Menē Inc. (MENE.V) (“Menē” or the “Company”), an online 24 karat investment jewelry brand, today announced financial results for the third quarter ended September 30, 2018. All amounts are expressed in Canadian dollars unless otherwise noted.
Q3 2018 Financial Highlights
- Revenue Growth accelerated for the fourth consecutive quarter since incorporation. Consolidated IFRS Revenue of $2.0 million, an increase of $0.6 million (43%) over Q2 2018.
- Gold weight sold increased by 13 kilograms (68%) and platinum weight sold increased by 1.2 kilograms (36%).
- Adjusted Gross Profit excluding impact of precious metal movement of $0.4 million, reflecting a 20% gross margin after manufacturing and payment processing costs.
- Total Traffic Acquisition Costs of only $0.1 million in quarter, reflecting the increasingly viral discovery of the Menē brand with organic word of mouth becoming the primary user acquisition funnel.
- Basic and diluted net loss per share of $0.01, stable compared to the previous two quarters.
- Tangible Common Equity1 at $10.1 million, a decrease of only $3.1 million since the company’s Series A Financing in December 2017, demonstrating the company’s high margin business model and relatively low fixed cost operating model.
Operational Highlights Through November 29, 2018
- Introduced 143 new product designs during the nine months ended September 30, 2018.
- Added a second U.S manufacturing partner and ramped up production output to meet increasing customer demand.
- Completed separation from Goldmoney Inc. (XAU.TO) and commenced trading on the TSX Venture Exchange (TSX-V) under the symbol “MENE” on November 6, 2018.
- Unveiled myMENĒ, an intelligent and interactive jewelry customization technology and user experience.
- Announced partnership with Affirm offering new credit alternative to U.S. customers.
- Surpassed 10,000 orders placed on mene.com by customers located in more than 60 countries on November 26, 2018.
- Outstanding customer order wait list of approximately $3.1 million as of November 29, 2018.
- Raised $30 million in an Equity and Debt Funding Round Underwritten by Canaccord Genuity that will strengthen working capital to circa $40 million at closing.
IFRS Consolidated Income Statement Data
July 11, 2017 to
|Gross profit excl. precious metal price movements2||407,885||285,933||214,771||13,621|
2 Refer to Non-IFRS Financial Measures for a full definition.
3 The Company began generating sales to an invite-only group in October 2017. The Company began selling to the general public in January 2018.
Statement from Founder & CEO Roy Sebag:
I am pleased to report Mene Inc.’s first quarterly results as a publicly traded company. The past few months have been eventful for our company, as we formalized our separation from Goldmoney Inc. and have seen significant traction in consumer adoption of our innovative and disruptive business model that sells 24 karat gold and platinum jewelry by gram weight. We have demonstrated to our original investors that the business model is not only disruptive but also profitable, and as such have decided to access capital in the form of equity and debt. Our debt financing is in the form of a gold-secured note that allows us to grow our inventory to as much as $30 million by Q2 2019.
In this business, a dollar of annual revenue requires about $0.50 of inventory as well as $0.20 of working capital at any given time. Therefore, scaling our operations to the tens if not hundreds of millions in revenue will require additional working capital. It is for this reason that we’re thrilled about the gold-secured note financing we have secured, as this access to capital will be transformative for the Company. This institutional commitment of up to $100 million will allow our business to grow inventory and working capital – contributing to revenue growth – with minimal equity dilution.
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.
Tangible Common Equity1 is a non-IFRS measure. This figure excludes intangible assets from total shareholder equity, and is useful to demonstrate the tangible capital employed by the business.
Gross profit excluding precious metal price movements2 is a non-IFRS financial measure. It is calculated as revenue less cost of metals sold at prevailing spot prices each day (excluding the Menē Premium), less non-metal cost of sales (i.e. direct labour, manufacturing overhead, packaging, shipping). The closest comparable IFRS financial measure is gross profit. Fluctuations in the value of precious metals inventories caused by fluctuations in market prices are included in gross profit. Management believes that excluding such fluctuations more clearly illustrates the Company’s business operations.
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 period ended September 30, 2018.
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.
This news release contains or refers to certain forward-looking information. Forward-looking information can often be identified by forward-looking words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "may", "potential" and "will" or similar words suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. All information other than information regarding historical fact, which addresses activities, events or developments that the Goldmoney Inc. (the "Company") believes, expects or anticipates will or may occur in the future, is forward looking information. Forward-looking information does not constitute historical fact but reflects the current expectations the Company regarding future results or events based on information that is currently available. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking information will not occur. Such forward-looking information in this release speak only as of the date hereof.