Clever Leaves Holdings Inc. (Nasdaq: CLVR) (“Clever Leaves” or the
“Company”) today reported financial and operating results for the
fourth quarter and full year ended December 31, 2020. All financial
information is provided in US dollars unless otherwise indicated.
Fourth Quarter 2020 Highlights vs. Same Year-Ago
Quarter
- Revenue increased 28% to $3.3
million compared to $2.6 million.
- All-in cost per gram of dry flower
improved to $0.15 per gram compared to $0.22 per gram.
- Gross profit increased 52% to $2.3
million compared to $1.5 million.
- Net loss improved to $11.6 million
compared to $18.3 million.
- Adjusted EBITDA (a non-GAAP
financial measure defined and reconciled below) improved to $(6.3)
million compared to $(15.9) million.
Full Year 2020 Highlights vs. Full Year
2019
- Revenue increased 55% to $12.1
million compared to $7.8 million.
- All-in cost per gram of dry flower
improved to $0.14 compared to $0.21.
- Gross profit increased significantly
to $7.4 million compared to $3.1 million.
- Net loss improved to $36.7 million
compared to $46.0 million.
- Adjusted EBITDA (a non-GAAP
financial measure defined and reconciled below) improved to $(23.3)
million compared to $(33.5) million.
“We ended 2020 in a position of strength as we
continued to develop our commercial partnerships, grow our
international distribution network, and establish Clever Leaves
within a new category of the growing cannabis industry: that of the
multi-national operator,” said Kyle Detwiler, CEO of Clever Leaves.
“During the fourth quarter, we meaningfully expanded sales
contributions from our cannabinoid segment, allowing us to generate
strong revenue growth. COVID-19 had very significant impact in the
earlier part of the year but towards the end of the year, we began
to recover from pandemic-related impacts on retail foot traffic in
the United States and supply chain processes globally.
“As we build our global platform, we are proud
to have achieved significant cost efficiencies and important
regulatory certifications. Our 2020 all-in cost of dry flower was
$0.14 per gram, highlighting the geographic and strategic
advantages of our Colombian cultivation environment. In addition,
our pharmaceutical grade extraction facility in Colombia became the
first in Latin America to receive the coveted European Union Good
Manufacturing Practices (EU GMP) certification. Coupled with the
significant THC quota that we received from the Colombian
government, and our status as one of the few licensed cultivators
in Portugal, we have built a comprehensive foundation that we
believe we can continue to leverage and enhance if and when
cannabis legalization expands internationally or in the US.
“We believe we are well-positioned to expand our
footprint and growth potential even further as we develop Portugal
into our European cornerstone cultivation site. By increasing our
global cultivation capacity, we believe we can both improve our
ability to serve our current markets and capitalize on the
long-term opportunity to supply flower to the international markets
that are operating under cultivation constraints. Our ability to
penetrate these markets has been aided by the multiple long-term
partnerships we have signed over the past six months, including our
most recent supply agreement with Ethypharm, a specialty
pharmaceutical company, in Germany.
“Although most of our strategic progress will be
gradual, we believe that our focus on quality and deep global
partnerships grant us a significant runway for long-term growth. As
regulatory standards evolve across our markets, our teams will
continue to take the time and precautions needed to align our
processes with these mandates. In addition, we plan to remain
highly attentive to the developments of the COVID-19 pandemic and
the related recovery within our markets and global supply chains.
We made progress on our strategy throughout 2020 and our early days
as a public company. However, our work is far from finished, and
our goal is to remain focused on our financial and operational
momentum through 2021 and beyond.”
Fourth Quarter 2020 Financial Results
Revenue in the fourth quarter of 2020 increased
28% to $3.3 million compared to $2.6 million for the same period in
2019. The increase was primarily driven by cannabinoid sales
contributions, which have continued to expand as the Company
pursues global business development opportunities and enters new
markets. This growth was also supported by sales strength within
the non-cannabinoid segment, which has continued to recover from
COVID-19 related reductions in US retail foot traffic as a result
of lockdowns and stay-at-home mandates throughout 2020.
