Agrify Corp AGFY, a cultivation and extraction solutions provider for the cannabis industry, announced its financial results for fiscal year 2022 and the first quarter of 2023, reflecting a challenging phase marked by strategic restructuring and innovation.
Q1 2023 Financial Highlights
- Revenue was $5.8 million, a strong decrease compared to $26.0 million for the first quarter of 2022.
- Net loss was $10.3 million, or $9.63 per diluted share, compared to net income of $1.8 million, or $13.79 per diluted share for Q1 2022.
- Adjusted EBITDA came in at a loss of $6.96 million, a slight increase compared to the loss of $6.1 million reported in the same quarter last year.
- Gross profit for this period was $1.0 million, compared to $4.2 million in the same quarter of the previous year.
- Operating expenses decreased to $8.6 million, contributing to a reduced operating loss of $7.6 million.
FY 2022 Financial Highlights
- Revenue was $58.3 million, a decrease of 2.7% compared to $59.9 million for the fiscal year ended December 31, 2021.
- Net loss was $188.2 million, or $902.19 per share, compared to a net loss of $32.5 million, or $340.75 per share, for FY 2021.
- Adjusted EBITDA came in at a loss of $110.7 million, a strong increase compared to the $19.98 million reported for FY 2021.
- Gross profit for FY 2022 was a loss of $31.8 million, a downturn from a profit of $5.2 million in FY 2021.
- Operating expenses soared to $161.5 million, primarily due to impaired goodwill and bad debt expenses, resulting in an operating loss of $193.3 million.
Notable developments include the launch of the Cannabeast 13 Distillation System and the PX30 Hydrocarbon Extraction System, catering to the evolving demands of the cannabis industry. In the cultivation division, Agrify’s collaboration with Nevada Holistic Medicine and Denver Greens LLC demonstrated successful commercialization, with new customer signings indicating potential growth.
CEO Outlook
"In 2023, we continued to make progress on our turn-around," said Raymond Chang, chairman and CEO of Agrify.
"After a difficult FY 2022, we have reexamined our business model, explored our strategic options, and reevaluated our product offerings to better serve our customers. In terms of the strategic changes, our top priorities have been: (1) restructuring our debts; (2) reducing our costs and headcount; (3) improving our product offerings; and (4) getting some of our key products CE-certified for the international markets. We believe that we have made strong progress in all four of these areas and will continue to prioritize these efforts. The historical acquisitions of the four extraction companies continue to add value, as the combination of Agrify, Precision Extraction Solutions, Pure Pressure, Lab Society, and Cascade Sciences allows us to offer a comprehensive portfolio of cultivation and extraction technologies to our customers. Now that the four acquired companies are completely integrated into Agrify, we believe the synergies are showing and will become even more robust in 2024."
These financial results highlight the challenges faced by Agrify, marked by cost-cutting measures and efforts to restructure debts and liabilities in response to industry headwinds.
AGFY Price Action
AGFY's shares were trading 0.65% lower at $1.52 per share at the time of this writing around noon ET Tuesday.
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