22nd Century Group, Inc. XXII reported its third quarter earnings results on Monday for the three months ended September 30, 2023, revealing an 8.2% year-over-year drop in net revenue to $17.8 million.
The Buffalo-based company reported that sales, general and administrative expenses decreased to $11.2 million. However the sum doesn’t reflect the cost reduction initiative announced for the second half of 2023, which is expected to yield at least $15 million in annualized operating cost reductions, which began implementation in late August, the company said.
Last month, 22nd Century reported it reduced the outstanding principle of its senior secured credit facility from roughly $22.1 million to approximately $14 million as part of an amendment and waiver process with its lenders.
Q3 2023 Financial Highlights
- Revenue from hemp/cannabis-related products was $9.9 million, while revenue from tobacco-related products was $7.9 million.
- Gross loss amounted to $2 million, as compared to gross profit of $0.6 million in the prior year period.
- Total operating expenses for the third quarter of 2023 were $69.5 million, including approximately $57 million of non-cash goodwill, impairment and restructuring charges, compared to $15.9 million in the prior year quarter.
- Operating loss was $71.5 million, compared to $15.3 million in the prior year period, reflecting the approximately $59 million in non-cash restructuring, impairment and goodwill charges incurred in the third quarter of 2023.
- Adjusted EBITDA came in negative at $11.2 million, compared to the prior year period loss of $11 million.
- As of Sept. 30, 2023, the company held $10.4 million in cash, cash equivalents and restricted cash.
XXII Price Action
22nd Century Group’s shares traded 3.98% lower at $0.484 per share during the pre-market session on Monday morning.
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