Safe & Green Holdings Corp. (NASDAQ: SGBX) ("Safe &
Green Holdings" or the "Company"), a leading developer,
designer, and fabricator of modular structures, reported results
for the year ended December 31, 2023.
Recent Highlights:
- Achieves 30%
year-over-year increase in construction services revenue for the
year ended December 31, 2023
- Executed a
Master Purchase Agreement (MPA) with Safe and Green Development
Corporation ("SG DevCo") (NASDAQ: SGD), the Company’s real estate
development subsidiary where SG DevCo has engaged SG Echo to
manufacture modular units for its planned real estate development
projects, including design, engineering, fabrication, delivery, and
installation of the modular systems; expected initial value of the
MPA to be in excess of $140 million in net revenue over a
multi-year period
- Received new
contract from a government contractor to refurbish 19 container
modules to be used by a major U.S. government agency that the
Company originally built
- Entered into a
non-binding Letter of Intent (LOI) to design, build, and operate an
800-unit supportive housing community for veterans, first
responders, and others who are disabled from their service and
interested in manufacturing work, as well as their families
- Entered into a
design-build contract with Hostel Cubed, to produce their first
modular camping cube for the California Coast, the "Coastal Camping
Cube"
- Received a
purchase order to provide additional modular units to an existing
infrastructure solutions customer
- Selected by the
Tunnel to Towers Foundation to construct a traveling modular home,
the Comfort Home Show model, designed to showcase the foundation’s
Homeless Veteran Program
"In 2023, Safe & Green Holdings experienced
a robust increase in revenue from construction services, achieving
a significant 30% increase compared to 2022," commented Paul
Galvin, Chairperson and Chief Executive Officer of Safe and Green
Holdings. "It was also an exciting year, and a year of celebration
for the Company, as we achieved a milestone event with the
successful spin-off of SG Development Corp. ("SG DevCo") into a
separate entity that now trades independently on the Nasdaq market
(NASDAQ: SGD). This strategic move came to fruition after more than
a year of relentless dedication and work by our team. At the time
of the spin-out, SG DevCo had a third-party fairness opinion that
valued SG DevCo's fair market value at $74 million."
"After the spin-out of SG DevCo, the Company
entered into a master purchase agreement ("MPA") with SG DevCo
engaging SG Echo to manufacture modular units for its planned real
estate development projects, including design, engineering,
fabrication, delivery, and installation of the units. The Company
believes the initial value of the MPA to be in excess of $140
million in net revenue to SG DevCo over a multi-year period and
that this is the first of several such agreements the Company may
enter into, to support SG DevCo’s upcoming development projects,
which currently total approximately 3,200 units with the potential
to generate in excess $500 million of gross revenue for Safe &
Green Holdings over the next several years. These projects are
expected to utilize SG Echo’s full manufacturing capacity, even if
no further projects were introduced."
"The Company is also experiencing solid growth
in our manufacturing sales pipeline. Based on an assessment of the
current sales pipeline alone, we expect to achieve a factory
utilization rate of more than 90% over the next two years. As a
result, we continue to expand our manufacturing capacity with our
Waldron Manufacturing site receiving its certificate of occupancy,
enhancing our production capabilities, and providing the Company
with two operational factories, with a third, the McLean
manufacturing facility in the design phase and a fourth in the
planning phase. Upon completion, these facilities are poised to
offer the Company more than 360,000 square feet of manufacturing
space within the United States. Looking at our projected growth, as
well as the scalability of our manufacturing operations, and
aggressive cost reductions allowing Safe and Green to focus on our
most profitable operations, we expect the Company to not only turn
cash flow positive by the end of 2024 but begin generating
meaningful cash flow throughout the balance of the year and beyond.
This has truly been a team effort, from our management team to our
employees in the factories."
"In 2023, the Company was honored with the
opportunity to partner with the Tunnel to Towers Foundation for the
creation of a portable modular home known as the Comfort Home Show
model. This project was aimed at highlighting the foundation's
initiative to assist homeless veterans. This collaboration expanded
to include the construction of three modular Comfort Homes in
Houston, Texas, further supporting the foundation's mission.
Additionally, we agreed in principle, through a non-binding Letter
of Intent (LOI) with Soldier On, to develop and manage an 800-unit
housing community specifically designed for veterans, first
responders, and their families, particularly those with
disabilities arising from their service. This unique project
envisions not just accommodating individuals with disabilities but
also incorporating an 80,000-square-foot manufacturing facility in
McClean, Oklahoma, compliant with the Americans with Disabilities
Act (ADA). This facility is intended to support the construction of
the 800 units as well as provide employment opportunities for
injured veterans. We take great pride in our involvement with
initiatives aimed at eradicating homelessness among veterans,
acknowledging their sacrifices, and facilitating job opportunities
for those with service-related disabilities. We are committed to
contributing to meaningful efforts that assist veterans in
reconstructing their lives, viewing it as both a privilege and a
responsibility."
