INLB - Item 9 Labs (INLB) - 1Q22 Results In-line with Expectations
1Q22 Results. For the quarter ended December 31st, Item 9 reported revenue of $6.2 million, an increase of $3.1 million, or 103.5%, compared with $3.0 million in 1Q21. Net loss was $3.3 million, or $0.04 per share. We had projected revenue of $6.2 million and a net loss of $3.8 million, or $0.04 per share. Adjusted EBITDA for the quarter was a loss of $1.2 million.Moving Forward. As the Company released FY21 results less than a month ago, there isn't a lot of new activity to report. The Nevada facility is 95% complete and should receive its Temporary Certificate of Occupancy in 2Q22. The Arizona expansion should be up and running during the summer. Recall, this will increase plant material output by 250-300%, reducing the need for outsourced product by 40-50%, and improving overall margins. Item 9 Labs product is in more than 50% of Arizona's dispensaries. Adding shelf space here is a key initiative. Demand for Item 9 products continues to outstrip supply.Unity Rd. Going through the licensing process for the owned Colorado store. Local Alliance agreement in Oklahoma should be implemented in 2Q22. Working through the licensing process alongside 20 partners for over three dozen locations across 9 states. Updated Projections. With the expansion projects moving forward and the potential of increased activity on the Unity Rd. side, we are going to maintain our previous estimates for the remainder of the year. Our estimated revenue for the second quarter of 2022 is $7.3 million with a loss of $3.2 million, or $0.03 per share for 2Q22. We continue to expect results to improve during 2H22. For the full year, we project revenue of $34.1 million and a net loss of $10.9 million, or $0.11 per share.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 >>