Greenlane Holdings, Inc. (NASDAQ:GNLN) Q2 2022 revenue increased 15% to $39.9 million, compared to $34.7 million in Q2 2021.
Financial Results
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Gross margins were 20.3% during the quarter versus 26.1% during the second quarter of 2021.
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Net loss attributable to Greenlane Holdings, Inc. was $12.1 million, or $2.27 per share, compared with a loss of $3.0 million, or $3.23 per share, in the first quarter of 2021.
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Adjusted EBITDA loss for Q2 2022 was $5.8 million or $1.09 per share compared to a loss of $3.7 million or $3.92 per share for Q2 of 2021.
Plan to Sell the Company's Packaging Business
The company plans to actively explore opportunities to sell its packaging business and reinvest in the company's consumer brands business. If a transaction or series of transactions are consummated, the sale is also expected to significantly reduce the company's working capital and warehousing requirements.
Promotion of Craig Snyder
The company promoted Craig Snyder, chief commercial officer, to president. Snyder has been responsible for all commercial activities since March 2022.
Sale of Non-Core Assets and Cost Cutting Initiatives
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Disposing of other non-core assets:
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On July 19th, 2022, the company monetized its interest in Vibes Holdings, LLC, for $5.3 million in cash, or an enterprise value of approximately 1X VIBES trailing 12 months revenue.
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In July 2022, the company sold its Azarius retail business in Amsterdam.
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Discontinuing sales of lower-margin 3rd-party brands and selling existing inventory:
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The company recently completed its strategic SKU rationalization efforts, establishing a single comprehensive product catalog, which is now available at the company’s website.
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In 2022, the company successfully generated over $2 million in sales and dispositions of previously reserved excess & obsolete inventory.
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Cost- cutting initiatives:
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Company also executed several cost-cutting initiatives resulting in expected savings of over $1.4 million annually, including terminating existing leases for facilities resulting in annual savings aggregating approximately $900,000 and restructuring a third-party vendor contract reducing working capital requirements and eliminating over $500,000 in annual costs.
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The company also secured a return of $1.35 million of its U.S. Customs and Border Protection bond.
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Outlook
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The company reaffirms its belief in raising a total of $30 million of non-dilutive capital under the liquidity plan
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The company adjusts expectation of achieving adjusted SG&A reductions to $14 million - $16 million by Q3 of 2022 to now $16 million - $18 million by Q3 to account for higher-than-expected shipping expenses
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The company withdraws its guidance of achieving positive adjusted EBIDTA in Q3 2022
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