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Tech Data Reports First Quarter Fiscal Year 2020 Results
Reading Time: 11 minutes
CLEARWATER, Fla.–(BUSINESS WIRE)–Tech Data (NASDAQ: TECD) (the “Company”) today announced its financial
results for the first quarter ended April 30, 2019.
| First quarter ended April 30, | ||||||
|
($ in millions,
except per share amounts) |
2019 | 2018 |
Y/Y |
|||
| Net Sales | $8,406.4 | $8,548.3 | -2% | |||
| Gross profit | $509.4 | $523.1 | -3% | |||
| Gross margin | 6.06% | 6.12% | -6 bps | |||
| SG&A expenses (GAAP) | $405.8 | $422.4 | -4% | |||
| % of net sales | 4.83% | 4.94% | -11 bps | |||
| SG&A expenses (Non-GAAP) | $384.6 | $399.1 | -4% | |||
| % of net sales | 4.58% | 4.67% | -9 bps | |||
| Operating income (GAAP) | $97.6 | $70.5 | 38% | |||
| Operating margin (GAAP) | 1.16% | 0.82% | 34 bps | |||
| Operating income (Non-GAAP) | $124.8 | $124.1 | 1% | |||
| Operating margin (Non-GAAP) | 1.48% | 1.45% | 3 bps | |||
| Net income (GAAP) | $55.4 | $33.7 | 64% | |||
| Net income (Non-GAAP) | $75.9 | $70.8 | 7% | |||
| EPS – diluted (GAAP) | $1.49 | $0.87 | 71% | |||
| EPS – diluted (Non-GAAP) | $2.04 | $1.84 | 11% | |||
A reconciliation of GAAP to non-GAAP financial measures is presented in
the financial tables of this press release.
This information is
also available on the Investor Relations section of Tech Data’s website
at www.techdata.com/investor.
“We are pleased to report a solid start to Tech Data’s fiscal year 20.
In Q1 we delivered double-digit earnings per share growth, generated
positive cash flow and earned an industry-leading return on invested
capital – all while making good progress on our strategy and continuing
to invest for the future. Our worldwide teams executed well in the
quarter, despite market uncertainty,” said Rich Hume, chief executive
officer. “Looking ahead, although IT market growth has slowed somewhat
from the year-ago levels, demand continues to be solid, and we remain
positive on the overall IT spending outlook.”
Regional Financial Highlights for the First Quarter Ended April 30,
2019:
| First quarter ended April 30, | ||||||
| ($ in millions) | 2019 | 2018 |
Y/Y |
|||
|
AMERICAS |
||||||
| Net Sales | $3,789.2 | $3,618.2 | 5% | |||
| % of WW net sales | 45% | 42% | ||||
| Operating income (GAAP) | $68.6 | $61.3 | 12% | |||
| % of net sales | 1.81% | 1.70% | 11 bps | |||
| Operating income (Non-GAAP) | $84.7 | $85.9 | -1% | |||
| % of net sales | 2.24% | 2.38% | -14 bps | |||
|
EUROPE |
||||||
| Net Sales | $4,309.5 | $4,661.7 | -8% | |||
| % of WW net sales | 51% | 55% | ||||
| Operating income (GAAP) | $36.4 | $17.3 | 110% | |||
| % of net sales | 0.85% | 0.37% | 48 bps | |||
| Operating income (Non-GAAP) | $45.6 | $43.6 | 4% | |||
| % of net sales | 1.06% | 0.94% | 12 bps | |||
|
ASIA PACIFIC |
||||||
| Net Sales | $307.7 | $268.4 | 15% | |||
| % of WW net sales | 4% | 3% | ||||
| Operating income (loss) (GAAP) | $0.9 | ($0.6) | NM | |||
| % of net sales | 0.28% | -0.21% | 49 bps | |||
| Operating income (Non-GAAP) | $2.8 | $1.1 | 161% | |||
| % of net sales | 0.91% | 0.40% | 51 bps | |||
Note: NM = not meaningful, WW = worldwide
Stock-based compensation
expense was $8.3 million, an increase of $0.7 million, compared to the
prior-year quarter. These expenses are excluded from the regional
operating results and presented as a separate line item in the company’s
segment reporting (see the GAAP to non-GAAP reconciliation in the
financial tables of this press release).
-
Net sales were $8.4 billion, a decrease of 2 percent compared to the
prior-year quarter. On a constant currency basis, net sales increased
3 percent.-
Americas: Net sales were $3.8 billion, an increase of 5 percent
compared to the prior-year quarter. On a constant currency basis,
net sales increased 6 percent. -
Europe: Net sales were $4.3 billion, a decrease of 8 percent
compared to the prior-year quarter. On a constant currency basis,
net sales increased 1 percent. -
Asia Pacific: Net sales were $0.3 billion, an increase of 15
percent compared to the prior-year quarter. On a constant currency
basis, net sales increased 19 percent.
-
Americas: Net sales were $3.8 billion, an increase of 5 percent
- Net cash generated by operations during the quarter was $63 million.
-
Return on invested capital for the trailing twelve months was 13
percent, compared to 4 percent in the prior year. Adjusted return on
invested capital for the trailing twelve months was 14 percent,
compared to 11 percent in the prior year.
“During Q1, we generated $63 million in cash from operations, returned
$36 million to our shareholders through share repurchases, and for the
trailing twelve-month period, earned an adjusted return on invested
capital of 14 percent. In addition, we recently improved our liquidity
profile to enhance our financial strength and flexibility – all of which
reflect our disciplined approach to optimizing our business and
commitment to creating shareholder value,” said Chuck Dannewitz,
executive vice president, chief financial officer.
Business Outlook
-
For the quarter ending July 31, 2019, the Company anticipates:
-
Worldwide net sales to be in the range of $8.6 billion to $8.9
billion -
EPS to be in the range of $1.53 to $1.83 and non-GAAP EPS to be in
the range of $2.15 to $2.45 - An effective tax rate in the range of 24 percent to 26 percent
-
Worldwide net sales to be in the range of $8.6 billion to $8.9
-
This guidance assumes an average U.S. dollar to euro exchange rate of
$1.12 to €1.00 which compares to $1.17 to €1.00 in the year-ago period.
Webcast Details
Tech Data will hold a conference call today at 9:00 a.m. (ET) to discuss
its financial results for the first quarter ended April 30, 2019. A
webcast of the call, including supplemental schedules, will be available
to all interested parties and can be obtained at www.techdata.com/investor.
The webcast will be available for replay for three months.
