Menē Inc. (TSX-V: MENE) (US:MENEF) (“Menē” or the “Company”), an
online 24 karat jewelry brand, today announced financial results
for the fourth quarter and fiscal year ended December 31, 2020. All
amounts are expressed in Canadian dollars unless otherwise noted.
FOURTH QUARTER FINANCIAL HIGHLIGHTS:
- Record IFRS Revenue of $7.1
million, an increase of $2.5 million, or 53% Year-over-Year
(“YoY”). Non-IFRS Adjusted Revenue2 was also a Company record of
$8.1 million.
- Consolidated IFRS Gross Profit of $1.7 million, compared to
$0.5 million in the prior year quarter.
- Reduced operating expenses to 27% of revenue, compared to 60%
in the same quarter last year.
- IFRS Net Loss decreased by $3.4 million or 98% YoY to $0.1
million, a new record low for the Company.
FISCAL YEAR 2020 FINANCIAL HIGHLIGHTS:
- Record Annual IFRS Revenue of $21.1
million, an increase of $8.1 million or 62% YoY.
- Record Annual Gross Profit of $5.2
million, a $2.5 million or 90% increase YoY.
- Operating Loss decreased by $5.2
million or 83% YoY to $1 million, a record low for the
Company.
- Reduced IFRS Net Loss and Total
Comprehensive Loss by $3.4 million (51%) and $3.7 million (50%)
respectively, YoY
- Sold 26,146 units of jewelry
through 15,885 Customer Orders during the year.
- Average Order Value of $1,530, an
increase of $590, or 63% YoY.
- Gold Weight Sold increased 21%,
Platinum Weight Sold increased 34% from the previous year.
- At December 31, 2020, Menē has
$10.9 million in Tangible Common Equity4, including $9.1 million in
cash and cash equivalents and $17 million in inventory.
OPERATIONAL AND BUSINESS HIGHLIGHTS:
- Introduced 180 new products over the course of 2020. Sales of
new designs accounted for 19% of total sales in 2020.
- Returning customers attributed to 69% of total sales due to
great customer satisfaction.
- Registered more than 21,500 independent customer reviews on
mene.com/reviews.
- Launched two new product series “Saints” and “Zodiac”.
- Unveiled “Menē Around the World”, a web-based tool that
transparently illustrates the growth of the Menē community across
the globe. Menē has sold to more than 60 countries, including to
customers in every Canadian province and U.S. state.
- Featured in ELLE Magazine as one of the “23 Fine Jewelry Brands
Worth Investing In”.
- Menē’s 24 karat gold Linear Link Chain was featured in Vogue
Arabia’s October 2020 issue.
- Cumulative units of jewelry sold reached 72,941 as of year end
and more than half a tonne of precious metal weight.
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IFRS Consolidated Income Statement Data &Key
Performance Indicators (KPIs)1 |
FY 2020 |
FY 2019 |
Q4 |
Q3 |
Q2 |
Q1 |
Q4 |
Q3 |
Q2 |
Q1 |
Revenue2 |
7,110,188 |
5,423,320 |
3,439,038 |
5,156,994 |
4,653,601 |
3,218,281 |
2,456,930 |
2,733,596 |
Gross profit |
1,691,750 |
1,578,417 |
917,721 |
1,012,923 |
458,201 |
1,000,210 |
600,719 |
678,814 |
Gross profit (%) |
24% |
29% |
27% |
20% |
10% |
31% |
24% |
25% |
Net loss |
(76,727) |
(383,602) |
(1,029,300) |
(1,855,303) |
(3,449,094) |
(1,535,114) |
(672,662) |
(1,107,752) |
Total comprehensive loss |
(697,478) |
(748,216) |
(1,448,394) |
(808,093) |
(3,991,270) |
(1,405,212) |
(868,785) |
(1,166,288) |
Non-IFRS Adjusted Revenue2 |
8,104,915 |
6,140,871 |
3,678,069 |
5,611,286 |
5,095,968 |
3,445,952 |
2,601,569 |
2,914,297 |
Non-IFRS Adjusted Income (Loss)3 |
23,936 |
61,777 |
(367,214) |
(666,378) |
(910,904) |
(512,774) |
(10,111) |
(521,434) |
Total Shareholders' Equity |
11,503,042 |
12,196,393 |
12,720,633 |
14,321,528 |
15,127,316 |
17,399,693 |
18,423,043 |
17,833,109 |
Inventory balance (kg of gold)4 |
219 |
210 |
131 |
132 |
212 |
249 |
255 |
222 |
Customer orders |
5,474 |
3,464 |
2,790 |
4,157 |
4,548 |
2,998 |
5,167 |
4,437 |
Units of jewelry sold |
8,632 |
5,958 |
4,915 |
6,641 |
7,225 |
5,164 |
7,183 |
8,182 |
Jewelry weight sold (total kg) |
76 |
56 |
39 |
69 |
65 |
44 |
42 |
43 |
(1) |
The Company’s financial statements for fiscal year-ending 2020 and
2019 are audited by an external assurance firm. |
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(2) |
The Company adjusts its revenue
by adding back the value of jewelry that was returned by customers,
and discounts given to customers. These adjustments are made to
assess the gross revenue before deducting these items from revenue