All-in cost of dry flower in the fourth quarter
of 2020 decreased to $0.15 per gram compared to $0.22 per gram in
the same period of 2019. The decrease was driven by increased
efficiencies and more streamlined operations at the Company’s
Colombia cultivation sites.
Gross profit in the fourth quarter of 2020
increased 52% to $2.3 million compared to $1.5 million for the same
period in 2019. Gross margin in the fourth quarter of 2020
increased significantly to 67.9% compared to 56.8%. The increase in
gross profit was driven by the aforementioned cannabinoid sales and
recovery in sales from the non-cannabinoid segment.
Operating expenses in the fourth quarter of 2020
decreased to $9.6 million compared to $18.8 million for the same
period in 2019. The decrease was driven by prudent variable cost
management, including continued expense reduction measures taken in
response to the COVID-19 pandemic.
Net loss in the fourth quarter of 2020 improved
to $11.6 million compared to $18.3 million for the same period in
2019.
Adjusted EBITDA in the fourth quarter of 2020
improved to $(6.3) million compared to $(15.9) million for the same
period in 2019. The increase was primarily driven by reductions in
operating expenses for the quarter, as well as the aforementioned
revenue and gross profit improvement.
Cash, cash equivalents and restricted cash
increased significantly to $79.5 million at December 31, 2020,
compared to $13.2 million at December 31, 2019. The increase
primarily reflects the gross proceeds the Company received in
connection with the closing of its business combination with
Schultze Special Purpose Acquisition Corp. on December 18,
2020.
Full Year 2020 Financial Results
Revenue in 2020 increased 55% to $12.1 million
compared to $7.8 million in 2019. The increase was primarily driven
by the sales contributions from the non-cannabinoid segment in the
United States, as well as a significant year-over-year improvement
in cannabinoid sales. This growth in the non-cannabinoid segment
was partially offset by sales impacts related to COVID-19 driven
declines in US retail foot traffic during the year.
All-in cost of dry flower in 2020 decreased to
$0.14 per gram compared to $0.21 per gram in 2019. The decrease was
driven by improved efficiencies and more streamlined operational
processes at the Company’s Colombia cultivation sites.
Gross profit in 2020 increased significantly to
$7.4 million compared to $3.1 million in 2019. Gross margin in 2020
increased significantly to 61.2% compared to 39.6% in 2019. The
increase was driven primarily by the previously discussed increase
in sales from the non-cannabinoid segment, as well as the decrease
in cost of goods in 2020 due to the inclusion in 2019 of additional
costs related to the fair value of Herbal Brands inventory
following the Herbal Brands acquisition.
Operating expenses in 2020 decreased to $35.9
million compared to $39.6 million in 2019. The decrease was
primarily due to prudent cost management, including reductions in
administrative and other variable expenses that were implemented in
response to the COVID-19 pandemic. This decline was partially
offset by a $1.7 million goodwill impairment in the first quarter
of 2020 related to the impact of the pandemic on the
non-cannabinoid segment.
Net loss in 2020 improved to $36.7 million
compared to $46.0 million in 2019.
Adjusted EBITDA in 2020 improved to $(23.3)
million compared to $(33.5) million in 2019. The improvement was
primarily driven by the aforementioned revenue and gross profit
improvements, as well as reductions in operating expenses
throughout the year.
