INLB - Item 9 Labs (INLB) - Reports Full Year Fiscal 2021 Results
FY21 Results. For the year ended September 30th, Item 9 reported revenue of $21.9 million, an increase of $13.8 million, or 170%, compared with $8.1 million in FY2020. Net loss was $10.9 million, or $0.14 per share. We had projected revenue of $23.3 million and a net loss of $1.5 million, or $0.02 per share.FY4Q21. Although Item 9 did not disclose fourth quarter 2021 results, by our calculations net revenue was $6.1 million, up from $2.5 million in the year ago period but down from the $6.7 million in the fiscal third quarter. Higher expenses and the inclusion of $3.9 million of debt discount amortization resulted in a loss for the quarter of $9.0 million, or $0.10 per share.Moving Forward. Item 9 continues to make progress on the foundations for future growth. The Nevada facility should be operational in Spring 2022. 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. The Company has leases ready for three additional dispensaries and franchising opportunities continue to grow. Updated Projections. With the expansion projects taking longer than anticipated, we expect revenue to be muted in 1H22. We are projecting revenue of $6.2 million and a loss of $3.8 million, or $0.04 per share for 1Q22. While we currently expect results to improve during 2H22, we are taking a more wait and see approach for the full year, estimating 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 >>