Applied UV, Inc. (NasdaqCM: AUVI) (“Applied UV” or the
“Company”), a pathogen elimination technology company that applies
the power of narrow-range ultraviolet light (“UVC”) for surface
areas and catalytic bioconversion technology for air purification
to destroy pathogens safely, thoroughly, and automatically,
announced its financial results for the second quarter 2022.
Recent Business
Highlights
- Expanded global distribution via M/S Novatek Pakistan, a
company distributor, that was awarded as the sole source provider
of Airocide air purification systems for government hospitals for
the KPK Province in Pakistan
- Installed Lumicide Surface and Drain UVC Disinfecting Systems
initially, in 17 patient rooms at Mt. Sinai Medical Center
Morningside in New York City
- Received a substantial order from Cellarius, the company’s
European distribution partner, expanding its use in wineries and
food processing
- Received a significant order from Tru Infusion, a cannabis
retailer, for Airoclean™ 420 air purification technology for use in
79 facilities
- Received a large, multi-unit, follow-on order from MedLine, the
company’s North American Scientific Air Management healthcare
distribution partner, for its patented S200 mobile air purification
system
- Granted a patent pertaining to the company’s system to
neutralize pathogens on ATM surfaces
- Received an order for air purification solutions that were
installed by Advance Beauty College at its campuses located in the
state of California
- Strengthened corporate governance with the addition of Mr. Jos
Luhukay and Ms. Monica Woo to the board of directors
John F. Andrews, Applied UV's Chief Executive Officer commented,
“Second quarter revenue was a record $5.9 million fueled by both
organic growth and the integration of recent acquisitions. Our
Disinfection segment was strengthened by a number of key wins
across a number of industries including cannabis, food preservation
and healthcare. In Hospitality, we completed the integration of our
Visionworks acquisition. We are encouraged by the growing market
opportunities in each of our business segments as the hospitality
industry is rebounding, and there is growing global demand for
pathogen elimination technologies such as ours.”
Summary of Financial Results
Segments
The Company has three reportable segments: the design,
manufacture, assembly and distribution of disinfecting systems for
use in healthcare, hospitality, and commercial municipal and
residential markets (Disinfection segment); the manufacture of fine
mirrors and furniture specifically for the Hospitality industry
(Hospitality segment); and the Corporate Segment, which includes
expenses primarily related to corporate governance, such as board
fees, legal expenses, audit fees, executive management, and listing
costs.
Net Sales
Net sales of $5.9 million represented an increase of $4.0
million, or 213.5% for the three months ended June 30, 2022, as
compared to net sales of $1.9 million for the three months ended
June 30, 2021. This increase was attributable to both the
Disinfection segment, which increased $819,000, largely as a result
of the strategic acquisitions of KES and Scientific Air in third
and fourth quarters of 2021, respectively, and the Hospitality
segment, which increased $3.2 million primarily as a result of the
fulfillment of orders that were delayed from the first quarter and
the addition of orders fulfilled from the recent VisionMark
acquisition.
Gross Profit
Gross profit increased $771,000, or 144.5%, to $1.3 million for
the three months ended June 30, 2022, as compared to $533,000 for
the three months ended June 30, 2021, driven by volume growth from
both the Disinfection and Hospitality segments. Gross profit as a
percentage of sales decreased from 28.3% in Q2 of 2021 to 22.1% in
Q2 of 2022, driven primarily by the initial costs required to
complete projects in process and to integrate and absorb the
VisionMark operations. As the Company continues to integrate its
strategic acquisitions, the focus will be on realizing cost
synergies from the consolidation and streamlining of the
manufacturing and distribution operations.
Selling, General, and Administrative (SG&A)
Expense
SG&A costs for the three months ended June 30, 2022,
increased to $4.0 million as compared to $2.7 million for the three
months ended June 30, 2021. This increase of approximately $1.3
million was driven primarily by the expansion of the Disinfection
segment with the additional acquisitions of KES and SciAir; the
expansion of the Hospitality segment with the addition of the
VisionMark acquisition; and Corporate segment expenses due to
increased consulting, legal, accounting and infrastructure costs
related to the initial integration of the operations of our
strategic acquisitions. The Company incurred one-time costs of
approximately $739,000 related primarily to the integration of
VisionMark operations and the establishment of strategic marketing
programs. The Company anticipates efficiency gains in the coming
year as it fully integrates its acquisitions and leverages
synergies where practical.
Other Income/Expense
Other expense was $79,000 for the three months ended June 30,
2022, which includes $49,000 in interest expense and $32,000 in
non-cash expense related to the change in fair value of warrant
liability. This compares to other income of $37,000 for the three
months ended June 30, 2021.