2021 Outlook
The Company has not provided guidance for Net
income/loss because of the difficulty of making accurate forecasts
and projections without unreasonable efforts. The Company remains
focused on supporting the growth of its sales pipeline, developing
products with strong or broad commercial appeal across various
geographies, continuing to expand its international distribution
network, and monitoring and responding to favorable changes in
regulatory restrictions and the opening of new cannabinoid markets
around the world. Nevertheless, the Company operates in a highly
unpredictable end markets where regulatory changes, interpretations
or delays as well as the lingering effects of COVID-19 can have
significant impacts on the magnitude, timing and certainty of
realizing revenue. In light of these priorities and important
considerations within its current markets, Clever Leaves expects
full year 2021 revenue to grow to between $17 million to $20
million, with gross margin of approximately 61%. The Company
expects full year 2021 Adjusted EBITDA in the range of $(24)
million and $(26) million, inclusive of costs associated with being
a public company of approximately $5 million, with capital
expenditures of approximately $10 million.
This outlook takes into account the increasingly
stringent quality, as well as testing and documentation
requirements that have recently been adopted throughout many
current and prospective international markets, which mirror or
mimic those that govern traditional pharmaceutical products.
Changes in quality guidelines can delay or lengthen the ramp time
of certain pharmaceutical contracts, as well as the processes
necessary for securing key certifications.
The outlook also takes into account the varying
states of recovery from pandemic-related impacts within Clever
Leaves’ current markets, as well as the Company’s limited
visibility on how these conditions may evolve throughout the year.
Clever Leaves remains dedicated to preserving the optimal health
and productivity of its workforce and will continue to operate with
caution within this fluid industry environment. See
“Forward-Looking Statements” below for further discussion.
Conference Call
Clever Leaves will conduct a conference call
today at 5:00 p.m. Eastern time to discuss its results for the
fourth quarter and full year ended December 31, 2020.
Clever Leaves management will host the
conference call, followed by a question and answer session.
Conference Call Date: March 30, 2021Time: 5:00 p.m. Eastern
timeToll-free dial-in number: 1-877-407-9208International dial-in
number: 1-201-493-6784Conference ID: 13717604
Please call the conference telephone number 5-10
minutes prior to the start time. An operator will register your
name and organization. If you have any difficulty connecting with
the conference call, please contact Gateway Investor Relations at
(949) 574-3860.
The conference call will be broadcast live and
available for replay here.
A telephonic replay of the conference call will
also be available after 8:00 p.m. Eastern time on the same day
through April 6, 2021.
Toll-free replay number: 1-844-512-2921International replay
number: 1-412-317-6671Replay ID: 13717604
About Clever Leaves
Clever Leaves is a multi-national cannabis
company with an emphasis on ecologically sustainable, large-scale
cultivation and pharmaceutical-grade processing as the cornerstones
of its global cannabis business. With operations and investments in
the United States, Canada, Colombia, Germany and Portugal, Clever
Leaves has created an effective distribution network and global
footprint, with a foundation built upon capital efficiency and
rapid growth. Clever Leaves aims to be one of the industry’s
leading global cannabis companies recognized for its principles,
people, and performance while fostering a healthier global
community. Clever Leaves has received multiple international
certifications that have enabled it to increase its export and
sales capacity from its Colombian operations, including European
Union Good Manufacturing Practices (EU GMP) Certification, a Good
Manufacturing Practices (GMP) Certification by Colombia National
Food and Drug Surveillance Institute - Invima, and Good
Agricultural and Collecting Practices (GACP) Certification. Clever
Leaves was granted a license in Portugal from Infarmed – the
Portuguese health authority – which allows Clever Leaves to
cultivate, import and export dry flower for medicinal and research
purposes. In addition, the Portuguese operation was granted
certification of compliance with GACP and IMC-GAP.For more
information, please visit https://cleverleaves.com/en/home/ and
follow us on LinkedIn.
Non-GAAP Financial Measures
In this press release, Clever Leaves refers to
certain non-GAAP financial measures including Adjusted EBITDA.
Adjusted EBITDA does not have a standardized meaning prescribed by
GAAP and is therefore unlikely to be comparable to similar measures
presented by other companies. Adjusted EBITDA is defined as income
from continuing operations before interest, taxes, depreciation,
amortization, share-based compensation expense, gains/losses on
foreign currency fluctuations, gains/losses on the early
extinguishment of debt, and miscellaneous expenses. Adjusted EBITDA
also excludes the impact of certain non-recurring items that are
not directly attributable to the underlying operating performance.
