Mr. Brad Douville reports

GREENLANE RENEWABLES ANNOUNCES THIRD QUARTER 2024 FINANCIAL RESULTS

Greenlane Renewables Inc. has released its financial results for the third quarter ended Sept. 30, 2024. For further information on these results please see the company's condensed consolidated interim financial statements and management discussion and analysis filed under the company's profile on SEDAR+. All amounts reported are in Canadian dollars and in accordance with international financial reporting standards as issued by the International Accounting Standards Board unless otherwise stated.

Third quarter highlights from continuing operations include:

• Revenue of $10.5-million;
• Gross profit of $3.4-million, gross margin before amortization of $3.6-million (34 per cent of revenue);
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) loss of $200,000;
• Net loss and comprehensive loss of $2-million;
• Sales order backlog of $14.3-million as at Sept. 30, 2024;
• Cash and cash equivalents of $15.4-million and no debt, other than payables resulting from normal course operations, as at Sept. 30, 2024.

"Greenlane's third quarter performance demonstrates our commitment to diligent completion of biogas upgrading system contracts, disciplined cost management and realizing operational efficiencies, leading to an increase in revenue over the same quarter last year and a substantial improvement in our cash balance and adjusted EBITDA," said Brad Douville, chief executive officer of Greenlane. "We have adapted and implemented changes to our cost structure appropriate for the opportunities in front of us through a reduction in work force. Our stated goal of achieving positive adjusted EBITDA for the full year depended upon signing new biogas upgrading system contracts that have experienced delays associated with our customers' final decisions to start construction. As a consequence, while we maintain our goal of positive adjusted EBITDA, we have determined that it will not be achieved in 2024.

"As recently announced, we have increased our service business by adding maintenance contracts that generate additional opportunities from Greenlane's large installed customer base. Greenlane continued to expand its impact in RNG [renewable natural gas] markets, completing over 20 biogas upgrading system projects in the last two years -- over 145 in total. While uncertainties in customer project starts and competitive pressures continue to affect new biogas upgrader system sales, we are excited about Greenlane's future. We are well positioned to capitalize on the global push towards decarbonization, and our ongoing projects underscore our commitment to supporting a sustainable energy transition. We're confident that our streamlined, agile organization will continue to make meaningful contributions to the RNG industry."

Monty Balderston, chief financial officer of Greenlane, noted: "As of Sept. 30, 2024, we had a cash balance of $15.4-million, which was a 70-per-cent increase from June 30, 2024, driven by the conversion of accounts receivable to cash. We reported revenue of $10.5-million for Q3 2024, a 10-per-cent increase over Q3 2023. Our revenue growth was driven by both system sales and aftercare services. System sales contributed $8.5-million while aftercare services grew to $2-million, reflecting increased demand for our support services. Greenlane's gross margin before amortization for the third quarter of 2024 of 34 per cent of revenue, or $3.6-million, benefited from the positive impact of $400,000 related to the release of expired warranty provisions. Excluding the warranty impact, gross margin before amortization is 30 per cent, which is higher than our overall third quarter of 2023 comparative period and second quarter 2024 financial performance as a result of higher aftercare service contribution to the revenue mix.

"Furthermore, as we have completed three upgrader projects in Q3 2024 (10 upgrader projects in the first nine months of 2024) and realized operational efficiencies, together with experiencing delays in new system contract awards, we have reduced our general and administrative cost run rate by over 25 per cent. We incurred a $500,000 restructuring charge in the third quarter of 2024 related to the work force reduction. We estimate the changes will result in a $5-million annual reduction in general and administrative costs. In addition, we incurred an impairment charge of $1-million on our outstanding notes receivable.

"For our shareholders, we saw improvement in our adjusted EBITDA, reducing our loss to $200,000 from a $4.4-million loss in Q3 2023. Our net loss and comprehensive loss of $2-million was a 61-per-cent improvement from a net loss of $5.1-million in Q3 2023. Airdep has become a much more prominent part of our business due to its consistent and profitable growth. Accordingly, we are now including Airdep's sales contracts in the sales order backlog. As of Sept. 30, 2024, Airdep contributed $5.9-million to our total sales order backlog of $14.3-million," added Mr. Balderston.

The market outlook

The International Energy Agency's (IEA) renewables report reflects optimism for the global renewables sector and calls for a worldwide effort to realize the potential of bioenergy and biofuels. For the first time in the IEA renewables market report series, the annual report features a special chapter on renewable fuels, including bioenergy, biogases, hydrogen and e-fuels. The report says that global demand for biogases (including both biogas and biomethane) is expected to accelerate, climbing an estimated 30 per cent in the period 2024 to 2030 to reach almost 2,270 petajoules (around 59 billion cubic metres equivalent) per year in 2030.

The Brazilian market continues to advance its RNG directives with a new regulatory framework for biofuels. Brazil recently passed legislation representing a significant milestone for the biofuels sector in Brazil, including biogas and biomethane. Known as the Future Fuels Law (Lei dos Combustiveis do Futuro), the new legislation aims to promote the decarbonization of the country's energy matrix, focusing on sectors such as transportation and mobility. The legislation includes programs such as the National Program for the Decarbonization of Natural Gas Producers and Importers and Incentives for Biomethane, which are essential to reducing greenhouse gas emissions and fostering sustainable development in the gas sector.

The growth of the overall RNG industry continues. The Coalition for Renewable Natural Gas (or RNG Coalition) announced a major milestone of 433 RNG-producing facilities now operational across North America. This achievement represents a significant leap from just a year ago, when the North American RNG industry celebrated the establishment of 300 facilities, marking a remarkable 44-per-cent growth within just one year. In addition to currently operational facilities, there are 436 facilities in various stages of planning or construction, creating a robust pipeline of forthcoming projects.

Conference call

The public is invited to listen to the conference call in real time by telephone today, Nov. 7, 2024, at 2 p.m. PT (5 p.m. ET). The public is invited to listen to the conference call in real time by telephone. To access the conference call by telephone, please dial 1-800-717-1738 (North America toll-free) or 1-289-514-5100. Callers should dial in five to 10 minutes prior to the scheduled start time and ask to join the Greenlane Renewables conference call. The company is committed to enhancing its communication initiatives moving forward and is pleased to announce that the coming Q3 conference call will include an open forum for discussion with all participants.

Shortly after the conference call, the replay will be archived on the Greenlane Renewables website and replay will be available in streaming audio and a downloadable audio file.

About Greenlane Renewables Inc.

Greenlane is driving change: accelerating the energy transition to a net-zero-emission economy. The company is cleaning up two of the largest and most difficult-to-decarbonize sectors of the global energy system: the natural gas grid and commercial transportation. As a pioneer and leading specialist in biogas upgrading, Greenlane has been actively contributing to the decarbonization of the planet for over 35 years. The systems the company provides transform biogas generated from organic waste into high-value, grid-ready renewable natural gas. Greenlane's systems produce clean, low-carbon and carbon-negative RNG from organic waste sources, including agriculture (such as dairy and hog manure), water resource recovery facilities, food waste, landfills and sugar mills. Greenlane is the only biogas upgrading company offering and actively deploying the three main upgrading technologies: water wash, pressure swing adsorption and membrane separation, plus proprietary biogas desulphurization technology. Greenlane has delivered over 145 biogas upgrading systems into 19 countries, including some of the largest RNG production facilities in the world, and over 160 biogas desulphurization units.

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