Irwin Naturals Inc. (CSE: IWIN) (OTC: IWINF) (FRA: 97X) (“Irwin” or the “Company”) announced the Company filed results for the fiscal fourth quarter and the financial year ended December 31, 2021, on Monday May 2, 2022 on www.sedar.com.
Financial Highlights
| (US$ '000s) | FY 2021 | Change | FY 2020 | Q4 2021 | Change | Q4 2020 |
| Operating Revenue | $100,342 | 12.3% | $89,377 | $25,941 | 5.9% | $24,487 |
| Income from operations | $10,570 | 38.0% | $7,658 | $2,400 | 7.6% | $2,231 |
| Margin | 10.5% | 22.9% | 8.6% | 9.3% | 1.5% | 9.1% |
| Adjusted EBITDA1 | $11,998 | 32.2% | $9,074 | $2,767 | 7.0% | $2,587 |
| Net Cash generated from Operating Activities | $10,955 | 33.3% | $8,218 | |||
1Adjusted EBITDA is a non IFRS metric that management believes provides a metric for rapid analysis of the underlying strength of the business. A reconciliation from IFRS to Adjusted EBITDA is provided in the accompanying tables at the end of this release.
Management Commentary
“In our 28th consecutive year of profitable operations, the core business continues grow,” said Klee Irwin, President and CEO. “These record-breaking top and bottom-line numbers are fueling our accretive rollup of psychedelic mental health clinics featuring psychedelic treatment with ketamine. It is noteworthy that our roll up is occurring without sacrificing profitability.”
Mr. Irwin continued, “As, mentioned in this 2-page overview document and my keynote talk last week at Benzinga’s psychedelic investor conference, brand is king. We are the first household name in the space, and we intend to execute on a similar path to expansion via both acquisition of clinics and organic clinic openings as that taken by other major national brand consumer focused chain outlets during their expansion phases. This means leveraging our first-mover advantage as a household brand name to execute on a highly aggressive M&A program to establish an advantage in terms of brand reach and clinic quantity. This is a once in a lifetime opportunity we believe will significantly accelerate revenues and profitability. We are proud of our profitable history and excited about our future and look forward to informing the markets as we progress with our expansion.”
Financial Highlights
Operational Highlights & Subsequent Events
Irwin has commenced its expansion into the high growth cannabis and psychedelics sectors. The Company intends to leverage its household name brand status to drive an aggressive rollup of mental health clinics (the Company is focused on ketamine clinics, as this is currently the only FDA-approved psychedelic substance). Furthermore, the Company has begun efforts to license its brand to distributors throughout the US.
Klee Irwin concluded, “Many North Americans suffer from mental health disorders. Ketamine therapy can greatly help this trend. Not all people go to the dentist once a year, yet we require over 189,000 dental clinics in the US. We need a lot more psychedelic mental health clinics, and we need them fast. We barely have 600 in the country today. These new therapies are the only ones we know of that have such an extreme level of effectiveness. We intend to roll up a large amount of these clinics into our public company in the months and years immediately ahead of us. Irwin Naturals is one of the world’s first mega-brand name to capitalize on this opportunity.”
Conference Call Details
CEO Klee Irwin and CFO Philippe Faraut will be hosting a conference call on Tuesday, May 3, 2022 to discuss the results, as well as the Company’s strategy and execution going forward. Details for participants to listen to the call are as follows:
Date time May 3, 2022 at 2:00 pm EST
Via zoom
Meeting URL: https://us02web.zoom.us/j/83004253799
Zoom Meeting ID: 830 0425 3799
By telephone:
Canada: 1-647-558-0588
North America: 1-646-558-8656
About Irwin Naturals
Irwin Naturals has been a household name and best-in-class nutraceutical company since 1994. It is now leveraging its brand into both the cannabis and psychedelic sectors. On a mission to heal the world with plant medicine, Irwin has operated profitably for over 27 years*. The growing portfolio of products is available in more than 100,000 retail doors across North America, where 80% of households know the Irwin Naturals brand**. In 2018, the Company first leveraged its brand to expand into the cannabis industry by launching hemp-based CBD products into the mass market. The Company is now leveraging its famous halo of brand trust to become, perhaps, the first household name brand to offer THC-based products. Its rapidly growing national chain of psychedelic mental health clinics is called Irwin Naturals Emergence.
* Under several corporate structures, Klee Irwin has operated the Irwin brand profitably since 1994, as measured by EBITDA adjusted for extraordinary costs.
