Replenish Nutrients Holding Corp. (formerly EarthRenew Inc.) (CSE: ERTH) (OTC: VVIVF) ("Replenish" or the "Company"), is pleased to announce its fourth quarter and year end financial results and business update.
Business Update and Market Outlook
2023 marked a productive year for Replenish on commercial, operational, product development and financial fronts. Commercially, the Company made significant progress on its goals to optimize and create key new commercial partnerships in its supply chain and distribution channels that have laid a strong foundation on which the Company can grow going forward. Operationally, Replenish continued to streamline its base blended fertilizer business and made significant progress improving the production quality and volume of its sold-out granulated fertilizer. On the product development front, Replenish continued to make key investments in its research and development programs through various successful field trials proving the value and efficacy of the Company's fertilizer products as well as updated patent registrations and protections around the Company's proprietary biologically-active regenerative fertilizer products and zero-waste, chemical-free manufacturing process. Financially, the Company demonstrated diligent cost control and disciplined working capital management as evidenced by significant reductions in selling, general and administration expenses and significant improvements in funds from (used-in) operations and cash from (used-in) operations. Separately, the Company continues to successfully capitalize on key government funding programs related to the Company's research and development activities and was notably selected by Emissions Reduction Alberta (ERA) to receive up to $7 million dollars in non-dilutive funding for the Company's DeBolt manufacturing facility in the agriculturally dense Peace River region in Northern Alberta. These financial supports validate the importance of sustainable agriculture and food production as well as Replenish's product efficacy and commercial viability in the market. The Company's ERA application continues to progress as the Company works to secure the final portions of debt and equity financing. Further updates relating to the ERA grant will be made when available.
At a macro level, Replenish's proprietary biologically-active regenerative fertilizer products and zero-waste, chemical-free manufacturing process are ideally positioned to capitalize on the multi-billion dollar investments and initiatives being made by governments and large multi-national corporations in sustainable food and agriculture practices. The Company expects this strong growth trend to continue and for growers to continue to adopt and invest in these areas, including key sustainability practices related to regenerative fertilizers and their critical importance to soil health and related nutrient density, crop health and crop yields.
The Company's fourth quarter and full-year results were relatively modest compared to the prior year on the revenue and gross profit fronts, but these variances were expected due to lower fertilizer pricing compared to record highs in the prior year and due to the Company working through some higher cost inventory carried over from the prior year. Notably, total sales volumes for the year were similar with a slight decrease due to some seasonal variation in the fourth quarter where certain customers deferred purchasing decisions until the spring. Going forward, the Company expects to hold lower average inventory levels compared to 2022 and 2023 to limit financial exposure to commodity fluctuations, while growing demand through increased production of its sold-out granulated fertilizer and an overall increase in the awareness and demand for the Company's regenerative fertilizer products.
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