Mene Inc. Reports First Annual Operating Income and Record Revenue for Fiscal Year 2021

TORONTO--(BUSINESS WIRE)-- 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, 2021. All amounts expressed herein reflect Canadian dollars unless otherwise noted.

FOURTH QUARTER FINANCIAL HIGHLIGHTS

• Record IFRS Revenue of $8.5 million and Non-IFRS Adjusted Revenue2 of $10.3 million, an increase of 20% and 28% respectively, Year-over-Year (“YoY”).
• Record Gross Profit of $2 million, an increase of 19% YoY.
• Operating Income of $0.2 million, an increase of 176% YoY.
• Generated Free Cash Flow of $3.8 million during the quarter.
• Sold metal weight of 98 kg and 10,143 Units of Jewelry, an increase of 29% and 18% YoY, respectively.
• Average Order Value of $1,646, an increase of 6% YoY.

2021 FISCAL YEAR FINANCIAL HIGHLIGHTS

• Record IFRS Annual Revenue of $26.8 million and Non-IFRS Adjusted Revenue2 of $31.8 million in Fiscal Year 2021, an increase of 27% and 35% respectively, YoY.
• Record Annual Gross Profit of $6.5 million, an increase of 25% YoY.
• Reported first Annual Operating Income of $0.3 million since the Company began selling its products to customers in January 2018.
• Total Comprehensive Income of $0.4 million and Non-IFRS Adjusted Income3 of $0.9 million, an increase of 111% and 198% respectively, YoY.
• Record low Operating Expenses as a percentage of Revenue of 23% vs 30% in FY 2020.
• Sold 31,512 Units of Jewelry through 20,181 Customer Orders during the fiscal year.
• Jewelry Weight Sold of 304 total kg, an increase of 64 kg, or 27% YoY.

OPERATIONAL HIGHLIGHTS IN 2021

• Introduced 140 new products over the course of 2021.
• Launched four new product collections: Etruscan, Chess, Good Luck and Wax Seals.
• Started to offer Pre-order and Made to Order available to select designs.
• Launched EUR currency payments for European customers.
• Sales to Returning Customers attributed to 67% of total sales in 2021, due to great customer satisfaction.
• Cumulative units of jewelry sold reached 104,600 as of year-end.
• Featured in HOLA Magazine, Sotheby’s 76 Faubourg, Barron’s Penta, Daniel Féau and Elle Italia.
• Registered nearly 29,000 independent customer reviews on mene.com/reviews.

1. The Company’s financial statements for fiscal year 2021 and 2020 are audited by an external assurance firm.
2. The Company adjusts its revenue by adding back the value of jewelry that was returned by customers, revenue from orders for which fulfillment is under process, 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.
3. The Company adjusts its total comprehensive income (loss) by removing the impact of non-cash expenses, consisting of depreciation and amortization, stock-based compensation, accretion, loss on debt retirement, revaluation of metal loan and translation gain or loss. See Non-IFRS Measures for a full reconciliation.
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.

STATEMENT FROM FOUNDER & CEO ROY SEBAG:

Fiscal 2021 was another record year for Menē. In our fourth year of operation, we generated $0.4 million of IFRS Total Comprehensive Income and $0.9 million of Non-IFRS Adjusted Income. Reaching the important milestone of profitability is necessary for any company, but even more so for a company like ours with long-term ambitions to become a global jewelry brand. A sustainable foundation has now been established, which allows Menē to strengthen its activities and continue to grow its market share. There are now well over 100,000 pieces of Menē jewelry being worn by customers in over 60 countries. This jewelry, which is essentially gold and platinum bullion, continues to appreciate in value relative to fiat currencies.

Moving forward, our primary task is to expand our production capacity as well as our direct-to-consumer distribution infrastructure. We are negotiating the acquisition of a US-based jewelry production facility. Menē has been one of the largest customers of the facility over the past two years. We believe that this acquisition will benefit Menē in several ways. First, we will be able to produce non-chain items within a much shorter time frame. Second, we will be able to conduct R&D on new designs more rapidly and efficiently. Third, we will be able to place a greater emphasis on our exemplary craftsmanship and technical capabilities, showcasing our savoir-faire. Finally, we will increase our production capacity allowing us to sell up to $50 million of non-chain items per year. Chains, which account for roughly 35% of total sales, are produced by a manufacturing partner with built-in capacity for up to $100 million a year in annual sales. In other words, with the acquisition of the US production facility, Menē would be in a position to sell circa $150 million in jewelry per year should the demand present itself.

With regard to expanding our distribution channels, our aim is to launch the next phase of Menē’s global footprint by establishing a European distribution facility. We have begun the process with an experienced partner and still believe that a European distribution facility will be established in the 2022 calendar year. Once this is achieved, Menē will launch its website and customer service in French, German, Italian and Spanish. We expect this launch to take place in early 2023.

These steps will form the basis for our next phase of growth from 2023-2030. It is imperative that we execute these steps well and continue to provide the same exemplary customer experience which has fueled the growth of our brand since we launched Menē in 2018. To that end, our brand continues to grow in value and clout. We have now registered close to 29,000 independent reviews of our jewelry. We believe that, over the long-term, Menē will continue to grow and disrupt the traditional jewelry market because our loyal customers love our jewelry and share their knowledge and experience of our unique business model with their friends and family.

I would like to thank Diana W. Picasso and Sunjoo Moon for their truly awe-inspiring creativity this past year. I would also like to thank our executive team members in Toronto and the US. Finally, I would like to thank our customers and shareholders for their continued trust and support. We are building a global jewelry brand that we hope will rival some of the household brands in the industry. I am very pleased with the results we have achieved thus far and continue to believe that our best days are in front of us.

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, revenue from orders not yet delivered, 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 Income (loss)3 is a non-IFRS measure. Non-IFRS Adjusted Income (Loss) is a non-IFRS measure, calculated as total comprehensive income (loss), excluding depreciation and amortization, stock-based compensation, accretion, revaluation of metal loan, loss on debt retirement and translation gain or loss. The closest comparable IFRS measure is total comprehensive income (loss).

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, 2021.

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.

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: the inability to successfully acquire and/or develop jewelry manufacturing facilities; 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220427005131/en/

Media and Investor Relations Inquiries:
Renee Wei
Head of Investor Relations
[email protected]

Adil Sheikh
Chief Financial Officer
Menē Inc.
+1 289 748 3702

Source: Menē Inc.

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