urban-gro, Inc. Reports Record Fourth Quarter and Full-Year 2020 Financial Results
March 31 2021 - 7:05AM
urban-gro, Inc. (NASDAQ: UGRO) (“urban-gro” or the “Company”), a
leading global horticulture company that engineers and designs
commercial Controlled Environment Agriculture (“CEA”) facilities
and integrates complex environmental equipment systems, today
reported its financial results for its fourth quarter and full
fiscal year ended December 31.
Bradley Nattrass, Chairman and CEO of urban-gro
stated, “While experiencing project-related challenges in the first
half of the year due to the pandemic, 2020 ultimately turned out to
be the Company’s best year since inception. Revenues increased
substantially, from $8.2 million in the negatively affected first
half of the year, to $17.6 million in the second half. I am
extremely pleased with the progress we have made on our strategic
goals across multiple fronts, and with the strong momentum and our
recent $62.1 million equity raise and up-listing to Nasdaq, we are
now funding our growth plans. We look forward to serving our
clients and expanding our reach globally to meet the growing demand
of our rapidly evolving industry. While 2020 stands out as a solid
representation of our execution and strengthened financial profile,
we are well positioned to achieve even more in 2021.”
Fourth Quarter 2020 Highlights vs. Prior
Year Period:
- Net revenue increased 30% to a
record $9.2 million compared to $7.1 million.
- Adjusted EBITDA was $0.2 million,
compared to an Adjusted EBITDA loss of $1.2 million, an improvement
of $1.4 million.
- Net loss was $1.1 million, or a
loss of $0.24 per share, which compares favorably to a net loss of
$2.6 million, or a loss of $0.57 per share.
Fiscal Year 2020 Highlights vs. Prior Year:
- Net revenue increased 7% to a
record $25.8 million compared to $24.2 million.
- Adjusted EBITDA was a loss of $0.7
million, versus a loss of $3.3 million, an improvement of $2.6
million, and finished fiscal year 2020 with two consecutive
positive Adjusted EBITDA quarters.
- Net loss was $5.1 million, or a
loss of $1.06 per share, compared to a net loss of $8.4 million, or
a loss of $1.90 per share. This improvement in Adjusted EBITDA and
net loss was primarily driven by a reduction in operating expenses
on a year over year basis. The Company was laser focused on
attaining our goal of being operationally cash flow positive by the
end of the year.
- Despite a record revenue year,
overall gross margin decreased to 22%, from 27%, primarily due to a
proportional increase in revenue from lower margin cultivation
equipment sales.
- Reported a backlog of over $14
million at December 31, 2020.
Recent Events and Cash
Position
- On February 17, 2021, the Company
consummated an underwritten public offering of 6,210,000 shares of
common stock, including the full exercise by the underwriters of
their option to purchase an additional 810,000 shares of common
stock to cover over-allotments. The shares were sold at a public
offering price of $10.00 per share, generating gross proceeds of
$62.1 million, before deducting the underwriting discounts and
other offering expenses. Net proceeds, net of all costs, were used
to repay debt, increase cash holdings, and for general working
capital purposes to position the company for future growth.
Cash at December 31, 2020 was $0.2 million, and
cash at March 30, 2021 was $50 million.
Business Updates
In 2020, the Company soft-launched its gro-care®
managed services offering to the North American market. gro-care®
prevents downtime while driving business continuity for our
client’s cultivation facilities once operational. Providing clients
with a variety of important services, this platform leverages
urban-gro’s commissioning engineers, personnel, and acquired
expertise through a monthly subscription offered at a fraction of
the cost of in-house staffing these specific technical skill sets.
For more information about gro-care®, please visit
urban-gro.com/gro-care/.
Despite the COVID-19 pandemic, urban-gro was
able to successfully execute on its expansion strategy into Europe,
signing six design contracts in 2020. Based on its market study in
2020, the Company plans to leverage global partnerships along with
its existing U.S.-based engineering and design expertise and
overhead for expansion in both the cannabis and food-focused
sustainable integrated CEA markets across Europe and North America.