Clever Leaves considers Adjusted EBITDA to be a meaningful
indicator of the performance of its business. Adjusted EBITDA
should neither be considered in isolation nor as a substitute for
the financial measures prepared in accordance with U.S. GAAP. For a
reconciliation of Adjusted EBITDA to the most directly comparable
U.S. GAAP measure, see the relevant schedules provided with this
press release. We have not reconciled the non-GAAP
forward-looking information to their corresponding GAAP measures
because the exact amounts for these items are not currently
determinable without unreasonable efforts but may be
significant.
Forward-Looking Statements
This press release includes certain statements
that are not historical facts but are forward-looking statements
for purposes of the safe harbor provisions under the United States
Private Securities Litigation Reform Act of 1995. Forward-looking
statements generally are accompanied by words such as “aim,”
“anticipate,” “believe,” “can,” “continue,” “could,” “estimate,”
“evolve,” “expect,” “forecast,” “future,” “guidance,” “intend,”
“may,” “opportunity,” “outlook,” “pipeline,” “plan,” “predict,”
“potential,” “projected,” “seek,” “seem,” “should,” “will,” “would”
and similar expressions (or the negative versions of such words or
expressions) that predict or indicate future events or trends or
that are not statements of historical matters. Such forward-looking
statements as well as our outlook for 2021 are subject to risks and
uncertainties, which could cause actual results to differ from the
forward-looking statements. Important factors that may affect
actual results or the achievability of the Company’s expectations
include, but are not limited to: (i) expectations with respect to
future operating and financial performance and growth, including if
or when Clever Leaves will become profitable; (ii) Clever Leaves’
ability to execute its business plans and strategy and to receive
regulatory approvals; (iii) Clever Leaves’ ability to capitalize on
expected market opportunities, including the timing and extent to
which cannabis is legalized in various jurisdictions; (iv) global
economic and business conditions; (v) geopolitical events, natural
disasters, acts of God and pandemics, including the economic and
operational disruptions and other effects of COVID-19 such as
travel restrictions, disruptions to physical shipments such as
outright bans on imported products, delays in issuing licenses and
permits, delays in hiring necessary personnel to carry out sales,
cultivation and other tasks, and financial pressures upon Clever
Leaves and its customers; (vi) regulatory developments in key
markets for the company's products, including international
regulatory agency coordination and increased quality standards
imposed by certain health regulatory agencies, and failure to
otherwise comply with laws and regulations; (vii) uncertainty with
respect to the requirements applicable to certain cannabis products
as well the permissibility of sample shipments, and other risks and
uncertainties; (viii) consumer, legislative, and regulatory
sentiment or perception regarding Clever Leaves’ products; (ix)
lack of regulatory approval and market acceptance of Clever Leaves’
new products; (x) the extent to which Clever Leaves’ is able to
monetize its existing THC market quota within Colombia; (xi) demand
for Clever Leaves’ products and Clever Leaves’ ability to meet
demand for its products and negotiate agreements with existing and
new customers; (xii) developing product enhancements and
formulations with commercial value and appeal; (xiii) product
liability claims exposure; (xiv) lack of a history and experience
operating a business on a large scale and across multiple
jurisdictions; (xv) limited experience operating as a public
company; (xvi) changes in currency exchange rates and interest
rates; (xvii) weather and agricultural conditions and their impact
on the Company’s cultivation and construction plans, (xviii) Clever
Leaves’ ability to hire and retain skilled personnel in the
jurisdictions where it operates; (xix) Clever Leaves’ rapid growth,
including growth in personnel; (xx) Clever Leaves’ ability to
remediate a material weakness in its internal control cover
financial reporting and to develop and maintain effective internal
and disclosure controls; (xxi) potential litigations; (xxiii)
access to additional financing; and (xxiv) completion of our
construction initiatives on time and on budget. The foregoing list
of factors is not exclusive. Additional information concerning
certain of these and other risk factors is contained in Clever
Leaves’ most recent filings with the SEC. All subsequent written
and oral forward-looking statements concerning Clever Leaves and
attributable to Clever Leaves or any person acting on its behalf
are expressly qualified in their entirety by the cautionary
statements above. Readers are cautioned not to place undue reliance
upon any forward-looking statements, which speak only as of the
date made. Clever Leaves expressly disclaims any obligations or
undertaking to release publicly any updates or revisions to any
forward-looking statements contained herein to reflect any change
in its expectations with respect thereto or any change in events,
conditions or circumstances on which any statement is based.
