- Revenue of
$20.9 million , representing a 69% increase over$12.4 million in the prior year period and a sequential increase of 11% over$18.8 million - Net Loss of
$3.4 million , representing an improvement of$5.3 million versus the prior year period and a sequential improvement of$2.1 million - GAAP Loss per share of
$0.29 , and Adjusted Loss per share of$0.20 - Adjusted EBITDA1 of negative
$1.3 million , representing an improvement of$1.0 million versus the prior year period and a sequential improvement of$0.7 million - Project backlog of
$84 million as ofSeptember 30, 2023 , representing a sequential increase of$5 million , or 6% - Provides fourth quarter 2023 guidance of approximately
$30 million in revenues and breakeven to slightly positive Adjusted EBITDA - Company to host conference call and webcast today,
November 9, 2023 at4:30 p.m. Eastern time
Third Quarter 2023 Financial Results
Revenue was
Gross profit was
Operating expenses were
Non-operating expenses were
Net loss was
Adjusted EBITDA1 improved by
Cash position at the end of the third quarter of 2023 was
Summary First Nine Months 2023 Financial Results
Revenue was
Net loss was
Adjusted EBITDA1 was negative
Backlog as of
Consolidated backlog is unrealized revenue represented by signed construction design-build, equipment systems, and service orders. As of
The following table summarizes the change in backlog for the current quarter:
Equipment Systems | Services | Construction Design-Build | Total Backlog | ||||||||||||
(in millions) | |||||||||||||||
Beginning backlog as of | $ | 5 | $ | 4 | $ | 70 | $ | 79 | |||||||
Revenue recognized | (3 | ) | (3 | ) | (15 | ) | (21 | ) | |||||||
Net backlog additions/(reductions) | — | 4 | 22 | $ | 26 | ||||||||||
Ending backlog as of | $ | 2 | $ | 5 | $ | 77 | $ | 84 | |||||||
Revenue and Adjusted EBITDA1 Guidance - Fourth Quarter 2023
For the Fourth Quarter 2023, the Company is providing guidance as follows:
Consolidated revenue: Approximately
Adjusted EBITDA1: Achievement of breakeven to slightly positive adjusted EBITDA, representing a sequential improvement from negative
Conference Call Details
urban-gro will host a conference call and live audio webcast to discuss the operational and financial results today,
1Adjusted EBITDA is a non-GAAP financial measure. Please see the information under “Use of Non-GAAP Financial Information” below for a description of Adjusted EBITDA and the table at the end of this press release for a reconciliation of this non-GAAP financial information to GAAP results.
Use of Non-GAAP Financial Information
We define Adjusted EBITDA as net income (loss) attributable to urban-gro, determined in accordance with
Our Board of Directors and management team focus on Adjusted EBITDA as a key performance and compensation measure. We believe that Adjusted EBITDA assists us in comparing our performance over various reporting periods because it removes from our operating results the impact of items that our management believes do not reflect our core operating performance.
There are limitations to using non-GAAP measures such as Adjusted EBITDA. Although we believe that Adjusted EBITDA can make an evaluation of our operating performance more consistent because it removes items that do not reflect our core operations, other companies in our industry may define Adjusted EBITDA differently than we do. As a result, it may be difficult to use Adjusted EBITDA to compare the performance of those companies to our performance. Adjusted EBITDA should not be considered as a measure of the income generated by our business or discretionary cash available to us to invest in the growth of our business.
About urban-gro, Inc.
urban-gro, Inc.® (Nasdaq:
Safe Harbor Statement
This press release contains forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. When used in this release, terms such as “believes,” “will,” “expects,” “anticipates,” “continue,” “expect,” “may,” “projects” and similar expressions and variations as they relate to the Company or its management are intended to identify forward-looking statements. The forward-looking statements in this press release include, without limitation, financial projections, financial guidance, future events, business strategy, future performance, future operations, future demand, backlog, financial position, estimated revenues, losses, adjusted EBITDA, prospects, plans and objectives of management, including expense optimization, working capital management, and the future ability to position the Company for growth. These and other forward-looking statements are based on current expectations, forecasts, and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially from those anticipated or