InterCure Reports Record Breaking Second Quarter Financial Results
InterCure reported record revenue of $37 million in Q2 2022, marking a 119% year-over-year growth and an annualized run rate of $150 million. Adjusted EBITDA rose 90% YoY to $9 million, with net income increasing to $6 million. This achievement represents the tenth consecutive quarter of profitable growth and eighth quarter of positive cash flow. The company exited Q2 with $96 million cash on hand and anticipates continued revenue growth into Q3 2022. Expansion efforts include the opening of new pharmacies and retail locations, highlighting strong market demand for their products.
- Record Q2 2022 revenue of $37 million (up 119% YoY).
- Adjusted EBITDA increased 90% YoY to $9 million.
- Net income rose to $6 million in Q2, a growth of over 160% YoY.
- Tenth consecutive quarter of profitable growth.
- Eighth consecutive quarter of positive cash flow from operations.
- Strong cash position with $96 million on hand.
- None.
Record revenue of over
Representing an annual run rate of
Adjusted EBITDAii for Q2 increased 90% YoY to $9 million
Net income of
Tenth consecutive quarter of profitable growth
Eighth consecutive quarter of positive cash flow from operations
Revenue growth expected to continue in the third quarter and throughout 2022
NEW YORK and TORONTO and HERZLIYA, Israel, Aug. 15, 2022 (GLOBE NEWSWIRE) -- InterCure Ltd. (NASDAQ: INCR) (TSX: INCR.U) (TASE: INCR) ("InterCure" or the “Company”) is pleased to announce its financial results for the second quarter of 2022 and is pleased to provide shareholders with a business update. All amounts are expressed in Canadian dollars ($)iii or New Israeli Shekels (NIS), unless otherwise noted.
Second Quarter 2022 and Recent Financial & Operating Highlights
- Record revenue of approximately
$37 million (NIS 95 million), more than double the revenues of the second quarter of 2021 and representing sequential growth of over9% . - Tenth consecutive quarter of high growth representing an annualized run rate of
$150 million (NIS 381 million). - Adjusted EBITDA increased
90% year-over-year to$9 million , representing23% of revenues and4% sequential growth. - Gross profitiv increased over
115% year-over-year and16% sequentially to over$16 million . - Net income of
$6 million in the second quarter, representing over160% growth year-over-year. - Eighth consecutive quarter of positive cash flow from operations, exited the quarter with
$96 million in cash. - Company expects continued increases in revenues during the third quarter of 2022 and throughout the year.
- Continued market share growth during the quarter due to solid demand for Canndoc's branded products and expansion of the Company’s medical cannabis dispensing operations.
- Successful opening of the first flagship Cookies retail location in Austria, located in the center of Vienna.
- Continued expansion of the Company's medical cannabis dedicated pharmacy chain with the grand opening of InterCure's flagship Cookies branded pharmacy in Be'er Sheva, the largest city in Israel's southern region. Additionally, the Company added a new pharmacy located in the northern city of Nahariya.
- During the quarter, the Company's leading medical cannabis dedicated pharmacy chain included24retail locations across Israel, of which16were actively dispensing medical cannabis.
- During the quarter, the Company scaled up its cultivation and production facilities by enlarging the Southern facility's post-harvest, nursery and grow houses further solidifying it as the largest and most advanced facility of its kind in the region.
- The cultivation operation successfully added and produced 12 new highly demanded strains into its growth cycles. Including high THC Cookies cultivars. Post quarter, the Company successfully launched four new premium branded products, cultivated at the Southern Facility.
First Half 2022 Financial Highlights
- Record revenue of approximately
$72 million (NIS 182 million), more than130% than the revenues of the first half of 2021. - Gross profit increased over
120% year-over-year to over$30 million (NIS 77 million). - Adjusted EBITDA for H1 2022 increased
100% year-over-year to$17 million (NIS 43 million). - Record profits before taxes for the first half of almost
$16 million (over NIS 41 million) representing188% growth year-over-year.
