IM Cannabis (US:IMCC)2022-05-15 15:02Financial Data and Key Metrics Changes - Revenues increased 169% year-over-year and 18% sequentially to $23.6 million in Q1 2022, compared to $8.8 million in Q1 2021 [7][20] - Gross profit before fair value adjustments rose 37% to $6.4 million in Q1 2022 from $4.6 million in Q1 2021 [21] - Net loss was $10.7 million in Q1 2022, compared to a net income of $4.7 million in Q1 2021, with basic loss per share at $0.14 [21][22] Business Line Data and Key Metrics Changes - The company is transitioning its supply source towards a third supply model leveraging Canadian yield, which is expected to enhance margin expansion [6][10] - The WAGNERS brand launched in Israel has received positive consumer feedback, contributing to the company's growth strategy [13][41] Market Data and Key Metrics Changes - In Canada, the company’s brands, WAGNERS and Highland Grow, are gaining market share, particularly in Ontario, Canada’s largest cannabis market [14] - The German market is being positioned for growth, with the company establishing a positive reputation and planning to launch the WAGNERS brand there [16][17] Company Strategy and Development Direction - The company aims to capture market share while integrating its global model to become a leading consumer packaged goods company in the cannabis industry [26] - Significant investments are being made in Germany to establish a foundation for future growth in the evolving cannabis market [17][18] Management's Comments on Operating Environment and Future Outlook - Management expects Q2 2022 revenues to accelerate year-over-year and approach positive adjusted EBITDA by the end of the quarter [23] - The company acknowledges a slowdown in the Israeli market but remains optimistic about overall growth [33] Other Important Information - The company does not foresee significant capital expenditures in the coming year as it focuses on operational improvements and synergies [24] - Cash and cash equivalents totaled $10.3 million at March 31, 2022, down from $13.9 million at December 31, 2021 [22] Q&A Session Summary Question: Clarification on Q2 profitability and EBITDA guidance - Management believes that adjusted EBITDA will be positive from June onwards, but cannot confirm if the entire quarter will be profitable [29] Question: Outlook on the Israeli market and industry sales - Management noted a slower growth rate in the Israeli market but emphasized that the market is still growing [33] Question: Commentary on Canadian market sales trends - Management confirmed ongoing market share capture in Canada and plans to enter the Quebec market, which is significant [35] Question: Allocation priorities between Canadian and international markets - The company is optimizing product allocation based on market margins and is in the early stages of this process [39] Question: Revenue contribution from Germany and timing for product exports - Revenue from Germany was $600,000 for the quarter, with expectations for product imports to begin in Q4 2022 [45]