SALT LAKE CITY, Feb. 12, 2021 /PRNewswire/ -- CleanSpark,
Inc. (Nasdaq: CLSK)("the "Company"), an advanced software and
controls technology solutions company, focused on solving modern
energy challenges, today reported results for the quarter ended
December 31, 2020.
Bitcoin Mining Helps CleanSpark Realize 130% Revenue
Improvement.
The Company's form 10-Q and accompanying unaudited interim
financial statements are available at www.sec.gov and the Company
website at https://ir.cleanspark.com/sec-filings/
Financial Highlights
- CleanSpark more than doubled its comparable quarterly revenues,
with quarterly revenue of $2.26
million, an increase of 130% from $0.98 million for the prior year.
- Gross Margin increased to 41% to $0.92
million compared to 10% and $0.10
million to the prior year.
- Loss from operations increased to $6.2
million compared to $3 million
for the prior year.
- Net loss for the three months attributable to common
shareholders for the three months ended December 31, 2020 was $7.2
million or $(0.32) per basic
and diluted earnings per share compared to a loss of $1.9 million or $(0.40) per basic and diluted earnings share for
the same year-ago period, an improvement of $0.08 per share.
- Adjusted EBITDA, a non-GAAP term, resulted in a non-GAAP net
loss attributable to common shareholders for the three months ended
December 31, 2020 of $591,975 or $(0.03)
per basic and diluted earnings per share, compared to a loss of
$1,765,826 or $(0.37) per basic and diluted earnings share for
the same year-ago period, an improvement of $0.34 per share.
- The Company decreased its revenue concentration risk, for the
three months ended December 31, 2020
37% of its revenues were derived from a single customer as compared
to 91% in the same year-ago period.
Financial Summary
Revenues
The Company recognized $2.25
million in revenues during the three-months ended
December 31, 2020, as compared with
$0.98 million in revenues for the
three-months ended December 31,
2019.
For the year ended December 31,
2020 and 2019 our revenue was derived from three business
segments:
Energy Segment – Consisting of our CleanSpark, LLC,
CleanSpark Critical Power Systems, Inc. and GridFabric, LLC lines
of business, this segment provides services, equipment and software
to the energy industry. The income from our Energy Segment is the
result of contracts to sell switchgear equipment, perform
engineering and design services, and provide software for
distributed energy and microgrid systems.
Digital Agency Segment – The Company's wholly owned
subsidiary p2klabs, Inc. provides design, software development and
other technology-based consulting services.
Digital Currency Mining Segment – Through ATL Data
Centers, the Company mines Bitcoin
Our Energy business segment contributed $1.2 million or 54% of consolidated revenue in
three-months ended December 31, 2020,
compared to $0.93 million or 100% of
consolidated revenue in the same year-ago period.
The Company's digital agency segment generated services revenue
from our p2klabs subsidiary. This segment contributed $0.3 million or 13% of consolidated revenue in
three-months ended December 31,
2020.
The Company's Bitcoin mining segment generated revenue from our
ATL Data Center subsidiary. This segment contributed $0.73 million or 32% of consolidated revenue in
three-months ended December 31,
2020.
Gross Profit
Our gross profit for the three-months ended December 31, 2020 was $0.92 million or 41% of revenue, as compared with
gross profits of $0.09 million or 10%
of revenue for the three-months ended December 31, 2019. The increase in gross margin
was largely driven by increased high-margin revenues derived from
our Bitcoin mining and related revenue.
Operating Expenses
Our operating expenses for the three-months ended December 31, 2020 increased to $7.1 million from $3.1
million for the same period in 2019. The increase in
operating expenses was largely driven by increased non-cash
compensation, payroll expenses, general or administrative expenses,
and increased depreciation and amortization.
Other income/(expense)
The Company's total other income/(expenses) in the three-months
ended December 31, 2020 totaled
approximately $(1.0) million as
compared to $1.1 million in 2019. The
increase in other expenses was mainly due to non-cash cash items,
specifically our derivative loss and unrealized loss on equity
securities.
Earnings/(Loss) Per share
Net loss for the three months attributable to common
shareholders for the three months ended December 31, 2020 was $7.2
million or $(0.32) per basic
and diluted earnings per share compared to a loss of $1.9 million or $(0.40) per basic and diluted earnings share for
the same year-ago period, an improvement of $0.08 per share.
Non-GAAP figures
Adjusted EBITDA, a non-GAAP term, resulted in negative
$0.6 million in three-months ended
December 31, 2020, as compared to
negative $1.7 million in three-months
ended December 31, 2019.