InterCure’s Chief Executive Officer, Alexander Rabinovitch, commented, "We are proud to deliver our tenth consecutive quarter of profitable growth, solidifying our operational excellency and leading position. We remain focused on developing and launching the highest quality pharmaceutical grade medical cannabis products as our target markets are evolving at a rapid pace. During the second quarter we have successfully ramped up our upstream and downstream operations and executed our global expansion to meet the solid demand for our high-quality branded products. We expect this growth to continue, while we remain focused and committed to expand our unique platform, building shareholder value and improving quality of life for patient communities.”
InterCure's Chief Financial Officer, Amos Cohen, commented, "Our teams delivered another strong quarter across all sectors, focusing on execution of our profitable growth strategy and fiscal discipline. With a strong balance sheet and over
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/c030c9c8-99b3-4829-93e0-83c349c48106
Key Q2 2022 Financial Highlights – Cannabis Sector
(In thousands $)
| First Half | H1-21 | H1-22 | ||
| Revenues | 30,783 | 71,768 | 133 | % |
| Gross Profit | 13,643 | 30,436 | 123 | % |
| Adjusted EBITDA | 8,559 | 17,071 | 99 | % |
| Second Quarter | Q2-21 | Q2-22 | ||
| Revenues | 17,786 | 37,466 | 119 | % |
| Gross Profit | 7,577 | 16,336 | 116 | % |
| Adjusted EBITDA | 4,601 | 8,696 | 89 | % |
| Q2-20 | Q3-20 | Q4-20 | Q1-21 | Q2-21 | Q3-21 | Q4-21 | Q1-22 | Q2-22 | ||||||||||
| Revenues | 4,398 | 8,847 | 10,654 | 12,997 | 17,786 | 24,261 | 31,341 | 34,302 | 37,466 | |||||||||
| Gross Profit | 1,893 | 4,229 | 5,230 | 6,066 | 7,576 | 9,706 | 14,398 | 14,100 | 16,336 | |||||||||
| GP Margin | 43 | % | 48 | % | 49 | % | 47 | % | 43 | % | 40 | % | 46 | % | 41 | % | 44 | % |
| Adjusted EBITDA | 619 | 2,739 | 3,409 | 3,958 | 4,601 | 5,521 | 8,294 | 8,375 | 8,696 | |||||||||
| Adjusted EBITDA Margin | 14 | % | 31 | % | 32 | % | 30 | % | 26 | % | 23 | % | 26 | % | 24 | % | 23 | % |
Conference Call
InterCure executives will host a live conference call and audio webcast to discuss these results on Tuesday, August 16, 2022, at 8:30 am Eastern Time, details of which are provided below.
To access the conference call, participants can register through the following URL: https://register.vevent.com/register/BI5e6af40482ac4b7bb3024b6aad2c8185.
Once registered participants will receive dials and a unique pin which will allow them to access the call.
A replay of the conference call will be available through the following Webcast link: https://edge.media-server.com/mmc/p/gm9sadgn, or through the ‘Events and Presentations’ section of the InterCure website at http://www.intercure.co.
Consolidated Financial Statements and Management's Discussion and Analysis
The publication of InterCure's financial statements and accompanying notes for the quarter ended June 30, 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 in thousands $) | PERIOD | |||
| Q2-21 | Q2-22 | |||
| Comprehensive income | 2,335 | 6,085 | ||
| Interest / Financing cost | 158 | (1,292 | ) | |
| Tax expenses (income) | 998 | 2,256 | ||
| Depreciation and amortization | 493 | 895 | ||
| EBITDA | 3,984 | 7,944 | ||
| Share-based payment expenses | 713 | 625 | ||
| Other expenses (income), net | (114 | ) | 365 | |
| Impairment losses and (gains) on financial assets through | (64 | ) | 29 | |
| Decrease (increase) | (267 | ) | (819 | ) |
| Adjusted EBITDA | 4,252 | 8,144 | ||
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 Officer
Amos@intercure.co
_______________
i All amounts are expressed in Canadian dollars ($)
ii 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
iii CAD conversation rate from NIS as of 08.12.2022
iv Gross profit before effect of fair value
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