Non-GAAP Financial Information
The non-GAAP financial information contained in this release is included
with the intention of providing investors a more complete understanding
of the Company’s operational results and trends, but should only be used
in conjunction with results reported in accordance with Generally
Accepted Accounting Principles (“GAAP”). Certain non-GAAP measures
presented in this release or other releases, presentations and similar
documents issued by the Company include sales, income or expense items
as adjusted for the impact of changes in foreign currencies (referred to
as “constant currency”), non-GAAP operating income, non-GAAP operating
margin, non-GAAP net income, non-GAAP earnings per diluted share and
Adjusted Return on Invested Capital. Certain non-GAAP measures also
exclude acquisition-related intangible assets amortization expense,
benefits associated with legal settlements, acquisition, integration and
restructuring expenses, value-added tax assessments and related interest
expense, tax indemnifications and changes in deferred tax valuation
allowances. A detailed reconciliation of the adjustments between results
calculated using GAAP and non-GAAP in this release is contained in the
attached financial schedules. This information can also be obtained from
the Company’s Investor Relations website at www.techdata.com/investor.
Forward-Looking Statements
Certain statements in this communication may contain “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements, including statements regarding
Tech Data’s plans, objectives, expectations and intentions, Tech Data’s
financial results and estimates and/or business prospects, involve a
number of risks and uncertainties and actual results could differ
materially from those projected. These forward looking statements are
based on current expectations, estimates, forecasts, and projections
about the operating environment, economies and markets in which Tech
Data operates and the beliefs and assumptions of our management. Words
such as “expects,” “anticipates,” “targets,” “goals,” “projects,”
“intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such
words, and similar expressions are intended to identify such forward
looking statements. In addition, any statements that refer to
projections of Tech Data’s future financial performance, our anticipated
growth and trends in our businesses, and other characterizations of
future events or circumstances, are forward looking statements. These
forward looking statements are only predictions and are subject to
risks, uncertainties, and assumptions. Therefore, actual results may
differ materially and adversely from those expressed in any forward
looking statements.
For additional information with respect to risks and other factors which
could occur, see Tech Data’s Annual Report on Form 10-K for the year
ended January 31, 2019, including Part I, Item 1A, “Risk Factors”
therein, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and
other securities filings with the Securities and Exchange Commission
(the “SEC”) that are available at the SEC’s website at www.sec.gov
and other securities regulators. Readers are cautioned not to place
undue reliance upon any such forward-looking statements, which speak
only as of the date made. Many of these factors are beyond Tech Data’s
control. Unless otherwise required by applicable securities laws, Tech
Data disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. Tech Data undertakes no duty to update any
forward looking statements contained herein to reflect actual results or
changes in Tech Data’s expectations.
About Tech Data
Tech Data connects the world with the power of technology. Our
end-to-end portfolio of products, services and solutions, highly
specialized skills, and expertise in next-generation technologies enable
channel partners to bring to market the products and solutions the world
needs to connect, grow and advance. Tech Data is ranked No. 88 on the
Fortune 500® and has been named one of Fortune’s “World’s
Most Admired Companies” for 10 straight years. To find out more, visit www.techdata.com or
follow us on Twitter, LinkedIn,
and Facebook.
| TECH DATA CORPORATION AND SUBSIDIARIES | ||||||
| CONSOLIDATED STATEMENT OF OPERATIONS | ||||||
| (In thousands, except per share amounts) | ||||||
| (Unaudited) | ||||||
| Three months ended April 30, | ||||||
| 2019 | 2018 | |||||
| Net sales | $ | 8,406,424 | $ | 8,548,319 | ||
| Cost of products sold | 7,897,045 | 8,025,202 | ||||
| Gross profit | 509,379 | 523,117 | ||||
| Operating expenses: | ||||||
| Selling, general and administrative expenses | 405,816 | 422,361 | ||||
| Acquisition, integration, and restructuring expenses | 6,221 | 33,225 | ||||
| Legal settlements and other, net | (282) | (2,965) | ||||
| 411,755 | 452,621 | |||||
| Operating income | 97,624 | 70,496 | ||||
| Interest expense | 26,257 | 25,922 | ||||
| Other (income) expense, net | (693) | 1,917 | ||||
| Income before income taxes | 72,060 | 42,657 | ||||
| Provision for income taxes | 16,660 | 8,958 | ||||
| Net income | $ | 55,400 | $ | 33,699 | ||
| Earnings per share: | ||||||
| Basic | $ | 1.50 | $ | 0.88 | ||
| Diluted | $ | 1.49 | $ | 0.87 | ||
| Weighted average common shares outstanding: | ||||||
| Basic | 37,011 | 38,281 | ||||
| Diluted | 37,247 | 38,561 | ||||
| TECH DATA CORPORATION AND SUBSIDIARIES | ||||||
| CONSOLIDATED BALANCE SHEET | ||||||
| (In thousands, except par value and share amounts) | ||||||
| (Unaudited) | ||||||
| April 30, | January 31, | |||||
| 2019 | 2019 | |||||
| ASSETS | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 797,500 | $ | 799,123 | ||
| Accounts receivable, net | 5,423,370 | 6,241,740 | ||||
| Inventories | 3,260,840 | 3,297,385 | ||||
| Prepaid expenses and other assets | 367,858 | 354,601 | ||||
| Total current assets | 9,849,568 | 10,692,849 | ||||
| Property and equipment, net | 271,906 | 274,917 | ||||
| Goodwill | 887,175 | 892,990 | ||||
| Intangible assets, net | 924,338 | 950,858 | ||||
| Other assets, net | 378,762 | 174,938 | ||||
| Total assets | $ | 12,311,749 | $ | 12,986,552 | ||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 6,715,555 | $ | 7,496,466 | ||
