Clever Leaves Holdings Inc. (NASDAQ:CLVR) (NASDAQ:CLVRW) Q3 2022 revenue was $3.3 million, a 18% decrease compared to $4.0 million in Q3 2021.
Q3 2022 vs. Q3 2021
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Gross profit was $280,000, which included a $1.7 million inventory provision, compared to $1.9 million, which included a $0.7 million inventory provision.
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Gross margin, which included such inventory provision of $1.7 million, was 8.5% compared to 47.9%, which included such inventory provision of $0.7 million.
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Net loss was $20.2 million compared to a net income of $1.0 million. This was driven primarily by a $19.0 million intangible asset impairment charge recorded during the quarter, and partially offset by approximately $6.7 million in deferred tax liability. Net income in the prior year period includes a $9.1 million gain on remeasurement of warrant liability, a $3.4 million gain on debt extinguishment, and $0.5 million in interest and amortization of debt issuance cost.
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Adjusted EBITDA improved 10% to $(5.4) million compared to $(6.0) million.
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Cash, cash equivalents and restricted cash were $17.6 million as of September 30, 2022 as compared with $37.7 million as of December 31, 2021. The company has largely eliminated its debt, reducing outstanding debt levels by approximately 93% since the beginning of the year.
“We worked diligently to continue progressing our growth strategy by improving the quality of our products and enhancing our commercial capabilities, while reducing operating costs across all our subsidiaries,” stated Andres Fajardo, CEO of Clever Leaves. “We drove 12% year-over-year growth in our cannabinoid revenues as we worked to meet evolving product quality and regulatory requirements across our core markets, and we have driven 100% growth in the segment year-to-date. Within our non-cannabinoid segment, we experienced some one-time disruptions related to inventory reductions across multiple channels.”
“However, we believe that the bulk of these inventory adjustments are now complete and expect a rebound in sell-through activities through expanding SKU counts and store expansion within our mass retail category. Though these dynamics across both business segments pressured our third quarter top-line performance, we have continued to strengthen our operational foundation by optimizing our flower product in Portugal, preparing for flower exports from Colombia, and further supporting our ongoing cost reductions and restructuring work. We believe our agility, strategic advancements, and commitment to pharmaceutical quality will allow us to further improve our leading positioning as a world-class multinational operator,” continued Fajardo.
2022 Outlook Update
Due to the impact of sales cycle disruptions across both segments of the business during the third quarter, Clever Leaves has revised its full year 2022 revenue outlook. The company now expects its 2022 revenue to be within the range of $17.0 million to $17.7 million, compared to its prior forecast of between $20 million and $25 million.
The company is reiterating its previously stated full year adjusted gross margin outlook, which is expected to range between 50% and 55%. Clever Leaves has also narrowed its expected range for full year adjusted EBITDA to between $(23) million and $(22) million, compared with its previously stated range of between $(23) million and $(20) million. As Clever Leaves continues to make progress on improving capital efficiency, the company now expects its 2022 capital expenditures to be approximately $1.5 million, compared to its previously stated range of between $2 million to $3 million.
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