Name: BODY & MIND INC. Q1 2024 Earnings Call
Start: 2023-12-21T00:00:00.000Z

Executive Summary

Q1 FY2024 revenue was $5.46M, down 7% YoY, with gross margin expanding to 37.4% from 14.7% YoY; total EPS was $0.00, with positive net income of $0.16M driven by the gain on sale of the Ohio dispensary .
The company fully repaid $7.33M of senior secured debt, citing roughly $1M per year interest savings and a leaner balance sheet as a strategic win .
Retail expansion milestones progressed: final ownership approval for Markham, IL closed; New Jersey secured state approval for an Annual Class 5 Retailer license; Lynwood, IL construction targeted for completion around March 1 with 1H 2024 openings expected .
Strategic optimization continued: definitive agreement to divest Nevada cultivation/processing (total consideration $2.0M, buyer assuming operational costs during transition), aligning focus to higher-return Illinois/NJ retail .
Stock reaction catalysts near term: opening timelines for IL/NJ stores and ongoing portfolio optimization, against a backdrop of improved gross margins and reduced interest burden .

What Went Well and What Went Wrong

Gross margin expanded to 37.4% vs 14.7% YoY as management emphasized cost savings and operational efficiencies; CEO: “hyper-focused on cost savings… improvements in our gross margin” .
Positive net income ($0.16M) vs prior-year net loss ($3.0M), aided by gain on Ohio dispensary sale and balance sheet strengthening (full repayment of senior secured debt) .
Retail expansion milestones achieved: IL Markham ownership finalized; NJ license approved; Lynwood IL construction nearing completion with anticipated performance given proximity to Indiana .

Continuing operations remained loss-making: net loss from continuing operations of $3.79M in Q1 FY2024, reflecting interest expense and corporate overheads .
Liquidity tight with working capital deficit of $(4.20)M; management notes need for financing access and capital resource flexibility despite anticipating coverage for current operations .
Elevated interest expense in the quarter ($1.86M), including recognition of unamortized debt discount and prepayment premium tied to debt repayment .

Metric	Q2 FY2023	Q3 FY2023	Q1 FY2024
Revenue ($USD Millions)	$7.7	$7.3	$5.456
Gross Profit ($USD Millions)	$2.26	$2.07	$2.041
Net Operating Profit (Loss) ($USD Millions)	$(1.8)	$(1.6)	$(1.163)
Net Income ($USD Millions)	$(2.741)	$(3.609)	$0.164
EPS (Basic/Diluted, $USD)	$(0.02)	$(0.02)	$0.00
Gross Margin (%)	N/A	N/A	37.4%

Metric	Q1 FY2023	Q1 FY2024
Revenue ($USD Millions)	$5.849	$5.456
Gross Margin (%)	14.7%	37.4%
Net Operating Profit (Loss) ($USD Millions)	$(2.155)	$(1.163)
Net Income (Loss) ($USD Millions)	$(2.953)	$0.164
EPS (Basic/Diluted, $USD)	$(0.03)	$0.00

Segment	Revenue ($USD)	Net Income (Loss) Before Tax ($USD)
Wholesale	$898,184	$(121,424)
Retail	$4,558,226	$264,206
All Others	N/A	$(3,092,573)
Total	$5,456,410	$(2,949,791)

KPI	Value
Gross Margin (%)	37.4%
Cash And Equivalents ($USD)	$890,966
Working Capital	$(4,201,115)
Senior Secured Debt Repaid ($USD)	$7.33M
Common Shares Outstanding	144,968,000 (as of Dec 15, 2023)

Metric	Period	Previous Guidance	Current Guidance	Change
IL Lynwood dispensary opening timeline	1H 2024	Not explicitly guided previously	Interior completion around Mar 1; opening anticipated 1H 2024	Established timeline
NJ dispensary license/status	Ongoing	Pending state approval	Annual Class 5 Retailer license approved; construction advancing with permits expected soon	Raised (approval achieved)
Nevada cultivation/processing	2024	Operated by DEP	Definitive agreement to divest; $2.0M consideration, buyer assumes operational costs during transition	Portfolio optimization
Interest expense outlook	2024+	Higher due to senior debt	Full repayment expected to save ~$1M/year	Improved (lower interest burden)

Topic	Previous Mentions (Q2 FY2023)	Previous Mentions (Q3 FY2023)	Current Period (Q1 FY2024)	Trend
Illinois retail expansion	Markham build-out ~90% complete; April opening targeted	Markham opened; Lynwood construction underway	Markham ownership finalized; Lynwood interior completion by Mar 1; 1H 2024 opening anticipated	Progressing to scale
New Jersey licensing	State application submitted; planning/design initiated	Formal planning approval; design advancing	Annual Class 5 Retailer license approved; permits expected; high-volume design	Major milestone achieved
Portfolio optimization	—	Michigan retail divested	Nevada cultivation/processing divestment signed	Continued streamlining
Debt and capital structure	Convertible debentures outstanding; senior debt in place	Senior debt still in place	Senior secured debt fully repaid; interest burden reduction	Balance sheet improved
Wholesale pricing/margins	Improved NV wholesale pricing; margin lift	Gross profit stable; margins pressured by expenses	Gross margin expansion to 37.4%	Improving unit economics

CEO: “We are hyper-focused on cost savings and the full repayment of our senior secured debt will save roughly one million dollars per year in interest payments… we are pleased with the improvements in our gross margin. We look forward to opening our dispensaries in Illinois and New Jersey in calendar 2024” .
COO: “We are excited to be nearing the opening of [Lynwood, IL] and anticipate strong performance… close proximity to Indiana” .
CEO on strategic focus: “Streamlining our assets and operations… the recent sale of our Ohio dispensary resulted in full repayment of our senior secured lender… reduced interest expenses by roughly $1 million per year” .
On NJ approval: “We are excited to receive state approval and look forward to bringing a Body and Mind dispensary to New Jersey… we feel the New Jersey market offers significant growth potential” .
On Nevada divestment: “This is a continuation of our strategy of prioritizing our operational focus on what we believe are our highest returning projects” .

No Q1 FY2024 earnings call transcript was identified in the filings or document catalog; management disclosures came via the 8-K press release and 10-Q/other 8-K updates .

Wall Street consensus estimates via S&P Global were unavailable; the SPGI/CIQ mapping for BMMJ could not be retrieved, so revenue/EPS comparisons to consensus cannot be provided at this time (consensus unavailable via S&P Global).

Margin inflection: gross margin rose to 37.4% despite softer revenue, indicating operational efficiency gains; watch for sustainability as new stores ramp .
Deleveraging reduces risk: repayment of $7.33M senior secured debt should lower interest burden (~$1M/year) and improve cash flow resilience .
Near-term catalysts: NJ license approval and Lynwood IL completion support 1H 2024 store openings; monitor opening dates and early run-rate performance .
Portfolio focus: Nevada divestment tightens focus on higher-return retail; track proceeds timing and working capital effects .
Segment dynamics: Retail drives 84% of revenue; “all others” segment losses weigh on consolidated results—continued cost discipline will be key .
Liquidity watch: working capital deficit of $(4.20)M underscores the importance of consistent operating cash flow and optionality for capital raises .
Trade setup: stock likely reacts to tangible opening milestones (IL/NJ) and further optimization updates; margin preservation and retail comps will shape estimate paths once coverage resumes .