Lowell Farms Inc. (the “Company”) (CSE: LOWL; OTCQX: LOWLF), a California-born innovator in cannabis cultivation and maker of the legendary brand Lowell Smokes, announces unaudited revenue and operating results for the first quarter and fiscal year (ended March 31, 2022). All figures stated are in US Dollars.
First Quarter Financial Highlights:
- Revenue generated for the three-month period ended March 31, 2022 was $12.4 million; an increase of 13% from Q1 2021.
- CPG revenue increased 10% sequentially, primarily due to increases in pre-roll and packaged flower revenue.
- As expected, Lowell Farm Services (LFS) revenue declined $2.8 million from fourth quarter seasonal high levels.
- Gross margin as reported was 12.7% in the first quarter compared to negative 12.3% sequentially and negative 13.4% year over year.
- Operating expenses were $4.0 million or 33% of sales for the quarter, compared to $6.3 million or 42% of sales in the fourth quarter last year and $4.2 million or 38% of sales in the first quarter last year, reflecting cost reductions realized in the current quarter.
- The operating loss in the first quarter was $2.5 million compared to an operating loss of $8.2 million sequentially and an operating loss of $5.7 million year over year, reflecting the favorable impact from increased sales, cost reductions and efficiencies.
- Net loss for the first quarter was $4.1 million compared sequentially to a net loss of $10.0 million, which compares to a net loss of $6.7 million in the first quarter last year.
- Adjusted EBITDA in the first quarter was negative $0.9 million compared sequentially to adjusted EBITDA of negative $3.6 million and negative adjusted EBITDA of $4.6 million year over year. Adjusted EBITDA is a non-GAAP financial measure. See “Use of Non-GAAP Financial Information” below for further information and a detailed reconciliation to Net Loss, the closest comparable GAAP measure.
| Revenue Summary ($’s in ‘000) |
| Q/Q | Q/Q | |||||||||
| Dec 31, 2021 | March 31, 2022 | % Change | $ Change | |||||||
| CPG Revenues | $ | 8,219 | $ | 9,077 | 10 | % | 858 | |||
| Bulk Product | $ | 2,609 | $ | 2,259 | -13 | % | (350 | ) | ||
| LFS | $ | 3,153 | $ | 350 | -89 | % | (2,803 | ) | ||
| Out-of-State Licensing | $ | 1,092 | $ | 723 | -34 | % | (369 | ) | ||
| Net revenue | $ | 15,073 | $ | 12,409 | -18 | % | (2,664 | ) |
“For the second quarter in a row, Lowell Farms has taken the lead as California’s largest combined seller of packaged flower and all-flower pre-rolls in California per Headset,” says Co-Founder and Chief Executive Officer Mark Ainsworth. “You get there by selling a consistent, quality product that consumers have learned to trust and that is exactly what we sell.
“We also continue to make great strides with our out-of-state licensing partnerships, rising to become one of the top players in both of those markets for pre-rolls. That is a strong statement about the power of that brand.”
Subsequent events to the first quarter ended March 31, 2022:
- Lowell Herb Co. Expands Award-Winning Cannabis Brand with All-New Products, April 18, 2022
- Lowell Farms Inc. Becomes Exclusive Distributor of Zippo Products for California Cannabis Dispensaries, April 20, 2022
Operational Highlights and Ongoing Initiatives:
The Company’s focus remains on key initiatives to drive sustainable profitable growth as well as working closely with governing bodies to ensure effective changes in the cannabis industry taxation system that would make higher profitability possible.