| Accrued expenses and other liabilities | 984,366 | 1,000,126 | ||||
| Revolving credit loans and current maturities of long-term debt, net | 123,092 | 110,368 | ||||
| Total current liabilities | 7,823,013 | 8,606,960 | ||||
| Long-term debt, less current maturities | 1,297,943 | 1,300,554 | ||||
| Other long-term liabilities | 274,887 | 142,315 | ||||
| Total liabilities | $ | 9,395,843 | $ | 10,049,829 | ||
| Shareholders’ equity: | ||||||
|
Common stock, par value $0.0015; 200,000,000 shares authorized; 59,245,585 |
$ | 89 | $ | 89 | ||
| shares issued at April 30, 2019 and January 31, 2019 | ||||||
| Additional paid-in capital | 836,508 | 844,206 | ||||
|
Treasury stock, at cost (22,483,529 and 22,305,464 shares at April 30, 2019 |
||||||
| and January 31, 2019) | (1,065,657) | (1,037,872) | ||||
| Retained earnings | 3,141,914 | 3,086,514 | ||||
| Accumulated other comprehensive income | 3,052 | 43,786 | ||||
| Total shareholders’ equity | 2,915,906 | 2,936,723 | ||||
| Total liabilities and shareholders’ equity | $ | 12,311,749 | $ | 12,986,552 | ||
| TECH DATA CORPORATION AND SUBSIDIARIES | ||||||||
| CONSOLIDATED STATEMENT OF CASH FLOWS | ||||||||
| (In thousands) | ||||||||
| (Unaudited) | ||||||||
| Three months ended April 30, | ||||||||
| 2019 | 2018 | |||||||
| Cash flows from operating activities: | ||||||||
| Cash received from customers | $ | 11,913,347 | $ | 11,514,374 | ||||
| Cash paid to vendors and employees | (11,800,318 | ) | (12,038,399 | ) | ||||
| Interest paid, net | (35,101 | ) | (33,763 | ) | ||||
| Income taxes paid | (14,739 | ) | (8,830 | ) | ||||
| Net cash provided by (used in) operating activities | 63,189 | (566,618 | ) | |||||
| Cash flows from investing activities: | ||||||||
| Expenditures for property and equipment | (7,745 | ) | (4,894 | ) | ||||
| Software and software development costs | (7,534 | ) | (3,561 | ) | ||||
| Other | (548 | ) | (267 | ) | ||||
| Net cash used in investing activities | (15,827 | ) | (8,722 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Principal payments on long-term debt | (5,224 | ) | (2,899 | ) | ||||
| Cash paid for debt issuance costs | (1,028 | ) | — | |||||
| Net borrowings (repayments) on revolving credit loans | 14,227 | (13,291 | ) | |||||
| Payments for employee tax withholdings on equity awards | (8,602 | ) | (6,255 | ) | ||||
| Proceeds from the reissuance of treasury stock | 495 | 442 | ||||||
| Repurchases of common stock | (35,681 | ) | — | |||||
|
Net cash used in financing activities |
(35,813 | ) | (22,003 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | (13,172 | ) | (12,708 | ) | ||||
| Net decrease in cash and cash equivalents | (1,623 | ) | (610,051 | ) | ||||
| Cash and cash equivalents at beginning of year | 799,123 | 955,628 | ||||||
| Cash and cash equivalents at end of period | $ | 797,500 | $ | 345,577 | ||||
|
Reconciliation of net income to net cash provided by operating activities: |
||||||||
| Net income | $ | 55,400 | $ | 33,699 | ||||
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
||||||||
|
Depreciation and amortization |
37,257 | 40,481 | ||||||
| Provision for losses on accounts receivable | 1,765 | 924 | ||||||
| Stock-based compensation expense | 8,305 | 7,587 | ||||||
| Accretion of debt discount and debt issuance costs | 378 | 378 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 751,836 | 670,528 | ||||||
| Inventories | 2,450 | (7,387 | ) | |||||
| Prepaid expenses and other assets | 2,245 | (30,344 | ) | |||||
| Accounts payable | (706,381 | ) | (1,132,019 | ) | ||||
| Accrued expenses and other liabilities | (90,066 | ) | (150,465 | ) | ||||
| Total adjustments | 7,789 | (600,317 | ) | |||||
| Net cash provided by (used in) operating activities | $ | 63,189 | $ | (566,618 | ) | |||
| TECH DATA CORPORATION AND SUBSIDIARIES | ||||||||||||
| GAAP TO NON-GAAP RECONCILIATION | ||||||||||||
| (In thousands) | ||||||||||||
| Three months ended April 30, 2019 | ||||||||||||
| Americas (1) | Europe (1) | Asia Pacific (1) |
Stock |
Consolidated | ||||||||
| Net Sales | $ 3,789,198 | $ 4,309,500 | $ 307,726 | $ 8,406,424 | ||||||||
| Operating income (GAAP) (1) | $ 68,633 | $ 36,420 | $ 876 | $ (8,305) | $ 97,624 | |||||||
| Acquisition, integration and restructuring expenses | 2,911 | 3,024 | 286 | – | 6,221 | |||||||
| Legal settlements and other, net | (282) | – | – | (282) | ||||||||
| Tax indemnifications | – | – | 320 | 320 | ||||||||
| Acquisition-related intangible assets amortization expense | 13,440 | 6,115 | 1,324 | 20,879 | ||||||||
| Total non-GAAP operating income adjustments | $ 16,069 | $ 9,139 | $ 1,930 | $ – | $ 27,138 | |||||||
| Operating income (non-GAAP) | $ 84,702 | $ 45,559 | $ 2,806 | $ (8,305) | $ 124,762 | |||||||
| Operating margin (GAAP) | 1.81% | 0.85% | 0.28% | 1.16% | ||||||||
| Operating margin (non-GAAP) | 2.24% | 1.06% | 0.91% | 1.48% | ||||||||
|
(1) GAAP operating income does not include stock compensation expense at the regional level. |
||||||||||||
| Three months ended April 30, 2018 | ||||||||||||
| Americas (1) | Europe (1) | Asia Pacific (1) |
Stock |
Consolidated | ||||||||
| Net Sales | $ 3,618,206 | $ 4,661,702 | $ 268,411 | $ 8,548,319 | ||||||||
| Operating income (loss) (GAAP) (1) | $ 61,342 | $ 17,318 | $ (577) | $ (7,587) | $ 70,496 | |||||||
| Acquisition, integration and restructuring expenses | 13,916 | 17,988 | 321 | 1,000 | 33,225 | |||||||
| Legal settlements and other, net | (2,965) | – | – | (2,965) | ||||||||
| Acquisition-related intangible assets amortization expense | 13,643 | 8,329 | 1,332 | 23,304 | ||||||||
| Total non-GAAP operating income adjustments | $ 24,594 | $ 26,317 | $ 1,653 | $ 1,000 | $ 53,564 | |||||||
| Operating income (non-GAAP) | $ 85,936 | $ 43,635 | $ 1,076 | $ (6,587) | $ 124,060 | |||||||
| Operating margin (GAAP) | 1.70% | 0.37% | -0.21% | 0.82% | ||||||||
| Operating margin (non-GAAP) | 2.38% | 0.94% | 0.40% | 1.45% | ||||||||
|
(1) GAAP operating income does not include stock compensation expense at the regional level. |
||||||||||||
| TECH DATA CORPORATION AND SUBSIDIARIES | ||||||
| GAAP TO NON-GAAP RECONCILIATION | ||||||