"In addition, we recently received a new
contract from a government contractor to refurbish 19 modular units
that Safe and Green originally built, to be used by a major U.S.
government agency. This ongoing collaboration is yet another
testament to the exceptional quality of our products as well as our
proficiency in modular construction. Furthermore, we received an
order to provide additional units to an existing infrastructure
solutions customer, which we believe demonstrates even further
validation of the quality of our work, the strong value proposition
that Safe and Green provides, and the Company’s ability to deliver
units quickly, sustainably, and cost-effectively."
Tricia Kaelin, Chief Financial Officer at Safe
& Green Holdings, stated, "During 2023, the Company
successfully secured non-dilutive funding, which speaks to the
strength of our assets as well as our ability to fund future growth
without turning to the equity markets. For example, we entered into
an LOI for a sale-leaseback transaction involving our Waldron
manufacturing facility located in Durant, Oklahoma in a strategic
financial move expected to generate gross proceeds of $2 million to
the Company and we expect to receive our ERTC refund of $1.5M
subject to IRS final approval. The infusion of capital is intended
to free up working capital, providing further support for Safe
& Green Holdings' growing customer demand and facilitating its
aggressive expansion strategies. The decision to engage in a
sale-leaseback transaction further demonstrates our prudent
financial management and strategic planning capabilities. By
capitalizing on the strong market value of our real estate assets,
the Company is well-positioned to accelerate growth and build
shareholder value while maintaining a solid financial
foundation."
"In addition, the Company has undergone a
thorough review of our operations and has identified reductions of
more than $2.5 million in annualized expenses expected to be
realized in 2024. Adding these expected cost saves to other already
identified cost reductions, we anticipate that our annual operating
expense run rate in 2024 will be approximately $2.5 million, a
significant reduction from our 2023 run rate," concluded Ms.
Kaelin.
"As we look forward towards 2024, the prospects
for Safe & Green Holdings are brighter than ever thanks to the
number of projects that we are currently involved in which we
believe will keep our factory utilization rate above 90% over the
next several years. Revenue from construction services grew
substantially in 2023 and we are more confident than ever in the
scalability of our business model and eager to continue expanding
our presence across the United States. The Company remains
dedicated to prudently managing our expenses and enhancing
stockholder value for our loyal, long-term stockholders," concluded
Mr. Galvin.
Financial Results for the Twelve Months
Ended December 31, 2023
Revenue for the twelve months ended December 31,
2023, was $16.5 million, compared to $24.4 million for the twelve
months ended December 31, 2022, reflecting a decrease in medical
revenue due to the discontinuation of COVID-19 testing facilities,
offset by an increase in construction services revenue.
Gross profit (loss) for 2023 was ($2.6) million
compared to a gain of $3.3 million for 2022, reflecting the costs
associated with MedCo and our new factory.
Operating expenses for 2023 were $22.2 million,
compared to $10.5 million for 2022, due to the costs of activating
MedCo and our new factory.
The net loss attributable to common shareholders
was approximately ($26.3) million, or ($34.03) per share in 2023,
compared to a net loss of ($8.3) million, or $(12.48) per share for
2022.
The Company’s Adjusted EBITDA for the year ended
December 31, 2023, was approximately ($16.8) million as compared to
Adjusted EBITDA of approximately ($4.0) million for the year ended
December 31, 2023. Both EBITDA and Adjusted EBITDA are non-GAAP
financial measures. The Company defines EBITDA as GAAP net income
(loss) attributable to common stockholders before interest expense,
income tax benefit (expense), depreciation and amortization.
Adjusted EBITDA is defined as EBITDA before certain non-recurring,
unusual or non-operational items, such as litigation expense, stock
issuance expense and stock compensation expense. The Company
believes that adjusting EBITDA to exclude the effects of these
items that are not closely associated with ongoing corporate
operations provides management and investors with a meaningful
measure that increases period-to-period comparability of the
Company’s operating performance.
The Company believes the presentation of EBITDA
and Adjusted EBITDA is relevant and useful by enhancing the
readers’ ability to understand the Company’s operating performance.
The Company’s management utilizes EBITDA and Adjusted EBITDA as a
means to measure performance.
The Company’s measurements of EBITDA and
Adjusted EBITDA may not be comparable to similar titled
measurements reported by other companies. EBITDA and Adjusted
EBITDA are not measurements of financial performance under GAAP and
should not be considered as an alternative to net income (loss)
attributable to common stockholders or as an indication of
operating performance or any other measures of financial
performance derived in accordance with GAAP. The Company does not
consider these non-GAAP measures to be substitutes for or superior
to the information provided by its GAAP financial results. The
non-GAAP information should be read in conjunction with our
consolidated financial statements and related notes. These measures
also should not be construed as an inference that our future
results will be unaffected by the non-recurring, unusual or
non-operational items for which these non-GAAP measures make
adjustments.
