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Friday, March 1, 2024

Urban-Gro, Inc. Reports Q1 2023 Financial Results, Focuses On Diversification & Cost Optimization – Urban-gro (NASDAQ:UGRO)

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On Wednesday, Urban-gro, Inc. UGRO reported first-quarter results and reaffirms full-year 2023 guidance.

CEO Bradley Nattrass highlighted the company’s focus on creating a durable and diversified organization.

“Our first quarter performance is consistent with our expectations as we continue to demonstrate that the acquisitions and investments we made have created a more durable and uniquely diversified company. We continue to see demand for our solutions in all sectors,” Nattrass said.

First Quarter 2023 Financial Results

  • First-quarter revenue was $16.8 million, down from $21.1 million in the previous year. However, the company offset some of the decreases with $10.2 million in revenue growth from construction design-build services related to an acquisition.
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  • Gross profit was $2.8 million, or 17% of revenue as compared to $4.9 million, or 23% of revenue in the prior year period.
  • Operating expenses were $7.9 million as compared to $5.8 million in the prior year period, representing an increase of $2.1 million. Moreover, operating expenses increased due to organic growth, acquisitions, professional fees, and expansion into the European market.
  • Non-operating expenses were $0.2 million as compared to non-operating income of $0.1 million in the prior year.
  • Net loss was $5.1 million, or $0.48 loss per share as compared to a net loss of $0.7 million, or $0.07 loss per share in the prior year period.
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  • Adjusted EBITDA was negative $3.4 million as compared to a positive $0.4 million in the prior year period.
  • Cash position at the end of the first quarter of 2023 was $7.3 million with no bank debt, per a press release.

2023 Backlog & Guidance

Additionally, UGRO’s consolidated backlog as of March 31, 2023, amounted to approximately $105 million in contracts, “comprised of $96 million in construction design-build, $4 million of professional services, and $5 million of equipment systems.”

Full-year 2023 guidance reiterates revenue in the range of $100 to $120 million and Adjusted EBITDA ranging from negative $3 million to slightly positive.

“Our primary near-term corporate priority remains our focus on achieving positive Adjusted EBITDA as quickly as possible,” said Nattrass, adding that the company implemented a cost optimization strategy in the second quarter, resulting in approximately $2 million in annualized savings. “All combined, we are positioning the business for long-term profitable growth,” he concluded.

Price Action: On Wednesday evening, UGRO shares closed at $1.75 per share trading 2.23% lower.

Photo: Courtesy Of Maxim Hopman On Unsplash

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