| (In thousands) | ||||||
| Selling, general and administrative expenses (“SG&A”) | Three months ended April 30, | |||||
| 2019 | 2018 | |||||
| Net Sales | $ | 8,406,424 | $ | 8,548,319 | ||
| SG&A Expenses (GAAP) | $ | 405,816 | $ | 422,361 | ||
| Tax indemnifications | (320) | – | ||||
| Acquisition-related intangible assets amortization expense | (20,879) | (23,304) | ||||
| SG&A Expenses (non-GAAP) | $ | 384,617 | $ | 399,057 | ||
| SG&A Expenses (GAAP) % | 4.83% | 4.94% | ||||
| SG&A Expenses (non-GAAP) % | 4.58% | 4.67% | ||||
| Three months ended April 30, | ||||||||
| 2019 | 2018 | |||||||
| Net Income | Diluted EPS | Net Income | Diluted EPS | |||||
| GAAP Results | $55,400 | $1.49 | $33,699 | $0.87 | ||||
| Acquisition, integration and restructuring expenses | 6,221 | 0.17 | 33,225 | 0.86 | ||||
| Legal settlements and other, net | (282) | (0.01) | (2,965) | (0.08) | ||||
| Value added tax assessments and related interest expense | – | – | (928) | (0.02) | ||||
| Tax indemnifications | 320 | 0.01 | – | – | ||||
| Acquisition-related intangible assets amortization expense | 20,879 | 0.56 | 23,304 | 0.61 | ||||
| Income tax effect of tax indemnifications | (320) | (0.01) | – | – | ||||
| Income tax effect of other adjustments above | (6,321) | (0.17) | (12,908) | (0.33) | ||||
| Change in deferred tax valuation allowances | – | – | (2,600) | (0.07) | ||||
| Non-GAAP Results | $75,897 | $2.04 | $70,827 | $1.84 | ||||
|
Return on Invested Capital (ROIC) |
||||||
| Twelve months ended April 30, | ||||||
| TTM Net Operating Profit After Tax (NOPAT)*: | 2019 | 2018 | ||||
| Operating income | $ | 520,930 | $ | 405,497 | ||
| Income taxes on operating income (1) | (52,272) | (242,229) | ||||
| NOPAT | $ | 468,658 | $ | 163,268 | ||
| Average Invested Capital: | ||||||
| Short-term debt (5-qtr end average) | $ | 115,018 | $ | 262,413 | ||
| Long-term debt (5-qtr end average) | 1,361,506 | 1,683,828 | ||||
| Shareholders’ Equity (5-qtr end average) | 2,881,968 | 2,745,501 | ||||
| Total average capital | 4,358,492 | 4,691,742 | ||||
| Less: Cash (5-qtr end average) | (676,308) | (751,732) | ||||
| Average invested capital less average cash | $ | 3,682,184 | $ | 3,940,010 | ||
| ROIC | 13% | 4% | ||||
| * Trailing Twelve Months is abbreviated as TTM. | ||||||
|
(1) Income taxes on operating income was calculated using the trailing twelve months effective tax rate. |
||||||
Adjusted Return on Invested Capital (ROIC)
| Twelve months ended April 30, | |||
| TTM Net Operating Profit After Tax (NOPAT), as adjusted*: | 2019 | 2018 | |
| Non-GAAP operating income (1) | $ 708,588 | $ 603,559 | |
| Income taxes on non-GAAP operating income (2) | (179,283) | (178,518) | |
| NOPAT, as adjusted | $ 529,305 | $ 425,041 | |
| Average Invested Capital, as adjusted: | |||
| Short-term debt (5-qtr end average) | $ 115,018 | $ 262,413 | |
| Long-term debt (5-qtr end average) | 1,361,506 | 1,683,828 | |
| Shareholders’ Equity (5-qtr end average) | 2,881,968 | 2,745,501 | |
| Tax effected impact of non-GAAP adjustments (3) | 44,860 | 95,713 | |
| Total average capital, as adjusted | 4,403,352 | 4,787,455 | |
| Less: Cash (5-qtr end average) | (676,308) | (751,732) | |
| Average invested capital less average cash | $ 3,727,044 | $ 4,035,723 | |
| Adjusted ROIC | 14% | 11% | |
| * | Trailing Twelve Months is abbreviated as TTM. | |
|
(1) |
Represents operating income as adjusted to exclude acquisition, integration and restructuring expenses, legal settlements and other, net, gain on disposal of subsidiary, value added tax assessments, acquisition-related intangible assets amortization expense, goodwill impairment and tax indemnifications. |
|
|
(2) |
Income taxes on non-GAAP operating income was calculated using the trailing twelve months effective tax rate adjusted for the impact of non-GAAP adjustments during the respective periods. |
|
|
(3) |
Represents the 5 quarter average of the year-to-date impact of non-GAAP adjustments. |
Guidance Reconciliation
| Three months ending July 31, 2019 | |||
|
Low end of |
High end of |
||
| Earnings per share – diluted | $1.53 | $1.83 | |
| Acquisition, integration and restructuring expenses | 0.59 | 0.59 | |
| Acquisition-related amortization of intangibles | 0.24 | 0.24 | |
| Income tax effect of the above adjustments | (0.21) | (0.21) | |
| Non-GAAP earnings per share – diluted | $2.15 | $2.45 | |
Contacts
Investor Contact
Tania Almond
Investor Relations
Director
+1 727.538.7064
[email protected]
Media Contact
Bobby Eagle
Director, External
Communications
+1 727.538.5864
[email protected]
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Innocan
Innocan Pharma Reports Breakthrough in a Pre-Clinical Trial: Liposomal-CBD Injection Restores Mobility to an Amputee Female Donkey
HERZLIYA, Israel and ALGARY, AB, May 9, 2024 /PRNewswire/ — Innocan Pharma Corporation (CSE: INNO) (FSE: IP4) (OTCQB: INNPF) (“Innocan” or the “Company”), a pioneer in the pharmaceutical and biotechnology industries, is pleased to announce the successful pre-clinical treatment with a liposomal-CBD injection in a female donkey. Innocan’s innovative therapy provided immediate noticeable pain relief and improved mobility.
Miri, a 7-year-old female donkey, underwent amputation of her right front limb at a young age, resulting in a weight burden primarily borne by her left front limb. Consequently, she developed laminitis in her left front limb, an inflammatory disease affecting the soft tissue that connects the foot bone to the hoof, seemingly causing extreme pain and limited mobility. Over time, Miri’s condition worsened, culminating in the formation of a abscess in the affected hoof, which appeared to have intensified her pain. Despite receiving pain relief medications, Miri found no respite, was unable to move, and her caregivers were advised to euthanize her.
As an act of compassionate therapy, the female donkey was administered a liposomal-CBD injection. The effect was immediate, with Miri becoming active and roaming the farm. Following the liposomal-CBD injection, the abscess in her affected foot healed, and Miri regained her ability to walk and move as she did before her laminitis developed.
