~Company delivers fifth consecutive quarter of
record revenue with over 100% year-over-year growth and a record
sales order backlog~
VANCOUVER, BC, Nov. 9, 2021 /CNW/ - Greenlane Renewables Inc.
("Greenlane'' or the "Company") (TSX: GRN) (FSE: 52G)
(OTC: GRNWF) today announced financial results for the third
quarter ended September 30, 2021. For
further information on these results please see the Company's
Condensed Consolidated Interim Financial Statements and
Management's Discussion and Analysis filed on SEDAR at
www.sedar.com. All amounts are in Canadian dollars unless otherwise
stated and in accordance with IFRS.
Third Quarter Highlights Include:
- Record revenue of $13.4 million,
an increase of 107% over the $6.5
million reported in the third quarter of 2020.
- Gross profit of $3.1 million,
gross margin (gross profit excluding amortization) of $3.4 million (25% of revenue).
- Net income of $0.1 million.
- Adjusted EBITDA of $0.1
million1.
- Record sales order backlog2 of $47.1 million as at September 30, 2021.
- Sales pipeline3 valued at over $850 million as at September 30, 2021.
- Cash and cash equivalents of $35.6
million and no debt, other than payables and bonding
resulting from normal course operations, as at September 30, 2021.
- The Company announced new contract wins totalling $18.9 million for the supply of five biogas
upgrading systems: the first for the supply of a new membrane
separation biogas upgrading system for a project owned by an
international energy company in the
United States, followed by the supply of two PSA biogas
upgrading systems for dairy farm RNG projects in the States of
Wisconsin and New York developed and owned by a proven
leader in the waste-to-energy industry, and finally a contract for
the supply of two PSA upgrading systems for Green Impact Partners
in the State of Colorado. Order
fulfilment on all five systems commenced immediately upon contract
signing.
"As global leaders, scientists, financiers, and negotiators
descended on Glasgow Scotland for
the COP26 UN Climate Change
Conference starting last week to hammer out solutions, the need to
accelerate decarbonization and hasten the energy transition to
renewables could not be more apparent. There is a growing
recognition that there is no net zero without biogas and as much
RNG as can be produced is needed. With these supportive
fundamentals, Greenlane's growth has continued as the company
delivered a fifth consecutive record revenue quarter exceeding 100%
year-over-year growth and a record sales order backlog," said
Brad Douville, President and CEO of
Greenlane. "Additionally, the company delivered a fourth
consecutive quarter of positive adjusted EBITDA, which was against
a backdrop of tightening labour markets and supply chain
disruptions globally."
"Our sales pipeline continues to grow, which is a reflection of
the ongoing expansion of the RNG industry and the increasing
urgency to decarbonize global energy systems through immediate and
proven technologies. Momentum continues to gather behind RNG
as an attractive low-carbon and carbon-negative solution to
displace diesel fuel in heavy duty trucks and marine vessels and
fossil natural gas in distribution networks fueling homes,
businesses and factories. Greenlane is solely focused on an
RNG market that is rapidly expanding. Our expertise as the
only global provider of the three main biogas upgrading
technologies provides us with the unique ability to meet the needs
of biogas projects around the world, no matter the size, feedstock
type, or pipeline injection specification. We are confident with
our competitive position and are excited about the path
ahead."
Greenlane continually updates its pipeline of active system
sales opportunities, which at September 30,
2021 was over $850 million.
The sales pipeline represents visibility to a significant number of
opportunities that funnel down through our sales process, and those
opportunities successfully converted into contract wins move into
our sales order backlog. The Company's sales order
backlog2 of $47.1 million
as at September 30, 2021 is a
snapshot in time which varies from quarter end to quarter end. The
sales order backlog increases by the value of new system sales
contracts and is drawn down over time as projects progress towards
completion with amounts recognized in revenue. The Company's gross
margin in the quarter was 25% ($3.4
million). Going forward, gross margin is expected to
continue to be in the range of 25% to 30% on an annual basis.
