Smart for Life, Inc. (Nasdaq: SMFL) (“Smart for Life” or
the “Company”), a high growth global leader in the health
& wellness sector, marketing and manufacturing nutritional
foods and supplements worldwide, today provided a business update
and reported financial results for the second quarter ended June
30, 2022.
“We continue to generate solid year-over-year
growth with revenues increasing more than four-fold to $4.3 million
for the second quarter of 2022,” stated Darren Minton, Chief
Executive Officer of Smart for Life. “We also achieved a 512.7%
year-over-year increase in revenue to $8.7 million for the six
months ended June 30, 2022. These strong results reflect our
organic growth and the successful implementation of our acquisition
strategy.”
“Not included in these results is the fact that
we completed the acquisition of Ceautamed Worldwide, a premier
nutritional supplement company and owner of the Greens First brand,
on July 29, 2022,” remarked Mr. Minton. “This transaction brings
solid financials, positive EBITDA, the addition of experienced
management, a successful medical distribution channel, migration of
substantial contract manufacturing business to our Miami-based
manufacturing facility and, most importantly, the addition of the
Greens First brand and over 45 SKUs to our growing portfolio of
great brands and products. Our mission is to significantly enhance
sales by leveraging Ceautamed’s broad distribution medical channel
and our own established direct-to-consumer relationships and
digital marketing platform. By migrating substantial contract
manufacturing business to our Miami-based manufacturing facility,
we expect to benefit from meaningful operating efficiencies and
cost savings.”
“This is our fifth successful acquisition
further validating our "buy and build" growth strategy and our
ability to successfully integrate each acquisition into the Smart
for Life corporate family,” commented A.J. Cervantes, Jr., Smart
for Life’s Executive Chairman. “Each transaction further validates
our ability to acquire cash flow positive companies at attractive
multiples, but also our ability to successfully integrate these
companies within our organization. With instantly recognizable
brands, industry-leading products, loyal customers, and a full
range of world-class service offerings, Smart for Life is ideally
positioned to bring health & wellness to customers around the
world, while remaining laser focused on driving shareholder
value.”
“Our proactive acquisition strategy aligns to
our previously announced goal of $300 million in revenue within the
next thirty-six months,” stated Alan Bergman, Smart for Life’s
Chief Financial Officer. “We believe that the net loss we have
generated as an emerging growth company does not fully reflect the
benefit of our recent acquisitions. We expect that the
consolidation of our operations should result in improved
profitability in future quarters as we continue to reduce costs and
grow our top-line revenue. In conclusion, we are successfully
executing on a carefully orchestrated roll up strategy capitalizing
on the fragmented yet rapidly growing nutraceutical market, and
believe we are well positioned to drive increased profitability
going forward given the scalability of our business model.”
Financial Results
Revenues increased to $4.3 million in Q2 2022
compared to $0.9 million for Q2 2021, an increase of $3.4 million,
or 401.2%. The increase was primarily due to the acquisitions of
Doctors Scientific Organica, LLC, Nexus Offers, Inc. and GSP
Nutrition Inc. that were completed in the third and fourth quarters
of 2021. Gross profit increased to $1.8 million in Q2 2022 compared
to approximately $9,000 for same period last year, an increase of
approximately $1.8 million. Net loss attributable to common
shareholders was $3.4 million in Q2 2022 compared to $1.0 million
in Q2 2021 primarily due to an increase in general and
administrative expenses of $3.1 million and total other expense of
$0.7 million.
Revenues increased to $8.7 million for the six
months ended June 30, 2022 compared to $1.4 million for the six
months ended June 30, 2021, an increase of $7.3 million, or 512.7%,
due to the acquisitions completed in 2021. Gross profit increased
to $3.3 million for the six months ended June 30, 2022 compared to
approximately $30,000 for same period last year, an increase of
$3.3 million. Net loss attributable to common shareholders was
$20.0 million for the six months ended June 30, 2022 compared to
$1.7 million for same period last year, primarily due to the
increase in general and administrative expenses of $6.8 million and
total other expense of $13.9 million.