expected, including, among others, our ability to successfully manage and integrate acquisitions, our ability to accurately forecast revenues and costs, competition for projects in our markets, our ability to predict and respond to new laws and governmental regulatory actions, including delays granting licenses to clients or potential clients and delays in passage of legislation expected to benefit our clients or potential clients, our ability to successfully develop new and/or enhancements to our product offerings and develop a product mix to meet demand, risks related to adverse weather conditions, supply chain issues, rising interest rates, economic downturn or other factors that could cause delays or the cancellation of projects in our backlog or our ability to secure future projects, our ability to maintain favorable relationships with suppliers, risks associated with reliance on key customers and suppliers, our ability to attract and retain key personnel, results of litigation and other claims and insurance coverage issues, risks related to our information technology systems and infrastructure, risks associated with climate change and ESG matters, our ability to maintain effective internal controls, our ability to execute on our strategic plans, our ability to achieve and maintain cost savings, the sufficiency of our liquidity and capital resources, and our ability to achieve our key initiatives for 2023, particularly our growth initiatives. A more detailed description of these and certain other factors that could affect actual results is included in the Company’s filings with the
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash | $ | 4,770,430 | $ | 12,008,003 | |||
Accounts receivable, net | 18,341,489 | 15,380,292 | |||||
Contract receivables | 8,378,657 | 3,004,282 | |||||
Prepaid expenses and other assets | 3,268,279 | 4,164,960 | |||||
Total current assets | 34,758,855 | 34,557,537 | |||||
Non-current assets: | |||||||
Property and equipment, net | 1,456,009 | 1,307,146 | |||||
Operating lease right of use assets, net | 2,217,738 | 2,618,825 | |||||
Investments | — | 2,559,307 | |||||
15,572,050 | 15,572,050 | ||||||
Intangible assets, net | 4,634,672 | 5,450,687 | |||||
Total non-current assets | 23,880,469 | 27,508,015 | |||||
Total assets | $ | 58,639,324 | $ | 62,065,552 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 22,194,304 | $ | 9,960,364 | |||
Accrued expenses | 4,074,098 | 3,196,961 | |||||
Contract liabilities | 1,981,728 | 1,294,452 | |||||
Customer deposits | 969,888 | 2,571,161 | |||||
Contingent consideration | 161,947 | 2,799,287 | |||||
Promissory notes | 1,964,775 | 3,832,682 | |||||
Operating lease liabilities | 598,447 | 600,816 | |||||
Total current liabilities | 31,945,187 | 24,255,723 | |||||
Non-current liabilities: | |||||||
Operating lease liabilities | 1,666,138 | 2,044,782 | |||||
Deferred tax liability | 865,802 | 1,033,283 | |||||
Total non-current liabilities | 2,531,940 | 3,078,065 | |||||
Total liabilities | 34,477,127 | 27,333,788 | |||||
Stockholders’ equity | |||||||
Preferred stock, | — | — | |||||
Common stock, | 13,120 | 12,221 | |||||
Additional paid-in capital | 88,268,286 | 84,882,982 | |||||
(12,045,542 | ) | (12,045,542 | ) | ||||
Accumulated deficit | (52,073,667 | ) | (38,117,897 | ) | |||
Total stockholders’ equity | 24,162,197 | 34,731,764 | |||||
Total liabilities and stockholders’ equity | $ | 58,639,324 | $ | 62,065,552 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Revenues: | |||||||||||||||
Equipment systems | $ | 3,043,659 | $ | 3,879,272 | $ | 10,575,367 | $ | 31,024,187 | |||||||
Services | 2,898,739 | 2,839,338 | 9,403,968 | 9,505,396 | |||||||||||
Construction design-build | 14,813,486 | 5,384,267 | 36,068,435 | 8,301,588 | |||||||||||
Other | 178,439 | 265,416 | 489,482 | 871,488 | |||||||||||
Total revenues and other income | 20,934,323 | 12,368,293 | 56,537,252 | 49,702,659 | |||||||||||
Cost of revenues: | |||||||||||||||
Equipment systems | 2,766,116 | 3,212,285 | 9,287,704 | 26,132,828 | |||||||||||
Services | 1,768,164 | 1,796,968 | 5,715,548 | 4,677,887 | |||||||||||
Construction design-build | 13,413,067 | 4,570,506 | 32,605,681 | 7,263,206 | |||||||||||
Other | 130,258 | 195,938 | 355,121 | 632,181 | |||||||||||
Total cost of revenues | 18,077,605 | 9,775,697 | 47,964,054 | 38,706,102 | |||||||||||
Gross profit | 2,856,718 | 2,592,596 | 8,573,198 | 10,996,557 | |||||||||||
Operating expenses: | |||||||||||||||
General and administrative | 5,000,846 | 5,792,418 | 17,974,049 | 14,758,506 | |||||||||||
Stock-based compensation | 722,647 | 96,767 | 1,824,835 | 1,860,767 | |||||||||||
Intangible asset amortization | 241,832 | 304,339 | 816,015 | 773,063 | |||||||||||
