Intercure(US:INCR)2022-05-17 21:06Financial Data and Key Metrics Changes - Total revenue for Q1 2022 was $34 million, nearly 3 times greater than Q1 2021, with a sequential growth of 9% [10][35] - Adjusted EBITDA for Q1 2022 was $8 million, representing over 100% growth year-over-year, with an EBITDA margin of 24% [11][39] - The company ended Q1 2022 with $91 million in cash, indicating a strong balance sheet [12][40] Business Line Data and Key Metrics Changes - The company achieved record profits before tax of almost $8 million, representing 250% growth year-over-year [11] - Gross margin for Q1 2022 was 41%, down from 44% in 2021, primarily due to expenses related to pharmacies obtaining medical cannabis licenses [36] - Excluding the impact of 9 pharmacies without licenses, gross margin would have been higher than 23% [36] Market Data and Key Metrics Changes - The Israeli market added approximately 3,000 new patients, a 4% growth, bringing the total to over 112,000 subscriptions [21] - The company is seeing demand for its branded products from Germany, the UK, Australia, and other emerging markets, indicating strong international interest [16] Company Strategy and Development Direction - The company is focused on expanding its vertically integrated seed-to-sale model into key territories, including the UK, Germany, Australia, and Austria [19][20] - A strategic partnership with Clever Leaves aims to enhance supply access to several medical cannabis markets, supporting international expansion without heavy infrastructure investment [17][18] - The company plans to launch its first retail location in Vienna and expects to launch branded dispensing operations in the UK, Australia, and Germany throughout 2022 [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate new import regulations and maintain quality in local cultivation [45][46] - The company anticipates continued revenue growth throughout 2022, supported by a strong operational track record [41] - Management highlighted the evolving regulatory landscape in Israel and Germany, which could lead to further market opportunities [33] Other Important Information - The company added three new pharmacies to its chain, bringing the total to 22 locations, with 14 actively dispensing medical cannabis [25] - The company is preparing to be the first to register CBD products in Israel, anticipating regulatory changes [28] Q&A Session Summary Question: Impact of domestic medical supply limitations in Israel - Management noted that if new regulations slow or stop imports, prices for high-quality products may increase due to reliance on imports [45] Question: Effects of new import regulations on partnerships - Management stated they are well-prepared to adapt to new regulations and have a strong local cultivation capability [46] Question: Future cash flow and capital needs - Management expects positive cash flow to continue but acknowledges the need for capital expenditures to support growth initiatives [50] Question: Potential for legalization in Germany and investment opportunities - Management believes that markets like Germany will eventually evolve into adult use, and they are focused on building brand equity in the meantime [53]