Clever Leaves Investor
Inquiries:Sean Mansouri, CFA or Cody SlachGateway Investor
Relations+1949-574-3860CLVR@gatewayir.com
Clever Leaves Press
Contacts:McKenna MillerKCSA Strategic
Communications+1347-487-6197mmiller@kcsa.com
Diana SigüenzaStrategic Communications
Director+57310-236-8830Diana.siguenza@cleverleaves.com
Clever Leaves Commercial
Inquiries:Andrew MillerVice President Sales - EMEA, North
America, and
Asia-Pacific+1416-817-1336andrew.miller@cleverleaves.com
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Balance Sheets |
|
|
|
|
|
(In thousands of United States dollars) |
|
December 31, 2020 |
|
December 31, 2019 |
Assets |
|
|
|
|
|
|
|
|
|
Current |
|
|
|
|
Cash & Cash Equivalents and Restricted Cash |
|
79,460 |
|
|
13,198 |
|
Accounts receivable, net |
|
1,676 |
|
|
526 |
|
Prepaids, advances and other |
|
3,174 |
|
|
3,284 |
|
Other receivables |
|
1,306 |
|
|
1,076 |
|
Inventories, net |
|
10,190 |
|
|
5,416 |
|
Total Current Assets |
|
95,806 |
|
|
23,500 |
|
|
|
|
|
|
Investments |
|
1,553 |
|
|
2,077 |
|
Property, plant and equipment, net |
|
25,680 |
|
|
24,373 |
|
Intangible assets, net |
|
24,279 |
|
|
25,510 |
|
Goodwill |
|
18,508 |
|
|
20,190 |
|
Other non-current assets |
|
52 |
|
|
66 |
|
|
|
|
|
|
Total Assets |
|
165,878 |
|
|
95,717 |
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
Current |
|
|
|
|
Accounts payable |
|
4,429 |
|
|
3,373 |
|
Deferred revenue |
|
870 |
|
|
- |
|
Accrued expenses and other current liabilities |
|
4,865 |
|
|
2,723 |
|
Total Current Liabilities |
|
10,164 |
|
|
6,096 |
|
|
|
|
|
|
Convertible notes |
|
27,142 |
|
|
26,566 |
|
Loans and borrowings |
|
6,701 |
|
|
7,162 |
|
Deferred revenue |
|
1,167 |
|
|
- |
|
Other long-term liabilities |
|
693 |
|
|
- |
|
Deferred tax liability |
|
5,700 |
|
|
5,700 |
|
Total Liabilities |
|
51,567 |
|
|
45,524 |
|
|
|
|
|
|
Shareholders' equity |
|
|
|
|
|
|
|
|
|
Additional paid-in capital |
|
194,105 |
|
|
77,431 |
|
Accumulated deficit |
|
(79,794 |
) |
|
(31,933 |
) |
Total equity attributable to shareholders |
|
114,311 |
|
|
45,498 |
|
Non-controlling interest |
|
- |
|
|
4,695 |
|
Total shareholders' equity |
|
114,311 |
|
|
50,193 |
|
|
|
|
|
|
Total liabilities and shareholders' equity |
|
165,878 |
|
|
95,717 |
|
|
|
|
|
|
|
|
Statements of Operations |
|
|
|
|
|
|
|
|
|
Year EndedDecember 31, |
|
Three Months endedDecember 31, (Unaudited) |
(In thousands of United States dollars, except for percentage
