VANCOUVER, BC, May 15, 2025 (CNW Group via COMTEX) --
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, 2025. 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.sedarplus.ca. All amounts reported are in Canadian dollars and in accordance with International Financial Reporting Standards ("IFRS") unless otherwise stated.
First Quarter Highlights Include:
"We are on track with the execution of our 2025 strategic plan," said Brad Douville, CEO of Greenlane. "Our aim is making renewable natural gas ("RNG") projects more accessible and scalable by solving the industry's most challenging problems. From a technology perspective, biogas desulfurization and landfill gas upgrading technology is needed at lower cost and higher performance. Every biogas project has hydrogen sulfide ("H2S") that must be removed and, in the Americas, 60% to 70% of RNG is produced from landfill gas. We have solved the H2S removal problem with our biogas desulfurization product line that has set the standard in Italy and is increasingly being adopted in global markets. The problem with today's landfill gas upgrading technology is achieving low cost and high methane recovery when oxygen and nitrogen need to be removed. Greenlane is solving this problem by developing and bringing to market our next generation landfill gas upgrading product line that incorporates the content of new patent applications we filed in December. As we strive to advance the state-of-the-art of technology in our industry, we are not only actively expanding our intellectual property portfolio, we are also deepening strategic partnerships and advancing plans to localize manufacturing in key markets, including the U.S. and Brazilâ??positioning us for long-term growth and operational resilience."
"During the current period of economic uncertainty, driven by new and changing U.S. tariffs, the focus of infrastructure investors in the U.S. appears to be on optimization of the large number of RNG producing assets constructed over the last few years while taking a wait-and-see approach on new project starts. In Canada, with the newly elected federal government, who campaigned in part on building a clean economy and tackling climate change, we are optimistic about new support for RNG projects. Brazil's new biomethane legislation under the Fuel for the Future law calls for a twenty-fold production increase. In Europe, a market increasingly dominated by anaerobic digestion of agricultural residues, we see continued investor enthusiasm for biomethane and demand for our products and services. All of this bodes well for our strategy because our biogas desulfurization products and our parts and service offerings not only play an important role in new projects, but also in optimizing existing ones and the time is now to be developing and bringing to market our next generation landfill gas upgrading product line."
"In the first quarter we delivered $7.0 million in revenue with a solid gross margin of 40%, versus 27% in the same period last year, reflecting our focus on profitable revenue streams," said Stephanie Mason, CFO of Greenlane. "While we reported an adjusted EBITDA loss of $1.1 million, we replenished our sales order backlog to $21.2 million, compared to $21.8 million as at December 31, 2024, and we realized 31% lower general and administration expenses of $3.5 million in the first quarter compared to $5.0 million in the same period last year. Additionally, our strong cash position of $16.2 million, consistent with the cash position as at December 31, 2024â??along with no debtâ??underscores the strength of our fundamentals. There was no royalty revenue in the first quarter. However, advance payments of $3.3 million received under the technology licensing agreement with ZEG Biogà¡s included in deferred revenue were considered fully earned subsequent to the end of Q1, 2025. Accordingly, this amount, resulting from the agreement's minimum volume commitment in the first two years, will be recognized as revenue at a gross margin excluding amortization of $2.8 million in the Company's second quarter 2025 results."
"We remain focused on operational discipline and execution as we work to convert our backlog into profitable revenue, grow sales in our most profitable segments and drive long-term value for our shareholders."
As a reminder, the three pillars of the Company's 2025 strategic plan include (1) continued sales growth in the most profitable segments of its business including biogas desulfurization products, parts and service, and technology licensing, (2) development of its compelling next generation landfill gas upgrading product line, and (3) improvement of profitability of its core upgrading systems segment.
The Market Outlook
Globally, biogas continues to be seen as a key player in addressing climate change and energy challenges. The American Biogas Council (ABC) has launched a major advertising campaign to emphasize the potential of biogas as a critical source of renewable energy and economic growth. As Congress considers key clean energy tax provisions, the campaign aims to raise awareness among policymakers and the public about biogas's ability to convert organic waste into renewable fuel and electricity. According to Patrick Serfass, Executive Director of ABC, biogas offers a solution to the dual challenges of waste management and energy production, providing a reliable source of domestic energy while driving job creation and economic development.
