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Lowell Farms Inc. Announces Audited Fourth Quarter and Fiscal Year 2022 Financial and Operational Results
SALINAS, Calif., March 30, 2023 (GLOBE NEWSWIRE) -- Lowell Farms Inc. (the "Company") (CSE: LOWL; OTCQX: LOWLF), a California-born vertically integrated cannabis company with advanced production capabilities including cultivation, extraction, manufacturing, and distribution, announces audited revenue and operating results for the fourth quarter and fiscal year (ended December 31, 2022). All figures stated are in US Dollars.
Fourth Quarter and Fiscal Year Financial Highlights:
-- Revenue generated for the quarter ended December 31, 2022, was $9.3
million; a decrease of 38% from the fourth quarter last year and a 7%
sequential increase from the third quarter of 2022.
-- Revenue for the year ended December 31, 2022 was $43.5 million.
-- Sales of self-grown bulk wholesale products increased 42% sequentially to
$2.8 million during the quarter including a 23% increase in volume and a
7% increase in realized price per pound.
-- Total revenues from out of state licensing reached $0.3 million in the
fourth quarter of 2022 and were $1.6 million for the year.
-- Gross profit for the year was negative 4.2%.
-- Operating loss during the quarter was $6.4 million, a favorable increase
of 22% year over year. Operating loss during 2022 was $17.1 million, a
favorable increase of 20% compared to 2021.
-- Net loss for the fourth quarter was $11.1 million (inclusive of $3.2
million of impairment on capitalized equipment and leases) compared
sequentially to net loss of $4.8 million, and a net loss of $10.0 million
for the fourth quarter of 2021. Net loss for the year was $24.6 million
compared to a net loss of $24.7 million in 2021.
-- Adjusted EBITDA in the fourth quarter was negative $4.1 million compared
sequentially to adjusted EBITDA of negative $3.5 million and negative
adjusted EBITDA of $5.4 million in the fourth quarter of 2021. Adjusted
EBITDA for the year was negative $9.6 million compared to negative
adjusted EBITDA of $14.4 million in 2021. Adjusted EBITDA is a non-GAAP
financial measure. See "Use of Non-GAAP Financial Information" below for
further information and a detailed reconciliation to Net Loss, the
closest comparable GAAP measure.
Revenue Summary ($'s in '000)
----------------------------------------------------
Q/Q
Q3 Q4 Growth
------ ------ --------
CPG Revenues $6,137 $5,682 -7%
Bulk Product $1,956 $2,768 42%
LFS $254 $549 116%
Out-of-State Licensing $310 $289 -7%
------ ------
Total $8,657 $9,288 7%
"We're proud to remain at the forefront of innovation in the cannabis industry, with numerous accomplishments in the past year, including the acquisition of advanced pre-roll production equipment that has accelerated our ability to bring products to market as well as our cultivation output yielding the highest levels of potency we have recorded and our continued improvement of efficiencies in our various capabilities," says Co-Founder and Chief Executive Officer Mark Ainsworth.
"We remain laser-focused on further dialing in our efficiencies as well as leveraging the incredible infrastructure we have in place with the best-in-class leadership team to maintain our position in California. Our commitment to quality, safety, and innovation is unwavering, and in the coming year we will continue to focus on growth."
Subsequent events to the fourth quarter ended December 31, 2022:
-- Lowell Farms Inc. and The Pharm, LLC to Bring the Award-Winning Lowell Smokes to Arizona Dispensaries, January 4, 2023 -- https://ir.lowellfarms.com/news-events/press-releases/detail/102/lowell-farms-inc-and-the-pharm-llc-to-bring-the -- Lowell Farms Inc. Retains Canaccord Genuity in Connection with Strategic Alternatives Review, January 12, 2023 -- https://ir.lowellfarms.com/news-events/press-releases/detail/103/lowell-farms-inc-retains-canaccord-genuity-in-connection -- Lowell Farms Announces Proposed Debt Settlement, Asset Sale, and Financing, March 15, 2023 -- https://ir.lowellfarms.com/news-events/press-releases/detail/104/lowell-farms-announces-proposed-debt-settlement-asset
Operational Highlights and Ongoing Initiatives:
We believe the Company's focus and strategic planning of key initiatives continue to drive sustainable growth, with top priorities on its cultivation facilities, improving operational efficiency, and refinement of biological assets.