“Thanks to our innovative liposomal-CBD injection, we are thrilled to have brought relief to Miri, eliminating the need for euthanasia,” commented Iris Bincovich, CEO of Innocan. “Once again, Innocan has shown liposomal-CBD to be effectively active for pain relief and well-being. We see this pre-clinical treatment as strong evidence of liposomal-CBD’s potential to improve the lives of animal patients and potentially human patients.”
“Laminitis is a crippling condition well familiar and common in horses,” said Prof Chezy Barenholz, the Chief Scientific Officer of Innocan. “The disease results in severe pain condition, representing another big market for liposomal-CBD with great potential to treat horses. Innocan is dedicated to advancing the development of CBD-based therapeutics for various indications in both humans and animals.”
For further information and a supporting video, please see: https://youtu.be/Hgqh2WOlwJQ?si=oGgSYrGi3rkW-RC
About Innocan Pharma:
Innocan is a pharmaceutical tech company that operates under two main segments: Pharmaceuticals and Consumer Wellness. In the Pharmaceuticals segment, Innocan focuses on developing innovative drug delivery platform technologies comprises with cannabinoids science, to treat various conditions to improve patients’ quality of life. This segment involves two drug delivery technologies: (i) LPT CBD-loaded liposome platform facilitating exact dosing and the prolonged and controlled release of CBD into the blood stream. The LPT delivery platform research is in the preclinical trial phase for two indications: Epilepsy and Pain Management. In the Consumer Wellness segment, Innocan develops and markets a wide portfolio of innovative and high-performance self-care products to promote a healthier lifestyle. Under this segment Innocan has established a Joint Venture by the name of BI Sky Global Ltd. that focuses developing on advanced targeted online sales. https://innocanpharma.com/
Contact Information:
For Innocan Pharma Corporation:
Iris Bincovich, CEO
+1 5162104025
+972-54-3012842
+442037699377
NEITHER THE CANADIAN SECURITIES EXCHANGE NOR ITS REGULATION SERVICES PROVIDER HAVE REVIEWED OR ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
Caution Regarding Forward-Looking Information
Certain information set forth in this news release, including, without limitation, the Company’s plans for human trials of its LPT-CBD platform, is forward-looking information within the meaning of applicable securities laws. By its nature, forward-looking information is subject to numerous risks and uncertainties, some of which are beyond Innocan’s control. . The forward-looking information contained in this news release is based on certain key expectations and assumptions made by Innocan, including expectations and assumptions concerning the anticipated benefits of the products, satisfaction of regulatory requirements in various jurisdictions and satisfactory completion of production and distribution arrangements.
Forward-looking information is subject to various risks and uncertainties that could cause actual results and experience to differ materially from the anticipated results or expectations expressed in this news release. The key risks and uncertainties include but are not limited to: global and local (national) economic, political, market and business conditions; governmental and regulatory requirements and actions by governmental authorities; and potential disruption of relationships with suppliers, manufacturers, customers, business partners and competitors. There are also risks that are inherent in the nature of product distribution, including import/export matters and the failure to obtain any required regulatory and other approvals (or to do so in a timely manner). The anticipated timeline for entry to markets may change for a number of reasons, including the inability to secure necessary regulatory requirements, or the need for additional time to conclude and/or satisfy the manufacturing and distribution arrangements. As a result of the foregoing, readers should not place undue reliance on the forward-looking information contained in this news release. A comprehensive discussion of other risks that impact Innocan can be found in Innocan’s public reports and filings which are available under Innocan’s profile at www.sedarplus.ca.
Readers are cautioned that undue reliance should not be placed on forward-looking information as actual results may vary materially from the forward-looking information. Innocan does not undertake to update, correct or revise any forward-looking information as a result of any new information, future events or otherwise, except as may be required by applicable law.
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IMC prepares for accelerated growth after legalization in Germany and recovers from the impact of the Israel-Hamas war.
TORONTO and GLIL YAM, Israel, May 8, 2024 /PRNewswire/ — IM Cannabis Corp. (the “Company” or “IMC“) (NASDAQ: IMCC) (CSE: IMCC), an international medical cannabis company, announced its financial results today for the first quarter ended March 31, 2024. All amounts are reported in Canadian dollars and compared to the quarter ended March 31, 2023, unless otherwise stated.
Q1 2024 Financial Highlights
- 13% Revenue increase vs. Q4 2023 of $12.1M vs. $10.7M and 4% decrease vs. Q1 2023 of $12.5M
- 125% Gross profit increase vs. Q4 2023 of $1.8M vs. $0.8 and 39% Gross profit decrease vs. Q1 2023 of $2.9M
- 29% decrease in operating expenses vs. Q1 2023 excluding the one-time Oranim revoke related losses of $4.6M vs. $6.5M and 14% increase including Oranim
- 12% increase of Non-IFRS Adjusted EBITDA loss to $2.1M
Operational Highlights
The Company intends to complete a non-brokered private placement (the “Offering“) of secured convertible debentures of the Company (each, a “Debenture“) for aggregate proceeds of up to C$2,500,000. The Debentures will mature on the date that is 12 months from the date of issuance and will not incur interest except in the event of default. The Debentures are being issued to holders of short term loans and obligations owed by the Company or its wholly owned subsidiaries. The principal of the Debenture may be converted into common shares in the Company (each, a “Share“) at a conversion price of $1.08 per Share.
Management Commentary
“With the April 1st cannabis legalization in Germany, we are augmenting our focus and resources on the German market, where we expect to see the biggest growth potential, and the best return on investment. While it is still too early to make any predictions, our sales in Germany almost doubled during the month of April,” said Oren Shuster, Chief Executive Officer of IMC. “Looking back on the first month post legalization in Germany, I see that we have the infrastructure and the supply agreements in place to continue delivering the accelerated growth we have already seen in April. We will also ensure that we have the necessary resources in place for success.”
“In 2023 we completely restructured, becoming a very lean and agile company, leaning into active cost management. This process is reflected in the numbers, our G&A decreased 27% vs Q1 2023” said Uri Birenberg, Chief Financial Officer of IMC. “While our results have recovered from the impact of the Israel-Hamas war, our revenue was still effected by both an unfavorable exchange rate, as well as price reductions to sell off inventory.”
Q1 2024 Conference Call
The Company will host a Zoom web conference call today at 9:00 a.m. ET to discuss the results, followed by a question-and-answer session for the investment community. Investors are invited to register by clicking here. All relevant information will be sent upon registration.
If you are unable to join us live, a recording of the call will be available on our website at https://investors.imcannabis.com/ within 24 hours after the call.