The table below reconciles EBITDA and Adjusted
EBITDA, both non-GAAP measures, to GAAP net gain (loss)
attributable to common stockholders of Safe & Green Holdings
Corp.
|
|
For the Year Ended December
31, 2023 |
|
|
For the Year Ended December
31, 2022 |
|
Net loss attributable to common stockholders of Safe & Green
Holdings Corp. |
|
$ |
(26,282,533 |
) |
|
$ |
(8,319,048 |
) |
Addback interest expense |
|
|
2,608,683 |
|
|
|
336,239 |
|
Addback interest income |
|
|
(119 |
) |
|
|
(73,821 |
) |
Addback depreciation and amortization |
|
|
3,459,286 |
|
|
|
615,191 |
|
EBITDA (non-GAAP) |
|
|
(20,214,683 |
) |
|
|
(7,441,439 |
) |
|
|
|
|
|
|
|
|
|
Addback loss on asset disposal |
|
|
— |
|
|
|
25,265 |
|
Addback litigation expense |
|
|
154,217 |
|
|
|
664,724 |
|
Addback stock-based compensation expense |
|
|
3,210,631 |
|
|
|
2,798,844 |
|
Adjusted EBITDA
(non-GAAP) |
|
$ |
(16,849,835 |
) |
|
$ |
(3,952,606 |
) |
|
|
|
|
|
|
|
|
|
At December 31, 2023, and December 31, 2022, the
Company had cash and cash equivalents of $17 thousand and $583
thousand, respectively. As of December 31, 2023, stockholders’
equity was ($6.3) million compared to $14.4 million as of December
31, 2022. Additionally, on May 6, 2024, the Company announced the
pricing of a $4 million private placement priced at-the-market
under Nasdaq rules.
About Safe & Green Holdings Corp.
Safe & Green Holdings Corp., a leading
modular solutions company, operates under core capabilities which
include the development, design, and fabrication of modular
structures, meeting the demand for safe and green solutions across
various industries. The firm supports third-party and in-house
developers, architects, builders, and owners in achieving faster
execution, greener construction, and buildings of higher value. The
Company’s subsidiary, Safe and Green Development Corporation, is a
leading real estate development company. Formed in 2021, it focuses
on the development of sites using purpose-built, prefabricated
modules built from both wood and steel, sourced from one of SG
Holdings’ factories and operated by the SG Echo subsidiary. For
more information, visit https://www.safeandgreenholdings.com/ and
follow us at @SGHcorp on Twitter.
Safe Harbor Statement
Certain statements in this press release
constitute "forward-looking statements" within the meaning of the
federal securities laws. Words such as "may," "might," "will,"
"should," "believe," "expect," "anticipate," "estimate,"
"continue," "predict," "forecast," "project," "plan," "intend" or
similar expressions, or statements regarding intent, belief, or
current expectations, are forward-looking statements. These
forward-looking statements are based upon current estimates and
assumptions and include statements regarding the Company’s
financial results for year-end 2023, the Company’s Master Purchase
Agreement (MPA) with Safe and Green Development Corporation, the
Company’s new contract from a government contractor to refurbish 19
container modules to be used by a major U.S. government agency that
the Company originally built, the Company’s non-binding Letter of
Intent (LOI) to design, build, and operate an 800-unit supportive
housing community for veterans, first responders, and others who
are disabled from their service and interested in manufacturing
work, as well as their families, the Company’s design-build
contract with Hostel Cubed, to produce their first modular camping
cube for the California Coast, the "Coastal Camping Cube", the
Company’s receipt of a purchase order to provide additional modular
units to an existing infrastructure solutions customer, the Company
being selected by the Tunnels to Towers Foundation to construct a
traveling modular home, the Comfort Home Show model, designed to
showcase the foundation’s Homeless Veterans Program, and the
outlook for Safe & Green Holdings. These forward-looking
statements are subject to various risks and uncertainties, many of
which are difficult to predict that could cause actual results to
differ materially from current expectations and assumptions from
those set forth or implied by any forward-looking statements.
Important factors that could cause actual results to differ
materially from current expectations include, among others, the
Company’s ability to execute on the MPA with Safe and Green
Development Corporation, the Company’s ability to refurbish the 19
container modules to be used by a major U.S. government agency, the
Company’s ability to design, build, and operate an 800-unit
supportive housing community per the Company’s non-binding LOI, the
Company’s ability to fulfill the design-build contract with Hostel
Cubed, to produce their first modular camping cube the "Coastal
Camping Cube", the Company’s ability to construct a traveling
modular home, the Comfort Home Show model, for the Tunnels to
Towers Foundation, the effect of government regulation, the
Company’s ability to maintain compliance with the NASDAQ listing
requirements, and the other factors discussed in the Company’s
Annual Report on Form 10-K for the year ended December 31, 2022 and
its subsequent filings with the SEC, including subsequent periodic
reports on Forms 10-Q and 8-K. The information in this release is
provided only as of the date of this release, and we undertake no
obligation to update any forward-looking statements contained in
this release on account of new information, future events, or
otherwise, except as required by law.
Investor Relations:
Crescendo Communications, LLC(212)
671-1020sgbx@crescendo-ir.com
Safe and Green (NASDAQ:SGBX)
Historical Stock Chart
From Aug 2024 to Sep 2024
Safe and Green (NASDAQ:SGBX)
Historical Stock Chart
From Sep 2023 to Sep 2024