Greenlane(US:GNLN)2021-08-16 20:35Financial Performance - For the three months ended June 30, 2021, net sales increased by $2.3 million compared to the same period in 2020, with a total increase of $2.5 million for the six months ended June 30, 2021[154]. - Greenlane Brand sales totaled $9.0 million for Q2 2021, representing a 62.5% increase compared to Q2 2020, and accounted for 25.9% of total revenue[155]. - Nicotine sales decreased by $2.2 million, or 89.6%, in Q2 2021 compared to Q2 2020, with a year-to-date decrease of $5.4 million, or 73.2%[154]. - Total net sales for the six months ended June 30, 2021, were $68.7 million, a 3.7% increase from $66.3 million in the same period in 2020[169]. - Net sales in the United States for Q2 2021 were approximately $30.7 million, a 16.5% increase from $26.4 million in Q2 2020, driven by a 35.0% increase in B2B sales[170]. - Core revenue in the United States for Q2 2021 grew to $30.3 million, representing a 20.8% increase from $25.1 million in Q2 2020, despite a significant decline in nicotine sales[171]. - Net sales in Canada for Q2 2021 were approximately $1.4 million, a 59.8% decrease from $3.5 million in Q2 2020, primarily due to a 99.5% decline in nicotine sales[173]. - Net sales in Europe for Q2 2021 were approximately $2.6 million, a 3.4% increase from $2.5 million in Q2 2020, and $5.4 million for the first half of 2021, an 11.0% increase from $4.9 million in the same period of 2020[174]. Operational Efficiency - The company operates distribution centers in the U.S., Canada, and Europe, and has consolidated its U.S. distribution centers to improve cost efficiency and service levels[149]. - B2B and supply and packaging revenues represented approximately 60.6% and 13.7% of net sales for Q2 2021, up from 53.9% and 10.6% in Q2 2020[153]. - The company has experienced supply chain issues due to winter storms and shipment backlogs, impacting purchasing activities[157]. - The introduction of the PACT Act may create logistical challenges, but the company is well-positioned compared to competitors due to existing compliance infrastructure[165]. Strategic Initiatives - The merger with KushCo Holdings, Inc. is expected to close in the second half of 2021, creating a leading ancillary cannabis products and services company[148]. - The trend of states legalizing cannabis is expected to increase demand for the company's products, with several states passing laws for adult-use cannabis[160]. - Greenlane Brands' growth, particularly in VIBES, is a key driver for the company's long-term strategy focusing on higher-margin products[155]. - The company has initiated a $50 million at-the-market equity offering program to fund potential business acquisitions and general corporate purposes[198]. Profitability and Expenses - Gross profit for Q2 2021 was $7.8 million, a 14.0% increase from $6.8 million in Q2 2020, with a gross margin of 22.4%[169]. - Operating expenses for Q2 2021 were $13.4 million, a slight increase of 1.2% from $13.2 million in Q2 2020[169]. - The net loss for Q2 2021 was $5.8 million, a 7.5% improvement from a net loss of $6.3 million in Q2 2020[169]. - General and administrative expenses increased by approximately $0.7 million, or 10.7%, in Q2 2021 compared to Q2 2020, driven by a $1.5 million increase in M&A expenses related to the merger with KushCo[180]. - Adjusted net loss for Q2 2021 was $4.2 million, compared to $5.1 million in Q2 2020, while adjusted EBITDA was $(3.7) million, an improvement from $(4.3) million in Q2 2020[189]. Cash Flow and Capital Resources - As of June 30, 2021, the company had approximately $11.6 million in cash and $36.4 million in working capital, compared to $30.4 million in cash and $54.2 million in working capital as of December 31, 2020[194]. - The company reported a net cash used in operating activities of approximately $15.2 million for the six months ended June 30, 2021, compared to $2.4 million for the same period in 2020[201]. - Cash used in investing activities for the six months ended June 30, 2021, included approximately $2.4 million for the acquisition of Eyce LLC[204]. - The company utilized approximately $1.5 million for capital expenditures related to the development of a new enterprise resource planning system during the same period[204]. - The net cash used in financing activities for the six months ended June 30, 2021, was approximately $0.2 million in payments on long-term liabilities and distributions[207]. - The company expects its cash on hand and access to capital markets to be sufficient to meet working capital and capital expenditure requirements for at least the next 12 months[197]. - The company did not have any off-balance sheet arrangements that could materially affect its financial condition as of June 30, 2021[209].