After the market closed on Monday, Lowell Farms Inc. (CSE: LOWL; OTCQX: LOWLF) announced revenue and operating results for the second quarter ending June 30, 2021. Lowell Farms generated revenue for the quarter of $15.2 million; an increase of 53% over last year and an increase of 37% over the first quarter. Lowell also reported a net income of $731,000 versus a net loss of $8.8 million and $6.7 million in Q2 2020 and Q1 2021, respectively. The company noted that the current quarter included proceeds from insurance claims of $2.6 million which was associated with plant stress that happened in 2020.
“We have a lot to be proud of, but I am particularly excited about the continued progress we are making at the cultivation level,” says Lowell Farms Inc. Chief Executive Officer Mark Ainsworth. “We have spent a good portion of Q2 dialing in our automated environmental systems to continue to reach increased yields and potencies and right now we are collecting important data to provide the optimal conditions for each particular genetics. This is an exciting phase and we look forward to reporting back to you on our learnings and improvements as well as the positive impacts on our annual harvest run rate.”
The company also trimmed its operating loss to $473,000 versus an operating loss of $4.8 million and $5.7 million in Q2 2020 and Q1 2021, respectively. The adjusted EBITDA for the quarter was $740,000 which excluded the insurance claim proceeds, compared to negative adjusted EBITDA of $7.2 million in Q2 2020.
“Our Flower production at the greenhouse ramped steadily during the quarter and we exceeded our guidance of 8,500 to 9,000 lbs during the quarter by a healthy margin at 9,553 lbs, a 102% increase over the preceding quarter. Additionally, our plan to restore the Lowell brand to health was met with success during the quarter.”
“We have a lot to look forward to, and despite the headwinds, we anticipate encountering from a decline in bulk sales and the compression in the market,” said George Allen, Chairman of the Board for Lowell Farms. “Our strategy is to offset revenues with our increased cultivation output and the launch of our new LFS business unit which is ramping quickly to incredibly high demand.
“We are also seeing extremely positive results from our expansion to Illinois and we are on track to launch Massachusetts later this quarter. We fully expect to add more markets in the near future. In California, we are positioning Lowell to be successful in an incredibly competitive operating environment and I am incredibly encouraged by the numbers coming out of our cultivation.”