data) |
|
2020 |
|
2019 |
|
|
2020 |
|
2019 |
|
Revenue |
|
12,117 |
|
7,834 |
|
|
3,347 |
|
2,623 |
|
|
|
|
|
|
|
|
Cost of Sales |
|
(4,704 |
) |
(4,732 |
) |
|
(1,075 |
) |
(1,132 |
) |
Gross Profit |
|
7,413 |
|
3,102 |
|
|
2,272 |
|
1,491 |
|
Gross Profit Margin |
|
61 |
% |
40 |
% |
|
68 |
% |
57 |
% |
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
General and administrative |
|
29,828 |
|
34,979 |
|
|
8,702 |
|
16,770 |
|
Sales and marketing |
|
2,577 |
|
3,183 |
|
|
285 |
|
1,274 |
|
Goodwill impairment |
|
1,682 |
|
- |
|
|
- |
|
- |
|
Depreciation and amortization |
|
1,854 |
|
1,480 |
|
|
603 |
|
774 |
|
Total expenses |
|
35,941 |
|
39,642 |
|
|
9,590 |
|
18,818 |
|
|
|
|
|
|
|
|
Loss for operations |
|
(28,528 |
) |
(36,540 |
) |
|
(7,318 |
) |
(17,327 |
) |
|
|
|
|
|
|
|
Other Expenses (Income), net |
|
|
|
|
|
|
Interest expense, net |
|
4,455 |
|
2,684 |
|
|
1,462 |
|
796 |
|
Loss on investments / equity investment share of loss |
468 |
|
852 |
|
|
160 |
|
694 |
|
Loss on debt extinguishment |
|
2,360 |
|
- |
|
|
2,360 |
|
- |
|
Foreign exchange loss |
|
491 |
|
1,574 |
|
|
36 |
|
(1,340 |
) |
Loss on fair value of derivative instrument |
|
657 |
|
3,795 |
|
|
600 |
|
654 |
|
Other (income) expenses, net |
|
(284 |
) |
535 |
|
|
(312 |
) |
172 |
|
Total other expenses, net |
|
8,147 |
|
9,441 |
|
|
4,306 |
|
976 |
|
|
|
|
|
|
|
|
Net Loss |
|
(36,675 |
) |
(45,980 |
) |
|
(11,624 |
) |
(18,303 |
) |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Reconciliation (Non-GAAP
Measure) |
|
|
|
|
|
|
|
|
|
Year ended |
|
Three months ended |
|
|
December 31, |
|
December 31, |
(In thousands of United States dollars) |
|
2020 |
2019 |
|
2020 |
2019 |
Net Loss |
|
(36,675) |
(45,980) |
|
(11,624) |
(18,303) |
Interest Expense, net |
|
4,455 |
2,684 |
|
1,462 |
796 |
Depreciation & amortization |
|
1,854 |
1,480 |
|
603 |
774 |
Share-based compensation |
|
1,652 |
1,522 |
|
450 |
652 |
Goodwill impairment |
|
1,682 |
- |
|
- |
- |
Loss on fair value of derivative instrument |
|
657 |
3,795 |
|
600 |
654 |
Loss on debt extinguishment |
|
2,360 |
- |
|
2,360 |
- |
Loss on investments / equity investment share of loss |
|
468 |
852 |
|
160 |
694 |
Foreign exchange loss |
|
491 |
1,574 |
|
36 |
(1,340) |
Other (income) expenses, net |
|
(284) |
535 |
|
(312) |
172 |
Adjusted EBITDA (Non-GAAP Measure) |
|
(23,340) |
(33,538) |
|
(6,265) |
(15,901) |
|
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