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Greenlane Renewables Announces First Quarter 2023 Financial Results

~Regained gross margin, taking action to improve operating leverage~

Vancouver, British Columbia, CanadaMay 11, 2023 Greenlane Renewables Inc. (“Greenlane” or the “Company”) (TSX: GRN / FSE: 52G / OTC: GRNWF) today announced its financial results for the first quarter ended March 31, 2023. For further information on these results please see the Company’s Condensed Consolidated Interim Financial Statements and Management’s Discussion and Analysis filed under the Company’s profile on SEDAR at www.sedar.com. All amounts reported are in Canadian dollars and in accordance with International Financial Reporting Standards (“IFRS”) unless otherwise stated.

First Quarter Highlights Include:

  • Revenue of $15.5 million.
  • Gross profit of $3.3 million, Gross Margin1 before amortization of $3.8 million (24% of revenue).
  • Net loss and comprehensive loss of $2.1 million.
  • Adjusted EBITDA2 loss of $1.7 million.
  • Sales Order Backlog3 of $25.1 million as at March 31, 2023.
  • Cash and cash equivalents of $16.3 million and no debt, other than payables, advance payment / performance bonding and standby letters of credit resulting from normal course operations, as at March 31, 2023.
  • The Company announced a $7.2 million contract win for a food waste-to-RNG project in Ohio, United States for the supply of a biogas upgrading system.

Subsequent Event:

  • On April 17, 2023, the Company announced a collaborative agreement with ZEG Biogás e Energis SA (“ZEG Biogás”), a company 50% owned by Vibra Energia S.A. (“VIBRA”), previously the fuel distribution unit of Petrobras, to establish industrial scale volume production of Greenlane’s Totara+ Water Wash biogas upgrading product locally in Brazil. Under a new royalty-like business model, ZEG Biogás has been granted exclusive rights to localize the supply chain, manufacturing, marketing and sales of the Totara+ in Brazil under the Greenlane brand. Greenlane retains responsibility for the product design, the supply of components not available locally in Brazil, and the local commissioning and servicing of the products. The Totara+ is one of Greenlane’s largest and most popular biogas upgrading products. ZEG Biogás’ goal is to deliver 75 Totara+ systems over the next 5 years, which would install greater biogas processing capacity than the more than 140 units Greenlane has delivered over the last 30 years. Production capacity in Brazil will be phased in over time, with a minimum volume commitment in the first two years.

“We’re focused on our future and expect to be cash flow and Adjusted EBITDA positive in the next twelve months,” said Brad Douville, CEO of Greenlane Renewables. “With a deep understanding of the RNG market, and given that growth is never a straight line, we’re resetting and we’ve honed our strategy to target attractive market segments where Greenlane can realize volume opportunities. We know the capabilities of each of the technologies we offer and we’ve fine-tuned our product portfolio to deliver configurable systems faster, replicate them across many similar opportunities, optimize costs and drive measurable value to our customers. Our collaboration with ZEG Biogás is a prime example of this strategy in action, and offers us the opportunity to create another step change in global RNG production capacity.”

“In support of our focused strategy, we are also investing in systems, processes and infrastructure to sustain the business as it scales, and we are realigning our resources,” said Monty Balderston, Chief Financial Officer of Greenlane. “While we could not have achieved our historical growth without the dedicated contributions of our employees, we have made the difficult decision to selectively reduce our workforce by approximately 10% and have also implemented other cost containment initiatives to reflect our needs while maintaining a strong core on which to build. By concentrating on our strategic competencies, we expect to be cash flow and Adjusted EBITDA positive by the first quarter of 2024.”

Greenlane continually provides an update on its system sales opportunities that successfully convert into contractual agreements in its reported sales order backlog (“Sales Order Backlog”). The Company’s Sales Order Backlog of $25.1 million as at March 31, 2023 is a snapshot in time which varies from quarter-to-quarter. 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. A typical system sales contract (excluding Airdep product sales) has six stages of completion and a duration of nine to 18 months, and therefore annual and quarterly operating results will fluctuate as a result of the timing of contract related work. Greenlane historically provided an estimate of its active system sales opportunities, or pipeline, to create awareness of the RNG marketplace, but will no longer be doing this now that this has been achieved.

The Market Outlook

Global biomethane production continues to reach record levels, as recent data from the International Energy Agency (IEA) shows 2022 global biomethane supply hit a record 7 billion cubic metres (bcm), an increase of 16 percent over 2021 levels. The U.S. continues to be the largest biomethane producing country in the world by far, with 2022 output increasing 20 percent to reach 2 bcm, equating to roughly 30 percent of global supply. The IEA estimates that the U.S. has over 250 operational biomethane facilities, with 220 additional projects under construction or planned, which should continue to support strong supply growth.

