florida over the next six to nine months, two openings in Massachusetts, and one in Illinois. As revenue from these new stores come online, we expect continued progress on profitability metrics. We appreciate the patience and support from our stakeholders as we executed the key elements of our turnaround plan. We believe this patience has paid off as we have taken a significant step forward with the recent Tilray and Soraya transactions. We could not be more excited to execute on our growth plan and deliver the revenue and profitability numbers we believe this brand is capable of generating. With that, I'll hand it over to Tim Bossidy for operational highlights.