Clever Leaves Holdings Inc. (NASDAQ: CLVR) announced a big cash burn, rising net losses, and a new CEO. The global cannabis company released its preliminary unaudited financial results for the fourth quarter and full-year ended December 31, 2021, along with its 2022 outlook. In the fourth quarter, Clever Leaves said its revenue is expected to increase 25% to approximately $4.2 million compared to $3.3 million. However, the net loss is expected to range between approximately $17.1 million and $17.5 million compared to $0.9 million. The company also said it has burned through its cash levels of $79.5 million bringing it down to $37 million at the end of 2021
For the full year, revenue is expected to increase 27% to approximately $15.4 million compared to $12.1 million. The net loss is expected to range between approximately $38.8 million and $39.2 million compared to $25.9 million. Clever Leaves said expects to report its fourth-quarter and full-year results, and provide additional operational updates, in March 2022.
“Our preliminary results demonstrate continued progress on our strategic objectives, providing a solid foundation for Clever Leaves in 2022,” said Kyle Detwiler, CEO of Clever Leaves. “We generated strong revenue growth year-over-year and maintained our prudent approach to cost management, which allowed us to drive continued margin benefits for the full year. We have executed on the milestone targets provided in our revised 2021 outlook, and I am proud of our team’s relentless dedication to sustaining production efficiencies and advancing our distribution efforts across key international markets.”
Clever Leaves said it expects full-year 2022 revenue to range between $20 million and $25 million, with a gross margin of between 50% and 55%. The company said this revenue range reflects an estimated increase in cannabinoid revenue of between two times and five times 2021 cannabinoid revenue. Clever Leaves also said it expects adjusted EBITDA to range between $(23) million and $(20) million. The Company expects approximately $2 million to $3 million of annual capital expenditures, representing an estimated 70% reduction compared to 2021.
Detwiler continued: “As we progress through 2022, we are working toward several commercial and regulatory milestones, which, if achieved, we expect will result in increased cannabinoid sales. Several regulatory or customer approval processes that were hampered by the pandemic now appear to be progressing. Having completed both construction and licensing on our Portugal cultivation expansion ahead of schedule in 2021, we are nearing completion on our capex cycle, which we believe positions us to maintain our disciplined approach to capital deployments. On the commercial front, our 2022 revenue expectations include the benefit from the cannabinoid product approvals we have obtained in Brazil. In 2022, we plan to continue our focus on ramping our existing supply partnerships and deepening our foothold within several international cannabis markets we believe have high potential.
In addition to that, Clever Leaves said in a separate statement that Andres Fajardo, currently a director and president of the Company, has been selected to succeed Kyle Detwiler as CEO, effective March 24, 2022. Detwiler will remain CEO until March 24, 2022, to ensure a smooth transition, and he will continue to serve as the company’s Chairman until such date.
“Today’s leadership changes are the culmination of a succession planning process that our board and Kyle have worked on together,” said Elisabeth DeMarse, who has served as an independent director of the board since December 2020. “We are pleased to have someone with Andres’ experience and knowledge of Clever Leaves succeed Kyle as CEO, and we expect he will benefit from Kyle’s continued support. On behalf of our board, we are grateful for Kyle’s many contributions to this company over the years, and we wish him well in his next chapter.”
Detweiler added, “To support our continued work on activating our commercial pipeline, we have identified six key strategic goals on which to focus our efforts in 2022. As of last month, we have already achieved progress on our first goal, having announced our entrance into the U.S. consumer CBD market with the launch of JoySol. In Germany, we continue to make progress towards commencing our full distribution of IQANNA following a successful soft launch of the product in the third quarter of 2021, and we are nearing several commercial and business development milestones with other B2B partnerships. We remain attentive to how regulatory standards evolve in the German market and across all of our core markets, particularly as we monitor product approvals in Brazil and the status of Colombia’s resolutions dictating the timing and regulations surrounding dried flower exports. In Brazil, after lengthy product registration work to comply with strict pharmaceutical product registration protocols, we have seen a few of our partners receive special marketing authorization for cannabis products, which is one of the last milestones to accomplish before a partner can move to commercial-scale orders.