The Market Outlook
Out of the COP26 UN Climate Change
conference in Glasgow last week,
came a milestone announcement which highlights the commitment of
world leaders to influence change and reduce the carbon footprint
of the global community. More than 100 countries representing 70%
of global GDP, signed the Global Methane Pledge to collectively
reduce methane emissions by 30% by 2030 from 2020 levels. Methane
is one of the main causes of climate change and reducing emissions
is one of the fastest methods of effecting positive change, for
example by capturing methane containing biogas from landfills and
other sources of biomass and upgrading it to valuable RNG before it
can escape into the environment.
Another important outcome from COP26 was the announcement that over $130 trillion of private finance is now committed
to science-based net zero targets and near term milestones, through
The Glasgow Financial Alliance for Net Zero, led by former Bank of
England governor Mark Carney. Analysis, commissioned by the UN
High Level Climate Action Champions, finds that the private sector
could deliver 70% of total investments needed to meet net zero
goals.
We continue to see increasing activity in RNG from the global
energy supermajors. Chevron announced in September a tripling of
its investment to $10 billion to
reduce its carbon emissions footprint through 2028, including
$3 billion earmarked for renewable
fuels. Chevron has also announced the creation of a joint venture
with Mercuria Energy Trading, one of the world's largest
independent energy traders, to own and operate a network of 60
compressed natural gas (CNG) stations across the US. The creation
of this joint venture will allow Chevron to rapidly grow its
renewable natural gas value chain, complementing its previously
announced plan to open more than 30 Chevron-branded CNG stations by
2025 as the company seeks to increase its RNG volumes tenfold by
2025.
Shell recently announced that it is now producing RNG from its
first biomethane facility in the U.S., as the company grows its
portfolio of low carbon-intensity fuels for use in heavy duty
transportation. Shell is also developing additional RNG production
facilities to be located directly within operating dairies. Shell
Downstream Galloway at the High Plains Ponderosa Dairy in
Kansas and Shell Downstream
Bovarius at the Bettencourt Dairies in Idaho are part of this expanding portfolio
using cow manure as feedstock. Together, these two facilities can
produce approximately 900,000 MMBtu a year of negative carbon
intensity RNG.
Repsol, the large Spanish integrated energy company, has
produced renewable hydrogen using biomethane as a raw material for
the first time, obtained from urban solid waste. Repsol is
replacing conventional natural gas with biomethane of sustainable
origin to produce renewable hydrogen in its industrial complexes,
therefore decarbonising its processes and products.
Seaspan Ferries became the first Canadian marine company to
pilot the use of RNG to reduce greenhouse gas emissions produced by
its roll-on, roll-off LNG-powered marine fleet. Seaspan anticipates
that by using RNG, greenhouse gas emissions can be reduced by
upwards of 85 per cent versus traditional diesel fuel. Using RNG
for marine LNG has the potential to be an emissions game changer
for the sector and is yet another example of how renewable gas
development is transforming natural gas infrastructure into a
delivery system for carbon neutral energy.
In Brazil, Petrobras signed a
Cooperation Agreement with ZEG Biogas for the joint development of
the biomethane market in the country. The objective is to promote
the growth of the biomethane market in Brazil, providing producers with technological
solutions for the manufacture of biomethane from by-products that
originate from the production of ethanol. The company believes that
the potential market for the product in Brazil is over 10 billion cubic meters per
year, which is equivalent to one third of the current demand for
natural gas in the country.
Conference Call
The public is invited to listen to the
conference call in real time by telephone at 2 pm PT (5 pm ET)
today, November 9th. To access the
conference call by telephone, please dial: 1-855-327-6838
(Canada & USA toll-free) or 604-235-2082. Callers should
dial in 5-10 minutes prior to the scheduled start time and ask to
join the Greenlane Renewables conference call.
Shortly after the conference call, the replay will be archived
on the Greenlane Renewables website and replay will be available in
streaming audio and a downloadable MP3 file.
NON-IFRS FINANCIAL MEASURES
Management evaluates the
Company's performance using a variety of measures, including
"Adjusted EBITDA", "gross margin" (gross profit excluding
amortization), "sales pipeline" and "sales order backlog". The
non-IFRS measures should not be considered as an alternative to or
more meaningful than revenue or net loss. These measures do not
have a standardized meaning prescribed by IFRS and therefore they
may not be comparable to similarly titled measures presented by
other publicly traded companies and should not be construed as an
alternative to other financial measures determined in accordance
with IFRS. The Company believes these non-GAAP financial measures
provide useful information to both management and investors in
measuring the financial performance and financial condition of the
Company. Management uses these and other non-IFRS financial
measures to exclude the impact of certain expenses and income that
must be recognized under IFRS when analyzing consolidated
underlying operating performance, as the excluded items are not
necessarily reflective of the Company's underlying operating
performance and make comparisons of underlying financial
performance between periods difficult. From time to time, the
Company may exclude additional items if it believes doing so would
result in a more effective analysis of underlying operating
performance. The exclusion of certain items does not imply that
they are non-recurring.
