Clever Leaves Reports First Quarter 2022 Results: Revenue Increases 50% To $5.2M

Clever Leaves Holdings Inc. CLVR CLVRW, a leading multinational operator and licensed producer of pharmaceutical-grade cannabinoids reported late Thursday its financial and operating results for the first quarter ended March 31, 2022.

First Quarter 2022 Summary vs. Same Year-Ago Quarter

• Revenue increased 50% to $5.2 million compared to $3.5 million. Cannabinoid revenue increased 195% to $2.0 million compared to $0.7 million, and non-cannabinoid revenue increased 15% to $3.2 million compared to $2.8 million.
• All-in cost per gram of dry flower increased to $0.35 compared to $0.16. The change in cost was attributed to the ramping of pre-commercial operating expenses ahead of expected revenue at the Company’s recently completed greenhouse expansion and post-harvest facility in Portugal.
• Gross profit was $2.0 million, which includes a $0.8 million inventory write-down, compared to $2.1 million, which includes a $0.2 million inventory write-down.
• Adjusted gross profit (a non-GAAP financial measure), which excludes such inventory write-down, increased 25% to $2.9 million compared to $2.3 million.
• The gross margin, which includes such inventory write-down of $0.8 million, was 39.0% compared to 61.5%. Adjusted gross margin (a non-GAAP financial measure defined and reconciled herein), which excludes such inventory write-down, was 55.2% compared to 66.4%.
• Net loss in the first quarter of 2022 increased to $16.1 million compared to $13.8 million for the same period in 2021, driven primarily by a $4.0 million restructuring expense, offset by an increase in loss due to a $1.7 million debt discount write off and loss on debt extinguishment of $2.3 million due to extinguishment of debt as offset by a gain on remeasurement of warrant liability.
• Adjusted EBITDA  was $(6.7) million compared to $(5.5) million predominantly due to increased cost of sales including an inventory write-down and nominally higher R&D expense related to positioning for Colombian dried flower export as well as sales and marketing expenses.
• Cash, cash equivalents, and restricted cash increased to $44.8 million on March 31, 2022, compared to $37.7 million on December 31, 2021. The increase was attributable to net proceeds raised from the Company’s at-the-market stock offering during the quarter.

Comments From Management

“Our revenue increased 50% year-over-year to $5.2 million, reflecting robust growth in our cannabinoid revenues across our target markets, as well as continued performance strength in our nutraceuticals business,” said Andres Fajardo, CEO of Clever Leaves in a press release.

“After narrowing our 2022 commercial focus to a core group of key markets—comprising Australia, Germany, Brazil, Israel, and the U.S.—we have already made solid progress activating and expanding our existing agreements, as well as adding new partnerships and growth initiatives, in those markets,” continued Fajardo.

Fajardo noted Clever expanded its distribution pathways in the U.S. and Germany by forming a research-oriented partnership with Biom Therapeutics in the U.S., becoming a fully-licensed medical cannabis distributor in Germany.

‘Aggressive Actions’

Clever completed a global workforce reduction. This reduction is expected to generate cash savings of $2.0 million in 2022 and $4.0 million in subsequent years. “We took aggressive actions to improve our balance sheet and our underlying cost structure, which we expect will yield cash savings in excess of $4.0 million per year. These initiatives allow us to operate from a leaner foundation as we strengthen our distribution network and capabilities,” Fajardo stated.

Reiterated 2022 Outlook and Strategic Growth Objectives

Based on current commercial momentum across its target markets, Clever Leaves reaffirms full-year 2022 revenue to be within the range of $20 million and $25 million, with adjusted gross margin expected to range between 50% and 55%.

The Company also expects adjusted EBITDA to range between $23 million and $20 million. In addition, Clever Leaves expects approximately $2 million to $3 million of annual capital expenditures.

Photo by Matteo Paganelli on Unsplash.