(This story has been up to date with particulars concerning the CFO’s departure.)

MediPharm Labs Corp. reported third-quarter revenue of 4.9 million Canadian {dollars} ($3.eight million), 88% decrease than the CA$43.Four million the Barrie, Ontario, firm booked in the identical interval final yr.

Revenue for the quarter ended Sept. 30 was 64% decrease than the earlier three-month interval.

The quarterly outcomes come days after the sudden resignation of Chief Financial Officer Bobby Kwon, who’s leaving the corporate later this month “for family reasons” one yr after taking the place.

The firm attributed the sharp decline in revenue to decrease common promoting costs and bulk extract volumes in addition to the influence of the COVID-19 pandemic.

MediPharm’s adjusted EBITDA loss – a measure of profitability – greater than tripled to CA$7.Three million from the earlier quarter.

International revenue was CA$700,000.

The quarterly outcomes have been beneath analyst expectations: Canaccord Genuity’s Matt Bottomley anticipated revenue of CA$14.5 million, for instance.

Kwon’s resignation as CFO comes at an important stage for the Canadian firm.

MediPharm says it’s transitioning its focus from the business-to-business wholesale focus market “due to oversupply in Canada.”

The firm will now give attention to white-label contract manufacturing.

The CFO had been the best compensated government at MediPharm, in keeping with a regulatory submitting.

On prime of Kwon’s CA$133,511 wage, he was eligible for nearly CA$2 million in option-based awards.

The government is just not eligible for a $670,000 severance payout as a result of he resigned, the corporate later clarified.

Executive compensation is changing into a rising concern for publicly traded Canadian hashish companies; MediPharm’s disclosed 2019 government compensation was virtually CA$7 million, principally consisting of option-based awards.

That’s considerably increased than the CA$1.Three million the corporate paid in 2018.

In the wake of the rising loss, MediPharm joined different Canadian hashish companies in slashing its workforce.

The firm expects to avoid wasting about CA$Three million yearly.

MediPharm wouldn’t say what number of jobs have been impacted, however a spokeswoman mentioned the cuts concerned “all Canadian employees focused around mid- to senior management and some executives as well.”

In an announcement, CEO Pat McCutcheon mentioned: “Economic situations, together with the oversupply within the Canadian bulk crude resin and distillate markets, together with the influence of COVID-19, proceed to problem the business.

“We are now focused on doing more to drive profitable revenue and address weaknesses including reducing our cost structure. We have taken immediate steps to improve our costs and organizational alignment against which we have put an action plan in place that will create value and enable us to achieve our potential.”

Last week, McCutcheon mentioned MediPharm would “commence a rigorous search for a new chief financial officer that will support the Company through our next phase of growth as a pharmaceutical company.”

MediPharm had CA$36.5 million in money and equivalents as of Sept. 30.

Shares of MediPharm are traded on the Toronto Stock Exchange as LABS.

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