InterCure Ltd. (NASDAQ: INCR) (TSX: INCR.U) (TASE: INCR) (dba
Canndoc) ("InterCure" or the “Company”) is pleased to announce its
financial and operating results for the fourth quarter and year
ended December 31, 2021. References herein to “preliminary results”
refer to the preliminary results published by the Company on
February 8, 2022. All amounts are expressed in New Israeli Shekels
(NIS) or Canadian dollars ($), unless otherwise noted.
Fourth Quarter 2021 Key Financial &
Operating Highlights
- Record revenue
of $33 million (NIS 80 million), which is higher than the
preliminary results, and three times greater than the fourth
quarter of 2020 and representing sequential growth of 29%.
- Record adjusted
EBITDA of $9 million (NIS 21 million), representing a 140% increase
year-over-year, sequential growth of almost 50% and adjusted EBITDA
margin of 26%.
- Net income loss
of $1 million (NIS 3 million) for the fourth quarter of 2021.
- Exceeded
preliminary results with its eighth consecutive quarter of high
double-digit growth representing an estimated annualized run rate
of over $130 million (NIS 320 million).
- Sixth
consecutive quarter of positive cash flow from operations.
- Announced
European expansion with international cannabis brand Cookies™ -
opening first retail locations in Austria and the United
Kingdom.
- Company
surpassed one-ton medical cannabis products dispensed per month in
the fourth quarter, representing approximately 30% market share of
Israel’s medical cannabis.
Full Year 2021 Key Financial &
Operating Highlights
- Record fiscal
year 2021 revenue and Adjusted EBITDA of $89 million (NIS 220
million) and $23 million (NIS 55 million), representing an increase
of 230% and 250% year-over-year, respectively.
- Adjusted EBITDA
margin of 25% for the fiscal year 2021 up 1% from 2020.
- Cash at year end
of $89 million (NIS 217 million).
- Net income of $3
million (NIS 7 million) for 2021.
- Increased market
share due to solid demand for Canndoc's branded products and
expansion of the Company’s medical cannabis dispensing
operations.
- Added 19
locations to its leading medical cannabis dedicated pharmacy chain,
out of which 13 are actively dispensing medical cannabis.
- Announced the
first major consolidation in the pharmaceutical medical cannabis
space with the signing of an LOI to acquire multi-national licensed
producer "Better".
- Solid
international demand for InterCure’s GMP branded products expected
to boost global expansion as Israeli government eases regulation on
exportation.
- Legislation of
adult use cannabis and CBD products in Israel progresses as a new
government sworn into office in June 2021.
- InterCure
commenced trading on Nasdaq.
- During the third
quarter, InterCure received 5.2 million shares back from the
sponsor of our SPAC transaction.
- CEO Alexander
Rabinovitch purchased on the open market a total of 423,501 shares
of the Company’s common stock for a total investment in the Company
of $3,790,238 or NIS 9,608,631.
Post-fourth quarter 2021
Highlights
- Announced it has signed a
definitive agreement to acquire 100% of Better's shares.
-
Announced international strategic partnership with Clever
Leaves.
-
Company expected to capitalize on new CBD market following the
Israeli Minister of Health's announcement that CBD will be removed
from the Dangerous Drugs Act through strategic partnership with
Charlotte's Web.
-
Signed definitive agreement with Altman Health, the leading Israeli
wellness brand with distribution into 1,700 points of sale,
focusing on the new Israeli CBD product market.
- Added 3 new medical cannabis
dedicated pharmacies to the Company's chain, totaling 23 retail
locations across Israel, out of which 15 are actively dispensing
medical cannabis.
“Our fourth quarter results came in stronger
than we initially expected as we successfully continue to expand
InterCure's branded product portfolio, scale up our unique global
supply chain and expand our pharmaceutical grade medical cannabis
dispensing operation,” said InterCure CEO Alexander
Rabinovitch, adding “Our results throughout 2021 reflect
the outstanding work we've accomplished and our focus on executing
our profitable growth strategy. As regulations are evolving
favorably, there is huge potential in all of our operating
territories, and we are well positioned for the growth ahead. We
will continue focusing on executing our profitable growth strategy,
creating value for our stakeholders."