Adjusted EBITDA, a non-GAAP term, resulted in a non-GAAP net
loss attributable to common shareholders for the three months ended
December 31, 2020 of $591,975 or $(0.03)
per basic and diluted earnings per share, compared to a loss of
$1,765,826 or $(0.37) per basic and diluted earnings share for
the same year-ago period, an improvement of $0.34 per share. (See details on Non-GAAP figures
below)
Working capital
Cash and cash equivalents totaled $25.6
million as of December 31,
2020, as compared to $3.1
million on September 30, 2020,
an increase of $22.5 million. We had
working capital of $28.7 million as
of December 31, 2020 compared to
$2.9 million as of September 30, 2020. An increase of $25.8 million.
Fiscal Quarter December 31,
2020 Operational Highlights
- On October 9, 2020, the Company
closed an underwritten offering and received gross proceeds of
$40 million, before deducting
underwriting expenses and fees.
- We completed the acquisition of ATL Data Center in an all-stock
transaction. The Company has contracted with the local municipality
to bring 30MW of additional power to a property adjacent to ATL
property to support additional CleanSpark Bitcoin mining
operations. This will bring the total power available for
mining and data centers for CleanSpark subsidiaries from 20MW to
50MW. The capacity increase is underway and is expected to be
complete by mid-year 2021. In addition to the additional
power to be delivered by the local utility, CleanSpark expects to
subsequently add renewable energy generating assets and energy
storage to the site, which will be operated by the Company's
patented mPulse controls. The Company intends to use the renewable
energy to further increase its total energy capacity to support
additional ASIC (application specific integrated circuit) mining
units and increase bitcoin mining revenues.
- We entered into the Electric Vehicle (EV) charging station
market through a new initiative focused on providing OpenADR
software solutions to aid in load management for EV charging
stations and balancing the impact the increased power demand has on
the traditional grid.
- We implemented new sales and marketing initiatives resulting in
increased revenues, contracted backlog, and proposal pipelines.
- We received a large switchgear order from a Houston, Texas developer in support of
microgrids to be built for the nation's largest retail chain.
- CleanSpark's strong presence at virtual conferences included
Platinum Sponsorship at Microgrid 2020 Global, Exhibition at the
Solar Power International, and speaking engagement by Amanda Kabak, CleanSpark CTO on "The Benefits of
Solar plus Storage".
- The CleanSpark team released a suite of usability enhancements
to both their mPulse and mVSO products, including self-serve
reporting of monthly and ad-hoc site telemetry as well as
improvements in mVSO ease of use to allow developers to completed
scenarios quickly and more efficiently. Updates to our mPulse
forecasting and control algorithms ensures optimal site operation
aligned with pre-determined targets. CleanSpark continues to grow
its software team with specialists in web and cloud
development.
Management-Commentary and Outlook
This was another record-breaking quarter for CleanSpark.
As we had discussed in our prior shareholder letter, the Company
expected the somewhat cyclical nature of our business to continue,
specifically related to our energy business segments. In
prior years we have recognized approximately 10% of our total
annual revenues in the quarter ending December 31. This trend has continued to be
reflected in the results of our most recent fiscal quarter. These
trends are largely due to the annual holiday slowdown and winter
weather as energy systems are more easily deployed in warm weather.
We continue to expect to see the strongest revenues related to our
energy segments in our third and fourth fiscal quarters. Our
Bitcoin mining revenues contributed significant profitable revenue
for the quarter, making up approximately 32% of our total quarterly
revenues. This is especially meaningful considering our Bitcoin
mining revenues consisted of only 21 full days of mining in
December. We expect to recognize substantially more revenue from
Bitcoin mining revenues in future quarters both as a result of
recognizing revenues from the full period, but also due the
expanded capacity expectations from approximately 200 PH/s in
December to more than 315 PH/s in February
2021.
We continue to expect to generate in excess of $30 million in total revenue in the fiscal year
ending September 30, 2021. Our
backlog as of today remains strong at approximately $7.3 million as of the date of this release, an
increase of $0.8 million from
December 2020. This increase is
directly attributable to our newly expanded sales team. We
expect our proposal closing rate to accelerate as COVID-19 vaccines
begin to be made available to the public in the coming quarters.
Our proposal pipeline remains strong at approximately $25.0 million as of the date of this release.
We believe our increase in contracted backlog and proposal
backlog demonstrates the pent-up demand for resilient, distributed
energy solutions as the pandemic begins to improve.
