Achieved record revenue of NIS 45
million (over CAD$17 million),
an increase of 400% year-over-year and over 35%
quarter-over-quarter
Achieved quarterly run-rate Q2 Pro
Forma[1] revenues of NIS 55
million (over CAD$21.4
million)
Recorded continued increase in operating profit,
EBITDA[2] and net profit
Achieved Q2 EBITDA margin of 26% and positive operational
cash flow
Revenue growth expected to continue in the third
quarter and for the
remainder of 2021
Completed all SEC filings for listing of shares on the
NASDAQ
TORONTO and HERZLIYA,
Israel, Aug. 16, 2021 /CNW/ -- InterCure Ltd. (TSX:
INCR.U) (TASE: INCR) (dba Canndoc) (the "Company") is pleased to
announce its financial results for the second quarter of 2021 and
provide a business update. All amounts are expressed in New Israeli
Shekels (NIS) or Canadian dollars ($), unless otherwise noted.
Second Quarter 2021 Key Financial & Operating
Highlights
- Achieved record revenue of NIS 45
million ($17 million), four
times greater than the second quarter of 2020 and up over 35%
compared to the first quarter of 2021.
- EBITDA2 for the second quarter of the
Company's cannabis business was NIS 12
million ($5 million), and
NIS 11 million ($4 million) on a consolidated basis. This
represents an annual run rate of close to NIS 50 million ($20
million), a significant increase year-over-year, driven by
revenue growth, improvement in gross profit and operating
profit.
- Positive cash flow from operations for the fourth consecutive
quarter.
- Strong balance sheet with NIS 201
million ($78 million) of cash
as of June 30, 2021.
- Generated Pro forma1 second quarter revenues of
NIS 55 million (over $21 million), representing a run rate of
NIS 220 million ($86 million).
- Recorded a continued increase in operating profit, EBITDA and
net profit.
- Continued to grow market share due to solid demand for
Canndoc's branded products, expansion of its medical cannabis
dispensing operation and continued improvement across all facets of
the business, including same store sales (SSS) increase.
- Added three additional medical cannabis license pharmacies
during the quarter, bringing the total retail locations to eight.
Expansion of the Company's medical cannabis dispensing operation is
expected to continue and accelerate in the third quarter and
throughout the remainder of 2021.
- Successful launch of the first ever Cookies™ GMP
premium products exclusively cultivated and manufactured in the
Company's advanced southern facility.
- Solid international demand for InterCure's GMP branded products
expected to boost global expansion as Ministry of Economy announced
easing regulation for medical cannabis exportation.
- Legislation of adult use cannabis and CBD products in
Israel progresses as a new
government sworn into office in June
2021.
- Revenue growth is expected to continue in the third quarter and
throughout 2021.
"We continue to execute our profitable growth strategy while
strengthening InterCure's brands, manufacturing and distribution
leadership," said InterCure CEO Alexander Rabinovich, adding, "we achieved
during this quarter unmatched results with some of the strongest
revenue growth rates and EBIDTA margin in the sector. Our
leadership position in Israel, the
leading GMP market, alongside our global expansion creates visible
momentum for continued near and long-term profitable growth,
generating value for shareholders and relief for patient
communities."
"The second quarter of 2021 is InterCure's sixth consecutive
quarter with quarter-to-quarter high double-digit growth and fourth
consecutive quarter with positive cash flow from operations," said
InterCure CFO Amos Cohen,
adding, "maintaining sound financial discipline and a strong
balance sheet are key in strengthening our position leading
the consolidation process outside North
America."
[1] Includes estimated revenues of all InterCure's
consolidated operations for the entire quarterly period.
[2] This is a non-IFRS financial measure and
does not have a standardized meaning prescribed by IFRS, please see
"Non-IFRS Measures" below.
Key Q2 2021
Financial Highlights – Cannabis Sector
|
(In thousands
NIS)
|
|
|
Q2-20
|
Q2-21
|
Revenues
|
11,185
|
45,230
|
Gross Profit
(1)
|
4,814
|
19,267
|
Operating
Profit
|
(847)
|
11,127
|
Adjusted EBITDA
(2)
|
1,582
|
11,701
|
|
Q1-20
|
Q2-20
|
Q3-20
|
Q4-20
|
Q1-21
|
Q2-21
|
Revenues
|
4,259
|
11,185
|
22,497
|
27,094
|
33,051
|
45,230
|
Gross Profit
(1)
|
1,516
|
4,814
|
10,755
|
13,302
|
15,427
|
19,267
|
Adjusted
EBITDA(2)
|
(1,313)
|
1,582
|
6,970
|
8,675
|
10,965
|
11,701
|
(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.
