Lowell Farms Inc LOWLF, a California-based cannabis company with advanced production capabilities, reported Thursday its audited financial and operational results for Q4 and the full year 2023.
Q4 2023 Financial Highlights
- Revenue decreased 19% to $7.5 million, as compared to $9.3 million for Q4 2022.
- Net loss was $13.1 million, compared to a net loss of $11.1 million for the quarter ended December 31, 2022.
- Adjusted EBITDA was negative $4.1 million, similar to the negative $4.1 million for the same quarter last year.
- Gross profit for the quarter was not included in the earnings report.
Full 2023 Financial Highlights
- Revenue was $28.3 million, down 35% from the $43.5 million for the year ended December 31, 2022.
- Net loss was $37.3 million, compared to net loss of $24.6 million for FY 2022.
- Adjusted EBITDA was negative $7.7 million compared to negative $9.5 million for the year ended December 31, 2022.
- Gross profit was negative $7.4 million, compared to the negative $1.8 million from the previous fiscal year.
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Amidst a turbulent market, the company reported a year-over-year decline in annual net revenue by 35%, tallying $28.3 million, down from the previous year. The fourth quarter saw a 19% decrease in net revenue to $7.5 million, against the backdrop of strategic realignments aimed at revitalizing its operational framework.
A detailed financial dissection uncovers a gross loss of $7.4 million for the year, translating to a negative gross margin of 26.3%. This was largely attributed to the company’s strategic exit from its cultivation facility, reflecting on its $17.6 million operating loss. The quarter concluded with a net loss of $13.1 million, albeit showing signs of resilience with a reduced net loss from the preceding quarter’s $20.2 million. Adjusted EBITDA stood at negative $4.1 million for the quarter, mirroring the prior year’s figure, albeit marking an improvement from the third quarter’s negative $1.3 million.
Operational And Market Adaptations
2023 unfolded with notable operational shifts, including the termination of the Zabala Road Lease and the appointment of Jamie Schniedwind as CFO, reflecting Lowell’s strategic pivot. The cultivation sector faced a yield decrease, while Lowell Farm Services (LFS) saw a revenue jump, indicating a shift towards processing and third-party collaborations.
CEO Outlook
Lowell Farms’ co-founder and CEO Mark Ainsworth remains optimistic. “As we move through 2024, Lowell stands today as a restructured company. The challenges of the past year have been formidable, but our team’s resilience and determination have propelled us through," Ainsworth stated.
"Our strategic decisions have now positioned us favorably and we expect to see a positive impact on the company in the quarters ahead. With our focus sharpened and our foundation strengthened, we are grateful to remain in this ever-evolving landscape that is the California cannabis industry.”
LOWLF Price Action
LOWLF's shares were trading 7.89% lower at $0.14 per share at the time of this writing around 11 AM ET Thursday.
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