Q1 2024 Financial Results
- Revenues for the first quarter of 2024 were $12.1 million compared to $12.5 million in the first quarter of 2023, a decrease of 3%. The decrease is mainly due an exchange rate effect of about $0.2 million and decrease in avg. price per sale due to increased competition.
- Gross profit for the first quarter of 2024 was $1.8 million, compared to $2.9 million in Q1 2024, a decrease of 39%. The downside is attributed mainly to the slow-moving stock that was moved out at a lower price and an exchange rate difference totaling $0.4 million and $0.64 million cost of sales loss due to an inventory erase of the slow-moving stock. Company fair value adjustment was $0 and $0.4 million for the Q1 2024 and Q1 2023 respectively.
- Total Dried Flower sold in Q1 2024 was approximately 1,873 kg with an average selling price of $5.68 per gram, compared to approximately 1,842kg in Q1 2023, with an average selling price of $6.59 per gram. This difference is mainly due to increased competition within the retail segment, and mid-range stock discounts to move out slow moving stock.
- Total operating expenses in Q1 2024 were $7.4 million compared to $6.5 million in Q1 2023. The increase is due to the other operating expenses related to Oranim Deal revoke, with an expected losses of $2.8 million. Adjusting for this one-time losses, Q1 2024 operating expenses were $4.6 million compared to $6.5 million in Q1 2023, a decrease of 29%.
- G&A Expenses in Q1 2024 were $2.3 million, compared to $3.2 million in Q1 2023, a decrease of 28%. The decrease in the G&A expense is attributable mainly to salaries and professional services of $0.64 million.
- Selling and Marketing Expenses in Q1 2024 were $2.3 million, compared to $2.8 million in Q1 2023, a decrease of 18% mainly due to a decrease in Salaries and professional services of $0.5 million.
- Net Loss from continuing operations in Q1 2024 was $6.0 million, compared to $0.9 million in Q12023.
- Basic and diluted Loss per Share in Q1 2024 was $0.42, compared to a loss of $0.05 per Share in Q1 2023.
- Non-IFRS Adjusted EBITDA loss in Q1 2024 was $2.1 million, compared to an Adjusted EBITDA loss of $1.9 million in Q1 2023 an increase of 10%.
- Cash and Cash Equivalents as of March 31, 2024, were $1.0 million compared to $1.8 million in December 31, 2023.
- Total assets as of March 31, 2024, were $41.1 million, compared to $48.8 million in December 31, 2023, a decrease of 16%. The decrease is mainly attributed to the goodwill reduction due to Oranim agreement cancelation of about $2.8M, a reduction in Inventory of $2.1 million, reduction of Cash and cash equivalents of $0.8M and reduction in Trade payables of $1.2 million.
- Total Liabilities as of March 31, 2024, were $32.8 million, compared to $35.1 in December 31, 2023, a decrease of about 7%. The decrease was mainly due to the reduction in other accounts payables and accrued expenses of $1.8 million and reduction in the PUT option liability of $0.7 million.
The Company’s financial statements as of March 31, 2024 includes a note regarding the Company’s ability to continue as a going concern. The Company’s Q1 2024 financial results do not include any adjustments relating to the recoverability and classification of assets or liabilities that might be necessary should the Company be unable to continue as a going concern. For more information, please refer to the “Liquidity and Capital Resources” and “Risk Factors” sections in the Company’s management’s discussion and analysis for the quarter ended March 31, 2024.
Non-IFRS Measures
This press release makes reference to “Gross Margin” and “Adjusted EBITDA”, which are financial measures that are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. These measures are provided as complementary information to the Company’s IFRS measures by providing further understanding of our results of operations from management’s perspective. Accordingly, these measures should neither be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS.
For an explanation of how management defines Gross Margin and Adjusted EBITDA, see the Company’s management’s discussion and analysis for the period ended March 31, 2024, available under the Company’s SEDAR+ profile at www.sedarplus.ca on EDGAR at www.sec.gov/edgar.
We reconcile these non-IFRS financial measures to the most comparable IFRS measures as set out below.
|
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION |
||||||
|
Canadian Dollars in thousands |
||||||
|
March 31, |
December 31, |
|||||
|
Note |
(Unaudited) |
|||||
|
ASSETS |
||||||
|
CURRENT ASSETS: |
||||||
|
Cash and cash equivalents |
$ 1,048 |
$ 1,813 |
||||
|
Trade receivables |
6,506 |
7,651 |
||||
|
Advances to suppliers |
780 |
936 |
||||
|
Other accounts receivable |
3,732 |
3,889 |
||||
|
Inventories |
3 |
7,901 |
9,976 |
|||
|
19,967 |
24,265 |
|||||
|
NON-CURRENT ASSETS: |
||||||
|
Property, plant and equipment, net |
4,939 |
5,058 |
||||
|
Investments in affiliates |
2,078 |
2,285 |
||||
|
Right-of-use assets, net |
1,243 |
1,307 |
||||
|
Intangible assets, net |
5,440 |
5,803 |
||||
|
Goodwill |
7,442 |
10,095 |
||||
|
21,142 |
24,548 |
|||||
|
Total assets |
$ 41,109 |
$ 48,813 |
||||
|
The accompanying notes are an integral part of the interim condensed consolidated financial statements. |
||||||
|
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION |
||||||
|
Canadian Dollars in thousands |
||||||
|
March 31, |
December 31, |
|||||
|
Note |
(Unaudited) |
|||||
|
LIABILITIES AND EQUITY |
||||||
|
CURRENT LIABILITIES:
|
||||||
|
Trade payables |
$ 9,511 |
$ 9,223 |
||||
|
Bank loans and credit facilities |
11,941 |
12,119 |
||||
|
Other accounts payable and accrued expenses |
4,440 |
6,218 |
||||
|
Accrued purchase consideration liabilities |
2,165 |
2,097 |
||||
|
PUT Option liability |
1,967 |
2,697 |
||||
|
Current maturities of operating lease liabilities |
461 |
454 |
||||
|
30,485 |
32,808 |
|||||
|
NON-CURRENT LIABILITIES:
|
||||||
|
Warrants measured at fair value |
4 |
137 |
38 |
|||
|
Operating lease liabilities |
744 |
815 |
||||
|
Long-term loans |
401 |
394 |
||||
|
Employee benefit liabilities, net |
96 |
95 |
||||
|
Deferred tax liability, net |
902 |
963 |
||||
|
2,280 |
2,305 |
|||||
|
Total liabilities |
32,765 |
35,113 |
||||
|
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY: |
5 |
|||||
|
Share capital and premium |
253,887 |
253,882 |
||||
|
Translation reserve |
1,399 |
95 |
||||
|
Reserve from share-based payment transactions |
9,664 |
9,637 |
||||
|
Accumulated deficit |
(255,431) |
(249,145) |
||||
|
Total equity attributable to equity holders of the Company |
9,519 |
14,469 |
||||
|
