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Greenlane Renewables Announces Fourth Quarter and Fiscal Year 2023 Financial Results

~Company invested for the future in 2023, with 2024 positive EBITDA goal remaining intact~

Vancouver, British Columbia, CanadaMarch 26, 2024 Greenlane Renewables Inc. (“Greenlane'' or the “Company”) (TSX: GRN / FSE: 52G / OTC: GRNWF) today announced its financial results for the fourth quarter and fiscal year ended December 31, 2023. For further information on these results please see the Company’s Audited Consolidated Financial Statements and Management’s Discussion and Analysis filed under the Company’s profile on SEDAR+ at www.sedarplus.ca. All amounts reported are in Canadian dollars and in accordance with International Financial Reporting Standards (“IFRS”) unless otherwise stated.

Fiscal Year 2023 Highlights Include:

  • Annual revenue of $57.8 million;
  • Gross profit of $12.4 million, Gross Margin1 before amortization of $14.4 million (25% of revenue);
  • Operating loss of $13.2 million; 
  • Adjusted EBITDA2 loss of $10.0 million;
  • Net loss and comprehensive loss of $29.4 million, including an impairment of intangible assets and goodwill charge of $14.4 million taken in the fourth quarter of 2023;
  • The Company announced $42.5 million in new system sale contract wins including a $35.3 million contract award in Q4 with a leading environmental services company in Brazil that is investing in a portfolio of landfill assets across the country to produce biomethane;
  • The Company launched its new sector-focused Cascade product lines; a portfolio of optimized solutions for the RNG industry; and
  • The Company entered into a collaborative agreement with ZEG Biogás e Energia SA to locally produce, market and sell one of Greenlane’s largest and most popular biogas upgrading products (Totara+ water wash system) in Brazil. The agreement established a first-of-its-kind royalty-like revenue agreement for Greenlane.

Fourth Quarter Highlights Include:

  • Revenue of $17.3 million;
  • Gross profit of $2.8 million, Gross Margin1 before amortization of $3.2 million (18% of revenue);
  • Operating loss of $3.0 million;
  • Adjusted EBITDA2 loss of $2.3 million;
  • Net loss and comprehensive loss of $17.7 million, including an impairment of intangible assets and goodwill charge of $14.4 million;
  • Sales Order Backlog3 of $36.0 million as at December 31, 2023; and
  • Cash and cash equivalents of $11.8 million and no debt, other than payables, advance payment / performance bonding and standby letters of credit resulting from normal course operations, as at December 31, 2023.
  Three months ended Dec 31 Twelve months ended Dec 31
(in millions, except as noted) 2023 2022 % Change 2023 2022 % Change
Revenue $17.3 $17.0 2% $57.8 $71.2 (19%)
Gross Margin1 before amortization $3.2 $3.3 (4%) $14.4 $16.8 (14%)
Gross Margin as % of revenue 18% 19%   25% 24%  
Gross profit $2.8 $3.2 (12%) $12.4 $14.9 (17%)
Adjusted EBITDA2 ($2.3) ($2.0) (17%) ($10.0) ($2.0) (410%)
Net loss and comprehensive loss ($17.7) ($1.5) (1087%) ($29.4) ($6.1) (384%)
Sales Order Backlog3       $36.0 $27.7 30%
Cash & cash equivalents       $11.8 $21.4 (45%)

“In 2023, our focus was on preparing the business for further growth, scaling and positive Adjusted EBITDA in 2024,” declared Ian Kane, President and CEO of Greenlane. “We continue on this journey of business foundation building and are happy with our progress to date. We have invested in and implemented processes and systems to enable us to achieve this scaling sustainably. We are transitioning from an engineered-to-order to a configured-to-order business model, emphasizing standard products to streamline our costs and enhance our competitiveness in the market. This accelerates our ability to increase the sales pipeline, revenue, and enhance our bottom line.”

“Focusing on the fourth quarter of 2023, gross margins were lower, largely associated with three of the Company’s active projects that experienced additional commissioning and other costs,” noted Monty Balderston, CFO of Greenlane. “Furthermore, the Company commenced work on its $35.3 million sales order announced in October which was secured at a lower margin than the Company’s historical run-rate. The Company also recorded an impairment of intangible assets and goodwill charge in Q4 of $14.4 million, which removes the remaining balance sheet value of our 2019 biogas upgrading business acquisition and is reflective of Greenlane’s current enterprise value.”

Ian Kane added, “As we mature our business, we have prioritized cost management, are realigning our cost structure and focusing on efficiency in our supply chain execution. These efforts are expected to contribute to our goal of achieving positive Adjusted EBITDA in 2024, as was achieved in 2021, and maintaining cash reserves. Our dedicated team, closely aligned with our customers, ensures the delivery of quality service and products. In 2023, we progressed twenty eight active biogas upgrading projects, demonstrating our team's experience and capacity. This puts us among the global industry leaders, and with a broad variety of solutions and configurations that is unparalleled. I am confident and excited about our strong future, considering the foundational work we have done and continue to do.”