Key Q4 and Full Year 2021 Financial Highlights
– Cannabis Sector
(In thousands $)
Full Year |
2020 |
2021(Preliminary) |
2021 |
Revenues |
26,628 |
87,000 |
88,779 |
Gross Profit(1) |
12,441 |
|
37,799 |
Adjusted EBITDA(2) |
6,508 |
|
22,566 |
Fourth Quarter |
Q4-20 |
Q4-21(Preliminary) |
2021 |
Revenues |
11,093 |
31,000 |
32,632 |
Gross Profit(1) |
5,446 |
|
14,990 |
Adjusted EBITDA(2) |
3,549 |
|
8,635 |
|
Q2-20 |
|
Q3-20 |
|
Q4-20 |
|
Q1-21 |
|
Q2-21 |
|
Q3-21 |
|
Q4-21 |
|
Revenues |
4,580 |
|
9,211 |
|
11,093 |
|
13,532 |
|
18,518 |
|
25,260 |
|
32,632 |
|
Gross Profit(1) |
1,971 |
|
4,403 |
|
5,446 |
|
6,316 |
|
7,889 |
|
10,106 |
|
14,990 |
|
GP Margin |
43% |
|
48% |
|
49% |
|
47% |
|
43% |
|
40% |
|
46% |
|
Adjusted EBITDA(2) |
644 |
|
2,852 |
|
3,549 |
|
4,121 |
|
4,791 |
|
5,749 |
|
8,635 |
|
Adjusted EBITDA(2) Margin |
14% |
|
31% |
|
32% |
|
30% |
|
26% |
|
23% |
|
26% |
|
(1) Gross profit before effect of fair value.(2)
EBITDA adjusted for changes in the fair value of inventory,
share-based payment expense, impairment losses (and gains) on
financial assets, non-controlling interest and other expenses (or
income). This is a non-IFRS financial measure and does not have a
standardized meaning prescribed by IFRS, please see “Non-IFRS
Measures” below.
Rescheduled Webcast and Conference
CallManagement will conduct a webcast on Wednesday, April
6, 2022 at 5:30 p.m. (Eastern Time) to review the results as well
as provide an overview of the Company’s recent milestones and
growth strategy.
To access the conference call, United States
participants please dial (844) 310-5056, or for
international callers, 1-706-679-4749. Conference
ID: 5661207.
Participants can access the live webcast through
the following link:https://bit.ly/37N92wN
Consolidated Financial Statements and
Management's Discussion and Analysis
The publication of InterCure's audited financial
statements and accompanying notes for the year ended
December 31, 2021 and related management's discussion and
analysis of financial condition and results of operations
("MD&A") are available under the Company's profile on
SEDAR.
About InterCure (dba
Canndoc)
InterCure (dba Canndoc) (NASDAQ: INCR) (TSX:
INCR.U) (TASE: INCR) is the leading, profitable, and fastest
growing cannabis company outside of North America. Canndoc, a
wholly owned subsidiary of InterCure, is Israel’s largest licensed
cannabis producer and one of the first to offer Good Manufacturing
Practices (GMP) certified and pharmaceutical-grade medical cannabis
products. InterCure leverages its international market leading
distribution network, best in class international partnerships and
a high-margin vertically integrated "seed-to-sale" model to lead
the fastest growing cannabis global market outside of North
America.
For more information,
visit: http://www.intercure.co.
Non-IFRS Measures
This press release makes reference to certain
non-IFRS financial measures. Adjusted EBITDA, as defined by
InterCure, means earnings before interest, income taxes,
depreciation, and amortization, adjusted for changes in the fair
value of inventory, share-based payment expense, impairment losses
(and gains) on financial assets, non-controlling interest and other
expenses (or income). This measure is not a recognized measure
under IFRS, does not have a standardized meaning prescribed by IFRS
and is therefore unlikely to be comparable to similar measures
presented by other companies. InterCure’s method of calculating
this measure may differ from methods used by other entities and
accordingly, this measure may not be comparable to similarly titled
measured used by other entities or in other jurisdictions.