Note 1 - Reconciliation of net loss to Adjusted
EBITDA:
|
Three months
ended
September 30,
2021
$000's
|
Three months
ended
September 30,
2020
$000's
|
Net income
|
52
|
743
|
Add
back:
|
|
|
Share based
compensation
|
295
|
152
|
Depreciation and
amortization
|
396
|
383
|
Finance
expense
|
9
|
101
|
Other
income
|
-
|
(1,777)
|
Foreign exchange
(gain) loss
|
(669)
|
199
|
Other adjustments -
bonus accrual
|
-
|
(161)
|
Adjusted EBITDA
Income (Loss)
|
83
|
(360)
|
Note 2 - Sales order backlog refers to the balance
of unrecognized revenue from contracted projects. The sales order
backlog increases by the value of new system sales contracts and is
drawn down over time as projects progress towards completion with
amounts recognized in revenue (by reference to the stage of
completion of each contract).
Note 3 - Greenlane maintains a sales pipeline of
prospective projects that it updates regularly based on quote
activity to ensure that it is reflective of sales opportunities
that can convert into orders within approximately a rolling 24
month time horizon. Not all of these potential projects will
proceed or proceed within the expected timeframe and not all of the
projects that do proceed will be awarded to Greenlane. Additions to
the amount in the sales pipeline come from situations where the
Company provides a quote on a prospective project and reductions to
the sales pipeline arise when the Company loses a prospective
project to a competitor, a project does not proceed or, where a
quote in the pipeline is converted to Greenlane's sales order
backlog.
All filings related to the third quarter ended September 30, 2021 are available on SEDAR at
www.sedar.com.
About Greenlane Renewables
Greenlane Renewables is a leading global provider of biogas
upgrading systems that are helping decarbonize natural gas. Our
systems produce clean, low-carbon and carbon-negative renewable
natural gas from organic waste sources including landfills,
wastewater treatment plants, dairy farms, and food waste, suitable
for either injection into the natural gas grid or for direct use as
vehicle fuel. Greenlane is the only biogas upgrading company
offering the three main technologies: waterwash, pressure swing
adsorption, and membrane separation. With over 30 years industry
experience, patented proprietary technology, and over 125 biogas
upgrading systems sold into 19 countries worldwide, including the
world's largest biogas upgrading facility, Greenlane is inspired by
a commitment to helping waste producers, gas utilities or project
developers turn a low-value product into a high-value renewable
resource. For further information, please visit
www.greenlanerenewables.com.
Forward Looking Information Advisory – This news release
contains "forward-looking information" within the meaning of
applicable securities laws. All statements contained herein that
are not historical in nature contain forward-looking information.