** Based on a formal Company survey with a sample size of 500 randomly selected adults.
For investor-related information about the Company, please visit ir.irwinnaturals.com/
To contact the Company’s Investor Relations department, please call toll-free at (800) 883-4851 or send an email to This email address is being protected from spambots. You need JavaScript enabled to view it..
“Klee Irwin”
________________________________
Klee Irwin
Chief Executive Officer
T: 310-306-3636
This email address is being protected from spambots. You need JavaScript enabled to view it.
Regulatory Overview
The following is a brief summary of regulatory matters concerning ketamine in the United States (“US”). Under the Controlled Substances Act (21 U.S.C. § 811) (the "CSA"), ketamine is currently a Schedule III drug as well as being listed under the associated Narcotic Control Regulations, and psilocybin is currently a Schedule I drug.
Most US States have enacted Controlled Substances Acts (“State CSAs”) which regulate the possession, use, sale, distribution, and manufacture of specified drugs or categories of drugs and establish penalties for State CSA violations and form the basis for much state and local drug laws enforcement activity. State CSAs have either adopted drug schedules identical or similar to the federal CSA schedules or, in some instances, have incorporated the federal scheduling mechanism. Among other requirements, some US States have established a prescription drug monitoring or review programs collect information about prescription and dispensing of controlled substances for the purposes of monitoring, analysis and education.
In the United States, facilities holding or administering controlled substances must be registered with the US Drug Enforcement Agency ("DEA") to perform this activity. As such, medical professionals and/or the clinics in which they operate, as applicable, are also required to have a DEA license to obtain and administer ketamine (a "DEA License"). While ketamine is a controlled substance in the United States, it is approved for general anesthetic induction under the US Food, Drug, and Cosmetic Act. Once a drug is approved for use, physicians may prescribe that drug for uses that are not described in the product’s labelling or that differ from those tested by the manufacturer and approved by the Food and Drug Administration (the "FDA"). Licensed medical practitioners may prescribe ketamine legally in Canada or the United States where they believe it will be an effective treatment in their professional judgment.
Please see Irwin’s filing statement on its SEDAR profile for more information on the regulatory environment and regulations surrounding the US THC industry.
Forward-Looking Information
This news release contains certain forward-looking statements that reflect the current views and/or expectations of management of the Company with respect to performance, business and future events. Forward-looking statements can often be identified by words such as "may", "will", "would", "could", "should", "believes", "estimates", "projects", "potential", "expects", "plans", "intends", "anticipates", "targeted", "continues", "forecasts", "designed", "goal", or the negative of those words or other similar or comparable words. Forward-looking statements are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about the business and the industry and markets in which the Company operates. The Company does not undertake any obligation to release publicly any revisions for updating any voluntary forward-looking statements, except as required by applicable securities law.
Neither the CSE nor its Market Regulator (as that term is defined in policies of the CSE) accepts responsibility for the adequacy or accuracy of this release.
EBITDA and Adjusted EBITDA - Reconciliation