“The RNG market is maturing, and customers are becoming more sophisticated, shifting toward both larger projects and larger portfolios of projects and this is influencing how we are orienting our business model going forward. Our sales funnel is robust, giving us confidence in our approach, and we are particularly excited about Brazil and North America, with extensive interest from multiple repeat customers and new customers. For example, the collaboration agreement that we entered into last year with ZEG Biogás to establish industrial scale volume production locally in Brazil is structured to provide revenue under a new royalty-like business model together with service contracts. This, combined with the transition of our business model emphasizing product standardization and cost streamlining, should assist our gross margin improvement efforts. Furthermore, we maintain cash reserves and have no debt.”

The Market Outlook

For the first time in the International Energy Agency’s (“IEA”) renewable energy market report series, the IEA dedicated a special section to biogas. The IEA Renewables 2023 report notes that biogas production began to grow in the 1990s and has been rising since, but policy support surged strongly in the last two years. The report goes on to say, in view of the urgent need to limit global temperature rise to 1.5°C, countries have begun to view biogas as a ready-to-use clean domestic energy source that can help accelerate decarbonization in the short term, and they are therefore developing specific policies that include biogas as a key component in their energy transition strategies. The report further notes that biomethane can be used to decarbonize hard-to-electrify sectors such as transport and industry and that both biogas and biomethane use reduces not only CO2 emissions from fossil fuel combustion but also when correctly managed, methane emissions from the waste and agriculture/livestock sectors (responsible for 60% of anthropogenic global methane emissions). This advantage aligns well with the emissions reduction objectives of the Global Methane Pledge launched in 2021 and signed by 155 countries (as of January 2024). Specifically for the U.S. market, the IEA forecasts biogas and RNG volumes to grow 2.1-fold over the next five years, with the new RFS Set Rule, LCFS incentives, and projects currently under development cited as catalysts.

The California Air Resources Board (“CARB”) recently proposed amendments that include steep CI reduction targets to the state’s Low Carbon Fuel Standard (“LCFS”) requirements. Highlights of these proposed amendments include increasing the 2030 carbon intensity reduction compliance target from 20% to 30% and 90% by 2045 and encouraging dairy/swine projects to break ground before 2030 to be eligible for up to 30 years of crediting.

In February, the United States Treasury Department and Internal Revenue Service issued a technical correction to the Notice of Proposed Rulemaking (“NPRM”) issued last November concerning proposed changes to the Sec. 48 investment tax credit (“ITC”) in the Inflation Reduction Act (“IRA”). The correction is intended to make clear that cleaning and conditioning equipment critical to processing biogas into renewable natural gas is eligible for the ITC and is expected to facilitate RNG deployment to maximize the benefits of methane capture and recycling.

New Mexico became the fourth state to pass a clean fuel standard, joining California, Oregon and Washington. This development is further evidence that states are gaining traction against combating climate change while encouraging good-paying jobs that support the clean fuels industry. Clean fuel standards are market-based policies designed to reduce carbon emissions in the transportation fuel mix while promoting increased investment in producing renewable fuels and vehicles.

Conference Call

The public is invited to listen to the conference call in real time by telephone. To access the conference call by telephone, please dial: 1-800-319-4610 (North America toll-free) or +1-604-638-5340. 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 audio file.


Management evaluates the Company’s performance using a variety of measures, including “Gross Margin before amortization”, “Adjusted EBITDA” and “Sales Order Backlog”. The specified financial measures, including non-IFRS measures and supplementary financial measures should not be considered as an alternative to or more meaningful than revenue, gross profit or net income. 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 specified financial measures provide useful information to both management and investors in measuring the financial performance and financial condition of the Company. Management uses these specified 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 - Gross Margin before amortization is a non-IFRS measure and is defined by the Company as gross profit before amortization of intangible assets and property and equipment.

Note 2 - Adjusted EBITDA is a non-IFRS measure and is defined by the Company as earnings before interest, taxes, foreign exchange, depreciation and amortization, as well as adjustments for other income (expense), value assigned to options and RSU’s granted, strategic initiatives, transaction costs and non-recurring items.

