INLB - Item 9 Labs Corp (INLB) - Record Quarterly Revenue in 3Q21
3Q21 Results. Item 9 reported record quarterly revenue of $6.7 million in the fiscal third quarter, up 203% from 3Q20. Revenue was up 9.5% sequentially. This marks seven consecutive quarters of revenue growth. Net loss declined to $833,905, or $0.01 per share, compared to a net loss of $1.6 million, or $0.03 per share last year. We had projected revenue of $6.5 million and net income of $300,000 or breakeven EPS.Solid Market Position. Item 9 Labs products have earned a solid position in the Arizona marketplace as the top brand in every dispensary the Company chooses to sell through, according to Leaf Link. Currently, at the end of the quarter, Item 9 Labs products were being sold in 79, or 64% of Arizona's dispensaries, up from 45, or 37% at the end of June 2020. As the Company continues to add dispensaries, this should help drive incremental revenue.Construction. Phase 1 construction on the Arizona site is expected to begin in early October. From this initial phase, Item 9 will increase its premium flower output by 30-35% and reduce reliance on 3rd party sourced material for lab productions by 40-50%. The reduction of outsourced material will help drive margins higher. Nevada is still on track to be completed by the end of the year and operational in January 2022.Updated Projections. For the fiscal fourth quarter we are maintaining our prior projections. We are projecting revenue of $7.5 million and breakeven EPS. For the full year, we are at $23.3 million and an EPS loss of $0.01. In fiscal 2022, we project revenue to jump to $80 million and diluted EPS of $0.15.Maintaining Outperform and $4.00 PT. We are maintaining our Outperform rating and $4.00 12-month price target on INLB shares. Item 9 is combining a traditional cannabis cultivation operation with an asset light franchise dispensary model to expand across the nation. We believe the combination creates a differentiated business model that offers premium products and distribution through an expanding network of dispensary franchises. Read More >>