Second Quarter 2021 Results
The Company reported second quarter 2021 revenue of NIS 45 million ($17
million), an increase of four times compared to revenue of
NIS 11 million in the prior year
period and up more than 37% sequentially compared to the first
quarter of 2021. Estimated revenue represents an annual run rate of
NIS 180 million (over $70 million). Pro Forma second quarter revenues
on a full quarterly operating basis of NIS
55 million (over $21 million),
representing a run rate of NIS 220
million ($86 million).
InterCure continued to grow its market share with strong demand
for Canndoc's branded products, expansion of its medical cannabis
dispensing operation and continued improvement across all facets of
the business, including same store sales (SSS) increase.
During the time of this report, InterCure launched its Lemonade™
medical cannabis approved pharmacy in Jerusalem, the first Lemonade™ retail location
outside of the US. In addition, it added two more medical
cannabis licensed pharmacies to its leading pharmacy chain –
Givol™, bringing the total number of medical cannabis approved
retail locations to eight. The expansion is expected to continue
and accelerate during the third quarter and throughout the
remainder of 2021.
The Company continued to generate increases in operating profit,
EBITDA and net profit during the second quarter of 2021, reflecting
InterCure's market leadership, scale and operational
excellence.
During the second quarter the southern facility, largest and
most advanced in Israel,
successfully ramped up its cultivation capacity to meet the growing
demand for InterCure's GMP products. To continue supplying the
solid demand, the Company is considering accelerating production
and development plans of its southern cultivation site.
During the quarter, the Company successfully launched new
branded products, including the first ever Cookies™ GMP premium
products, setting new standards of quality. These were exclusively
cultivated and manufactured in the Company's advanced southern
facility as part of the strategic partnership with Cookies™.
In late June 2021, the Company was
one of the first and only Israeli licensed producers to meet the
new standards set by the IMCA (Act 109) and successfully resumed
importation of medical cannabis from its exclusive strategic
partner Tilray. Importation is expected to continue and accelerate
throughout the third quarter and the rest of 2021.
Legalization of adult cannabis use progresses, for the first
time in Israel's history cannabis
reform was part of the new government's coalition agreements. Since
the new parliament was assembled in June, both coalition and
opposition parties put forward bills for adult cannabis use with
minor differences. InterCure remains committed to lead this
upcoming new market once the legislations pass.
Another expected reform is the completion of de-listing CBD from
the Dangerous Drugs Act. With the formation of a new government,
this process is expected to continue and come to completion. During
the quarter, InterCure has laid infrastructure with our strategic
partner Charlotte's Web™, a global leader, and is prepared for the
launching of this new segment.
The new Minister of Economy also enacted an ease on exporting
GMP grade medical cannabis and CBD products from Israel. Combined with solid international
demand for InterCure's GMP branded products, the new regulations
are expected to boost the Company's global expansion. InterCure's
leadership and brand equity in international target markets,
including Europe, position the
Company for long term growth in these emerging markets.
The Company is in advanced stages of completing an acquisition
and merger of Israeli medical cannabis licensed producer 'Better'.
The integration with Better is expected to increase InterCure's
market share and further strengthen its leadership position within
the pharmaceutical cannabis market.
On April 20, 2021, InterCure
applied to list its shares on The Nasdaq Capital Market ("Nasdaq")
and has filed a registration statement with the SEC to register its
shares under the Exchange Act of 1934, a prerequisite to listing on
Nasdaq. The Company expects to satisfy all of the requirements for
listing and will issue a statement once a trading date has been
confirmed by Nasdaq.
Consolidated Financial Statements and Management's Discussion
and Analysis
InterCure's unaudited financial statements and accompanying notes
for the three and six month periods ended June 30, 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) (TSX:INCR.U, TASE:INCR) is the leading,
fastest growing and the most profitable 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 market leading distribution network, best
in class international partnerships and a high-margin vertically
integrated "seed-to-sale" model to be the most profitable cannabis
company globally outside of North
America.
InterCure is listed on the Toronto Stock Exchange under the
symbol INCR.U and trades on the Tel Aviv Stock Exchange under the
symbol INCR.TA.
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 information
within the meaning of applicable securities legislation, which
reflects InterCure's current expectations regarding future events.
The words "will", "expects", "intends" and similar expressions are
often intended to identify forward-looking information, although
not all forward-looking information contains these identifying
words. Specific forward-looking information contained in this press
release includes, but is not limited to: the Company's future
revenue growth and results, its ability to list its shares on the
Nasdaq, the success of the acquisition of Better and the future
outcomes of the acquisition, the legalization of recreational
cannabis in Israel, 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 and the expansion
strategy to major markets worldwide. 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 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. 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.
Contacts:
InterCure Ltd.
Amos
Cohen, Chief Financial Officer
amos@canndoc-pharma.com
Investor and Media Relations:
KCSA Strategic
Communications
InterCure@kcsa.com
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SOURCE InterCure Ltd.