Oil and gas majors bp and Shell are both integrating large RNG acquisitions that were recently completed, with significant plans for growth. bp, through its acquisition of Archaea Energy, is targeting annual biomethane production of 145 mmBtu by 2030 from the current 13 mmBtu through Archaea’s significant development pipeline, while Shell, through its acquisition of Nature Energy, is looking to scale up its existing RNG business as part of a strategy to build a global integrated biomethane value chain.

Investment in the RNG sector continues to grow at a rapid pace, with new entrants making significant capital commitments thus far in 2023.  Marathon Petroleum Corporation, a large U.S. refiner, announced an investment of up to US$100 million in an emerging producer of RNG from a portfolio of dairy farm-based, low carbon intensity RNG projects. And one of Canada’s largest pension funds, the Ontario Teachers’ Pension Plan, announced that it will purchase a majority position in a dairy farm RNG project developer for US$250 million to finance new RNG projects across North America.

The Brazilian sugarcane sector is a promising new and immense market opportunity for biomethane. Today, there are more than 330 sugar mills across the country engaged in the production of sugar and ethanol biofuel. The latter produces vast quantities of a liquid byproduct called vinasse, which is an untapped and ideal feedstock for the production of biomethane. The ethanol biofuel production industry in Brazil dates back to the 1970s and today the country is the world’s second largest producer. The consumption of ethanol biofuel is equivalent to gasoline volumes in the country’s transportation sector. Biomethane production from sugar mill waste across the entire sector has the potential to exceed the total current natural gas consumption in Brazil.

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: 1-888-396-8063 (North America toll-free) or 1-416-764-8652. Callers should dial in 5-10 minutes prior to the scheduled start time and ask to join the Greenlane Renewables conference call. Callers should dial in 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, and strategic initiatives.

Reconciliation of net loss and comprehensive loss to Adjusted EBITDA:

(in $000s) Three months ended Mar 31
2023 2022
Net loss and comprehensive loss (2,118) (2,160)
Add (deduct):    
Exchange difference on translating foreign operations (201) 9
Provisions for income taxes 82 -
Foreign exchange (gain) loss (286) 692
Other loss 21 -
Finance income (208) (24)
Finance expense 18 25
Share-based compensation 355 550
Strategic initiatives - 321
Amortization of office equipment 111 118
Amortization of property and equipment 36 30
Amortization of intangible assets 473 469
Adjusted EBITDA (1,717) 30

Note 3 - Sales Order Backlog is a supplementary financial measure that refers to the balance of unrecognized revenue from contracted biogas upgrading system supply 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).

About Greenlane Renewables

Greenlane Renewables is a pioneer in the rapidly growing renewable natural gas (“RNG”) industry. As a leading global provider of biogas upgrading systems, we are helping to clean up two of the largest and most difficult-to-decarbonize sectors of the global energy system: the natural gas grid and the commercial transportation sector. Our systems produce clean, low-carbon and carbon-negative RNG from organic waste sources such as landfills, wastewater treatment plants and agricultural and food waste streams. To the company’s knowledge, Greenlane is the only biogas upgrading company offering and actively deploying the three main technologies: waterwash, pressure swing adsorption, and membrane separation. Greenlane’s business has been built on over 35 years of industry experience, patented and proprietary technology, with over 140 biogas upgrading systems sold into 19 countries, including some of the largest RNG production facilities in the world, and over 140 biogas desulfurization units sold. For further information, please visit www.greenlanerenewables.com.

For more information please contact:
Incite Capital Markets
Eric Negraeff / Darren Seed
Greenlane Renewables Inc.
Brad Douville, 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”, “expects” or “is expected to”,“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 or be repeated. The forward-looking information contained in this press release, includes, but is not limited to: that ZEG Biogás’ goal is to deliver 75 Totara+ systems over the next 5 years, that production capacity in Brazil will be phased in over time, that the collaboration with ZEG Biogás offers the opportunity to create a step change in global RNG production capacity, and that biomethane production from sugar mill waste has the potential to exceed the total current natural gas consumption in Brazil; management’s expectation that the Company will be cash flow and EBITDA positive in the next twelve months; that the Company’s fine-tuned product portfolio will deliver fulsome solutions that optimize performance for our customers and that it will develop configurable systems faster, replicate them across many similar opportunities, optimize costs and drive measurable value; that the Company is investing in systems, processes and infrastructure to scale the business; management’s expectations for regulatory developments in the US that support RNG demand and that  U.S. continues to be the largest biomethane producing country in the world by far; that the sales order backlog will be drawn down and the Company advances and completes projects to realize revenue; that significant capital continues to flow into the RNG sector. 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, that 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: risks relating to the collaboration with ZEG Biogás not resulting in the volume production of Units or other ancillary benefits to Greenlane as anticipated, risks that ZEG Biogás’ biomethane production goals are not met over the anticipated time period; the anticipated legislative changes and the ability of legislation to affect the pace of growth and the flow of capital into 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, Greenlane may face impediments in delivering and advancing projects to be able to timely realize revenue reducing the sales backlog; 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 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.