-- Cultivation Quality and Efficiency:
-- Continuing to refine its cultivation processes, genetics, and
enhance facilities and systems is always at the forefront of the
Company's objectives. In doing so, it allows improved yield,
potencies and increased margins.
-- Lowell Farms saw its flower production at the greenhouse
continue to increase year-over-year, with flower product
totaling 8,369 lbs during the fourth quarter of 2022 in
comparison to 8,336 lbs in the fourth quarter of 2021.
-- The Company harvested 41 times in the fourth quarter
of 2022; in contrast to 39 harvests in the fourth
quarter of 2021.
-- The average turn time for the flowering rooms
remained consistent with 58 days in the fourth
quarter of 2022 compared to 56 days in the fourth
quarter of 2021.
-- The portfolio of strains and increased THC potencies coming from
the cultivation are a result of the upgrades the Company has made
to the electrical, mechanical, and environmental systems.
-- These improvements resulted in an increased average potency
of 28% in the fourth quarter of 2022 compared to 26% in the
fourth quarter of 2021.
-- Fourth quarter 2022 results held steady despite abnormally cooler
and wetter winter weather in the region.
-- All science amendments to convert from Provisional to Annual
licenses are complete and expected to be issued in Q1 2023.
-- Lowell Farm Services
-- Lowell Farms first-of-its-kind cannabis processing facility in
Salinas Valley.
-- In the fourth quarter of 2022 the Company generated revenue
of approximately $0.5 million associated with Lowell Farm
Services in comparison to $3.7 million in the fourth
quarter of 2021 with 2022 YTD revenue of $3.7 million. LFS
revenue includes sales of third party bulk flower.
-- Lowell Farm Services processed approximately 70,000 pounds
of wet weight third-party flower in the fourth quarter of
2022 yielding approximately 2,400 pounds of finished flower
compared to 298,000 pounds in Q4 2021.
-- California Market Trends
-- Lowell Herb Co.
-- Since launching the Lowell 35's product in Q32022, Lowell
has remained the No. 1 top-selling non-infused pre-roll
brand in California, according to Headset data.
-- Each of the three core Lowell 35's blends has made the list
for the top 10 most purchased, up from the top 15 in
Q32022, non-infused pre-roll SKUs in California, according
to Headset data for Q42022.
-- Sales of Lowell branded products generated revenue of $4.7
million in the fourth quarter, while revenues for the year
totaled $19.6 million compared to $17.6 million for the
year ended 2021.
-- Out-of-State Licensing
-- Collectively out-of-state revenues were $289k in Q4 compared to
$310k in Q3.
-- Out-of-state revenues were $1.6 million in 2022 compared to $1.7
million in 2021.
-- Massachusetts
-- Lowell Herb Co is the 12th top-selling non-infused pre-roll
brand in the state, according to 2022 BDS data.
-- The Lowell Smokes 'Creative Sativa' pack is the 2nd highest
selling pre-roll SKU in the state, according to October
2022 BDS data.
-- Illinois
-- Lowell is the 4th top-selling non-infused pre-roll brand in
the state, according to 2022 BDS data.
-- The Lowell Smokes 'Social Sativa' pack is the number one
selling pre-roll SKU in the state, according to 2022 BDS
data.
-- Four additional Lowell Smokes products are in the top 15
selling non-infused pre-roll SKUs in the state, according
to 2022 BDS data.
-- Colorado
-- Lowell Herb Co launched in the state throughout the LivWell
dispensary network in the latter part of Q42022.
-- Lowell Smokes & Quicks products launched throughout
the Starbuds and Emerald Fields dispensary networks
bringing the Company's total retail doors to over 40
going into 2023.
-- New Mexico
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