Item 8.01. Other Events.
The preliminary estimated and unaudited financial data announced by the Company on November 3, 2021 are provided below.
On a preliminary (unaudited) basis, the Company anticipates:
•Net sales of between approximately $40 million and $41 million
•GAAP Gross margin of between approximately (2)% to 0%
•Adjusted Gross margin of between approximately 19% to 21%
•Total cash balance of approximately $13 million
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Margin
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GAAP Gross profit
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$(1) million to $0 million
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(2)% to 0%
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Inventory Rationalization1
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$9 million
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Adjusted Gross profit
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$8 million to $9 million
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19% to 21%
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________
1.Represents charges relating to one-time inventory rationalization adjustments implemented in connection with the closing of the merger with KushCo Holdings, Inc. Amount is currently under review and represents management’s current estimate. The final inventory rationalization adjustment for the quarter ended September 30, 2021, has not been determined as of the date hereof and is subject to change as a result of, among other things, the completion of our financial closing procedures and the preparation of our financial statements for the quarter ended September 30, 2021. The information presented herein should not be considered a substitute for the financial information we will file with the Securities and Exchange Commission in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 once it becomes available.
Greenlane’s estimated and unaudited consolidated financial data presented above are preliminary and were prepared by management in good faith based upon internal reporting for the three months ended September 30, 2021. Although Greenlane has not identified any unusual or unique events or trends that occurred during the period which might materially affect these estimates, actual results may still be outside of the ranges provided. Greenlane’s independent registered public accounting firm, Marcum LLP, has not audited, reviewed, compiled or performed any procedures on this preliminary financial data. You should not place undue reliance on this preliminary and estimated financial information and should view this information in the context of Greenlane’s third quarter 2021 results when such results are disclosed in Greenlane’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021.
Forward Looking Statements
Certain matters within this Current Report on Form 8-K are discussed using forward-looking language as specified in the Private Securities Litigation Reform Act of 1995, and, as such, may involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance to differ from those projected in the forward-looking statements. These forward-looking statements include, among others: comments relating to the current and future performance of the Company’s business; the impacts of acquisitions and other similar transactions; and the Company’s financial outlook and expectations. For a description of factors that may cause the Company’s actual results or performance to differ from its forward-looking statements, please review the
information under the heading “Risk Factors” included in the Company's most recent Annual Report on Form 10-K for the year ended December 31, 2020, the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021 and the Company's other filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. Additional information is also set forth in Greenlane's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021. Undue reliance should not be placed on the forward-looking statements in this press release, which are based on information available to Greenlane on the date hereof. Greenlane undertakes no duty to update this information unless required by law.
Adjusted Gross Margin
Adjusted gross margin is a supplemental non-GAAP financial measure, which the Company calculates as total revenues less cost of revenues, prepared in accordance with GAAP, adjusted for certain non-recurring, non-cash items to the extent such items relate to cost of revenues, including charges relating to the Company’s inventory rationalization initiatives. The Company uses adjusted gross margin as a supplemental performance measure because it believes that adjusted gross margin is beneficial to investors for purpose of measuring the Company’s operational performance, exclusive of certain non-recurring non-cash items that are not expected to be incurred in future periods. Specifically, in excluding charges relating to the Company’s inventory rationalization initiatives, which the Company does not believe are indicative of the Company’s operating performance, adjusted gross margin provides a performance measure that, when compared period-over-period, more accurately reflects the Company’s operational performance. Adjusted gross margin should be considered supplemental to and not a substitute for financial information prepared in accordance with GAAP. The Company's definition of adjusted gross margin may differ from similarly titled measures used by other companies.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
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Exhibit No.
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Description
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104
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Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document)
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*Furnished herewith.