In addition, the Company is working with a key manufacturing
partner to develop and secure all certifications for a
purpose-built mechanical system designed to address the market gap
for use in indoor CEA facilities within Europe.
Conference Call Details
urban-gro will host a conference call and live
audio webcast to discuss the operational and financial results
today, March 31, 2021 at 8:30 a.m. ET. Interested participants and
investors may access the conference call by dialing (877) 524-8416
(domestic) or (412) 902-1028 (international). The live webcast will
be accessible on the Events page of the Investors section of the
urban-gro website, urban-gro.com and will be archived for 90 days
following the event.
Use of Non-GAAP Financial Information
We define Adjusted EBITDA as net income (loss)
attributable to urban-gro, Inc., determined in accordance with
GAAP, excluding the effects of certain operating and non-operating
expenses including, but not limited to, interest expense,
depreciation of tangible assets, amortization of intangible assets,
impairment of investments, and stock-based compensation that we do
not believe reflect our core operating performance. We use Adjusted
EBITDA as a measure of our operating performance. Adjusted EBITDA
is a supplemental non-GAAP financial measure and it is not a
substitute for net income (loss), income (loss) from operations,
cash flows from operating activities or any other measure
prescribed by GAAP.
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.
|
|
Three Months EndedDecember
30, |
|
|
Years EndedDecember 30, |
|
|
2020 |
|
2019 |
|
|
2020 |
|
2019 |
Net Loss |
|
$ |
(1,113,813) |
|
$ |
(2,631,169) |
|
|
$ |
(5,073,695) |
|
$ |
(8,350,573) |
Interest expense |
|
|
439,967 |
|
|
329,380 |
|
|
|
1,497,469 |
|
|
704,230 |
Interest expense –
amortization of |
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible debentures |
|
|
– |
|
|
537,287 |
|
|
|
– |
|
|
1,333,520 |
G&A – amortization of
convertible debentures |
|
|
– |
|
|
264,744 |
|
|
|
– |
|
|
432,578 |
Write down of investment |
|
|
– |
|
|
– |
|
|
|
310,000 |
|
|
505,766 |
Stock-based compensation |
|
|
411,595 |
|
|
224,070 |
|
|
|
1,803,403 |
|
|
1,830,426 |
Contingent consideration –
purchase price |
|
|
– |
|
|
– |
|
|
|
155,000 |
|
|
– |
Depreciation and
amortization |
|
|
76,690 |
|
|
70,641 |
|
|
|
258,440 |
|
|
266,476 |
Unrealized exchange loss |
|
|
397,292 |
|
|
– |
|
|
|
397,292 |
|
|
– |
Adjusted
EBITDA |
|
$ |
211,731 |
|
$ |
(1,205,047) |
|
|
$ |
(652,091) |
|
$ |
(3,277,577) |
Profit and Loss – Q4 2020 and
2019
|
|
|
|
Three months ended |
|
|
|
|
December 31, 2020 |
|
December 31, 2019 |
|
|
|
|
|
|
|
Revenues |
|
|
|
|
9,212,228 |
|
|
|
7,133,066 |
|
Cost of goods sold |
|
|
|
7,508,819 |
|
|
|
6,034,146 |
|
Gross Profit |
|
|
|
|
1,703,409 |
|
|
|
1,098,920 |
|
|
|
|
|
|
18 |
% |
|
|
15 |
% |
|
|
|
|
|
|
|
Operating expenses |
|
|
|
1,959,022 |
|
|
|
2,905,438 |
|
|
|
|
|
|
|
|
Earnings / (Loss) from operations |
|
(255,613 |
) |
|
|
(1,806,518 |
) |
|
|
|
|
|
|
|
Non-operating income (expense) |
|
|
|
Interest expense |
|
|
|
(439,967 |
) |
|
|
(329,380 |
) |
Interest expense – amortization of convertible debentures |
|
- |
|
|
|
(537,287 |
) |
Unrealized exchange loss |
|
|
|
(397,292 |
) |
|
|
- |
|
Other income (expense) |
|
|
|
(20,941 |
) |
|
|
42,016 |
|
Total non-operating income (expenses) |
|
(858,200 |
) |
|
|
(824,651 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income / (loss) |
