The Green Organic Dutchman Hits Record Quarterly Net Revenues Of $8.93M, Here Are The Details

The Green Organic Dutchman Holdings Ltd. TGOD TGODF, released its financial results for the quarter ended June 30, 2022, revealing record quarterly net revenues of CA$11.63 million ($8.93 million), a 43% increase from Q2 2021, and a 10% increase from Q1 2022.

The quarter-over-quarter increase in revenue is in line with the company's forecast and can be mainly attributed to the launch of premium flowers (Cherry Mints & Maple Kush), launch of Pre-rolls, and Highly Dutch Organic flower continuing to gain traction in 2022.

Q2 2022 Financial Highlights

• Gross profit (before changes in fair value) in Q2 2022 was CA$2.49 million.

• Gross profit margin of 21%.

• General and administrative expenses were CA$4.90 million for the three months ended June 30, 2022, an 8% decrease in comparison to CA$5.34 million for Q2 2021.

• Adjusted EBITDA loss was CA$4.27 million for Q2 2022, representing an 80% improvement of CA$17.10 million compared to Q2 2021. This was largely as a result of the company's increase in revenue and continued cost cutting initiatives.

• As of June 30, 2022, the company had a total cash position of CA$4.67 million, including CA$1.47 million in restricted cash.

Other Highlights

• In May 2022, the company announced that it had completed the sale of the Puslinch Facility building improvements for CA$3.0 million and in conjunction extinguished two shareholder promissory notes totaling CA$900,000.

• On April 29, 2022, the company announced that the revolver loan was amended and restated, whereby the lender agreed to:

  • Increase the overall revolver loan limit from CA$30 million to CA$34 million, through providing an additional advance of CA$4 million.

  • Increase the term portion of the revolver loan from CA$20 million to CA$24 million.

  • Amend the EBITDA financial covenant to take effect on June 30, 2022.

  • Remove the covenant requiring a CA$4 million prepayment through funds raised by the sale of HemPoland.

  • Introduce certain prepayment fees in the combined amount of 2% of any prepayments, subject to the satisfaction of various conditions set out therein.

• Since October 2021, the company has been engaged with advisors for the sale of company's entity in Poland, HemPoland S.p.a. Z.o.o. ("HemPoland"), which was deemed non-core to future operations and the company strategy. The company received a non-binding competitive offer subsequent to Q2 2022. The company anticipates completing the sale of HemPoland by the end of September 2022.

"Our momentum continued in Q2 2002, including another record month in June. Quarterly growth was achieved by several initiatives, including the first harvest from the Valleyfield facility, the launch of Organic Cherry Mints premium flower, continued expansion in distribution, increasing key account agreements, and a continued commitment to the TGOD promise of quality, consistency, and high THC products," stated Sean Bovingdon, CEO of TGOD.

"In addition to continuing to increase our retail distribution by investing in building relationships with the retail cannabis chains, we are preparing for future growth with new and unique strains and products. We continue to have strong conviction in our products and believe they can provide further penetration in key markets to drive our revenue potential. In Q2 our success in Ontario and in roads into growth markets in western Canada have been vital drivers of our financial performance. We remain focused on quality and consistency, as well as continued cost discipline and execution to build a strong and sustainable organization and brands that consumers love."

Photo by Giorgio Trovato on Unsplash

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