InterCure Ltd. (NASDAQ: INCR) (TSX: INCR.U) (TASE: INCR) (dba
Canndoc)("InterCure" or the “Company”) is pleased to announced its
financial results for the first quarter of 2022 and is pleased to
provide shareholders with a business update. All amounts are
expressed in Canadian dollars ($)3 or New Israeli Shekels (NIS),
unless otherwise noted.
First Quarter
2022 and Recent
Financial & Operating
Highlights
-
All-time record quarterly revenue of $34 million (NIS 87 million),
almost three times greater than Q1 2021 ($13 million or NIS 33
million) and up 9% sequentially compared to the prior quarter.
-
Representing a run rate of $138 million (NIS 350 million).
-
Adjusted EBITDA2 for the first quarter of the Company’s cannabis
sector was $8 million (NIS 21 million). This represents an annual
run rate of $32 million (NIS 85 million), 112% year-over-year
increase, driven by solid demand for Canndoc's high quality branded
products and expansion of the medical cannabis dispensing
operation.
-
Net income of $6 million (NIS 15 million) for the Q1 of 2022
compared to $2 million (NIS 4 million) in Q1 of 2021 Seventh
consecutive quarter of positive cash flow from operations.
-
Record profits before taxes for the first quarter of almost $8
million (over NIS 19 million) representing 245% growth
year-over-year.
-
$91 million in cash (more than NIS 231 million) as of March 31,
2021.
-
Added three new pharmacies to the Company's medical cannabis
dedicated pharmacy chain, totaling 23 retail locations across
Israel, in which 14 were actively dispensing medical cannabis
during the quarter.
-
Excluding the temporary negative impact of eight pharmacies (which
are in the process of receiving medical cannabis dispensing
licenses) and one pharmacy whose activity was temporarily halted,
gross margin for the first quarter was higher than 43%.
-
During the second quarter the pharmacy in question resumed to full
cannabis dispensing activity and one of the eight pharmacies
received its medical cannabis dispensing license. The Company
expects that the remaining seven pharmacies will receive medical
cannabis dispensing licenses during 2022.
-
Global expansion plans are on track with first retail location
launching in Europe in the second quarter and expected accretive
impact in H2 2022.
-
Revenue growth expected to continue in the second quarter and
throughout 2022.
-
Announced the signing of a definitive agreement to acquire Better.
The transaction is expected to close in Q3 2022, subject to
customary closing conditions as well as specific approvals of the
IMCA and other regulatory agencies.
-
Announced exclusive international strategic partnership with Clever
Leaves.
-
Signed definitive agreement with Altman Health, the leading Israeli
wellness brand with distribution into 1,700 points of sale,
focusing on the new Israeli CBD product market, following the
Israeli Minister of Health's announcement that CBD will be removed
from the Dangerous Drugs Act.
______________1 All amounts are expressed in
Canadian dollars ($)2 Adjusted EBITDA is a non-IFRS financial
measure and does not have a standardized meaning prescribed by
IFRS, please see “Non-IFRS Measures” below.3 CAD conversation rate
from NIS as of 03.31.2022
InterCure’s Chief Executive Officer,
Alexander Rabinovitch, commented, "During the
first quarter we continued to execute our strategy and delivered
the 9th consecutive quarter of high profitable growth. Our strong
balance sheet and our leadership position sets us up to capitalize
on strategic opportunities arising in the global cannabis market."
He added, "Evolving regulations in our key markets, continued
consolidation process and duplicating our unique seed-to-sale
operation to more territories sets 2022 to be another milestone
year for InterCure."
InterCure's Chief Financial Officer,
Amos Cohen, commented, "Across our organization,
we will continue focusing on execution while maintaining our strict
fiscal discipline and identifying additional strategic
opportunities within our key markets." He added, "As we continue to
focus on executing our profitable growth strategy, we are
well-positioned to continue building on our solid foundation as the
leading cannabis company outside North America.”
Key Q1
2022 Financial Highlights
– Cannabis Sector
(In thousands CAD)
First Quarter |
Q1-21 |
Q1-22 |
Revenues |
13,038 |
34,410 |
Gross Profit (1) |
6,086 |
14,145 |
Adjusted EBITDA (2) |
3,970 |
8,401 |
|
Q2-20 |
Q3-20 |
Q4-20 |
Q1-21 |
Q2-21 |
Q3-21 |
Q4-21 |
Q1-22 |
Revenues |
4,412 |
8,875 |
10,688 |
13,038 |
17,842 |
24,337 |
31,440 |
34,410 |
Gross Profit 1 |
1,899 |
4,243 |
5,247 |
6,086 |
7,601 |
9,737 |
14,443 |
14,145 |
GP Margin |
43% |
48% |
49% |
47% |
43% |
40% |
46% |
41%4 |
Adjusted EBITDA2 |
621 |
2,748 |
3,420 |
3,970 |
4,616 |
5,539 |
8,320 |
8,401 |
Adjusted EBITDA3 Margin |
14% |
31% |
32% |
30% |
26% |
23% |
26% |
24% |
______________
(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.(3) 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.(4) Excluding the temporary negative
impact of eight pharmacies (which are in the process of receiving
medical cannabis dispensing licenses) and one pharmacy whose
activity was temporarily halted, gross margin for the first quarter
was higher than 43%.
Conference
CallManagement will conduct a conference on
Tuesday, May 17, 2022 at 8:00 a.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: 6439945.
Participants can access the live webcast through
the following link: https://bit.ly/37MXcmN
Consolidated Financial Statements and
Management's Discussion and Analysis
The publication of InterCure's financial
statements and accompanying notes for the quarter ended
March 31, 2022 and related management's discussion and
analysis of financial condition and results of operations
("MD&A") 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) |
PERIOD |
|
Q1-21 |
Q1-22 |
Comprehensive income (loss) |
1,521 |
5,799 |
Interest / Financing cost |
35 |
229 |
Tax expenses (income) |
699 |
1,857 |
Depreciation and amortization |
492 |
929 |
EBITDA |
2,747 |
8,814 |
Share-based payment expenses |
790 |
336 |
Other expenses (income), net |
- |
77 |
Impairment losses and (gains) on financial assets through |
(64) |
20 |
profit and loss |
|
|
Decrease (increase) Fair value adjustment to inventory |
262 |
(1,391) |
Adjusted EBITDA |
3,735 |
7,854 |
*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 expected operations, financial results business strategy,
competitive strengths, expansion strategy to major markets
worldwide, the legalization of CBD in Israel and its impacts on the
Company, 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 Israeli, 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 the Company Annual
Information Form dated April 5, 2022 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 April 28, 2022. 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
A graph accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/24eaf679-cf18-4e72-9809-7ddeac7341b2
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