CubicFarm Systems (TSX:CUB) is slashing overhead, including 87 employees or 50.4 per cent of its workforce, to produce savings and find an easier path towards profitability.
This comes hot after last month’s revelation that the company lost CAD $9.1 million and $17.9 million respectively over the three and six month period ending June 30, 2022, compared with the losses of the previous year over the two periods, which were $6.5 million and $10.1 million. Now the company is unloading $9 million per year in operating expenses by reducing $6.4 million payroll and $2.6 million in non-payroll.
“Going forward, CubicFarms will operate and succeed as a nimble, cost-conscious business, driven by disciplined growth and data from key strategic initiatives. In particular, our HydroGreen systems put us in a great position with on-site US-based manufacturing capability and an expanding dealer network, giving us immediate access to the farm and cattle industries where there is strong demand for our technologies. We must conserve agricultural resources such as land, water, and energy using innovative indoor growing technologies. Farmers around the world want nutritious livestock feed for their animals and they need innovative solutions to address drought, water shortages, and land scarcity issues. As climate change, persistent drought, and long supply chains continue to disrupt populations and economies, the demand for our on-farm solutions has never been greater,” said Edoardo De Martin, interim CEO.
CubicFarms is an agricultural technology company involved in developing and disseminating technology to help growers produce high quality produce and livestock feed. Its proprietary tech comes from a subsidiary called Hydrogen Nutrition Technology, and the system involves patented technology for growing leafy greens and other crops indoors no matter the season.
Specifically, the technology is called HydroGreen’s Automated Vertical Pastures Technology and it’s used to grow sprout grains like barley and wheat in a controlled environment that makes minimal use of land, labour and water. The one-button automated system performs all the growing functions from seeding, watering, lighting harvesting and re-seeding. It also delivers forage for livestock without investments in fertilizer, chemicals, fuel, field equipment and transportation.
Factoring in that the company presently as 223 modules pending manufacturing and installation with a contract value of USD$30.7 million, and a revenue for the three months ending June 30, 2022, of $2.9 million, and Q2 sales of Cubicfarm systems and HydroGreen AVPs of $2.7 million, and revenue for the six months ended June 30, 2022, of $3.1 million, the suggestion is that overhead needed to come down
“Today was a tough day at CubicFarms because exceptional people will be leaving our company. I am grateful to each person for what they have contributed; their world-class talents will continue to have positive ripple effects, not only in our company, but for the future of ag-tech and we owe them a debt of gratitude,” said De Martins.