Non-controlling interests |
(1,175) |
(769) |
||||
|
Total equity |
8,344 |
13,700 |
||||
|
Total liabilities and equity |
$ 41,109 |
$ 48,813 |
||||
|
The accompanying notes are an integral part of the interim condensed consolidated financial statements. |
||||||
|
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS |
||||||
|
AND OTHER COMPREHENSIVE INCOME (UNAUDITED) |
||||||
|
Canadian Dollars in thousands, except per share data |
||||||
|
Three months ended March 31, |
||||||
|
Note |
2024 |
2023 (*) |
||||
|
Revenues |
$ 12,063 |
$ 12,529 |
||||
|
Cost of revenues |
10,274 |
9,286 |
||||
|
Gross profit before fair value adjustments |
1,789 |
3,243 |
||||
|
Fair value adjustments: |
||||||
|
Realized fair value adjustments on inventory sold in the period |
(10) |
(339) |
||||
|
Total fair value adjustments |
(10) |
(339) |
||||
|
Gross profit |
1,779 |
2,904 |
||||
|
General and administrative expenses |
2,332 |
3,175 |
||||
|
Selling and marketing expenses |
2,292 |
2,805 |
||||
|
Restructuring expenses |
– |
283 |
||||
|
Share-based compensation |
32 |
258 |
||||
|
Other operating expenses |
9 |
2,753 |
– |
|||
|
Total operating expenses |
7,409 |
6,521 |
||||
|
Operating loss |
5,630 |
3,617 |
||||
|
Finance income |
4 |
(14) |
3,530 |
|||
|
Finance expense |
(487) |
(795) |
||||
|
Finance income, net |
(501) |
2,735 |
||||
|
Gain (loss) before income taxes |
(6,131) |
(882) |
||||
|
Income tax benefit |
(111) |
(16) |
||||
|
Net )loss( gain |
(6,020) |
(866) |
||||
|
Other comprehensive income that will not be reclassified to profit or loss in |
||||||
|
Total other comprehensive income that will not be reclassified to profit or loss |
67 |
36 |
||||
|
Exchange differences on translation to presentation currency |
1,330 |
(562) |
||||
|
Total other comprehensive income (loss) that will not be reclassified to profit |
1,397 |
(526) |
||||
|
Other comprehensive income that will be reclassified to profit or loss in |
||||||
|
Adjustments arising from translating financial statements of foreign operation |
(35) |
155 |
||||
|
Total other comprehensive income (loss) that will be reclassified to profit or loss |
(35) |
155 |
||||
|
Total other comprehensive income (loss) |
1,362 |
(371) |
||||
|
Total comprehensive loss |
$ (4,658) |
$ (1,237) |
||||
|
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS |
||||||
|
AND OTHER COMPREHENSIVE INCOME (UNAUDITED) |
||||||
|
Canadian Dollars in thousands, except per share data |
||||||
|
Three months ended March 31, |
||||||
|
Note |
2024 |
2023 (*) |
||||
|
Net income (loss) attributable to: |
||||||
|
Equity holders of the Company |
(5,623) |
(600) |
||||
|
Non-controlling interests |
(397) |
(266) |
||||
|
$ (6,020) |
$ (866) |
|||||
|
Total comprehensive income (loss) attributable to: |
||||||
|
Equity holders of the Company |
(4,252) |
(959) |
||||
|
Non-controlling interests |
(406) |
(278) |
||||
|
$ (4,658) |
$ (1,237) |
|||||
|
Net income (loss) per share attributable to equity holders of the Company: |
7 |
|||||
|
Basic and diluted (loss) gain per share (in CAD) |
$ (0.42) |
$ (0.05) |
||||
|
Earnings (loss) per share attributable to equity holders of the Company |
||||||
|
Basic and diluted (loss) gain per share (in CAD) |
$ (0.42) |
$ (0.05) |
||||
|
(*) See note 1 regarding figures disclosure. |
||||||
|
The accompanying notes are an integral part of the interim condensed consolidated financial statements. |
||||||
|
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |
||||
|
Canadian Dollars in thousands |
||||
|
Three months ended March 31, |
||||
|
2024 |
2023 (*) |
|||
|
Cash provided by operating activities: |
||||
|
Net income (loss) for the period |
$ (6,020) |
$ 43 |
||
|
Adjustments for non-cash items: |
||||
|
Fair value adjustment on sale of inventory |
10 |
339 |
||
|
Fair value adjustment on Warrants, investments and accounts receivable |
100 |
(3,636) |
||
|
Depreciation of property, plant and equipment |
147 |
174 |
||
|
Amortization of intangible assets |
452 |
456 |
||
|
Depreciation of right-of-use assets |
118 |
179 |
||
|
Impairment of goodwill |
2,753 |
– |
||
|
Finance expenses, net |
401 |
635 |
||
|
Deferred tax liability, net |
(69) |
(150) |
||
|
Share-based payment |
32 |
258 |
||
|
Restructuring expense |
– |
283 |
||
|
3,944 |
(1,462) |
|||
|
Changes in working capital: |
||||
|
Decrease (increase) in trade receivables |
1,332 |
1,937 |
||
|
Decrease (increase) in other accounts receivable and advances to suppliers |
159 |
(940) |
||
|
Decrease (increase) in inventories, net of fair value adjustments |
2,159 |
90 |
||
|
Decrease (increase) in trade payables |
663 |
(6,021) |
||
|
Changes in employee benefit liabilities, net |
– |
(22) |
||
|
Increase in other accounts payable and accrued expenses |
(2,745) |
(14) |
||
|
1,568 |
(4,970) |
|||
|
Taxes (paid) received |
(121) |
328 |
||
|
Net cash used in operating activities |
(629) |
(6,061) |
||
|
Cash flows from investing activities: |
||||
|
Purchase of property, plant and equipment |
(2) |
(411) |
||
|
Payment of purchase consideration |
– |
(56) |
||
|
Net cash used in investing activities |
$ (2) |
$ (467) |
||
|
The accompanying notes are an integral part of the interim condensed consolidated financial statements. |
||||
|
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |
||||
|
Canadian Dollars in thousands |
||||
|
Three months ended March 31, |
||||
|
2024 |
2023 |
|||
|
Cash flow from financing activities: |
||||
|
Proceeds from issuance of share capital, net of issuance costs |
176 |
825 |
||
|
Proceeds from issuance of warrants |
(176) |
7,027 |
||
|
Repayment of lease liability |
(118) |
(175) |
||
|
Interest paid – lease liability |
(15) |
(18) |
||
|
Receipt (repayment) of bank loan and credit facilities |
(2,856) |
(1,046) |
||
|
Cash paid for interest |
(444) |
(56) |
||
|
Proceeds from discounted checks |
2,581 |
|||
|
Net cash (used in) provided by financing activities |
(852) |
6,557 |
||
|
Effect of foreign exchange on cash and cash equivalents |
718 |
(1,059) |
||
|
Decrease in cash and cash equivalents |
(765) |
(1,030) |
||
|
Cash and cash equivalents at beginning of the period |
1,813 |
2,449 |
||
|
Cash and cash equivalents at end of the period |
$ 1,048 |
$ 1,419 |
||
|
Supplemental disclosure of non-cash activities: |
||||
|
Right-of-use asset recognized with corresponding lease liability |
$ 40 |
$ 49 |
||
|
Issuance of shares in payment of debt settlement to a non-independent director of the company |
$ – |
$ 222 |
||
|
(*) See note 1 regarding Figures disclosure. |
||||
|
The accompanying notes are an integral part of the interim condensed consolidated financial statements. |
||||
About IM Cannabis Corp.