InterCure uses this measure because it believes it provides useful
information to both management and investors with respect to the
operating and financial performance of the company. A
reconciliation of Adjusted EBITDA to an IFRS measure (revenue) is
provided below:
Adjusted EBITDA Reconciliation (consolidated
base) |
FOURTH QUARTER |
FULL YEAR |
|
Q4-20 |
|
Q4-21 |
|
2020 |
|
2021 |
Comprehensive income (loss) |
4,188 |
|
(1,244) |
|
(14,756) |
|
2,987 |
Interest / Financing cost |
(94) |
|
2,659 |
|
(38) |
|
3,870 |
Tax expenses (income) |
(1,042) |
|
2,291 |
|
(929) |
|
4,684 |
Depreciation and amortization |
438 |
|
1,314 |
|
1,332 |
|
3,027 |
EBITDA |
3,491 |
|
5,020 |
|
(14,391) |
|
14,568 |
Share-based payment expenses |
686 |
|
479 |
|
4,098 |
|
2,641 |
Other expenses (income), net |
381 |
|
643 |
|
1,868 |
|
1,217 |
Impairment losses and (gains) on financial assets
through profit and loss |
(1,085) |
|
901 |
|
15,229 |
|
765 |
Fair value adjustment to inventory |
(129) |
|
920 |
|
(650) |
|
1,989 |
Adjusted EBITDA |
3,344 |
|
7,963 |
|
6,154 |
|
21,179 |
*All amounts shown in CAD
Forward-Looking Statements
This press release may contain forward-looking
statements. Forward-looking statements may include, but are not
limited to, statements relating to InterCure’s objectives plans and
strategies, as well as statements, other than historical facts,
that address activities, events or developments that InterCure
intends, expects, projects, believes or anticipates will or may
occur in the future. These statements are often characterized by
terminology such as “believes”, “hopes”, “may”, “anticipates”,
“should”, “intends”, “plans”, “will”, “expects”, “estimates”,
“projects”, “positioned”, “strategy” and similar expressions and
are based on assumptions and assessments made in light of
management’s experience and perception of historical trends,
current conditions, expected future developments and other factors
believed to be appropriate. Forward-looking statements are not
guarantees of future performance and are subject to risks and
uncertainties that could cause actual results to differ materially
from those expressed or implied in such statements. Many factors
could cause InterCure’s actual activities or results to differ
materially from the activities and results anticipated in
forward-looking statements, including, but not limited to, the
following: the Company’s future revenue growth and profitability,
the success of its global expansion plans, its continued growth,
the expected operations, financial results business strategy,
competitive strengths, goals and expansion and growth plans,
expansion strategy to major markets worldwide, the impact of the
COVID-19 pandemic and the war in Ukraine. Forward-looking
information is based on a number of assumptions and is subject to a
number of risks and uncertainties, many of which are beyond
InterCure’s control, which could cause actual results and events to
differ materially from those that are disclosed in or implied by
such forward-looking information. Such risks and uncertainties
include, but are not limited to: changes in general economic,
business and political conditions, changes in applicable laws, the
U.S. and Canadian regulatory landscapes and enforcement related to
cannabis, changes in public opinion and perception of the cannabis
industry, reliance on the expertise and judgment of senior
management, as well as the factors discussed under the heading
“Risk Factors” in Subversive Acquisition LP’s final long form
prospectus dated March 15, 2021, which is available on SEDAR at
www.sedar.com, and under the heading “Risk Factors” and “Cautionary
Note Regarding Forward-Looking Statements” in the registration
statement on Form 20-F, filed with the Securities Exchange
Commission on July 14, 2021, as amended August 3, 2021 and August
18, 2021. InterCure undertakes no obligation to update such
forward-looking information, whether as a result of new
information, future events or otherwise, except as expressly
required by applicable law.
Contact:
InterCure Ltd.Amos Cohen, Chief Financial
OfficerAmos@intercure.co
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