The Company defines EBITDA and Adjusted EBITDA as per the table below. It should be noted that these performance measures are not defined under IFRS and may not be comparable to similar measures used by other entities. The Company believes that these measures are useful financial metrics as they assist in determining the ability to generate cash from operations. Investors should be cautioned that EBITDA and Adjusted EBITDA should not be construed as an alternative to net earnings or cash flows as determined under IFRS. The reconciling items between net earnings, EBITDA, and Adjusted EBITDA are as follows:
| Years ended | |||||||||||||
| (in thousands) | December 31 | $ | % | ||||||||||
| 2021 | 2020 | Change | Change | ||||||||||
| Net Profit | $ | 10,114 | $ | 7,240 | $ | 2,874 | 39.7 | % | |||||
| Interest Expense | 131 | 312 | (181 | ) | (58.0 | %) | |||||||
| Income Tax (Recovery) / Expense | (2,186 | ) | 116 | (2,302 | ) | -1984.5 | % | ||||||
| Depreciation and Amortization | 1,428 | 1,406 | 22 | 1.6 | % | ||||||||
| EBITDA | $ | 9,487 | $ | 9,074 | $ | 413 | 4.6 | % | |||||
| Foreign Exchange (Gain) / Loss | (1 | ) | - | (1 | ) | 100.0 | % | ||||||
| Listing Expenses | 2,512 | - | 2,512 | 100.0 | % | ||||||||
| Adjusted EBITDA | $ | 11,998 | $ | 9,074 | $ | 2,924 | 32.2 | % | |||||
| Quarter ended | |||||||||||||
| (in thousands) | December 31 | $ | % | ||||||||||
| 2021 | 2020 | Change | Change | ||||||||||
| Net Profit | $ | 4,888 | $ | 2,146 | $ | 2,742 | 127.8 | % | |||||
| Interest Expense | 40 | 46 | (6 | ) | (13.0 | %) | |||||||
| Income Tax (Recovery) / Expense | (2,537 | ) | 39 | (2,576 | ) | -6605.1 | % | ||||||
| Depreciation and Amortization | 367 | 356 | 11 | 3.1 | % | ||||||||
| EBITDA | $ | 2,758 | $ | 2,587 | $ | 171 | 6.6 | % | |||||
| Foreign Exchange (Gain) / Loss | (1 | ) | - | (1 | ) | 100.0 | % | ||||||
| Listing Expenses | 10 | - | 10 | 100.0 | % | ||||||||
| Adjusted EBITDA | $ | 2,767 | $ | 2,587 | $ | 180 | 7.0 | % | |||||
Irwin Naturals Consolidated Audited Balance Sheet
| December 31 | ||||||
| 2021 | 2020 | |||||
| ASSETS | ||||||
| Current Assets: | ||||||
| Cash | $ | 625 | $ | 442 | ||
| Other Financial Assets | 1 | - | ||||
| Trade Receivables | 16,394 | 17,214 | ||||
| Inventory | 18,652 | 14,577 | ||||
| Prepaid Expenses and Other Current Assets | 1,469 | 1,656 | ||||
| Total Current Assets | 37,141 | 33,889 | ||||
| Non-Current Assets: | ||||||
| Property and Equipment | 190 | 262 | ||||
| Right-of-Use Assets | 3,722 | 2,047 | ||||
| Notes Receivable from Shareholders | 3,264 | - | ||||
| Intangible Assets | 87 | 87 | ||||
| Other Non-Current Assets | 165 | 136 | ||||
| Deferred Tax Asset | 2,650 | - | ||||
| Total Non-Current Assets | 10,078 | 2,532 | ||||
| TOTAL ASSETS | $ | 47,219 | $ | 36,421 | ||
| LIABILITIES | ||||||
| Current Liabilities: | ||||||
| Trade and Other Payables | $ | 13,310 | $ | 11,616 | ||
| Reserve for Returns | 814 | 387 | ||||
| Lease Liability - Current | 1,366 | 1,334 | ||||
| Line of Credit | 6,178 | 7,500 | ||||
| Total Current Liabilities | 21,668 | 20,837 | ||||
| Non-Current Liabilities: | ||||||
| Lease Liability - Non Current | 2,434 | 812 | ||||
| Deferred Tax Liability | 1 | - | ||||
| TOTAL LIABILITIES | 24,103 | 21,649 | ||||
| EQUITY | ||||||
| Common Stock | - | 1 | ||||
| Multiple Voting Shares | 59 | - | ||||
| Subordinate Voting Shares | 0 | - | ||||
| Class B Non Voting Shares | 13,750 | - | ||||
| Accumulated Other Comprehensive Income | (9 | ) | - | |||
| Additional Paid In Capital | - | 14,771 | ||||
| Retained Earnings | 681 | - | ||||
| Total Controlling Interest | 14,481 | 14,772 | ||||
| Non-Controlling Interest | 8,635 | - | ||||
| Total Equity | 23,116 | 14,772 | ||||
| TOTAL LIABILITIES & EQUITY | $ | 47,219 | $ | 36,421 | ||
Irwin Naturals Consolidated Audited Statement of Profit and Loss
| For the Years Ended December 31 | ||||||||
| 2021 | 2020 | |||||||
