Earnings call transcript Q1 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and welcome to the Lowell Farms First Quarter 2023 Financial Results Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Mr. Bill Mitoulas, Investor Relations with Lowell Farms. Please go ahead.

Bill Mitoulas

to results call of for welcome Farms discuss XXXX. and financial Inc.'s the afternoon, the to conference Lowell Good first quarter

Risk are the expectations. expectations make may to forward-looking of and Form forward-looking in to in Before you These uncertainties obligation filed forward-looking outlined our does call, let that please based present in Please statements. XX listing be forward-looking we any These subject Farms the course on as Any differ future. revise outlook to factors. are during and current light Lowell is should may we results conference management Factors are not of materially SEDAR. cause management also of me our Inc. undertake section risks any and statements actual on note of these statements from this any statement EDGAR that filed begin, the that statements remind risks that considered on today,

includes Chief This as Farms; Chief well as Ann for Shure. Executive Officer; Co-Founder Lowell the Mark Ainsworth, Board Officer, and call Brian Financial Chairperson of Lawrence,

We The will go into portion the the in quarter this into call. performance, operations provide company's results the the analyst detail later financial strategy. will company's call questions to be for insight open of to Q&A about further go-forward and

recorded call page. our be to website those conference before its archived call Investor For will please happen conclusion, advised you leave who this of be that on may Relations and our

to And go ahead. now, Ann, Ann. over I'll the call hand

Ann Lawrence

you for joining you, Lowell thank earnings the Thank Bill, call. Farms and

efficiencies cost-cutting restructuring work and Lowell entire to measures the and for efforts drive efforts. thank hard continue ongoing to their like I'd First, our as we through operational team

these trend quarter. driving through see quarter to second in the efforts year the operations and We the first of expect streamlined of and continued growth continue to sustainable the results of this efforts

we to property the continue We alternatives, Lowell including with intent strategic assets a announced of this move of year. in our sell forward to March intellectual number

finalize had during as and are as While our earlier to with this the transaction calls, occur the noteholders closing partners quarter. we we well to brand an anticipated anticipate the working with out-of-state

to to will of in As all measured business. advantage a growth environment, market our us California allow continue navigate aspects the challenging of platform take and believes opportunities company we drive industry across our

QX turn I'll Mark, that, please to With over ahead. who operational go over Mark, go will it results.

Mark Ainsworth

QX Co.'s XXXX. launched Good quarter share everyone, our has you, Ann. the stores, would in has jump product afternoon, the maintained in the the I by made. XXX of presence QX thank same store XX's and earnings pre-roll like QX end ended and and Herb retail Lowell and CPG, to progress being company the call into In by

an quarter. In to an XXX,XXX, sales achieved the previous QX the company XX's highest approximately had XXX,XXX, XXXX saw approximately XXXX, growth while the in in increase milestones at We approximately over one QX month-to-date reached XXX,XXX. in revenue XX% where sales March

QX. is and quarter-over-quarter. category provide XX% remains The in offerings to team incremental launch The The SKUs Smokes, innovation the quarter, remained providing increase experienced the Lowell infused was quarter-over-quarter plans to product quarters dispensary new flat generated sales in XXX,XXX in black pre-roll coming X% revenue. Lowell, packs down committed for Overall, the to but product additional approximately pack black Lowell partners an which year-over-year. in to a under offerings company During the the pre-roll. decline sales [ph] introduced Classic however,

channels. QX by of to was from approximately $X.X the company's million, the roughly a reduced brands, QX both XXXX biomass continued cultivation the primarily move strategy CPG revenue, harvest sales flower winter XX%. packaged owned A and $X.X CPG yields to in dropped decline portfolio, lower Regarding to while revenues decreased resulting primarily XXXX through XXX,XXX revenue around consisting contributed revenue at million.

the quarter-over-quarter. in XXX,XXX XX% the for for revenue increased by QX, growth distributed a approximately Revenue with XX,XXX, approximately brand

sales, sales the pounds team. of the sales $X.X from strategy revenues redirecting for million. CPG the of This allowed As biomass bulk for X,XXX company's sale quarter of bulk strategy finished around cultivation, approximately involves a for the of flower the to generating portion from

bulk $XXX previous conditions, the sales market compared on per for per price approximately pound possible This reaching during per optimize sold. pound biomass team revenue represents per to by the $XXX XX%, quarter's returns. average period X% in a The continues decline sold quarter-over-quarter of and current ensuring The price the to pound. XX% based in total best increased pounds total pound the the

