Greenlane Holdings, Inc. (NASDAQ:GNLN), one of the largest global sellers of premium cannabis accessories, packaging and specialty vaporization products, reported its financial results for the fourth quarter and full-year ended December 31, 2021.
Fourth Quarter Financial Highlights
- Total revenue in the fourth quarter of 2021 increased 54.4% YOY, to $56.0 million.
- Gross profit was $12.5 million, or 22.3% of net sales in the fourth quarter of 2021, compared to $6.2 million, or 17.0% of net sales in the same quarter of 2020.
- Sales of Greenlane Brands increased 16.9% to $7.4 million, or 13.2% of total revenue, in the fourth quarter of 2021 compared to $6.3 million, or 17.5% of total revenue in the same quarter of 2020.
Full-Year Financial Highlights
- Total revenue for 2021 increased 20.1% YOY to $166.1 million. The increase was primarily driven by the KushCo merger, and partially offset by lower sales of lower-margin third-party brands, as part of the Company's continued focus on shifting away from these product categories and focusing more on higher-margin proprietary Greenlane Brands.
- For the full year, gross profit was $27.7 million, or 16.7% of net sales in 2021, compared to $22.8 million, or 16.5% of net sales in 2020.
- Sales of Greenlane Brands increased 52.3% to $34.8 million, or 21.0% of total revenue, in 2021 compared to $22.8 million, or 16.5% of total revenue, in 2020.
- As of December 31, 2021, cash totaled $12.9 million, and working capital was $53.8 million in comparison to working capital of $54.2 million as of December 31, 2020.
Growing in-house brands: a 'key focus'
"2021 was one of the most pivotal years in Greenlane's 17-year history," said Nick Kovacevich, CEO of Greenlane. "Not only did we complete our transformational merger with KushCo, creating the industry's leading ancillary cannabis company, but we also strengthened our Greenlane Brands portfolio with the acquisitions of Eyce and DaVinci (...) While the overall cannabis industry is facing headwinds in the form of inflation, supply chain disruptions, and stock price declines, we are positioning ourselves to accelerate our path to profitability.”
"Net sales for the quarter grew 54% year-over-year to $56.0 million, which included a full quarter of KushCo sales for the first time. Growing our in-house brands remains a key focus, as it helps expand our strategic moat, margins, revenue, and profitability, as we look to become the leading house of brands in the ancillary cannabis industry," added the CEO.
"We expect continued growth in this core part of our business and expect our 2022 Plan to help us achieve positive adjusted EBITDA by Q3 of 2022," concluded Kovacevich.
The "2022 Plan"
Greenlane implemented a new strategic plan to accelerate the path to profitability and capitalize on the business in a non-dilutive manner by reducing headcount and facility footprint, disposing of non-core assets, discontinuing distribution, selling lower-margin 3rd-party brands, and securing an asset-based loan to support the Company's long-term working capital needs.
The Company expects the 2022 Plan to:
- Reduce adjusted SG&A by nearly 40% on a quarterly basis to between approximately $14 million and $16 million in Q3 2022, down from $26.6 million in Q3 2021.
- Help the Company achieve positive adjusted EBITDA by Q3 2022.
- Generate liquidity in excess of $30 million if all measures are successful.
Image By Ilona Szentivanyi.