There is significant growth potential in Brazil, where new biomethane legislation under the Fuel for the Future law mandates a progressive reduction in greenhouse gas emissions from natural gas suppliers. Starting in 2026, at least 1% of carbon dioxide emissions must be offset using biomethane or certified credits, with a long-term goal of reaching 10%. Meeting this target will require biomethane production to scale up to approximately 5.1 million cubic meters per dayâ??twenty times the country's current average production. This presents a major opportunity for Greenlane, particularly as we advance our growth plans and operations in Brazil while delivering scalable upgrading solutions.
Management's Discussion on Financial Results
The public is invited to watch Brad Douville, Chief Executive Officer, and Stephanie Mason, Chief Financial Officer present the results through a video presentation on the Company's Events and Presentations page located HERE.
SPECIFIED FINANCIAL MEASURES
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 1Â - 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 from continuing operations:
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 system sales. 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 these projects progress towards completion with amounts recognized in revenue (by reference to the stage of completion of each contract). Note that Sales Order Backlog does not include part and service or royalty revenue.
About Greenlane RenewablesGreenlane is driving change: accelerating the energy transition. 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 desulfurization and upgrading, we have been actively contributing to the decarbonization of our planet for over 35 years with more than 355 systems supplied into 28 countries. We transform biogas generated from organic waste into high-value grid-ready renewable natural gas ("RNG") from a wide range of sources such as landfills, sugar mills, dairy farms, wastewater, and food waste. Greenlane is transforming energy production and creating new, sustainable revenue streams for its customers - all while dramatically reducing carbon emissions. Partner with us, let's accelerate the energy transition together. For further information, please visit www.greenlanerenewables.com.
Forward Looking Information Advisory â??
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", "will" or "is/are expected to", "goal", "objectives", "future", "shifting toward", "potential", "proposed", "estimate", "believe", "continue to", "look to", "ongoing", "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. The forward-looking information contained in this press release, includes, but is not limited to: the Company remaining on track to execute its 2025 strategic plan; the expectation to grow sales in its most profitable segments including biogas desulfurization products, parts and service, and technology licensing; development and commercialization of its next generation landfill upgrading product line; improvements to the profitability of its core upgrading systems segment; continued expansion of its intellectual property portfolio and deepening of strategic partnerships; that the Company will localize manufacturing in key markets including U.S. and Brazil; that the U.S. RNG market is temporarily in holding pattern due to policy uncertainty and that it creates favorable conditions for the Company's service and optimization offerings; anticipated Canadian political support for RNG projects; continued investor demand in Brazil and Europe will drive continued demand for the Company's products and services; that Brazil's Fuel for the Future law will significantly increase demand for biomethane infrastructure; and that international biogas market momentum will continue; that the Company will convert its sales backlog into revenue and drive long-term shareholder value; recognition of deferred revenue related to the ZEG Biogas licensing agreement in Q2 2025 and the Company's goal of achieving positive Adjusted EBITDA in 2025. These forward-looking statements are based on assumptions that management believes are reasonable at the time the statements are made, including but not limited to: assumptions regarding the Company's ability to execute on its 2025 strategic initiatives; the continued demand and policy support for renewable natural gas and biogas technologies; stability in global supply chains, timely commercialization of new product lines; conversion of sales opportunities into contracts and a stable economic and regulatory environment. 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 Company's inability to achieve 2025 strategic goals or commercial milestones; delays or underperformance in product development, including next generation landfill gas system; fluctuations in customer demand or competitive conditions; challenges in localizing manufacturing; changing political or regulatory landscapes that do not favor the RNG industry or the Company; and the inability to convert the sales backlog as anticipated. 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, 2025, 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 â?? 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.
SOURCE: Greenlane Renewables Inc.
For more information please contact: Incite Capital Markets, Darren Seed / Clayton
Paradis, Ph: 604.493.2004; Brad Douville, CEO, Greenlane Renewables, Email:
IR@greenlanerenewables.com
COMTEX_465534000/2197/2025-05-15T16:06:00
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