per IFRS. See Non-IFRS Measures for a full reconciliation. |
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(3) |
The Company adjusts its total
comprehensive loss by adjusting for Non-IFRS Adjusted Gross Profit,
and removing the impact of non-cash expenses, consisting of
depreciation and amortization, stock-based compensation, accretion,
revaluation of metal loan and translation gain or loss. See
Non-IFRS Measures for a full reconciliation. |
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(4) |
Inventory balances in kilograms
of gold are calculated by taking the total Canadian Dollar (CAD)
inventory value at each quarter-end date and dividing the value by
the CAD gold spot price per gram. |
DEBT RETIREMENT
Subsequent to the year end, the Company entered
into a debt retirement agreement with a private institutional
lender. Pursuant to the debt retirement agreement, the Company
issued an aggregate of 9,920,635 Class B Shares in settlement of
$5,000,000 ($0.504 per Class B Share), and made a cash payment of
$5,119,166.83 (including all accrued interest to the date of
completion of the debt retirement), in consideration for the
retirement of a total of $10,119,166.83 in principal and accrued
liabilities owing to the lender. With this increase in shareholders
equity, the Company is well positioned to deliver sustainable
growth, without the need to raise further capital for the next few
years.
STATEMENT FROM FOUNDER & CEO, ROY
SEBAG:
Fiscal 2020 was a monumental year for Menē. We
achieved our goal of $20 million in annual revenue and began to
transition to an economically sustainable business model. Our
business continues to grow rapidly into 2021, and we look forward
to sharing our impressive financial results for Q1 2021 with
shareholders. Another important economic milestone was achieved
through the debt retirement subsequent to year end. This event has
improved our balance sheet and establishes a solid foundation for
Menē to earn healthy returns on capital in 2021 and beyond.
I would like to thank Sunjoo Moon and Diana W.
Picasso for their creativity which vivifies brilliant new designs
for our customers. I am also grateful to our craftsmen and women in
North America who have worked tirelessly to manufacture these
exquisite pieces throughout the challenging pandemic. Likewise, I
would also like to thank our executive and operational teams in
Toronto for working through this difficult time and adapting so
well to the “work from home” environment. Finally, I would like to
thank our loyal customers who continue to purchase Menē for
themselves, for their friends and for their families, and who
continue to spread the word about Menē far and wide. We are
grateful for your patronage, and Menē will remain fully committed
to producing the most beautiful jewellery in the world which is
also a store of enduring value.
Diana and I personally feel humbled by Menē’s
vision, its realisation and its ongoing success. We feel grateful
to have created this unique brand which continues to develop into
an important player in the global jewellery industry. We firmly
believe in the mission of Menē: to reinstate jewellery as a
lifetime investment by creating objects which are pure, traditional
and sustainable. We also believe that the Menē vision heralds the
future of conscious consumption by empowering the consumer to
reject disposable trends in favour of pieces which last
forever.
Non-IFRS Measures
This news release contains non-IFRS financial
measures; the Company believes that these measures provide
investors with useful supplemental information about the financial
performance of its business, enable comparison of financial results
between periods where certain items may vary independent of
business performance, and allow for greater transparency with
respect to key metrics used by management in operating its
business. Although management believes these financial measures are
important in evaluating the Company's performance, they are not
intended to be considered in isolation or as a substitute for, or
superior to, financial information prepared and presented in
accordance with IFRS. These non-IFRS financial measures do not have
any standardized meaning and may not be comparable with similar
measures used by other companies. For certain non-IFRS financial
measures, there are no directly comparable amounts under IFRS.
