Replenish Nutrients Announces 2024 Second Quarter Financial Results and Business Update

/NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO UNITED STATES WIRE SERVICES/

OKOTOKS, AB, Aug. 28, 2024 /CNW/ – Replenish Nutrients Holding Corp. (formerly EarthRenew Inc.) ERTH VVIVF (“Replenish” or the “Company”), is pleased to announce its 2024 second quarter financial results and business update.

Business Update and Market Outlook

The second quarter of 2024 saw modest revenues, sales volumes, and margins in the Company’s blended fertilizer product – largely due to some final higher cost inventory carryover and some deferral of sales to the fall season. The overall demand for the Company’s regenerative fertilizer products remains robust with consistent and growing purchases from existing and new customers, with fluctuations largely due to variability in seasonal demand from weather and the expected cycling of different nutrient requirements for different crop types. The Company expects second half revenues and gross margin percentages in 2024 to be higher than the comparative periods in 2023, leading to solid overall results for annual 2024.

The granulated fertilizer product produced at the Beiseker facility continued to demonstrate strong pricing and margins vis-à-vis the blended product in the second quarter and provides excellent insight into the upside potential of an upgraded Beiseker facility that targets to produce and sell 20,000 to 25,000 metric tonnes of granulated fertilizer per year upon completion of the facility upgrades. As noted in previous quarters, the Company is focused on shifting the sales mix of its products from being predominantly lower margin blended fertilizer towards higher margin granulated fertilizer.

On the financing front, the Company expects to use a combination of internal cash flows, debt and equity, as required, to complete the Beiseker facility upgrade in 2024 or early 2025. The Company expects to close the final financing for the Beiseker upgrade in the coming weeks and months ahead. In the meantime, the Company has continued to progress the Beiseker facility upgrade using existing financing. On the DeBolt project, the Company’s ERA application continues to progress as the Company looks to secure the final debt and equity financing. Further updates relating to the ERA grant will be made when available.

Overall, Replenish was pleased with the adjustments and upgrades made to the granulation process at the Beiseker facility during the second quarter and is confident in the ability to ramp up granulated fertilizer production upon the completion of the upgrade later in the second half of 2024 or early 2025. Although granulated fertilizer volumes were modest in the quarter, the Company was pleased with the strong granulated pricing and margins and expects significant margin and cash flow improvements from higher granulated production rates and sales volumes out of Beiseker in the later half of the year and into 2025. Until then, the Company expects the blended fertilizer product margins to sufficiently support the day-to-day cash requirements of the business.

Consolidated Financial Highlights

Revenues of $0.9 million and $2.2 million compared to $4.3 million and $6.8 million in the prior year, a decrease of $3.4 million and $4.6 million, respectively. The decrease is largely due to variability in seasonal demand from weather and the expected cycling of different nutrient requirements for different crop types. Customer demand for the Company’s product remains robust.
Gross profit of $0.0 million and $0.2 million compared to $0.6 million and $0.7 million in the prior year, a decrease of $0.6 million and $0.6 million, respectively. The decrease is due the flow through of remaining higher cost inventory.
Net loss of $1.3 million and $2.9 million compared to a net loss of $0.6 million and $0.8 million in the prior year, a decrease of $0.8 million and $2.1 million, respectively.
Cash flows used-in operating activities of $0.2 million and $0.4 million compared to cash flows from operating activities of $0.2 million and cash flows used-in operating activities of $0.5 million in the prior year, an increased use of cash of $0.4 million and a decreased use of cash of $0.1 million. The decreases were due to compressed margins from higher cost inventory while the improvements were due to favourable changes in working capital changes year over year.

About Replenish Nutrients

Replenish Nutrients is an agriculture bioscience company and a leading intellectual property developer of regenerative and sustainable fertilizer solutions and manufacturing processes that support a healthy soil ecosystem and grower profitability. Through proprietary fertilizer products containing essential nutrients, biological material and a chemical-free, zero-waste manufacturing process, Replenish has developed a sustainable alternative to synthetic fertilizers that enhances overall soil function and biology while providing valuable plant-available nutrients farmers rely upon for healthy crops and sustainable farming business models. Replenish Nutrients is a wholly-owned subsidiary of Replenish Nutrients Holding Corp. ERTH VVIVF. To learn more about Replenish visit our website at www.replenishnutrients.com.

About Replenish Nutrients Holding Corp. (formerly EarthRenew Inc.)

Replenish Nutrients Ltd. is a wholly owned subsidiary of Replenish Nutrients Holding Corp. (formerly EarthRenew Inc.) ERTH VVIVF.

Cautionary Note Regarding Forward-Looking Information

This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements with respect to financial and operating results. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “will”, “may”, “would”, “should”, “could”, “plans”, “expects”, “budget”, “schedule”, “estimates”, “forecasts”, “intends”, “anticipates”, “believes”, and similar expressions, including variations thereof and negative forms. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to: general business, economic, competitive, geopolitical and social uncertainties; regulatory risks; other risks of the energy and fertilizer industries and other risk factors disclosed in our public disclosure which can be found under our profile on SEDAR+ at www.sedarplus.ca. Readers are cautioned that these risk factors should not be construed as exhaustive. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Neither the Canadian Securities Exchange nor its Market Regulator (as that term is defined in the policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE Replenish Nutrients Holding Corp.