IMC (Nasdaq: IMCC) (CSE: IMCC) is an international cannabis company that provides premium cannabis products to medical patients in Israel and Germany, two of the largest medical cannabis markets. The Company has exited operations in Canada to pivot its focus and resources to achieve sustainable and profitable growth in its highest value markets, Israel and Germany. The Company leverages a transnational ecosystem powered by a unique data-driven approach and a globally sourced product supply chain. With an unwavering commitment to responsible growth and compliance with the strictest regulatory environments, the Company strives to amplify its commercial and brand power to become a global high-quality cannabis player.
The IMC ecosystem operates in Israel through Focus Medical Herbs Ltd., which imports and distributes cannabis to medical patients, leveraging years of proprietary data and patient insights. The Company also operates medical cannabis retail pharmacies, online platforms and logistical hubs in Israel that enable the safe delivery and quality control of IMC products throughout the entire value chain. In Germany, the IMC ecosystem operates through Adjupharm GmbH, where it distributes cannabis to pharmacies for medical cannabis patients. The Company also operated in Canada through Trichome Financial Corp and its wholly owned subsidiaries. The Company has exited operations in Canada and considers these operations as discontinued.
Disclaimer for Forward-Looking Statements
This press release contains forward-looking information or forward-looking statements under applicable Canadian and United States securities laws (collectively, “forward-looking statements“). All information that addresses activities or developments that we expect to occur in the future are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “believe”, “plan”, “estimate”, “expect”, “likely” and “intend” and statements that an event or result “may”, “will”, “should”, “could” or “might” occur or be achieved and other similar expressions. Forward-looking statements are based on the estimates and opinions of management on the date the statements are made. In the press release, such forward-looking statements include, but are not limited to, statements relating to: the impact of the Israel-Hamas war on the Company, including its operations and the medical cannabis industry in Israel; the timing and impact of the legalization of medicinal cannabis in Germany, including, the Company having it “all in house”; the Company being positioned to take advantage of the legalization; the Company’s growth in 2024; the market growth for medicinal cannabis in Germany; the stated benefits of the Company’s EU-GMP processing facility and an EU-GDP logistics center; the Company to host a teleconference meeting as stated; and the Company’s stated goals, scope, and nature of operations in Germany, Israel, and other jurisdictions the Company may operate.
Forward-looking statements are based on assumptions that may prove to be incorrect, including but not limited to: the Company’s ability to focus and resources to achieve sustainable and profitable growth in its highest value markets; the Company’s ability to mitigate the impact of the Israel-Hamas war on the Company; the Company’s ability to take advantage of the legalization of medicinal cannabis in Germany; the Company’s ability to host a teleconference meeting as stated; and the Company’s ability to carry out its stated goals, scope, and nature of operations in Germany, Israel, and other jurisdictions the Company may operate.
The above lists of forward-looking statements and assumptions are not exhaustive. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated or implied by such forward-looking statements due to a number of factors and risks. These include: the failure of the Company to comply with applicable regulatory requirements in a highly regulated industry; unexpected changes in governmental policies and regulations in the jurisdictions in which the Company operates; the Company’s ability to continue to meet the listing requirements of the Canadian Securities Exchange and the NASDAQ Capital Market; any unexpected failure to maintain in good standing or renew its licenses; the ability of the Company and its subsidiaries (collectively, the “Group“) to deliver on their sales commitments or growth objectives; the reliance of the Group on third-party supply agreements to provide sufficient quantities of medical cannabis to fulfil the Group’s obligations; the Group’s possible exposure to liability, the perceived level of risk related thereto, and the anticipated results of any litigation or other similar disputes or legal proceedings involving the Group; the impact of increasing competition; any lack of merger and acquisition opportunities; adverse market conditions; the inherent uncertainty of production quantities, qualities and cost estimates and the potential for unexpected costs and expenses; risks of product liability and other safety-related liability from the usage of the Group’s cannabis products; supply chain constraints; reliance on key personnel; the risk of defaulting on existing debt; risks surrounding war, conflict and civil unrest in Eastern Europe and the Middle East, including the impact of the Israel-Hamas war on the Company, its operations and the medical cannabis industry in Israel; risks associated with the Company focusing on the Israel and Germany markets; the inability of the Company to achieve sustainable profitability and/or increase shareholder value; the inability of the Company to actively manage costs and/or improve margins; the inability of the company to grow and/or maintain sales; the inability of the Company to meet its goals and/or strategic plans; the inability of the Company to reduce costs and/or maintain revenues; the Company’s inability to take advantage of the legalization of medicinal cannabis in Germany; and the Company’s inability to host a teleconference meeting as stated.
Please see the other risks, uncertainties and factors set out under the heading “Risk Factors” in the Company’s annual report dated March 28, 2024, which is available on the Company’s issuer profile on SEDAR+ at www.sedarplus.ca and Edgar at www.sec.gov/edgar. Any forward-looking statement included in this press release is made as of the date of this press release and is based on the beliefs, estimates, expectations and opinions of management on the date such forward looking information is made. The Company does not undertake any obligation to update forward-looking statements except as required by applicable securities laws. Investors should not place undue reliance on forward-looking statements. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement.
Company Contact:
Anna Taranko, Director Investor & Public Relations
IM Cannabis Corp.
+49 157 80554338
[email protected]
Oren Shuster, CEO
IM Cannabis Corp.
+972-77-3603504
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