These non-IFRS financial measures should not be viewed as
alternatives to measures of financial performance determined in
accordance with IFRS. Moreover, presentation of certain of these
measures is provided for year-over-year comparison purposes, and
investors should be cautioned that the effect of the adjustments
thereto provided herein have an actual effect on the Company's
operating results.
Non-IFRS Adjusted Revenue2 is a non-IFRS
measure. The Company adjusts its revenue by adding back the value
of jewelry that was returned by customers, and discounts given to
customers. These adjustments are made to assess the gross revenue
before deducting these items per IFRS revenue. The closest
comparable IFRS measure is revenue.
Non-IFRS Adjusted Loss3 is a non-IFRS measure.
Non-IFRS Adjusted Loss is a non-IFRS measure, calculated as total
comprehensive loss, plus adjustment for Non-IFRS Adjusted Gross
Profit and debt forgiveness, and excluding depreciation and
amortization, stock-based compensation, accretion, revaluation of
metal loan, and translation gain or loss. The closest comparable
IFRS measure is total comprehensive loss.
Tangible Common Equity4 is a non-IFRS measure.
It is calculated as total shareholder’s equity excluding intangible
assets.For a full definition of non-IFRS financial measures used
herein to their nearest IFRS equivalents, please see the section
entitled "Non-IFRS Financial Measures" in the Company's MD&A
for the year ended December 31, 2020.
About Menē Inc.Menē crafts pure
24 karat gold and platinum jewelry that is transparently sold by
gram weight. Through mene.com, customers may buy jewelry,
monitor the value of their collection over time, and sell or
exchange their pieces by gram weight at prevailing market
prices. Menē was founded by Roy Sebag and Diana Widmaier-Picasso
with a mission to restore the relationship between jewelry and
savings. Menē empowers consumers by marrying
innovative technology, timeless design, and pure precious
metals to create pieces which endure as a store of value.
For more information about Menē,
visit mene.com.
Media and Investor Relations
Inquiries:
Adil SheikhChief Financial OfficerMenē
Inc.ir@mene.com+1 289 748 3702
Forward-Looking Statements
This news release contains certain
“forward-looking information” within the meaning of applicable
Canadian securities laws that are based on expectations, estimates
and projections as at the date of this news release. Any statements
that involve discussions with respect to predictions, expectations,
beliefs, plans, projections, objectives, assumptions, future events
or performance (often but not always using phrases such as
“expects”, or “does not expect”, “is expected”, “anticipates” or
“does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”,
“estimates”, “believes” or “intends” or variations of such words
and phrases or stating that certain actions, events or results
“may” or “could”, “would”, “might” or “will” be taken to occur or
be achieved) are not statements of historical fact and may be
forward-looking information and are intended to identify
forward-looking information.
This forward-looking information is based on
reasonable assumptions and estimates of management of the Company
at the time it was made, and involves known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of the Company to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking information. Such
factors include, among others; an inability to predict and
counteract the effects of COVID-19 on the business of the Company,
including but not limited to the effects of COVID-19 and other
infectious diseases presenting as major health issues on the price
of precious metals, capital market conditions, restriction on
labour and international travel and supply chains; failure to
comply with environmental and health and safety laws and
regulations; operating or technical difficulties in connection with
the manufacture, sale and distribution of jewelry; actual audited
results differing from reported unaudited results; global economic
climate; dilution of the Company’s shares; the Company’s limited
operating history; future capital needs and uncertainty of raising
capital; the competitive nature of the jewelry industry; currency
exchange risks; the need for the Company to manage its planned
growth and expansion; the effects of product development and need
for continued technology and manufacturing change; protection of
proprietary rights; the effect of government regulation and
compliance on the Company and the industry; network security risks;
the ability of the Company to maintain properly working systems;
theft and risk of physical harm to personnel; reliance on key
personnel; global economic and financial market deterioration
impeding access to capital or increasing the cost of capital; and
volatile securities markets impacting security pricing unrelated to
operating performance. Although the Company has attempted to
identify important factors that could cause actual results to
differ materially, there may be other factors that cause results
not to be as anticipated, estimated or intended. There can be no
assurance that such 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 information. The Company
undertakes no obligation to revise or update any forward-looking
information other than as required by law.
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Mene (TSXV:MENE)
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