Net Loss
The Company recorded a net loss of $2.9 million for the three
months ended June 30, 2022, compared to a net loss of $2.1 million
for the three months ended June 30, 2021. The increase in net loss
of $744,000 was mainly due to the increase in SG&A expense
incurred in support of business acquisitions and expansion of both
the Disinfection and Hospitality segments.
The Company had approximately $3.0 million of unrestricted cash
available on its consolidated balance sheet as of June 30,
2022.
Conference Call/Webcast Information
Applied UV's management team will host an investor conference
call and live webcast at 9 a.m. ET on August 15, 2022. Investors
can access the live webcast at
https://www.webcaster4.com/Webcast/Page/2626/46351.
For those planning to participate on the call, please dial
+1-888-506-0062 (for domestic calls), or +1-973-528-0011 (for
international calls), passcode 660050.
A replay of the conference call will be available online on the
Applied UV web site, and a dial-in replay will be available for one
week following the call at +1-877-481-4010 (for domestic calls) or
+1-919-882-2331 (for international calls), replay passcode
46351.
About Applied UV
Applied UV is focused on the development and acquisition of
technology that address infection control in the healthcare,
hospitality, commercial and municipal markets. The Company has two
wholly owned subsidiaries – SteriLumen, Inc. (“SteriLumen”) and
Munn Works, LLC (“Munn Works”). SteriLumen’s connected platform for
Data Driven Disinfection™ applies the power of ultraviolet light
(UVC) to destroy pathogens safely, thoroughly, and automatically,
addressing the challenge of healthcare-acquired infections
(“HAIs”). Targeted for use in facilities that have high customer
turnover such as hospitals, hotels, commercial facilities, and
other public spaces, the Company’s Lumicide™ platform uses UVC LEDs
in several patented designs for infection control in and around
high-traffic areas, including sinks and restrooms, killing
bacteria, viruses, and other pathogens residing on hard surfaces
within devices’ proximity. The Company’s patented in-drain
disinfection device, Lumicide Drain, is the only product on the
market that addresses this critical pathogen intensive location.
SteriLumen’s Airocide® air purification devices are research
backed, clinically proven and developed for NASA with assistance
from the University of Wisconsin. Airocide® is listed as an FDA
Class II Medical device, utilizes a proprietary photo-catalytic
(PCO) bioconversion technology that draws air into a reaction
chamber that converts damaging molds, microorganisms, dangerous
airborne pathogens, destructive VOCs, allergens, odors and
biological gasses into harmless water vapor and green carbon
dioxide without producing ozone or other harmful byproducts.
Airocide® applications include healthcare, hospitality, grocery
chains, wine making facilities, commercial real estate, schools,
dental offices, post-harvest, grocery, cannabis facilities and
homes.
For more information about Applied UV, Inc., and its
subsidiaries, please visit the following website:
https://www.applieduvinc.com/.
Forward-Looking Statements
The information contained herein may contain “forward‐looking
statements.” Forward‐looking statements reflect the current view
about future events. When used in this press release, the words
“anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,”
“plan,” or the negative of these terms and similar expressions, as
they relate to us or our management, identify forward‐looking
statements. Such statements include, but are not limited to,
statements contained in this press release relating to the view of
management of Applied UV concerning its business strategy, future
operating results and liquidity and capital resources outlook.
Forward‐looking statements are based on the Company’s current
expectations and assumptions regarding its business, the economy
and other future conditions. Because forward–looking statements
relate to the future, they are subject to inherent uncertainties,
risks and changes in circumstances that are difficult to predict.
The Company’s actual results may differ materially from those
contemplated by the forward‐looking statements. They are neither
statements of historical fact nor guarantees of assurance of future
performance. We caution you therefore against relying on any of
these forward‐looking statements. Factors or events that could
cause the Company’s actual results to differ may emerge from time
to time, and it is not possible for the Company to predict all of
them. The Company cannot guarantee future results, levels of
activity, performance, or achievements. Except as required by
applicable law, including the securities laws of the United States,
the Company does not intend to update any of the forward‐looking
statements to conform these statements to actual results.