The Company reported EBITDA of ($2.0) million in
Q2 2022, as compared to EBITDA of ($0.9) million for Q2 2021. For
the six months ended June 30, 2022, the Company reported EBITDA of
($5.4) million versus EBITDA of ($1.5) million for the same period
last year. The Company defines EBITDA as earnings before interest,
taxes and depreciation and amortization. EBITDA is not a measure of
performance calculated in accordance with Generally Accepted
Accounting Principles in the United States of America (“GAAP”), and
should not be considered in isolation of, or as a substitute for,
earnings as an indicator of operating performance or cash flows
from operating activities as a measure of liquidity. The Company
believes the presentation of EBITDA is relevant and useful by
enhancing the readers’ ability to understand the Company’s
operating performance. The Company’s management utilizes EBITDA as
means to measure performance. The Company’s measurements of EBITDA
may not be comparable to similar titled measures reported by other
companies. The table below reconciles EBITDA, a non-GAAP measure,
to GAAP numbers for net loss 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 Loss |
(3,385,195 |
) |
(960,722 |
) |
(19,959,672 |
) |
(1,741,363 |
) |
Interest |
984,427 |
|
64,159 |
|
13,741,907 |
|
138,999 |
|
Taxes |
- |
|
- |
|
- |
|
- |
|
Depreciation and
amortization |
430,092 |
|
20,746 |
|
853,102 |
|
74,754 |
|
EBITDA |
(1,970,676 |
) |
(875,817 |
) |
(5,364,663 |
) |
(1,527,610 |
) |
About Smart for Life, Inc.
Smart for Life, Inc. (Nasdaq: SMFL) is engaged
in the development, marketing, manufacturing, acquisition,
operation and sale of a broad spectrum of nutritional and related
products with an emphasis on Health & Wellness. Structured as a
publicly held global holding company, the Company is executing a
buy-and-build strategy with serial accretive acquisitions creating
a vertically integrated company with an objective of aggregating
companies generating a minimum of $300 million in revenues within
the next thirty-six months. To drive growth and earnings, Smart for
Life is developing proprietary products as well as acquiring other
profitable companies, encompassing brands, manufacturing and
distribution channels. The Company currently operates five
subsidiaries including Doctors Scientific Organica, Nexus Offers,
Bonne Santé Natural Manufacturing, GSP Nutrition and Ceautamed
Worldwide. For more information about Smart for Life, please visit:
www.smartforlifecorp.com.
Video regarding the Company’s manufacturing
facility at Bonne Santé Natural Manufacturing is available at:
www.bonnesantemanufacturing.com/video.
Investor material and a Fact Sheet with
additional information about Smart for Life is available at:
www.smartforlifecorp.com/investor-center/.
Forward-Looking Statements
This press release may contain information about
our views of future expectations, plans and prospects that
constitute forward-looking statements. All forward-looking
statements are based on management’s beliefs, assumptions and
expectations of Smart for Life’s future economic performance,
taking into account the information currently available to it.
These statements are not statements of historical fact. Although
Smart for Life believes the expectations reflected in such
forward-looking statements are based on reasonable assumptions, it
can give no assurance that its expectations will be attained. Smart
for Life does not undertake any duty to update any statements
contained herein (including any forward-looking statements), except
as required by law. No assurances can be made that Smart for Life
will successfully acquire its acquisition targets. Forward-looking
statements are subject to a number of factors, risks and
uncertainties, some of which are not currently known to us, that
may cause Smart for Life’s actual results, performance or financial
condition to be materially different from the expectations of
future results, performance or financial position. Actual results
may differ materially from the expectations discussed in
forward-looking statements. Factors that could cause actual results
to differ materially from expectations include general industry
considerations, regulatory changes, changes in local or national
economic conditions and other risks set forth in “Risk Factors”
included in our filings with the Securities and Exchange
Commission.
Disclaimer
The information provided in this press release
is intended for general knowledge only and is not a substitute for
professional medical advice or treatment for specific medical
conditions. Always seek the advice of your physician or other
qualified health care provider with any questions you may have
regarding a medical condition. This information is not intended to
diagnose, treat, cure or prevent any disease.
Investor Relations Contact
Crescendo Communications, LLCTel: (212)
671-1021SMFL@crescendo-ir.com
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