Out-of-state decline revenues QX strategies. around XXX,XXX experienced be including approximately factors, in XXXX. This to our and various expansion XXXX to can QX in a decrease fluctuations in approximately licensing of out-of-state attributed from market adjustments XX% XXX,XXX

markets. royalties QX to quarter. strides XX%, previous continued to the challenges, In Despite brand XXXX, XXX,XXX also compared drop new a to make of saw amounting about our in these

quickly in as the brand the the top-selling in pre-rolls Arizona Sunday products of demonstrates our launch account, accomplishment appeal a high-quality became our in flagship This even notable success of markets. Goods. was Lowell's Our our and strength product competitive

figure XX,XXX of market. highlights the roughly product During California, offerings our continued Smokes across represents markets, packs number state the of in all of for period, and Classic a the from approximately core units, prior units slight the excluding XX,XXX sold sold our Lowell demand while reached outside the decrease same total period this California

part first Consequently, Monterey California. the County, operations, cultivation New occurred Central brought and disruption throughout on Eve, located weather river to national epicenter Year's flooding County, QX the the the events, faced significant with the causing Beginning making Monterey Regarding an several widespread XXXX headlines. atmospheric region Coast. conditions of unprecedented northern of in

including and and conditions company's during region, the to impact Lowell challenges and agricultural to weather, evaluating weather transportation efforts. influenced output quality consider heavy area, had by quarter. is when as product flower Farms' yields, operations it These agricultural that within the the factors is in an heavily important the posed these the crop on extreme overall likely rainfall productivity cultivation The flooding

we primarily lack the were we was that few one during of the several for lucky of sunshine experience ones in infrastructure to power did the yields that due lost had lower instances remained days. a where an While intact, quarter,

this year-over-year. delivered XX% X,XXX flower, dedication to a the In and pounds our we exceptional year, previous our safety Despite decrease of from X,XXX resulting work down in in of operations. pounds cultivation and period, cultivated and hard the team resilience, demonstrated ensure integrity

during on continued and in facility efficiencies decrease attrition have in County. labor Monterey compared well processed within XX,XXX Farm XXXX. of period as is wet third-party reduced seasonality the Regarding quarter. functions XX,XXX approximately weight pounds as to resulted biomass in Lowell the processing The QX Services, to the attributed focus costs The company's pounds the

to saving In initiated the XXXX, QX QX cost consecutive we that decline XXXX revenue. in in continue response into measures

will As efforts approximately annual of an additional Brian this testament $X.X we million. force put which savings of levels, numerous discuss saving effort, reduction a the that in in entire an at forth results the by of part cost to impacted the implemented employees incredible resulting soon varying Lowell are measures, team.

us our Their our to in optimize demonstrated collaboration our pivotal company, for played We to and are for and have deeply also maximize only everyone role but staff unwavering our operations shareholders. a have value allowing significant hard to work collective commitment not achieving these involved. results, grateful valued dedicated who

Brian. over to With that, I'll it turn

Brian Shure

and Thank afternoon, everyone. good you, Mark,

U.S. and be reporting are portion commentary my a please that Before our GAAP, we results note XXXX QX begin, a financial non-GAAP of on I basis. in will

would report indicated. So full U.S. I figures all will to dollars, earnings be these a are the to refer otherwise CSE. and in GAAP XX-Q today's for Form results. unless please quarterly release filed results unaudited, that also with SEC our non-GAAP of presently reconciliation We and the report note

down QX reporting of million and XX% XX% $X.X revenue representing and sequentially to are XX% were Lowell revenues of XX% down for CPG declined $X.X year-over-year. million, We net XX% declined year-over-year. CPG sequentially revenues. QX revenue brand million, $X.X

X% flower offset million million, Services price XX% and increased Lowell $X.X quarter. a sold, increase from QX XX% revenue by but pound. sequentially to revenue decreased compared XX% decreased in The decrease to million a Farm is prior year-over-year. $X.X per to in pounds Bulk $X.X due in the reduction to

XX% quarter decreased in licensing X.X% the as year-over-year, was by revenues. driven revenue million, comparing $X.X Gross Out-of-state first XX.X% CPG sequentially and decreased to year-over-year. in reported XX% compared decline the margin to

were sales realized quarter expenses of $X the XXXX, QX of in or compared sales $X.X current of year. XX% million reductions sales last for quarter. or and first XX% XX% reflects or quarter to Operating during the cost the $X.X million million in This

a year. net an net quarter of quarter quarter the $X.X was sequentially Net to million first to sequentially, was compared million, million loss loss million $X.X million first operating in $XX.X loss compares and of first operating in compared the which to for a loss an year-over-year. last $X.X operating of The loss million $X.X of $X loss the

EBITDA negative $X.X million the adjusted year-over-year. of negative was compared million to million first EBITDA negative and in EBITDA $X.X Adjusted quarter of $X.X adjusted sequentially

Turning of $XX.X end at the in of million end of capital debentures balance XXXX. negative of capital Included XXXX. $XX.X quarter to at current the million of $XX.X quarter at net at million convertible and sheet. end to the the was the $XX.X the negative Working the million working is compared net end

of million XXXX. had $X.X of Excluding at end these the in to cash capital $X.X current there end company million from of compared of quarter working million quarter. $X.X working end The the is capital, the the the at third at

like to I of would at and Directors. moment the Lowell working a I you, Farms. forward all to team to to serve look on take enjoyed the I of Board thank with have continuing

the turn call I Now to will the for operator questions. over

Mark Ainsworth

and to for our call. business. call earnings again all with for update next on you We you to joining Thank on forward look taking time an the our the talking get

Operator

today's concluded. presentation. for The Thank you conference has attending now

You may all disconnect. now

Lowell Farms (LOWLF) 11 May 232023 Q1 Earnings call transcript