VANCOUVER, British Columbia, May 2, 2023 – CubicFarm® Systems Corp. (“CubicFarms” or the “Company”) (TSX:CUB), a leading local chain agricultural technology company, reports its financial results for the three months and year ended December 31, 2022. All amounts are in Canadian dollars.
Fourth Quarter and Fiscal Year End Financial Results
- Revenue for the three months ended December 31, 2022, was $0.2 million, compared to $0.8 million in the prior year. Revenue for the year ended December 31, 2022 was $3.6 million, compared to $5.3 million in the prior year. The reduction was due to lower machine sales.
- Corporate overhead, which included general and administrative, selling, and research and development expenses was $5.7 million for the three months ended December 31, 2022, reduced by $4.6 million or 45% compared to $10.4 million in the prior year due to the Company’s cost reduction plan that was implemented in the second half of 2022. For the year ended December 31, 2022, corporate overhead was $31.6 million, compared to $30.5 million in the prior year. The Company believes it is on track to achieve annual savings of $15.6 million of cash-based operating expenses as previously announced in September 2022.
- The Company recorded non-cash impairment charges of $23.1 million for the three months and $26.5 million for the year ended December 31, 2022 relating to its Fresh and Feed divisions, as a result of the Company’s assessment of the carrying amount of its net assets in excess of the recoverable amount.
- Net loss for the three months ended December 31, 2022 was $29.8 million, compared to $11.2 million in the prior year. The higher net loss in Q4 2022 was primarily due to the impairment charges, partially offset by lower operating expenses as mentioned above. Net loss for the year ended December 31, 2022 was $60.4 million, compared to $29.4 million in the prior year.
“As we move forward, CubicFarms is committed to operating as a lean, efficient business focused on disciplined growth,” said Interim CEO of CubicFarms and President of HydroGreen, John de Jonge. “Our ongoing restructuring efforts have focused on strengthening the future financial viability of the company. We continue to explore all options and remain optimistic about future prospects. With HydroGreen, we are well-positioned to serve the dairy and cattle industries, which have a strong demand for our technology and feed solution. The world continues to face challenges such as climate change, drought, and land scarcity, and so we remain dedicated to providing innovative indoor growing solutions that conserve agricultural resources and provide superior nutritious feed to benefit dairy and beef animals.”
HydroGreen produces Automated Vertical Pastures™, a type of smart farming equipment that uses a unique process to sprout grains such as wheat and barley, in a controlled growing environment to efficiently produce a high-performance feed ingredient for livestock 365 days a year. HydroGreen’s equipment is simple and easy to operate and performs all growing functions automatically, including seeding, watering, lighting, harvesting, and re-seeding, which allows livestock businesses to feed consistent nutrition every day with minimal labour. When balanced correctly in the ration, HydroGreen sprouted grain modifies animal digestion which enhances productivity and reduces the amount of enteric methane emitted in ruminant livestock. The result also enables environmental benefits to the farm while helping to meet increasing demand for valuable farm-based inset and offset carbon credits.
CubicFarms is a leading local chain agricultural technology company developing and deploying technology to feed a changing world. Its proprietary ag-tech solutions enable growers to produce high quality, predictable produce and fresh livestock feed with HydroGreen Nutrition Technology, a division of CubicFarm Systems Corp. The CubicFarms™ system contains patented technology for growing leafy greens and other crops onsite, indoors, all year round. CubicFarms provides an efficient, localized food supply solution that benefits our people, planet, and economy.
Forward looking and other cautionary statements
Certain statements in this release constitute “forward-looking statements” or “forward-looking information” within the meaning of applicable securities laws, including, without limitation, statements with respect to: the Company’s ability to complete the Required Filings by April 28, 2023 or May 30, 2023 and to comply with the provisions of the alternative information guidelines described in sections 9 and 10 of NP 12-203. Such statements involve known and unknown risks, uncertainties, and other factors and assumptions which may cause the actual results, performance, or achievements of CubicFarm Systems Corp., or industry results, to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements or information including, without limitation, the risk of the Company not obtaining the MCTO or file the Required Filing on time and the other factors disclosed under “Risk Factors” in the Company’s annual information form for the year ended December 31, 2021, and those risks described in other documents incorporated or deemed to be incorporated by reference in the prospectus. Such statements can be identified by the use of words such as “intend”, “expect”, “believe”, “plan”, “anticipate”, “estimate”, “scheduled”, “forecast”, “predict”, and other similar terminology, or state that certain actions, events, or results “may”, “can”, “could”, “would”, “might”, or “will” be taken, occur, or be achieved.
These statements reflect the Company’s current expectations regarding future events, performance, and results and speak only as of the date of this news release. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Except as required by securities disclosure laws and regulations applicable to the Company, the Company undertakes no obligation to update these forward-looking statements if the Company’s expectations regarding future events, performance, or results change.