Replenish Nutrients Holding Corp (CSE:ERTH, OTC:VVIVF, FRA:7KE) said it is nearing full commercial-scale production at its Beiseker fertilizer facility in Alberta as the company continues ramping up granulated fertilizer operations and advancing several production and licensing projects.
Along with reporting its first quarter results, the company said the Beiseker facility is in the final stages of completing its load-out tower and is preparing for 24-hour production runs through the hiring of additional plant operators.
Replenish expects the facility to reach its targeted production capacity of 2,000 metric tonnes per month by the third quarter of 2026.
Replenish also reported record year-to-date production and sales of granulated fertilizer as of the date of the release, with second-quarter volumes already significantly surpassing first-quarter sales. The company said demand for locally produced fertilizer has increased amid geopolitical disruptions affecting international fertilizer supplies.
During Q1, the company recorded gross profit margins before other direct costs of 29% on granulated fertilizer produced at the Beiseker facility. Replenish said it continues to expect granulated and pellet fertilizer gross margins before other direct costs to range between 25% and 35% once operations reach full scale.
The company also announced a partnership with the Beiseker Hutterite colony to produce its patented pellet fertilizer at a newly commissioned facility expected to manufacture approximately 1,000 metric tonnes per month. Initial production and sales are anticipated to begin in the third quarter of 2026.
In addition, Replenish provided updates on its licensing agreements with Farmers Union and MJ Ag, stating that both projects achieved construction and commissioning milestones during the first quarter.
The company expects initial production at both licensed facilities to begin by the third quarter of 2026, with annualized production capacities projected to reach 50,000 metric tonnes and 10,000 metric tonnes, respectively, by year-end.
Replenish reported Q1 revenue of approximately $0.42 million, up slightly from about $0.40 million in the same period last year. The company said the increase was driven by higher sales volumes of granulated fertilizer, stronger average fertilizer pricing, and higher average power pool pricing in its power segment, partially offset by lower blended fertilizer sales.
Net loss widened to approximately $1.83 million, or $0.01 per share, compared with a net loss of about $1.22 million, or $0.01 per share, in the prior-year period. Replenish said the larger loss was primarily due to lower gross profit margins, higher finance costs, and a non-cash unrealized loss on financial assets during the quarter.
Gross profit declined to a loss of approximately $0.24 million from a positive gross profit of about $0.07 million a year earlier, while gross margin fell to negative 57% from 19%. The company attributed the decline to the expected transition toward full-scale granulated fertilizer operations at the Beiseker plant, lower blended fertilizer margins, and additional ramp-up costs associated with progressing toward 24-hour operations.
Operating loss widened slightly to approximately $1.12 million from about $1.09 million in the year-ago quarter, while adjusted EBITDA loss increased to roughly $0.82 million from about $0.55 million. Selling, general and administrative expenses declined to approximately $0.58 million from about $0.63 million.
Cash used in operating activities totaled approximately $0.85 million during the quarter, compared with cash provided by operating activities of about $0.15 million in the same period last year. The company said the increased cash usage reflected lower operating margins and higher working capital requirements.
"We are highly encouraged by our Q1 performance, where early granulated fertilizer sales delivered a strong 29% gross margin before other direct costs,” Replenish CEO Neil Weins said in a statement.
“This validates our long-term margin target of 25% to 35% before other direct costs as we drive toward full scale commercial operations.”
Replenish also noted it completed a private placement financing during the quarter that raised approximately $4.80 million.
Subsequent to the quarter-end, the company said it further strengthened its balance sheet through a previously disclosed $1.95 million expansion of its existing revolving credit facilities.
"With our Beiseker facility capable of full capacity by Q3 2026, and our pellet partnership and licensing deals scaling rapidly through the end of the year, we are successfully shifting our product mix toward higher-volume, higher-margin production that will drive meaningful value for our shareholders,” Weins added.