| Operating Revenue | $ | 100,342 | $ | 89,377 | ||||
| Cost of Sales | (55,648 | ) | (52,876 | ) | ||||
| Gross Profit | 44,694 | 36,501 | ||||||
| Operating Expenses: | ||||||||
| Selling, General and Administrative Expenses | 34,124 | 28,896 | ||||||
| Gain on Sale of Property and Equipment | - | (53 | ) | |||||
| Income from Operations | 10,570 | 7,658 | ||||||
| Other Expense: | ||||||||
| Interest Income | - | 10 | ||||||
| Interest Expense | (131 | ) | (312 | ) | ||||
| Listing Expense | (2,512 | ) | - | |||||
| Gain / (Loss) on Foreign Currency Exchange | 1 | - | ||||||
| Total Other Income / (Expense) | (2,642 | ) | (302 | ) | ||||
| Profit before Income Taxes | 7,928 | 7,356 | ||||||
| Income Tax Recovery / (Expense) | 2,186 | (116 | ) | |||||
| Net Profit | 10,114 | 7,240 | ||||||
| Less: Net Profit Attributable to Non-Controlling Interest | (1,499 | ) | - | |||||
| Net Profit Attributable to Controlling Interest | $ | 8,615 | $ | 7,240 | ||||
| Foreign Currency Translation Differences | (11 | ) | - | |||||
| Total Comprehensive Income | 10,103 | 7,240 | ||||||
| Less: Comprehensive Income Attributable to Non-Controlling Interest | (1,501 | ) | - | |||||
| Comprehensive Income Attributable to Controlling Interest | $ | 8,602 | $ | 7,240 | ||||
| Earnings per share - basic | $ | 8.43 | $ | 7.24 | ||||
| Earnings per share - diluted | $ | 0.03 | $ | 7.24 | ||||
| Weighted average number of shares outstanding- basic | 1,200,001 | 1,000,000 | ||||||
| Weighted average number of shares outstanding - diluted | 312,218,241 | 1,000,000 | ||||||
Irwin Naturals Consolidated Audited Statements of Cash Flows
| For the Years Ended December 31 | ||||||||
| 2021 | 2020 | |||||||
| Net Profit | $ | 10,114 | $ | 7,240 | ||||
| Adjustments to Reconcile Net Profit to Net Cash Provided by Operating Activities: | ||||||||
| Depreciation and Amortization | 1,428 | 1,406 | ||||||
| Change in Allowance for Doubtful Accounts | - | 134 | ||||||
| Change in Inventory Reserve | (297 | ) | 3,176 | |||||
| Deferred Tax Asset | (2,650 | ) | - | |||||
| Non-Cash Share Capital from Share-Based Payment Transaction | 3,058 | - | ||||||
| Realized Gain on Sale of Property and Equipment | - | (53 | ) | |||||
| Gain on PPP Loan Forgiveness | - | (1,838 | ) | |||||
| Interest Income | (24 | ) | (10 | ) | ||||
| Interest Expense | 156 | 312 | ||||||
| Income Taxes Expense / (Recovery) | (2,186 | ) | 116 | |||||
| Changes in Working Capital: | ||||||||
| Trade Receivables | 820 | (1,606 | ) | |||||
| Inventories | (3,777 | ) | 1,750 | |||||
| Prepaid Expenses and Other | 187 | (259 | ) | |||||
| Trade and Other Payables | 3,728 | (1,985 | ) | |||||
| Reserve for Returns | 427 | (165 | ) | |||||
| Changes in Other Non-Current Assets | (29 | ) | - | |||||
| Net Cash Provided by Operating Activities | 10,955 | 8,218 | ||||||
| Cash Flow from Investing Activities: | ||||||||
| Purchases of Investments | (1 | ) | - | |||||
| Purchases of Property and Equipment | (51 | ) | (134 | ) | ||||
| Proceeds from Disposal of Property and Equipment | - | 53 | ||||||
| Net Cash Used in Investing Activities | (52 | ) | (81 | ) | ||||
| Cash Flow from Financing Activities: | ||||||||
| Proceeds from Line of Credit | 34,860 | 22,828 | ||||||
| Payments of Line of Credit | (36,183 | ) | (24,528 | ) | ||||
| Proceeds from PPP Loan | - | 1,838 | ||||||
| Distributions to Shareholders | (8,059 | ) | (6,950 | ) | ||||
| Payments on Lease Liability | (1,327 | ) | (1,254 | ) | ||||
| Net Cash Used in Financing Activities | (10,709 | ) | (8,066 | ) | ||||
| Effect of Foreign Exchange on Cash | (11 | ) | - | |||||
| Net Increase in Cash | 183 | 71 | ||||||
| Cash at Beginning of the Year | 442 | 371 | ||||||
| Cash at End of the Year | $ | 625 | $ | 442 | ||||
| Last Trade: | US$0.10 |
| Daily Volume: | 0 |
| Market Cap: | US$337K |
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