Discover the latest news from CubicFarms (TSX: CUB), a modular vertical farm based in Vancouver, Canada:
CubicFarms Reports Its Q1 2023 (2023/05/16)
The Company reported increased revenue for Q1 2023, at $455,392, up from $243,912 during the same period last year. Despite this increase, the firm posted net losses of $4.7 million for Q1 2023, a significant reduction from the $8.8 million net loss recorded in Q1 2022.
This reduction in net losses can be attributed to the Company’s recent cost-cutting measures. As a result, CubicFarms reported that operating expenses, including selling, general & administrative, and research & development expenses, were reduced to $3.9 million, down from $8.1 million the previous year.
Key operational highlights from Cubicfarms Q1 2023 include a partnership with Langley Indoor Produce Ltd. On January 17, CubicFarms announced it had leased FreshHub machinery and equipment to Langley Indoor Produce Ltd., retaining an option for up to 97.6% equity interest. As part of this arrangement, CubicFarms granted a license for the FreshHub intellectual property limited to indoor, non-containerized use of the CubicFarms patented equipment. Future funding for Langley Indoor Produce Ltd. is expected to be provided by third-party investors.
Another operational highlight came from CubicFarms’ livestock feed subsidiary, HydroGreen, Inc., which installed two machines sold to Jim Cheney Inc. in Utah, as announced on March 7.
Further, during CubicFarms Q1 2023, the company confirmed the completion of its overnight marketed public offering on March 17, issuing 56,027,000 units priced at $0.05 per unit. The offering generated gross proceeds of $2,801,350, which included 10,261,000 units issued to reduce the Company’s working capital obligations, addressing $513,050 in payables.
Interim CFO Michael Kyne expressed satisfaction with the results, citing the increased revenue, reduced net losses, and decreased operating expenses as positive outcomes of the Company’s cost-reduction measures. He emphasized the role of strategic partnerships and successful installations in driving operational progress. He reiterated the Company’s commitment to delivering value to shareholders and pursuing sustainable growth in the agricultural sector.
CubicFarm Systems Corp released its financial results for the year ended December 31, 2022 (2023/05/03)
The agri-tech Company reported revenue of $0.2 million for the fourth quarter, a drop from $0.8 million during the same period last year. Annual revenue also suffered, totaling $3.6 million in 2022 compared to $5.3 million in the prior annum.
Net loss for Q4 2022 widened significantly to $29.8 million, up from $11.2 million during the same period in 2021. For the full year, the net loss was $60.4 million, more than double the $29.4 million loss in the prior year.
The higher net losses in 2022 were primarily due to impairment charges, despite reduced operating expenses. The Company recorded non-cash impairment charges of $23.1 million for the fourth quarter and $26.5 million for the whole year. These charges are associated with the Fresh and Feed divisions, following the Company’s assessment of the net assets’ carrying amount exceeding the recoverable amount.
Corporate overhead, encompassing general and administrative, selling, and research and development expenses, was $5.7 million for the fourth quarter. The overheads represent a 45% reduction from $10.4 million in the prior year, achieved through the Company’s cost reduction plan implemented in the second half of 2022. However, the annual corporate overhead in 2022 increased slightly to $31.6 million from $30.5 million in 2021.
CubicFarm is optimistic about its cost reduction plan, which is projected to yield annual savings of $15.6 million in cash-based operating expenses. The plan was announced in September 2022, and the Company reiterates it is on track to achieve this goal.
Despite the challenges faced in 2022, CubicFarm Systems Corp is determined to return to financial stability by continuing to implement its cost reduction strategy while reassessing its asset values and working towards enhancing machine sales.
Second Quarter 2022: Restructuring Process (2022/08/15)
In the second quarter of 2022, CubicFarms maintained its emphasis on project execution, particularly the installation of their CubicFarm Systems and HydroGreen Automated Vertical Pastures™ (AVPs) solutions, while continuing to build their sales pipeline, according to CFO Carlos Yam. Operational performance is reviewed continually, and measures, including expense management, are implemented to ensure financial alignment within operations. HydroGreen, a division of CubicFarms, is nearing completion on its installation of AVPs at Burnett’s Land & Livestock in Carpenter, Wyoming. These AVPs comprise the world’s most comprehensive automated indoor growing solution, garnering significant interest from potential customers.
The company showcased its HydroGreen Innovation Center R&D facility in Sioux Falls, South Dakota, to more than 400 National Holstein Convention conference attendees. Demonstrations at the event highlighted the six-day growth cycle from seed to feed and the nutritional benefits of HydroGreen fresh forage. Specifically, the forage could decrease methane emissions in dairy cows by roughly 24% per unit of milk output and beef cattle by about 48% per kilogram weight gain, offering additional benefits like water and land conservation.
CubicFarms CEO, Dave Dinesen, emphasized the company’s strategic focus on the next generation of indoor growing systems, leveraging their software platform and the latest research. The R&D efforts are consistently enhancing the scalability of CubicFarm Systems and HydroGreen AVPs, with data science improving plant and animal performance outcomes. In addition, the recently announced carbon credit commercialization strategy and recently published studies create an attractive economic proposition in the livestock industry, allowing farmers and ranchers to achieve reliable, consistent feed production for their herds.
Despite the net loss of $9.1 million for the three months and $17.9 million for the six months ended June 30, 2022, the company has announced several cost reduction measures. They have reduced approximately 16.5% of their workforce and other non-payroll-related overhead expenditures, resulting in an estimated $6.7 million in annualized savings. This equates to a reduction of 21.8% of the Company’s cash-based operating expenses on a trailing 12-month basis. In addition, a centralized procurement structure will be implemented to right-size indirect costs and optimize supply chain efficiencies. These cost-saving measures will positively impact the company’s financial performance starting in the third quarter 2022.
Image provided by Cubicfarms
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