Irwin Naturals Inc has filed its second-quarter 2022 results, and the company’s executives sounded off on the path forward as its cannabis and ketamine operations ramp up.
“While supply chain issues, reduced inventory at our customers and product transitions resulted in an 18% decrease in revenues, we maintained profitability,” CFO Philippe Faraut said in a statement. “Additionally, as we continue to execute on our cannabis licensing and ketamine clinic rollup strategy, we will be adding new revenue streams to our results in the quarters to come.
In the quarter, the company brought in income from operations of $500,000, compared to $3.1 million in the same period a year earlier. The decline to supply chain issues was caused in part by a fire at a key supplier of its CBD division, along with startup costs for its ketamine clinics and intellectual property licensing to the cannabis industry.
WATCH: Irwin Naturals grows its footprint of mental-health facilities with Georgia and Vermont acquisitions
That said, production is up and running again and Faraut believes growth will soon follow.
“Following a bump in sales once the nation emerged from the most severe Covid-related restrictions, we believe that our mass market (nutraceutical) business, we are now tracking back to normal sales patterns, which we believe will result in secular growth in the coming quarters,” Faraut said.
Additionally, cash flow of $5.9 million for the six months ended June 30 as well as a largely undrawn line of credit provides the company with the financial resources to drive continued execution of its strategy.
“We maintain a healthy balance sheet, have very limited debt and have access to considerable working capital through our credit line and other instruments to invest in accelerated growth through our Emergence clinics and cannabis business lines,” Faraut added. “With acquisitions resulting in 11 clinics announced and completed, we anticipate seeing considerable growth coming from our Emergence business in the coming quarters, further supported by the rollout of our licensing deals, which now sees us in four states and in Canada.”
CEO Klee Irwin also weighed in on the state of the psychedelics sector. Irwin Naturals intends to leverage its brand status to drive an aggressive rollout of mental health clinics, namely ketamine clinics.
“The current proliferation of scientific research into the efficacy of psychedelics assisted mental health treatments has sorted two effects,” Irwin said. “On the one hand, treating physicians are taking notice of the remarkable results this line of treatment can accomplish, which is driving adoption amongst physicians and other mental health workers. On the demand side, we are seeing a rapidly accelerating destigmatization of psychedelics. Both are drivers that will continue to grow the market and with our rapidly expanding clinics chain, we are exceptionally well positioned to capitalize on this growth.”
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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