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, 2022. All amounts are expressed in New Israeli
Shekels (NIS) or Canadian dollars ($), unless otherwise noted.
Full Year 2022
Key Financial & Operating Highlights (Cannabis
Sector)
- Record fiscal
year 2022 revenue of $150 million (NIS 389 million).
- Gross profit of
$61 million (NIS 159 million) and gross margin of 41%.
- Adjusted EBITDA
of $32 Million (NIS 84 million) representing 22% of revenues.
- Net income
(consolidated) of $17 million (NIS 44 Million).
- Garneted
positive (consolidated) cash flow from operations of $20 Million
(NIS 51 Million).
- Cash
(consolidated) at year end of $95 million (NIS 246 million).
- Increased market
share due to solid demand for Canndoc's branded products and
expansion of the Company’s medical cannabis dispensing
operations.
- Added 8
locations to its leading medical cannabis dedicated pharmacy chain
to a total of 28, out of which 20 are actively dispensing medical
cannabis.
- Executed our
global expansion strategy with the successful opening of the first
Cookies flagship store in Vienna, Austria, and adding the first
location in London, UK which in the process of obtaining regulatory
approvals. (Part of the total 28 location mentioned above)
- Scaled up our
cultivation, production facilities and expended our distribution
pharmaceutical logistic hub capacity, further solidifying us as one
of the largest and most advanced platforms in the space.
- Record of new
product launches with more than 30 new GMP SKUs added to the
Company's portfolio of products during the quarter.
- First company to
comply with the new strict 109 import regulations of the Israel
Medical Cannabis Agency, resuming importation of medical cannabis
to Israel.
*Cannabis sector
Fourth Quarter Key
Financial & Operating
Highlights (Cannabis Sector)
-
Record revenue of $41 million (NIS 106 million) 33% growth YoY and
5% QoQ growth due to continued increase in market share.
-
Gross profit of $14 million (NIS 37 million), gross margin of 35%
dropped from 44% (QoQ) as a result market condition. During the
fourth quarter, financially struggling companies and companies
exiting the market sold low-to-medium quality products at lower
prices to liquidate their inventories. This had an impact primarily
on our ultra-medical and legacy products, while the prices for our
top selling high quality products remained stable.
-
Adjusted EBITDA of $7 million (NIS 19 million), representing 18% of
revenues.
-
Expended our exclusive partnership with Organigram, a world-leading
indoor grower, to supply us up to 20 tons and extending its reach
into new territories and product lines.
-
Announced expansion of the company's partnership forming a
collaboration with the renowned cannabis brand 'Binske' to develop
and offer a range of non-flower cannabis products, which we believe
will significantly enhance our product portfolio and further
strengthen our market position.
Post-fourth quarter
2022 Highlights
-
Successfully completed export of our GMP products to Intercure's EU
hub, preparing for commercial launches of our products in UK and
Germany.
-
Announced the termination of the Better acquisition agreement,
which has led us subsequently to file a lawsuit to recover the
funds loaned in connection with the merger agreement.
“We are pleased to report another
record-breaking quarter and fiscal year for InterCure, solidifying
our leading position," said InterCure CEO
Alexander Rabinovich, adding “As our
target markets are evolving, we remain focused on execution with
financial discipline while navigating through regulatory barriers
and market challenges. During 2022, we have successfully ramped up
our upstream global supply chain and scaled our downstream
distribution operations to meet the solid demand for our
high-quality branded products. While favorable regulatory cannabis
reforms are on the horizon, we expect our growth journey to
continue as we remain focused and committed to expand our leading
platform, building shareholder value and improving quality of life
for patient communities across the world.”
Key Q4 and Full
Year 2022 Financial Highlights –
Cannabis Sector
(In thousands NIS)
|
2021
|
2022
|
Revenues
|
219,677
|
388,684
|
Gross Profit (1)
|
95,989
|
158,957
|
Adjusted EBITDA (2)
|
56,897
|
84,125
|
|
Q4-21
|
Q4-22
|
Revenues
|
79,702
|
105,606
|
Gross Profit (1)
|
36,613
|
37,484
|
Adjusted EBITDA (2)
|
21,091
|
18,527
|
|
Q2-21
|
Q3-21
|
Q4-21
|
Q1-22
|
Q2-22
|
Q3-22
|
Q4-22
|
Revenues
|
45,230
|
61,695
|
79,701
|
87,229
|
95,277
|
100,572
|
105,606
|
Gross Profit (1)
|
19,267
|
24,682
|
36,613
|
35,857
|
41,542
|
44,074
|
37,484
|
Gross Profit %
|
43%
|
40%
|
46%
|
41%
|
43%
|
44%
|
35%
|
Adjusted EBITDA(2)
|
11,701
|
14,041
|
21,091
|
21,298
|
22,113
|
22,187
|
18,527
|
Adjusted EBITDA %
|
26%
|
23%
|
26%
|
24%
|
23%
|
22%
|
18%
|
(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. |
Webcast and Conference
Call
The Company will conduct a webcast on Monday,
April 3, 2023 at 04:30 p.m. (Eastern Time) to review the results as
well as provide an overview of the Company’s recent milestones and
growth strategy.
Participants can access the live webcast and
conference call through the following
link:https://register.vevent.com/register/BIdec7603751894ebcbf0f22eca91cdb4a
Consolidated Financial
Statements, Management's
Discussion and Analysis and Annual Information
Form
InterCure's audited financial statements and
accompanying notes for the year ended December 31, 2022 and
related management's discussion and analysis of financial condition
and results of operations ("MD&A"), together with its Annual
Information Form for the same period, 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),
which is incorporated by reference to this press release, is
available in InterCure’s MD&A for the period under the heading
“Results of Operation”, available under the Company's profile on
SEDAR at www.sedar.com.
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, the war in Ukraine, macro economic factors
(including inflation) and uncertainty created as a result of the
socio-political situation in Israel. 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
the Company’s Annual Information Form for the year ended December
31, 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 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
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/c892f769-b7be-4838-9e15-847c00c73873
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