Greenlane Renewables Inc.

afternoon ladies and gentlemen welcome to the green lane renewables fourth quarter and year end in december 31st 2024 video conference my name is darren seed president of inside capital markets responsible for investor relations at green lane i'm joined today by brad deville green lane's chief executive officer and stephanie mason green lane's chief financial officer we'll begin with prepared remarks followed by q a which i will moderate Before beginning our formal remarks, we'd like to remind listeners that today's discussion may contain forward-looking statements that reflect current views with respect to future events. Any such statements are subject to risks and uncertainties that can cause actual results to differ materially from those projected in these forward-looking statements. Green Lane Renewables does not undertake to update any forward-looking statements, except as may be required by applicable laws. Listeners are urged to review the full discussion of risk factors in the company's annual information form, which has been filed with Canadian securities regulators. Please feel free to submit any questions you may have through our investor email address at ir.greenlanerenewables.com. Now, over to Brad.

Thanks, Darren. Good afternoon and thank you, everyone, for joining us today. As you can tell, we're driving forward on a new path for our quarterly results, where Stephanie and I will discuss the quarter near end, December 31st, 2024, through this video presentation. We made significant progress in 2024, as evidenced by our strong financial results and continued operational improvements. While Stephanie will provide the details of our financial results in a moment, I did want to highlight that our adjusted EBITDA improved by over 80%, balance sheet cash position strengthened by over 35%, and G&A cost run rate reduced by over 25%. This reflects disciplined cost management and positive impact from gross margin as a percent of revenue that increased from 25% in 2023 to 32% in 2024. With over 16 million in cash, no debt, a backlog of over 21 million as at December 31st, 2024, we are entering 2025 with a strong foundation. Beyond financial results, technological innovation and leadership through products that provide the best price and performance remain the focal point for us. Greenlane recently filed two new patent applications for landfill gas upgrading technology aimed at maximizing methane recovery while reducing capital expenditure. The company plans to unveil its next generation product line in 2025. Higher performance and lower cost systems boost revenue generating RNG output while minimizing upfront investment, making RNG projects more accessible and scalable. Outside of our results and product development plans, we do receive inquiries about the nature, extent and duration of any U.S. tariffs. We are assessing the direct and indirect impacts that these tariffs may have on our business, including the impacts of any retaliatory tariffs or other trade protectionist measures implemented as the situation evolves. The company is currently not supplying systems in the United States reliant on components or assemblies supplied from Canada or Mexico. leading biomethane off-takers have come together under the leadership of the european biogas association to emphasize biomethane's essential role in achieving europe's climate neutrality objectives while ensuring the continent's global competitiveness Harman Decker, CEO of the European Biogas Association, said that the European Commission's net zero targets require a profound transformation of Europe's energy systems driven by renewables, infrastructure development and new market opportunities. He went on to say that to achieve this in the most competitive way, sustainable biomethane is a vital role to play in the upcoming Clean Industrial Deal, serving as an essential component of this transition by providing de-fossilization solutions, enhancing energy security and strengthening Europe's industry. In the U.S., Democratic Congresswoman Hilary Scholten and Republican Congressman David Bladel introduced the Agricultural Environmental Stewardship Act of 2025 to extend the Section 48 investment tax credit under the Inflation Reduction Act for qualified biogas properties. Congresswoman Scholten said that Extending the Section 48 investment tax credit is common sense and to secure America's green future, producers must have the clarity necessary to make critical investments in biogas. She went on to say that her bill would put West Michigan's agricultural community at the forefront of the clean energy transition while cutting harmful greenhouse gas emissions and lowering costs for families across the country. She also said she's glad to work with her Republican colleague to introduce solutions that support communities across the country. Meanwhile, CNBC reported that natural gas producers are bullish on demand as they see significant upside from the immense energy needs of artificial intelligence and data centers. The surge in power demand poses a challenge for Amazon, Google, Microsoft and Meta. The tech companies have committed to powering their data centers with renewables to slash carbon emissions. but solar and wind alone may be inadequate to meet the electricity load because they are dependent on variable weather. GreenLane believes that the near-term rapid uptake of natural gas for AI and data centers presents a new potential pathway for RNG as the tech companies ultimately fulfill their commitments to renewables by displacing that natural gas with RNG over time. With that, I'll now turn the call over to Stephanie.

Thanks, Brad, and good afternoon, everyone. I'll bring up a slide that summarizes our 2024 results. As a reminder, all figures are in Canadian dollars and all comparisons are for the fourth quarter and fiscal year 2024 against the respective periods of 2023 for continuing operations unless otherwise stated. GreenLane generated revenue in the fourth quarter of 8.5 million compared to 16.5 million for the comparative period of 2023. The change reflects an 8.5 million reduction in system sales, partially offset by a 0.5 million improvement in aftercare services. For the fiscal year 2024, revenue of $51.8 million was 5% lower than 2023 revenue of $54.6 million. System sales revenue accounted for 83% of total 2024 revenue compared to 89% in 2023, which is recognized in accordance with the stage of completion of projects, with the remaining 17% of revenue generated from aftercare services and royalty contracts compared to 11% in 2023. Our gross margin excluding amortization in the fourth quarter of 2024 was 45% or 3.8 million, a substantial increase from gross margin of 20% on 3.3 million in the same period of 2023. For the full year, we delivered a gross margin excluding amortization of 32% or 16.3 million compared to 25% or 13.6 million in 2023. The company has a portfolio of active projects at different stages of completion and at different gross margin levels. Reflecting on the gross margin improvements in the fourth quarter and the full year 2024, the increases are largely attributable to product mix as well as an increased contribution from parts and service and higher costs in the prior year from non-recurring commissioning and other costs. It is also worth pointing out that the full year margins benefited from the positive impact of expired warranty provisions and a second quarter adjustment to the company's current warranty provision estimates based on historical experience. Adjusted EBITDA in the fourth quarter improved 85% to a loss of $0.2 million versus a $1.4 million loss in the fourth quarter of 2023. For the full year, adjusted EBITDA was a loss of $1.7 million versus a $9 million loss in 2023, an improvement of 81%. The improvements in adjusted EBITDA results for 2024 reflect, as Brad noted, disciplined cost management, improved overall product gross margin, along with a decrease in system sales revenue in comparison to 2023 results. The company generated net income and comprehensive income of 1.9 million in the fourth quarter of 2024 compared to a net loss and comprehensive loss of 16.8 million in Q4, 2023. This is primarily from the change in fair value of a note receivable and foreign exchange gains included in other income. For fiscal 2024, the company incurred a net loss and comprehensive loss of 1.3 million compared to a net loss and comprehensive loss of 28.3 million in 2023. This is a significant improvement on a quarter-over-quarter and year-over-year basis despite Q4 2023 results, including an impairment of goodwill and intangible assets. The company's sales order backlog was 21.8 million as at December 31st, 2024. As a reminder, the sales order backlog is a snapshot at one moment in time, which varies from quarter to quarter. The sales order backlog increases by the value of new system sales contracts and is drawn down over time as projects progress towards completion with amounts recognized in revenue. Our sales order backlog does not include service revenue or revenue from the company's royalty-like agreement with SAIC Biogas. our 6.5 million system supply contract announced in the fourth quarter for a landfill RNG project boosted our sales order backlog and highlights the demand for GreenLane systems. As of December 31st, 2024, GreenLane had cash and cash equivalents of 16.2 million, an increase of 37% or 4.4 million over the same period in 2023. We continue to maintain a strong balance sheet with no debt, which provides us with financial flexibility as we invest in key growth areas, optimize operations while driving financial performance. I now turn the call back to Brad for closing remarks.