Business development | — | 3,299,864 | — | 3,299,864 | |||||||||||
Total operating expenses | 5,965,325 | 9,493,388 | 20,614,899 | 20,692,200 | |||||||||||
Loss from operations | (3,108,607 | ) | (6,900,792 | ) | (12,041,701 | ) | (9,695,643 | ) | |||||||
Non-operating income (expense): | |||||||||||||||
Interest expense | (39,928 | ) | (7,088 | ) | (158,134 | ) | (22,270 | ) | |||||||
Interest income | 19,461 | 94,200 | 167,652 | 221,329 | |||||||||||
Write-down of investment | (258,492 | ) | (1,710,358 | ) | (258,492 | ) | (1,710,358 | ) | |||||||
Contingent consideration | — | — | (160,232 | ) | — | ||||||||||
Loss on settlement | — | — | (1,500,000 | ) | — | ||||||||||
Other income (expense) | (28,605 | ) | (210,399 | ) | (172,344 | ) | (147,528 | ) | |||||||
Total non-operating income (expense) | (307,564 | ) | (1,833,645 | ) | (2,081,550 | ) | (1,658,827 | ) | |||||||
Loss before income taxes | (3,416,171 | ) | (8,734,437 | ) | (14,123,251 | ) | (11,354,470 | ) | |||||||
Income tax benefit | 48,383 | 73,654 | 167,481 | 258,166 | |||||||||||
Net loss | $ | (3,367,788 | ) | $ | (8,660,783 | ) | $ | (13,955,770 | ) | $ | (11,096,304 | ) | |||
Comprehensive loss | $ | (3,367,788 | ) | $ | (8,660,783 | ) | $ | (13,955,770 | ) | $ | (11,096,304 | ) | |||
Loss per share - basic and diluted | $ | (0.29 | ) | $ | (0.81 | ) | $ | (1.29 | ) | $ | (1.05 | ) | |||
Weighted average shares - basic and diluted | 11,649,790 | 10,674,796 | 10,859,820 | 10,577,453 |
NET LOSS (GAAP) RECONCILIATION TO ADJUSTED EBITDA (NON-GAAP) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Net loss (GAAP) | $ | (3,367,788 | ) | $ | (8,660,783 | ) | $ | (13,955,770 | ) | $ | (11,096,304 | ) | |||
Interest expense | 39,928 | 7,088 | 158,134 | 22,270 | |||||||||||
Interest income | (19,461 | ) | (94,200 | ) | (167,652 | ) | (221,329 | ) | |||||||
Federal and state income tax (benefit) expense | (48,383 | ) | (73,654 | ) | (167,481 | ) | (258,166 | ) | |||||||
Depreciation and amortization | 372,969 | 526,750 | 1,201,201 | 1,116,585 | |||||||||||
EBITDA (non-GAAP) | $ | (3,022,735 | ) | $ | (8,294,799 | ) | $ | (12,931,568 | ) | $ | (10,436,944 | ) | |||
Non-recurring legal fees | 284,641 | 205,486 | 769,252 | 276,246 | |||||||||||
Contingent consideration - change in fair value | — | — | 160,232 | — | |||||||||||
Contingent consideration - DVO acquisition | 78,181 | — | 204,878 | — | |||||||||||
One time business development expenses | — | 3,299,864 | — | 3,299,864 | |||||||||||
Reduction in force costs | 31,987 | — | 334,540 | — | |||||||||||
One-time employee expenses | — | 670,095 | — | 787,691 | |||||||||||
Impairment loss | 258,492 | 1,710,358 | 258,492 | 1,710,358 | |||||||||||
Loss on settlement | — | — | 1,500,000 | — | |||||||||||
Retention incentive | 300,000 | 942,000 | — | ||||||||||||
Stock-based compensation | 722,647 | 96,767 | 1,824,835 | 1,860,767 | |||||||||||
Transaction costs | 29,141 | 39,182 | 91,079 | 258,111 | |||||||||||
Adjusted EBITDA (non-GAAP) | $ | (1,317,646 | ) | $ | (2,273,047 | ) | $ | (6,846,260 | ) | $ | (2,243,907 | ) | |||
NET LOSS (GAAP) RECONCILIATION TO ADJUSTED NET LOSS (NON-GAAP) AND EPS | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Net loss (GAAP) | $ | (3,367,788 | ) | $ | (8,660,783 | ) | $ | (13,955,770 | ) | $ | (11,096,304 | ) | |||
Non-recurring adjustments, net of taxes: | |||||||||||||||
Non-recurring legal fees | 284,641 | 205,486 | 769,252 | 276,246 | |||||||||||
Contingent consideration - change in fair value | — | — | 160,232 | — | |||||||||||
Contingent consideration - DVO acquisition | 78,181 | — | 204,878 | — | |||||||||||
One time business development expenses | — | 3,299,864 | — | 3,299,864 | |||||||||||
Reduction in force costs | 31,987 | — | 334,540 | — | |||||||||||
One-time employee expenses | — | 670,095 | — | 787,691 | |||||||||||
Impairment loss | 258,492 | 1,710,358 | 258,492 | 1,710,358 | |||||||||||
Loss on settlement | — | — | 1,500,000 | — | |||||||||||
Retention incentive | 300,000 | — | 942,000 | — | |||||||||||
Transaction costs | 29,141 | 39,182 | 91,079 | 258,111 | |||||||||||
Adjusted net loss (non-GAAP) | $ | (2,385,346 | ) | $ | (2,735,798 | ) | $ | (9,695,297 | ) | $ | (4,764,034 | ) | |||
Weighted average shares - basic and diluted | 11,649,790 | 10,674,796 | 10,859,820 | 10,577,453 | |||||||||||
Loss per share (GAAP) | $ | (0.29 | ) | $ | (0.81 | ) | $ | (1.29 | ) | $ | (1.05 | ) | |||
Adjusted loss per share (non-GAAP) | $ | (0.20 | ) | $ | (0.26 | ) | $ | (0.89 | ) | $ | (0.45 | ) | |||
Investor Contacts:
-or-
(720) 730-8160
investors@urban-gro.com
Media Contact:
(720) 903-1139
media@urban-gro.com
Source: urban-gro
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