Greenlane Holdings, Inc. (NASDAQ:GNLN) announced leadership changes and plans to capitalize the business and accelerate the company's path to profitability, as well as provided preliminary financial results for its fourth quarter and full year ended December 31, 2021.
Reducing Cost Structure & Increasing Liquidity
Greenlane revealed that it has completed a reduction in force - as part of its ongoing cost-cutting initiatives to accelerate the path to profitability – which is expected to result in roughly $8 million in annualized cash compensation cost savings.
In addition, the company is also poised to reduce its facility footprints worldwide and adjust its go-to-market strategy significantly to reduce its operating costs and enhance liquidity.
The plan is expected to help generate liquidity in excess of $30 million if all measures described above are implemented successfully.
Leadership Team Changes
Greenlane also revealed that Adam Schoenfeld, the company’s co-founder and board member opted to step down as chief marketing officer, effective March 31.The company sad that it will not seek to fill the vacant role at this time.
In the meantime, Craig Snyder - an experienced leader with over 20 years of success in driving growth and development of high tech and emerging technology organizations - agreed to serve as the company’s new chief commercial officer.
Snyder has held senior leadership positions at PepsiCo, Inc. (NASDAQ:PEP) and Citibank, with executive leadership experience in two successful startup to Nasdaq IPO success stories - Go2Net & Marchex - as well as significant experience with large scale M&A integration and restructuring.
His day-to-day responsibilities will be focused on managing the commercial side of Greenlane's business, from developing the company's go-to-market strategies to bolstering its sales initiatives as well as on digitally transforming the company's consumer goods strategy,.
Preliminary Estimated & Unaudited Q4 & FY 2021 Financial Highlights
- Reiterates its expectation of net sales to be between $55.5 million and $56.5 million for the fourth quarter and between approximately $165.5 million and $166.5 million for the full year.
- Increases its expectation of gross margins to be between 20% and 22% (previously between 18% to 20%) for the fourth quarter and reiterates its expectation of gross margins to be between approximately 15% and 16% for the full year.
- Adjusted SG&A is expected to be between approximately $20 million and $22 million for the fourth quarter, and between $75 million and $77million for the full year.
- Net loss is expected to be between approximately $11 million and $13 million for the fourth quarter, and between approximately $53 million and $55 million for the full year.
- Adjusted EBITDA is expected to be a loss of between approximately $5.5 million and $7.5 million for the fourth quarter. For the full year, Adjusted EBITDA is expected to be a loss of between approximately $21 million and $23 million.
- Total cash balance as of December 31, 2021 is expected to be approximately $12.9 million.
- Working capital is expected to be between approximately $53 million and $55 million as of December 31, 2021.
Management Commentary
"We recognize the importance of achieving profitability, especially in this current inflationary climate, which has seen COVID-related supply chain disruptions increase the expenses and working capital needs of virtually every industry," Nick Kovacevich, CEO of Greenlane, said. "Now is the time to take our cost-cutting initiatives to the next level.”
“We are pursuing several initiatives to capitalize the business and increase liquidity, while limiting dilution to our shareholders,” Kovacevich added. “ This includes selling our corporate headquarters building and non-core assets; discontinuing and disposing of slow-turning, low-margin inventory; and securing an asset-based loan that can support the company's working capital needs.”
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