Irwin Naturals Inc has reported its results for the three months ended March 31, 2022, showing it remains in "very robust financial health".
In a statement accompanying the financials, Irwin Naturals’ CFO Philippe Faraut said: “Profitability remained strong with an 11.2% operating margin despite start-up expenses related to building our cannabis licensing and psychedelic clinics businesses.
"Overall, with little debt on our balance sheet, positive cash flow, a rapidly growing network of profitable clinics and an expanding network of brand licensees for THC enhanced products, we remain in very robust financial health to fuel profitable expansion," he added.
READ: Irwin Naturals expands licensing footprint for branded THC products to Ohio
The company reported a 6.4% decline in operating revenue to $22,594 for the three months ended March 31, 2022, due to supply issues in the CBD segment as a result of a fire at a key supplier.
The cannabis company said the decline in sales is expected to be temporary as production of CBD products has restarted at the manufacturer.
"These issues were resolved and, subsequent to the quarter, CBD sales are trending back to normal. Further impacts came from product transitions and order timing,” Faraut said.
The company saw its income from operations in Q1 2022 come in at $2.5 million, down by 33.6% primarily driven by the supply issue and start-up costs for its Emergence by Irwin Naturals ketamine clinics and brand licensing for Irwin Naturals Cannabis. This resulted in a 29.5% decrease in EBITDA to $2.9 million in the three-month period, the company added.
It noted that cash flow from operations was positive at $3.2 million, though lower than a year earlier in part due to the start-up costs. Positive cash flow from operations, combined with a largely undrawn line of credit, provides the company with the financial resources to drive execution of its strategy, it added.
Irwin CEO Klee Irwin said the company has continued to hit the ground running with deals involving seven clinics in the past few weeks.
“While only the beginning, our pace shows that clinics want to join our roll-up and that our brand promise resonates with them. We will continue to expand our pipeline, currently at over 100 target clinics, and will continue to add profitable acquisitions, expand our international footprint and accelerate profitable growth," he added.
CEO Irwin and CFO Faraut will host a conference call on Tuesday, May 31, 2022, at 2.00pm EST to discuss the results as well as the company's strategy and execution going forward. To join the meeting, investors can click here with the meeting ID: 879 3546 5330.
Irwin Naturals has been a household name and best-in-class herbal supplement formulator since 1994. Its growing portfolio of products is available in more than 100,000 retail doors across North America, where nearly 100 million people know the Irwin Naturals brand. It is now leveraging its brand to enter into both the cannabis and psychedelic industries.
Contact the author at jon.hopkins@proactiveinvestors.com