The following is a summary of the Lowell Farms Inc. (LOWLF) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Lowell Farms reported Q3 2024 net revenue of $3.2 million, an 8% sequential decrease and a 48% decrease year-over-year.

• Gross margin reported at negative 29% for Q3, primarily due to selling higher cost inventory.

• Operating expenses for Q3 were $1.8 million, equating to 57% of sales.

• Net loss for Q3 was $3.6 million, a significant decline compared to the previous quarters.

• Adjusted EBITDA for Q3 was negative $2 million.

Business Progress:

• Lowell Farms has entered the California retail market, acquiring and managing retail outlets to enhance brand presence and margins.

• Significant restructuring, including a 45% reduction in staff, aiming for cost reduction and improved operational efficiency.

• Entering the co-manufacturing space to produce CPG products for other brands.

Opportunities:

• Expansion into retail operations in California presents potential for revenue growth and margin improvement.

• New partnerships in manufacturing underscore growth opportunities in branded product distribution.

Risks:

• Supply chain disruptions and inventory shortages pose risks to consistent product availability and may impact sales.

• Ongoing adjustments in operations and market positioning introduce uncertainties in achieving forecasted financial improvements.

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