Forward-looking information can be identified by words or phrases
such as "may", "expect", "likely", "should", "would", "plan",
"anticipate", "intend", "potential", "proposed", "estimate",
"believe", "continues to", or "continually" or the negative of
these terms, or other similar words, expressions and grammatical
variations thereof, or statements that certain events or conditions
"may" or "will" happen. The forward-looking information contained
in this press release, includes, but is not limited to: Greenlane's
increased quarterly revenue in the third quarter of 2021 being
indicative of future growth in revenue, that there will be progress
of new opportunities and future growth, the state of the "sales
pipeline" and the ability of the Company to convert opportunities
into signed contracts, then deliver against them, including that
the sales order backlog will be drawn down as the Company advances
and completes projects to realize revenue, the overall growth of
the global RNG market, that natural gas utilities will proceed with
announced initiatives and projects, that regulatory changes will
have a positive impact and support growth in the RNG industry; the
ability of the Company to pursue strategic growth initiates and
further invest in product enhancements; management's belief that
the sales pipeline represents visibility to a significant number of
opportunities that will funnel down, through the sales process, and
move into the sales order backlog; management's anticipation that
the going forward gross margin will be in the range of 25-30% on an
annual basis; management's expectations and beliefs regarding its
ability to maintaining its competitive position going
forward. The forward-looking information contained herein is
made as of the date of this press release and is based on
assumptions management believes to be reasonable at the time such
statements were made, including management's perceptions of future
growth, results of operations, operational matters, historical
trends, current conditions and expected future developments, the
state of competition in the RNG industry and competitors'
capabilities, that natural gas utilities will proceed with
announced initiatives and projects, that regulations enacted will
have beneficial effects, as well as other considerations that are
believed to be appropriate in the circumstances. While management
considers these assumptions to be reasonable based on information
currently available to management, there is no assurance that such
expectations will prove to be correct. By their nature,
forward-looking information is subject to inherent risks and
uncertainties that may be general or specific and which give rise
to the possibility that expectations, forecasts, predictions,
projections or conclusions will not prove to be accurate, that
assumptions may not be correct and that objectives, strategic goals
and priorities will not be achieved. A variety of factors,
including known and unknown risks, many of which are beyond
Greenlane's control, could cause actual results to differ
materially from the forward-looking information in this press
release. Such factors include, without limitation: risks relating
to Greenlane's financial performance in 2021, Greenlane may not be
able to convert sales opportunities into contracts as expected,
Greenlane may face impediments in delivering and advancing projects
to be able to timely realize revenue reducing the sales backlog,
Greenlane having a role in economies working towards combating
climate change, large oil and gas producers not investing in the
RNG industry as expected, RNG initiatives and projects of natural
gas utilities being changed, delayed or cancelled, RNG not
impacting the transportation sector and gas grid as expected,
Greenlane's market outlook, Greenlane's market share of the RNG
value chain, the state of competition in the RNG industry,
Greenlane's position as a leading biogas upgrading and project
development solutions provider, US RNG production facilities not
having the strong capacity growth expected; the transportation
sector not focusing on low carbon fuel sources as anticipated, and
large oil and gas producers not aiming to reduce their net carbon
intensity as anticipated. Additional risk factors can also be found
in the Company's Management Discussion and Analysis, its Annual
Information Form and in its base shelf prospectus dated
June 24, 2021, all of which have been
filed under the Company's SEDAR profile at www.sedar.com. Readers
are cautioned not to put undue reliance on forward-looking
information. The Company undertakes no obligation to update or
revise any forward-looking information, whether as a result of new
information, future events or otherwise, except as required by
applicable law. Forward-looking statements contained in this news
release are expressly qualified by this cautionary statement.
FINANCIAL OUTLOOK INFORMATION – This news release contains
"financial outlook information" regarding Greenlane's prospective
revenue and results, which is subject to the same assumptions, risk
factors, limitations, and qualifications as set forth in the
above. Revenue and other estimates contained in this news
release were made by Greenlane management as of the date of this
news release and are provided for the purpose of describing
anticipated changes, and are not an estimate of profitability or
any other measure of financial performance. Investors are
cautioned that the financial outlook information contained in this
news release should not be used for purposes other than for which
it is disclosed herein. The Company's revenues are largely derived
from a relatively small number of biogas upgrader orders accounted
for on a stage of completion basis over typically a nine to
eighteen-month period. Timing of new contract awards varies
due to customer-related factors such as finalizing technical
specifications and securing project funding, permits and RNG
off-take and feedstock agreements. Some contracts contain
termination provisions that allow the customer to terminate with no
penalty or with minimum prescribed threshold payments based on the
length of time since the contract was entered into. Some projects
have built-in pause periods to allow customers to complete
concurrent activities such as civil work. As a result, the
Company's revenue varies from month to month and
quarter-to-quarter. THE COMPANY QUALIFIES ALL THE FORWARD LOOKING
STATEMENTS AND FINANCIAL OUTLOOK INFORMATION CONTAINED IN THIS NEWS
RELEASE BY THE FOREGOING CAUTIONARY STATEMENTS.
Neither the TSX Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Exchange)
accepts responsibility for the adequacy or accuracy of this release
or has in any way approved or disapproved of the contents of this
news release.
SOURCE Greenlane Renewables Inc.