Reconciliation of net loss and comprehensive loss to Adjusted EBITDA:

(in $000s) Three months ended Dec 31 Twelve months ended Dec 31
2023 2022 2023 2022
Net loss and comprehensive loss (17,679) (1,490) (29,355) (6,062)
Add (deduct):        
Exchange difference on translating
foreign operations
(134) (347) (225) 557
Provisions for income taxes 485 (136) 1,102 16
Foreign exchange (gain) loss (39) (853) 256 (2,167)
Other loss (income) 111 37 172 37
Finance income (139) (279) (651) (359)
Finance expense 34 40 84 109
Impairment of goodwill and
intangible assets
14,352 - 14,352 -
Impairment of notes receivable - - 1,068 -
Strategic initiatives - 418 - 1,592
Share-based compensation 196 421 775 1,977
Amortization of office equipment 107 79 435 447
Amortization of property and equipment 47 68 175 146
Amortization of intangible assets 336 58 1,775 1,736
Adjusted EBITDA (2,323) (1,984) (10,037) (1,968)

Note 3 - Greenlane provides regular updates on its upgrader system sales opportunities that successfully convert into contractual agreements in its reported sales order backlog (“Sales Order Backlog”). Sales Order Backlog is a supplementary financial measure that refers to the balance of unrecognized revenue from contracted biogas upgrading system supply projects. The Company’s Sales Order Backlog is a snapshot in time which varies from period-to-period. 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). A typical biogas upgrading system sales contract has six stages of completion and a duration of nine to 24 months, and therefore annual and quarterly operating results will fluctuate as a result of the timing of contract related work. Note that Sales Order Backlog does not include Cascade H2S sales, service revenue, or revenue from the Company’s agreement with ZEG Biogás.

About Greenlane Renewables

Greenlane is driving change: accelerating the energy transition to a net-zero emissions economy. We are cleaning up two of the largest and most difficult to decarbonize sectors of the global energy system: the natural gas grid and commercial transportation. As a pioneer and leading specialist in biogas upgrading, we have been actively contributing to the decarbonization of our planet for over 35 years. The systems we provide transform biogas generated from organic waste into high-value grid-ready renewable natural gas (“RNG”). Our systems produce clean, low-carbon and carbon-negative RNG from organic waste sources including agriculture (such as dairy and hog manure), water resource recovery facilities, food waste, landfills, and sugar mills. Greenlane is the only biogas upgrading company offering and actively deploying the three main upgrading technologies: waterwash, pressure swing adsorption, and membrane separation, plus proprietary biogas desulfurization technology. Greenlane has delivered over 145 biogas upgrading systems into 19 countries, including some of the largest RNG production facilities in the world, and over 160 biogas desulfurization units. For further information, please visit www.greenlanerenewables.com.

For more information please contact:
Incite Capital Markets
Eric Negraeff / Darren Seed
Greenlane Renewables Inc.
Ian Kane, CEO
Ph: 604.493.2004
Email: IR@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”, “could”, “plan”, or “is/are expected to”, “goal”, “objectives”, “future”, “shifting toward”, “potential”, “proposed”, “estimate”, “believe”, “continues to”, “remains” 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 or that current events or conditions will continue, be ongoing or be repeated such as “are transitioning” or “are realigning”. The forward-looking information contained in this press release, includes, but is not limited to: that the Company is continuing to build its business foundation and is transitioning from an engineered-to-order to a configured-to-order business model; that the Company is realigning its cost structure and focusing on efficiency in supply chain execution; that it has a goal of achieving positive Adjusted EBITDA in 2023 and maintaining cash reserves; that the Company’s sales funnel is robust and it has a strong future; that the RNG market is maturing and is shifting towards larger projects within larger portfolios of projects; that the agreement with ZEG Biogás will provide royalty-like revenue together with service contracts; management’s expectations for regulatory developments in the US that support RNG demand including that the California Air Resources Board (“CARB”) recently proposed with steep CI reduction targets will be implemented as proposed and will have the anticipated effects to encourage dairy/swine projects before 2030; that the technical correction issued by the United States Treasury Department and Internal Revenue Service respecting certain proposed changes to the Inflation Reduction Act will facilitate RNG deployment; that other regulatory developments in the US will support RNG demand with improved economics for Greenlane’s current and future customers; and management’s expectations respecting the amount and timing for the sales order backlog to become realized revenue as the Company advances and completes projects. 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 assumptions about: the benefits realizable from the initiatives to transition its business model based on a stronger foundation and its ability to generate new sales and sustain future growth; that CARB will increase the 2030 carbon intensity reduction compliance target to at least 30%; that other regulatory developments in the US and other jurisdictions in which the Company conducts business will be favourable for the RNG industry; 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 favourable legislative initiatives will have a positive impact on the pace of growth and the availability of financing in the RNG industry and will generate sales opportunities for Greenlane, 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: the anticipated legislative changes and the ability of legislation to affect the pace of growth and availability of financing in the RNG industry; the plans, estimates and intentions of third parties in respect of intended transactions and activities to transition to clean energy; risks relating to Greenlane’s financial performance, including that 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; risks relating to the collaboration with ZEG Biogás not resulting in the anticipated revenue or service contracts; RNG initiatives and projects of natural gas utilities being changed, delayed or canceled, the state of competition in the RNG industry, Greenlane’s position as a leading biogas upgrading and project development solutions provider. Additional risk factors can also be found in the Company's Management Discussion and Analysis, its Annual Information Form and its base shelf prospectus dated January 4, 2024, all of which have been filed under the Company's SEDAR profile at www.sedarplus.ca. 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.