|
$ |
(1,113,813 |
) |
|
$ |
(2,631,169 |
) |
|
|
|
|
|
|
|
Loss per share: |
|
|
|
|
|
Net loss per share – basic and diluted |
|
(0.24 |
) |
|
|
(0.57 |
) |
|
|
|
|
|
|
|
Profit and Loss – Year Ended 2020 and
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years
ended |
|
|
|
|
December 31, 2020 |
|
December 31, 2019 |
|
|
|
|
|
|
|
Revenues |
|
|
|
25,837,917 |
|
|
|
24,189,803 |
|
Cost of goods sold |
|
|
20,122,281 |
|
|
|
17,563,594 |
|
Gross Profit |
|
|
|
5,715,636 |
|
|
|
6,626,209 |
|
|
|
|
|
22 |
% |
|
|
27 |
% |
|
|
|
|
|
|
|
Operating expenses |
|
|
8,461,306 |
|
|
|
12,486,814 |
|
|
|
|
|
|
|
|
Earnings / (Loss) from operations |
(2,745,670 |
) |
|
|
(5,860,605 |
) |
|
|
|
|
|
|
|
Non-operating income (expense) |
|
|
|
Interest expense |
|
|
(1,497,469 |
) |
|
|
(704,230 |
) |
Interest expense – amortization of convertible debentures |
- |
|
|
|
(1,333,520 |
) |
Contingent Consideration – Purchase Price |
(155,000 |
) |
|
|
- |
|
Write-down of investment |
|
(310,000 |
) |
|
|
(505,766 |
) |
Unrealized exchange loss |
|
|
(397,292 |
) |
|
|
- |
|
Other income (expense) |
|
|
31,736 |
|
|
|
53,548 |
|
Total non-operating income (expenses) |
(2,328,025 |
) |
|
|
(2,489,968 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income / (loss) |
|
(5,073,695 |
) |
|
$ |
(8,350,573 |
) |
|
|
|
|
|
|
|
Loss per share: |
|
|
|
|
|
Net loss per share – basic and diluted |
(1.06 |
) |
|
|
(1.90 |
) |
|
|
|
|
|
|
|
About urban-gro, Inc.
urban-gro, Inc. (NASDAQ: UGRO) is a leading
engineering design and services company focused on the commercial
horticulture market. We engineer and design commercial
Controlled Environment Agriculture (“CEA”) facilities and then
integrate complex environmental equipment systems into these
high-performance facilities. Operating in the global market,
our custom-tailored approach to design, procurement, and equipment
integration provides a single point of accountability across all
aspects of growing operations. Visit urban-gro.com to learn
more.Safe Harbor StatementThis 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,” “estimates,” “should,”
“could,” “would,” “plans,” “expects,” “intends,” “anticipates,”
“may,” “forecasts,” “projects” and similar expressions and
variations as they relate to the Company or its management are
intended to identify forward-looking statements. Such
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 statements related to
the demand for our services and products, our ability to manage the
adverse effect brought on by the COVID-19 pandemic, our ability to
execute on our strategic plans, our ability to achieve positive
cash flows or profitability, 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 2020.
A more detailed description of these and certain other factors that
could affect actual results is included in the Company’s filings
with the Securities and Exchange Commission. Readers are cautioned
not to place undue reliance on these forward-looking statements,
which speak only as of the date hereof. The Company undertakes no
obligation to update any forward-looking statements to reflect
events or circumstances after the date hereof, except as may be
required by law.urban-gro Investor Relations
Contact:Jenene ThomasChief Executive OfficerJTC Team,
LLCT: 833.475.8247 investors@urban-gro.com
Urban Gro (NASDAQ:UGRO)
Historical Stock Chart
From Mar 2024 to Apr 2024
Urban Gro (NASDAQ:UGRO)
Historical Stock Chart
From Apr 2023 to Apr 2024