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Greenlane Reports Q1 2023 Revenue Increase of 9% and a 32% Decrease in Operating Expenses Over Q4 2022
BOCA RATON, FL / ACCESSWIRE / May 15, 2023 / Greenlane Holdings, Inc. (“Greenlane” or the “Company”) (NASDAQ:GNLN), one of the largest global sellers of premium cannabis accessories, child-resistant packaging, and specialty vaporization products, today reported financial results for the first quarter ended March 31st, 2023.
- Revenue for Q1 2023 increased 9.0% to $24.0 million, compared to $22.0 million in Q4 2022.
- Operating expenses in Q1 2023 were down $7.1 million or 32% compared with Q4 2022, inclusive of a Q4 2022 intangible assets impairment charge of $4.6 million.
- Net loss attributed to Greenlane Holdings, Inc. for Q1 2023 was $10.2 million, compared to $13.3 million in Q4 2022, inclusive of the $4.6 million intangible assets impairment charge. Basic and diluted net loss of $0.64 per share compared to a loss of $1.02 per share for the prior quarter.
- Adjusted EBITDA loss for Q1 2023 was $6.8 million compared to a loss of $7.6 million for Q4 2022.
- The Company has launched 16 new products: 12 products from Groove, 3 from Eyce, and the MIQRO-C from DaVinci.
Results from Operations
Net sales for the three months ended March 31, 2023, were $24.0 million, an increase of $2.0 million or 9.0% over the prior quarter.
Gross margin was 23.0% during the quarter versus 26.7% during the fourth quarter of 2022.
Operating expenses in Q1 2023 were down $7.1 million or 32% compared with Q4 2022, inclusive of a Q4 2022 intangible assets impairment charge of $4.6 million.
Net loss attributable to Greenlane Holdings, Inc. was $10.2 million during the quarter, or $0.64 per share, compared with a loss of $13.3 million, or $1.02 per share, in the fourth quarter of 2022, which included $4.6 million related to a goodwill impairment charge.
Adjusted EBITDA loss was $6.8 million during the quarter, compared with a loss of $7.6 million, in the fourth quarter of 2022.
Path to Profitability
At Greenlane, we are hyper focused on getting our business profitable and well-capitalized for long-term sustainability. We have been working hard to right-size our business, focus on core areas, and reduce our overall cost structure while improving our margins in an effort to be profitable in 2023.
In addition, we are emphasizing our higher-margin proprietary Greenlane brands, including Eyce, DaVinci, Groove, Marley Natural, Keith Haring, and Higher Standards. We believe this forms a central part of our growth strategy and will enhance our overall gross margin profile and accelerate our path to profitability.
We reduced our total operating expenses from $24.2 million in Q1 2022 to $15.0 million in Q1 2023, a reduction of over $9.1 million or 37.8%. We significantly reduced our labor-related expenses by 46.6%, and have reduced general and administrative expenses by 34.5% for the same comparable periods. We have also seen a year over year improvement of 47.7% in loss from operations.
We are executing on our aggressive transformative strategy by focusing on our path to profitability, enhancing and growing our leading position as a product innovator and disruptor in our segment, and our continued advancement and performance in developing our global omnichannel strategy.
Craig Snyder, Greenlane CEO
The tangible progress we’ve made in the first quarter, including increased revenue in both our consumer and industrial segments, as well as a reduction in operating expenses, puts us on a positive trajectory for the remainder of 2023.
Snyder added, “Our emphasis remains on our consumer business where our higher-margin proprietary Greenlane brands reside, as we believe this focus will continue to improve our overall gross margin profile and accelerate our path to profitability.
We have already seen a positive impact in our revenue due to our sixteen product launches in Q1 from Eyce, DaVinci and Groove. We look forward to additional Greenlane brand product launches in Q2 and fiscal year 2023 and expect to see continued revenue growth from our consumer segment.
In the first quarter, we also continued to advance our global omnichannel strategy to improve the customer experience, efficiency and expand our market reach. Our global strategic market distribution partners spanning across South America, Canada, Mexico, and Puerto Rico have allowed us to reach consumers globally and have enabled us to continue to scale our brands worldwide.”
Conference Call Information
Greenlane management will host a scheduled conference call and webcast later today, Monday, May 15at 4:30 p.m. Eastern time to discuss the results for its first quarter ended March 31, 2023, followed by a question-and-answer session. The call will be webcast with an accompanying slide deck, which will be accessible by visiting the Financial Results page of Greenlane’s investor relations website.
All interested parties are invited to listen to the live conference call and presentation by dialing the number below or by clicking the webcast link available on the Financial Results page of the Company’s investor relations website.
DATE: Monday, May 15, 2023
TIME: 4:30 p.m. Eastern Time
WEBCAST: Click to access
DIAL-IN NUMBER: 888-506-0062 (Toll-Free) / 973-528-0011 (International)
CONFERENCE ID: 503830
REPLAY: 877-481-4010 or 919-882-2331
Replay Passcode: 48304
Available until May 29, 2023
If you have any difficulty connecting with the conference call or webcast, please contact Greenlane’s investor relations at email@example.com.
To be added to the Company’s distribution list, please email firstname.lastname@example.org with “Greenlane” in the subject line.
About Greenlane Holdings, Inc.
Founded in 2005, Greenlane is a premier global platform for the development and distribution of premium smoking accessories, vape devices, and lifestyle products to thousands of producers, processors, specialty retailers, smoke shops, convenience stores, and retail consumers. We operate as a powerful family of brands, third-party brand accelerator, and an omnichannel distribution platform.
We proudly offer our own diverse brand portfolio including DaVinci Vaporizers, Higher Standards, Groove, and Eyce, and our exclusively licensed Marley Natural and K.Haring branded products. We also offer a carefully curated set of third-party products such as Storz & Bickel (Canopy-owned), Pax, VIBES, and CCELL through our direct sales channels and our proprietary, owned and operated e-commerce platforms which include Vapor.com, Vaposhop.com, DaVinciVaporizer.com, PuffItUp.com, EyceMolds.com, HigherStandards.com, and MarleyNaturalShop.com.
For additional information, please visit: https://investor.gnln.com.
Use of Non-GAAP Financial Measures
Greenlane discloses Adjusted EBITDA, which is a non-GAAP performance measure because management believes this measure assists investors and analysts in assessing our overall operating performance and evaluating how well we are executing our business strategies. You should not consider Adjusted EBITDA as alternatives to net loss, as determined in accordance with U.S. GAAP, as indicators of our operating performance. Adjusted EBITDA has limitations as an analytical tool. Some of these limitations are:
- Adjusted EBITDA does not include interest expense, which has been a necessary element of our costs, and income tax payments we may be required to make;
- Adjusted EBITDA does not reflect equity-based compensation;
- Adjusted EBITDA does not reflect other one-time expenses and income, including consulting costs related to the implementation of our ERP system and the reversal of an allowance against indemnification receivables associated with the EU VAT liability;
- Adjusted EBITDA does not reflect goodwill and intangible asset impairment;
- Other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure.
Because Adjusted Net Loss and Adjusted EBITDA do not account for these items, these measures have material limitations as indicators of operating performance. Accordingly, management does not view Adjusted Net Loss or Adjusted EBITDA in isolation or as substitutes for measures calculated in accordance with U.S. GAAP.
Adjusted SG&A is a supplemental non-GAAP financial measure, which the Company calculates as total selling, general and administrative expenses less depreciation and amortization expense, and goodwill and intangible asset impairment. The Company believes this measure is helpful to investors because it gives investors information about cash operating expenses.
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