Sugarmade Discusses its Growing Cost Advantages
in Hydroponics Supplies - Announces Strong Preliminary Results for
Calendar 2019 Exceeding Internal
Forecasts
NEW
YORK, NY -- November 19, 2019 -- InvestorsHub NewsWire --
Sugarmade, Inc. (OTCQB:SGMD)
(“Sugarmade”, “SGMD”, or the “Company”), a major supplier to the
hydroponic cultivation and hemp sectors, today announces
preliminary calendar year to date revenue performance of $26
million and strengthening gross margins. The Company is
expecting its recently acquired hydroponics supply operation to
produce approximately $32 million for the calendar year.
Based on both growing revenues and an expanding sector cost
advantage, the Company believes it is well-positioned moving into
2020.
“This
business sector is all about robust product sourcing, efficiency in
logistics and effective e-commerce programs, not to mention
effective placement on Amazon, where
we are realizing great success. Our revenue and gross margin
production are testaments to the fine job our staff has done
relative to these areas,” commented Chief Executive Officer, Jimmy
Chan. “Our revenue for this calendar year, as well as our
gross margins, have exceeded our internal forecasts. We are
especially pleased with how gross margins have remained robust all
year and have actually risen over the past few months, bucking the
expected seasonal trend in this subsector of the agricultural
supply industry. We believe we are especially well set up
moving into 2020, with not only e-commerce, but also brand and
logistical advantages over the
competition.”
The
Company’s online strategy, especially relating to placement on
Amazon.com, has proven to be a significant success with the ipower
and Simple Deluxe product lines now becoming “Best Seller” brands
on the e-commerce site. Over the past year, the Company has
continued to increase the number of its products available via the
Amazon sales channel. As a result, the product lines now hold
the Amazon
“Best
Rated in Greenhouse Ventilation
Equipment.”
In
addition, to growth via the Amazon channel, the operation has also
been very successful via its own logistic, e-commerce, and
fulfillment efforts. Management believes the Company now has
a cost advantage by way of its 55,000-square-foot fulfillment
center located in Irwindale, California. Located
strategically along a logistics corridor, which directly connects
to the Port of Long Beach, the Company is able to import and
fulfill customer deliveries from a very low cost position,
especially relative to orders placed by the growing number of
California-based customers. Internal Company analysis places this
cost savings at an approximate 65% cost advantage compared to
traditional warehousing and logistics
structures.
The
Company is extremely pleased with the seasonality trends relative
to both revenues and gross margins. Despite a normal peak
sales season in the agricultural sectors centering around late
Spring as cultivators prepare for peak planting season, the Company
has been able to maintain sequential monthly revenue growth over
the past few months with revenue production for each of the months
of October and November equaling or exceeding all other months,
except for the expected peak planting month of May. Combined
gross margins for the months of August, September and October at
nearly 36% easily exceeded the average for the first seven months
of the calendar year, reflecting both revenue strength and an
increasingly favorable product mix of newly introduced products,
which are increasingly being accepted by the Company’s
customers.
The
Company attributes much of the revenue growth and strong margin
successes to its continually evolving online strategy
and to its
strong product sourcing capabilities. Mr. Chan continued, “Our online
strategies have been on point all year, allowing us to keep
customer acquisition costs in-line, while strongly growing
revenues. We have also been highly successful in sourcing
products. When products demanded by our customers could not
be procured at reasonable prices, our staff innovated by initiating
programs directly with manufacturers. These internally sourced
products have been some of our best performers. We then
utilize our considerable logistics operations to get these products
into the hands of our customers. With a strong cost
advantage, we have been able to keep our prices low, which has
increased customer loyalty, allowing
us to capture a growing market share at numerous important
cultivators. We have now exceeded one of our long term goals
by surpassing the important
$1,000,000 annual
per-employee revenue market. We are looking forward to
continued growth in 2020.”
About
Sugarmade, Inc.
Sugarmade, Inc. (OTCQB:
SGMD) is a product and branding marketing company investing in
operations and technologies with disruptive potential. The Company
is becoming a leading supplier to the growing hemp industry and is
benefitting from the growth of the hydroponic marketplace. The
Company is in the process of acquiring several leading hydroponic
and agricultural supply companies that are currently producing in
excess of $70 million in annual revenues. Sugarmade is also an
investor in fast growing Hempistry, Inc., a Kentucky-based,
operates Zenhydro.com a leading online provider to Hydroponic
industry and Carryoutsupplies.com a leading provider to the quick
service restaurant industry.
FORWARD-LOOKING
STATEMENTS: This release contains "forward-looking statements"
within the meaning of the safe harbor provisions of the U.S.
Private Securities Litigation Reform Act of 1995. Forward-looking
statements also may be included in other publicly available
documents issued by the Company and in oral statements made by our
officers and representatives from time to time. These
forward-looking statements are intended to provide management's
current expectations or plans for our future operating and
financial performance, based on assumptions currently believed to
be valid. They can be identified by the use of words such as
"anticipate," "intend," "plan," "goal," "seek," "believe,"
"project," "estimate," "expect," "strategy," "future," "likely,"
"may," "should," "would," "could," "will" and other words of
similar meaning in connection with a discussion of future operating
or financial performance. Examples of forward looking statements
include, among others, statements relating to future sales,
earnings, cash flows, results of operations, uses of cash and other
measures of financial performance.
Because
forward-looking statements relate to the future, they are subject
to inherent risks, uncertainties and other factors that may cause
the Company's actual results and financial condition to differ
materially from those expressed or implied in the forward-looking
statements. Such risks, uncertainties and other factors include,
among others. such as, but not limited to economic conditions,
changes in the laws or regulations, demand for products and
services of the company, the effects of competition and other
factors that could cause actual results to differ materially from
those projected or represented in the forward looking
statements.
Any
forward-looking information provided in this release should be
considered with these factors in mind. We assume no obligation to
update any forward-looking statements contained in this
report.
Corporate
Contact:
Jimmy
Chan
+1-(888)-982-1628
info@Sugarmade.com
Press
& Media Inquiries:
EHC
Branding Agency
Info@EHCBrandingAgency.Com
(626)
MJ-BRAND
Corporate
Communications:
NetworkWire
(NW)
New
York, New York
www.NetworkNewsWire.com
212.418.1217
Office
Editor@NetworkWire.com
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