Adam JacksonGlass House Brands (OTC: GLASF) reported better-than-expected financial results for the first quarter ending March 31, despite recording a net loss.
The California-based single-state operator posted net sales of $30.1 million, a 9% increase from the $27.6 million recorded in the same period last year and surpassing its guidance range of $28 million to $29 million. The figure also beat Yahoo Finance’s analyst expectations by $2 million.
Despite the growth, the quarter’s net loss came out to $18.3 million, which was still an improvement from the $34.8 million net loss in the first quarter of 2023 and $38 million loss sequentially.
Glass House attributed a 26% sequential decline in revenue due to a typical seasonal reduction in biomass production, which reached 61,334 pounds in the first quarter, exceeding guidance and growing 28% year-over-year. The company also said that its new facility, Greenhouse 5, is now running at full capacity and will have its first full quarter of production and sales in the second quarter.
One of the company’s key metrics, production cost per pound, fell 7% over the year to $182 per pound in the first quarter.
The company reported a gross profit of $12.5 million, or 42% of net revenue, versus $12.6 million, or 46%, in the first quarter of 2023. Adjusted EBITDA was negative $1.6 million, compared with $500,000 in the prior-year period. Glass House ended March with a cash balance of $24.4 million, higher than $16.4 million at the end of the same month last year.
The company also reported a 4% increase in consumer packaged goods revenue when compared to the fourth quarter of 2023.
“Allswell revenue growing by 20%. The Allswell eighth priced at $9.99 out-the-door, including taxes, has been one of our most successful launches ever and shows the strength of our vertical integration, from farm to consumer,” CEO Kyle Kazan said in a statement. “In early March, we introduced this new pricing across all of our stores, and it resulted in the Allswell Eighth becoming our best-selling product by unit sales volume, up from the No. 2 position in January and February.”
Looking ahead, management said it anticipates setting a new single-quarter revenue record in the second quarter of 2024, projecting $52 million to $54 million, which would represent a 76% sequential increase and 19% year-over-year growth at the midpoint of guidance. The company also raised its second quarter biomass production guidance to 128,000 to 130,000 pounds, indicating 110% sequential and 25% year-over-year growth at the midpoint.
For the full year 2024, Glass House maintained its revenue guidance of $215 million to $220 million, a 35% increase at the midpoint versus 2023. The company expects adjusted EBITDA to exceed $50 million and operating cash flow to be in the mid $30 million range, not including an anticipated $11.5 million employee retention credit refund later this year.