-- Tables Follow –
Applied UV, Inc. and
Subsidiaries
Unaudited Condensed
Consolidated Balance Sheets
As of June 30, 2022 and
December 31, 2021
2022
2021
Assets
Current Assets
Cash and cash equivalents
$
3,122,761
$
7,922,906
Restricted cash
120,750
845,250
Accounts receivable, net of allowance for
doubtful accounts
1,970,542
986,253
Costs and estimated earnings in excess of
billings
443,572
—
Inventory, net
4,677,894
1,646,238
Vendor deposits
497,154
992,042
Prepaid expense and other current
assets
482,310
419,710
Total Current Assets
11,314,983
12,812,399
Property and equipment, net of accumulated
depreciation
1,228,127
196,611
Goodwill
3,722,077
4,809,811
Other intangible assets, net of
accumulated amortization
18,093,270
18,976,556
Right of use asset
2,648,441
1,730,615
Total Assets
$
37,006,898
$
38,525,992
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable and accrued expenses
$
2,410,980
$
1,642,108
Contingent consideration
—
1,460,000
Billings in excess of costs and earnings
on uncompleted contracts
772,363
—
Deferred revenue
1,476,270
788,776
Due to landlord (Note 2)
201,640
—
Warrant liability
56,546
68,263
Financing lease obligations
4,178
7,671
Operating lease liability
1,528,886
389,486
Note Payable
97,500
97,500
Total Current Liabilities
6,548,363
4,453,804
Long-term Liabilities
Due to landlord-less current portion (Note
2)
514,740
—
Note payable- less current portion
60,000
60,000
Operating lease liability-less current
portion
1,138,298
1,346,428
Total Long-Term Liabilities
1,713,038
1,406,428
Total Liabilities
8,261,401
5,860,232
Stockholders' Equity
Preferred stock, Series A Cumulative
Perpetual, $0.0001 par value, 19,990,000 shares authorized, 552,000
shares issued and outstanding as of both June 30, 2022 and December
31, 2021
55
55
Preferred stock, Series X, $0.0001 par
value, 10,000 shares authorized, 2,000 shares issued and
outstanding as of both June 30, 2022 and December 31, 2021
1
1
Common stock $.0001 par value, 150,000,000
shares authorized; 12,930,674 shares issued and 12,817,189 shares
outstanding as of June 30, 2022, and 12,775,674 shares issued and
outstanding as of December 31, 2021
1,294
1,278
Treasury stock at cost, 113,485 shares as
of June 30, 2022 and 0 shares as of December 31, 2021
(149,686
)
—
Additional paid-in capital
44,370,056
42,877,622
Accumulated deficit
(15,476,223
)
(10,213,196
)
Total Stockholders' Equity
28,745,497
32,665,760
Total Liabilities and Stockholders'
Equity
$
37,006,898
$
38,525,992
Applied UV, Inc. and
Subsidiaries
Unaudited Condensed Interim
Consolidated Statements of Operations
For the Three and Six Months
Ended June 30, 2022 and 2021
Three Months Ended June 30,
Six Months Ended June 30,
2022
2021
2022
2021
Net Sales
$
5,907,646
$
1,884,320
$
9,263,736
$
4,196,935
Cost of Goods Sold
4,603,854
1,351,091
6,810,845
2,739,440
Gross Profit
1,303,792
533,229
2,452,891
1,457,495
Operating Expenses
Research and development
82,049
9,763
141,363
53,408
Selling, general and administrative
expenses
4,031,215
2,698,482
7,132,441
4,299,999
Loss on impairment of goodwill
—
—
1,138,203
—
Total Operating Expenses
4,113,264
2,708,245
8,412,007
4,353,407
Operating Loss
(2,809,472
)
(2,175,016
)
(5,959,116
)
(2,895,912
)
Other Income (Expense)
Change in Fair Market Value of Warrant
Liability
(32,111
)
10,948
11,717
(300,452
)
Interest expense
(49,020
)
—
(53,076
)
—
Loss on change in Fair Market Value of
Contingent Consideration
—
—
(240,000
)
—
Gain on Settlement of Contingent
Consideration (Note 2)
—
—
1,700,000
—
Other Income
1,948
25,837
1,948
25,182
Total Other Income (Expense)
(79,183
)
36,785
1,420,589
(275,270
)
Loss Before Provision for Income Taxes
(2,888,655
)
(2,138,231
)
(4,538,527
)
(3,171,182
)
Provision from Income Taxes
—
—
—
—
Net Loss
$
(2,888,655
)
$
(2,138,231
)
$
(4,538,527
)
$
(3,171,182
)
Net Loss attributable to common
stockholders:
Dividends to preferred shareholders
(362,250
)
—
(724,500
)
—
Net Loss attributable to common
stockholders
(3,250,905
)
(2,138,231
)
(5,263,027
)
(3,171,182
)
Basic and Diluted Loss Per Common
Share
$
(0.26
)
$
(0.23
)
$
(0.41
)
$
(0.35
)
Weighted Average Shares Outstanding -
basic and diluted
12,665,385
9,407,367
12,799,783
9,102,677
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220815005070/en/
Applied UV Inc. John F. Andrews Applied UV CEO, Director
john.andrews@applieduvinc.com
Applied UV Investor Relations Brett Maas, Managing
Principal Hayden IR brett@haydenir.com (646) 536-7331
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