InterCure (NASDAQ:INCR) released its financial results for the first quarter of 2022 and provided shareholders with a business update. All amounts are expressed in Canadian dollars 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 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 of 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 the first retail location launching in Europe in the second quarter and an expected accretive impact in H2 2022.
- Revenue growth is 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.
"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 set us up to capitalize on strategic opportunities arising in the global cannabis market," said InterCure’s CEO, Alexander Rabinovitch. "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 CFO, Amos Cohen added that they will continue focusing on execution while maintaining strict fiscal discipline and identifying strategic opportunities within key markets.
"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.”