We continue to work diligently to expand the Company's total
energy capacity and Bitcoin mining capacity. We expect to reach
more than 315 PH/s within the month of February. We also expect to
have the initial power capacity increase completed over the next
two quarters and anticipate bringing additional mining equipment
online in parallel with the available power. We believe the
improvements will add an additional 800 to 880 PH/s of processing
capacity over the coming quarters. We expect this to bring the
total capacity under CleanSpark's subsidiaries to between 1.0 to
1.3 EH/s by mid-summer. Given the current difficulty rates,
this is expected to result in the production of 6-9 Bitcoins per
day. At the current price of Bitcoin ($47,000) this would result in $115 to $150
million per year in Bitcoin mining revenue. As stated,
our goal is to mine Bitcoins at the lowest rates nationwide and we
expect to achieve greater than 80% gross profit margin on our
Bitcoin mining activities.
We are also expanding our residential initiatives, including the
launch of a new offering which we look forward to discussing in
greater detail next week.
Our focus continues to be on increasing our sales in each of our
segments, enhancing the features and functionality of our software
products as well as our aggressive pursuit of additional accretive
acquisitions.
We remain deeply grateful for the continued support of all
stakeholders of CleanSpark, most importantly, the shareholders who
have entrusted the Company with their investment dollars. On behalf
of our entire organization, we provide this update and outlook with
extreme optimism for the future.
With Warmest Regards,
Zachary Bradford, CleanSpark's
President and Chief Executive Officer and
Matthew Schultz, CleanSpark's
Executive Chairman.
Parties interested in learning more about CleanSpark products
and services are encouraged to inquire by contacting the Company
directly at info@cleanspark.com or visiting the Company's website
at www.cleanspark.com.
Investors are encouraged to contact the Company
at ir@cleanspark.com, or visiting the Company's website at
https://ir.cleanspark.com/
About CleanSpark:
CleanSpark, Inc., a Nevada
corporation, is in the business of providing advanced software and
controls technology solutions to solve modern energy
challenges. We have a suite of software solutions that
provide end-to-end microgrid energy modeling, energy market
communications, and energy management solutions. Our
offerings consist of intelligent energy monitoring and controls,
intelligent microgrid design software, middleware communications
protocols for the energy industry, energy system engineering, and
software consulting services.
Through its wholly owned subsidiary ATL Data Centers LLC,
CleanSpark owns and operates a data center that provides customers
with traditional on-site and cloud-based data center services. The
Company also owns and operates a fleet of Bitcoin miners producing
over 200 PH/s in mining capacity. Capacity is expected to increase
to over 315 PH/s in mining capacity in early 2021. CleanSpark plans
to apply its energy technologies to these divisions with a goal of
mining bitcoins at the lowest energy prices in the United States. For more information, visit
https://ATL-DATA.com
Non-GAAP Financial Measures
Management believes that the use of adjusted earnings before
interest, taxes, depreciation and amortization, or adjusted EBITDA,
is helpful for an investor to assess the performance of the
company. The company defines adjusted EBITDA as income (loss)
attributable to common stockholders before interest, taxes,
depreciation, amortization, impairment of long-lived assets,
financing costs, stock-based compensation expense, unrealized gains
and losses on securities, non-cash amortization of right of use
assets, other non-cash expenses, and expenses related to
discontinued operations.
Adjusted EBITDA is not a measurement of financial performance
under generally accepted accounting principles in the United States, or GAAP. Because of varying
available valuation methodologies, subjective assumptions and the
variety of equity instruments that can impact a company's non-cash
operating expenses, CLSK management believes that providing a
non-GAAP financial measure that excludes non-cash and non-recurring
expenses allows for meaningful comparisons between the company's
core business operating results and those of other companies, as
well as providing the company with an important tool for financial
and operational decision making and for evaluating its own core
business operating results over different periods of time.
|
The company's
adjusted EBITDA measure may not provide information that is
directly comparable to that provided by other companies in its
industry, as other companies in its industry may calculate non-GAAP
financial results differently, particularly related to
non-recurring, unusual items. The company's adjusted EBITDA is not
a measurement of financial performance under GAAP, and should not
be considered as an alternative to operating income or as an
indication of operating performance or any other measure of
performance derived in accordance with GAAP. CLSK management does
not consider adjusted EBITDA to be a substitute for, or superior
to, the information provided by GAAP financial results.
