Clever Leaves Holdings Inc. (Nasdaq: CLVR) (“Clever Leaves” or the “Company”), a multinational operator, or MNO, and licensed producer of pharmaceutical-grade cannabinoids, today reported financial and operating results for the first quarter ended March 31, 2021. All financial information is provided in US dollars unless otherwise indicated.
First Quarter 2021 Summary vs. Same Year-Ago Quarter
- Revenue increased 19% to $3.5 million compared to $2.9 million, primarily attributed to significant growth in cannabinoids revenue.
- All-in cost per gram of dry flower improved to $0.13 compared to $0.15.
- Gross profit increased 3% to $2.2 million.
- Net loss was $13.8 million. Net loss (excluding $4.9 million loss on remeasurement of warrant liability) improved to $8.9 million compared to $10.2 million, with the improvement primarily resulting from a reduction in operating expenses.
- Adjusted EBITDA (a non-GAAP financial measure defined and reconciled herein) improved to $(5.4) million compared to $(6.7) million.
“The first quarter reflected continued progress towards our growth objectives that we believe will drive the next stage of our journey to become an industry-leading MNO,” said Kyle Detwiler, CEO of Clever Leaves. “We continued to generate strong year-over-year revenue growth driven by increased cannabinoid shipments and improvements across key operating metrics, including adjusted EBITDA. In addition, we inked partnership deals with major pharmaceutical companies, such as Ethypharm in Germany, and received a record-level export quota from Colombia, representing approximately 18% of the world’s allocation. This strengthens our confidence in the future as we continue to prove the export process with initial shipments into our target markets globally.
“We also continued to realize cost efficiencies and prioritize the successful attainment of essential government certifications. Even as we worked to ramp our Portuguese operations, our all-in cost of dry flower for the quarter remained well below our industry peer group average at $0.13 per gram. Our continued and improving cost leadership shows the potential of our global supply chain opportunity for being a scale supplier of pharmaceutical-grade cannabinoids. To date, we have already made significant progress in Portugal, as we achieved GACP certification of our Portuguese operations in the first quarter of 2021 and generated our first revenues out of the country in April 2021. As regulatory reforms continue to progress throughout the developed world, we remain confident in our position to leverage the infrastructure of shipping agreements, certifications, and strategic partnerships that we have meticulously cultivated around the world.
“Charting our path to success, we established a partnership with the European pharmaceutical company, Ethypharm, to enable our entry into the strictly regulated German market. We have also continued to expand our distribution footprint in Latin America, and we will continue to nurture these significant relationships in the coming months.
“We are encouraged by the progress we have made thus far, while recognizing that it will be a gradual journey to realizing the full economic potential of our operating model. Though the pace of global regulatory developments remains uneven, the underlying long-term opportunity for our business remains strong. We will continue to execute with maximum efficiency in our existing markets and reinforce the foundation for our continued expansion efforts around the globe. I could not be prouder of the hard work and accomplishments the team has achieved thus far and I am most enthusiastic about what lies ahead for the rest of 2021 and beyond.”
First Quarter 2021 Financial Results
Revenue in the first quarter of 2021 increased 19% to $3.5 million compared to $2.9 million for the same period in 2020. This was primarily driven by continued significant growth in cannabinoid sales, which have further expanded as the Company pursues global business development opportunities and enters new markets.
All-in cost per gram of dry flower in the first quarter of 2021 was $0.13 per gram, an improvement from $0.15 in the year-ago period, due largely to lower operating costs in Colombia, partially offset by production costs associated with the ramp up of the Company’s early-stage operations in Portugal.
Gross profit in the first quarter of 2021 increased slightly to $2.2 million compared to the same period in 2020. Gross margin in the first quarter of 2021 was 64% compared to 74% for the same period in 2020. The decrease in gross margin, as anticipated, was driven by growth in the cannabinoid segment, where margins have yet to fully mature relative to the non-cannabinoid segment.
Operating expenses in the first quarter of 2021 decreased to $10.0 million compared to $11.3 million in the same period in 2020. The improvement was due to cost control measures established in 2020 and lower marketing and selling expenditures, partly offset by an increase in share-based compensation, insurance and professional fees related to being a public company.
Net loss was $13.8 million. Net loss (excluding $4.9 million loss on remeasurement of warrant liability) in the first quarter of 2021, improved to $8.9 million compared to $10.2 million. The improvement was driven by lower operating expenses during the quarter as a result of cost control measures initiated in the second quarter of 2020, partially offset by the aforementioned increase in public company expenses.
Adjusted EBITDA in the first quarter of 2021 improved to $(5.4) million compared to $(6.7) million for the same period in 2020. The improvement was primarily driven by the previously discussed improvement in gross profit and reductions in operating expenses.
Cash, cash equivalents and restricted cash was $69.2 million at March 31, 2021, compared to $79.5 million at December 31, 2020. This is primarily attributed to anticipated operating losses and capital investments in the quarter, partially offset by $1.4 million in warrant exercise proceeds and a $1.2 million Portuguese project financing.
2021 Outlook
Based on momentum achieved in the first quarter on expansion, execution on the revenue pipeline and cost containment measures, the Company is pleased to announce it is on track to achieve its 2021 plan and reiterates its previously disclosed 2021 full year guidance of $17 million to $20 million in revenue, gross margin of approximately 61%, and adjusted EBITDA in the range of $(24) million to $(26) million, inclusive of costs associated with being a public company, and capital expenditures of approximately $10 million.
Conference Call
Clever Leaves will conduct a conference call today at 5:00 p.m. Eastern time to discuss its results for the first quarter ended March 31, 2021.
Clever Leaves management will host the conference call, followed by a question and answer session.
Conference Call Date: May 17, 2021
Time: 5:00 p.m. Eastern time
Toll-free dial-in number: 1-877-300-8521
International dial-in number: 1-412-317-6026
Conference ID: 10156553
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at (949) 574-3860.
The conference call will be broadcast live and available for replay here.
A telephonic replay of the conference call will also be available after 8:00 p.m. Eastern time on the same day through May 24, 2021.
Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 10156553
