Market Trends

IM Cannabis Corp. Announces Financial Outcomes for 2023 Amidst Market Challenges

TORONTO and GLIL YAM, Israel, March 28, 2024 /PRNewswire/ -- IM Cannabis Corp. (the "Company" or "IMC") (NASDAQ: IMCC) (CSE: IMCC), a veteran in the international medical cannabis field, has made public its financial and operational results for the fiscal year that ended on December 31, 2023. Despite navigating through a difficult year marked by currency fluctuations and the impacts of the Israel-Hamas war, the company has managed to report notable figures across several areas.

All financial figures have been reported in Canadian dollars. The Company's in-depth consolidated audited financial statements for the year ended December 31, 2023, and the preceding year, alongside the Annual MD&A, offer a detailed exposition of its performance. These documents can be retrieved from the Company's website at https://investors.imcannabis.com/, as well as from EDGAR and SEDAR+ profiles.

Financial Highlights

For the fiscal year 2023, revenues observed a downturn to $48.8 million, which is a 10% decrease from 2022's $53.3 million. A significant portion of this decline can be attributed to negative currency fluctuations and the operational impacts stemming from the conflict between Israel and Hamas.

The last quarter of 2023 experienced a more pronounced drop, with revenues plummeting 26% to $10.7 million from $14.5 million in the final quarter of the previous year. This was largely a result of a constrained supply chain and the Company's strategy to discount certain inventories at lower prices due to the wartime disruptions.

Contrastingly, the Company's gross profit for the year rose by 7.5% to $9.8 million, compared to 2022's $9.2 million, showcasing the Company's resilient operational framework.

Other operational expenditures, including General & Administrative (G&A) and Selling and Marketing expenses, also decreased significantly due to strategic adjustments and cost management efforts.

Operational Outcomes

IM Cannabis also reported a 20% drop in total assets as of December 31, 2023, with figures standing at $48.8 million, compared to $60.7 million the year before. This is primarily linked to an inventory reduction of approximately $6.6 million, lower current and non-current assets, and a decrease in trade payables of $6.1 million.

Despite this, the Company retains robust liquidity with cash and cash equivalents totaling $1.8 million by year end, ensuring operational agility and responsiveness to market changes.

Strategic Growth and Market Dynamics

The international situation surrounding medical cannabis is complex and evolving, yet IM Cannabis has shown promise in specific markets. In Germany, a key demographic for the company, IMC experienced accelerated growth in 2023. It emerged as a leading player in terms of sales per stock keeping unit and saw the highest growth rate amongst its competitors in the German market. This growth is expected to flourish even further following the regulatory rescheduling of cannabis in Germany, set to take effect from April 1st. The Company anticipates that this change will drive market growth for medical cannabis in already established and upcoming markets.

Management's Perspective

IMC's CEO, Oren Shuster, has expressed optimism for the future given the restructuring and focus on the Israeli and German markets. Uri Birenberg, the CFO, further highlighted the increase in gross profit for 2023 as evidence of the Company's capacity to navigate through challenging periods.

Forward-Looking Statements

IM Cannabis Corp. is forward-looking in nature. Statements made in this press release are based on current expectations, estimations, and projections about future events. These may involve risks and uncertainties inherent to the volatile medical cannabis industry. Investors are encouraged to read the "Risk Factors" section in the 2023 Annual MD&A for additional information on potential risks faced by the Company.

Web Conference Call

IMC will host a Zoom web conference call to discuss these results and engage with the investment community. A recording of the call will be available on the Company's website within 24 hours post-call.

About IM Cannabis Corp.

IM Cannabis Corp. is a notable global player in the medical cannabis space, committed to providing high-quality cannabis for medical patients in Israel and Germany. The Company is leveraging its extensive expertise and market insights for expansion and growth in the international market, while continually reiterating its commitment to responsible development and compliance with stringent regulatory standards globally.

For further details on IM Cannabis Corp.'s financial health and operational plans, visit the official company website and financial platforms.

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SOURCE IM Cannabis Corp.