|
|
|
|
December 31,
2020
|
|
December 31,
2019
|
Net loss (US
GAAP)
|
$
|
(7,167,530)
|
$
|
(1,916,254)
|
Less: Depreciation,
amortization and other non-cash items:
|
|
|
|
|
Depreciation and
amortization
|
|
1,078,429
|
|
587,490
|
Software
amortization
|
|
39,286
|
|
39,286
|
Stock based
compensation
|
|
4,350,643
|
|
636,269
|
Interest, financing
charges, non-cash amortization of debt discounts
|
|
1,339
|
|
1,560,315
|
Unrealized
gain/(loss) on equity security
|
|
73,500
|
|
(368,868)
|
Unrealized
gain/(loss) on derivative security
|
|
1,020,494
|
|
(2,266,654)
|
Non-cash amortization
of right of use assets
|
|
11,864
|
|
10,731
|
Total:
|
$
|
6,575,555
|
$
|
198,569
|
|
|
|
|
|
Non-GAAP Adjusted
EBITDA (after elimination of stock based and other non-cash
expenses)
|
$
|
(591,975)
|
$
|
(1,717,685)
|
Adjusted EPS excludes the impact of certain items and,
therefore, has not been calculated in accordance with GAAP. CLSK
management believes that exclusion of certain selected items
assists in providing a more complete understanding of the company's
underlying results and trends and allows for comparability with its
peer company index and industry. CLSK management uses this measure
along with the corresponding GAAP financial measures to manage its
business and to evaluate the company's performance compared to
prior periods and the marketplace. The company defines Non-GAAP
(loss) income attributable to common stockholders as (loss) or
income before amortization, stock-based compensation, expenses
related to discontinued operations, impairment of long-lived assets
and non-cash financing, unrealized gains and losses on securities,
non-cash amortization of right of use assets and non-cash
interest expense. Adjusted EPS expresses adjusted (loss) income on
a per share basis using weighted average diluted shares
outstanding.
Adjusted EPS is a non-GAAP financial measure and should not be
considered in isolation or as a substitute for financial
information provided in accordance with GAAP. These non-GAAP
financial measures may not be computed in the same manner as
similarly titled measures used by other companies. The company
expects to continue to incur expenses similar to the adjusted
income from continuing operations and adjusted EPS financial
adjustments described above, and investors should not infer from
the company's presentation of these non-GAAP financial measures
that these costs are unusual, infrequent or non-recurring.
The following table sets-forth non-GAAP net loss attributable to
common stockholders and basic and diluted earnings per share:
|
|
December 31,
2020
|
|
December 31,
2019
|
Net loss (US
GAAP)
|
$
|
(7,167,530)
|
$
|
(1,916,254)
|
Less: Depreciation,
amortization and other non-cash items:
|
|
|
|
|
Depreciation and
amortization
|
|
1,078,429
|
|
587,490
|
Software
amortization
|
|
39,286
|
|
39,286
|
Stock based
compensation
|
|
4,350,643
|
|
636,269
|
Non-cash interest,
financing charges, non-cash amortization of debt
discounts
|
|
1,339
|
|
1,512,174
|
Unrealized
gain/(loss) on equity security
|
|
73,500
|
|
(368,868)
|
Unrealized
gain/(loss) on derivative security
|
|
1,020,494
|
|
(2,266,654)
|
Non-cash amortization
of right of use assets
|
|
11,864
|
|
10,731
|
Total:
|
$
|
6,575,555
|
$
|
150,428
|
|
|
|
|
|
Non-GAAP Adjusted
Loss
|
$
|
(591,975)
|
$
|
(1,765,826)
|
|
|
|
|
|
Weighted average
common shares outstanding - basic and diluted
|
|
22,146,992
|
|
4,781,075
|
Loss per common share
- basic and diluted
|
$
|
(0.03)
|
$
|
(0.37)
|
Forward-Looking Statements:
CleanSpark cautions you that statements in this press release
that are not a description of historical facts are forward-looking
statements. These statements are based on CleanSpark's current
beliefs and expectations. The inclusion of forward-looking
statements should not be regarded as a representation by CleanSpark
that any of our plans will be achieved. Actual results may differ
from those set forth in this press release due to the risk and
uncertainties inherent in our business, including, without
limitation: the fitness of the product for a particular application
or market, the expectations of future revenue growth may not be
realized, timing of orders and deliveries, the successful and
continued integration of acquired businesses, ongoing demand for
its software products and related services, the price volatility of
Bitcoin, the impact of global pandemics (including COVID-19) on the
demand for its products and services; and other risks described in
our prior press releases and in our filings with the Securities and
Exchange Commission (SEC), including under the heading "Risk
Factors" in our Annual Report on Form 10-K and any subsequent
filings with the SEC. You are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of the
date hereof, and we undertake no obligation to revise or update
this press release to reflect events or circumstances after the
date hereof. All forward-looking statements are qualified in their
entirety by this cautionary statement, which is made under the safe
harbor provisions of the Private Securities Litigation Reform Act
of 1995.
Contact - Investor Relations:
CleanSpark Inc.
Investor Relations
(801)-244-4405
View original content to download
multimedia:http://www.prnewswire.com/news-releases/cleanspark-inc-reports-quarterly-financial-results-for-the-three-months-ended-december-31-2020-301227464.html
SOURCE CleanSpark, Inc.