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HENDERSON, Nev., Feb. 14, 2023 /PRNewswire/ -- Upexi, Inc. (NASDAQ: UPXI) (the "Company" or "Upexi"), a multi-faceted Amazon and Direct to Consumer brand owner and innovator in aggregation, today announced its financial results for the fiscal 2023 second quarter ending December 31, 2022.
Fiscal 2023 Second Quarter Financial Highlights:
"The strategic measures we have taken during the last nine months have resulted in record revenue and positive Adjusted EBITDA for our fiscal 2023 second quarter," stated Allan Marshall, Upexi Chief Executive Officer. "During that period we divested our select CBD operations and focused our resources on our diverse business mix of non-discretionary brands in health, wellness, pet, toys, and liquidation in wholesale, DTC and Amazon."
Mr. Marshall continued, "During the quarter we transitioned sequentially from an Adjusted EBITDA loss to positive Adjusted EBITDA. Throughout the remainder of calendar 2023 we expect to see further efficiency in our operations, which will drive higher EBITDA margins. The business is well positioned to meet our projected revenue goal of $100 million for calendar 2023 and we expect EBITDA margins to increase steadily throughout the calendar year to trend towards 8% to 12% by end of year."
Fiscal 2023 Second Quarter and Subsequent Operational Highlights:
Financial Highlights for Fiscal 2023 Second Quarter
Revenue for the three months ended December 31, 2022 totaled $27.1 million, an increase of 444% as compared to $4.9 million for the same period the year prior. Revenue growth was predominantly driven by acquisitions as well as strong year-end sales in many of our brands including; E-core, Tytan Tiles, Vitamedica, and Cygnet Online, as well as strong sales from our pet product business, Lucky Tail.
Cost of revenue during the quarter totaled $16.8 million, compared to $.7 million for the same period the prior year. Gross profit for the quarter was $10.3 million, an increase of 141% as compared to $4.3 million for the same period in the prior year. Gross margins declined to 38%.
Operating expenses totaled $12.5 million, an increase of 83% as compared to $6.8 million for the same period in the prior fiscal year.
The Company had a net loss from continued operations of $2.1 million for the three months ended December 31, 2022, representing a 16% improvement compared to the $2.5 million net loss for the same period the prior year.
The Company had cash of $4.5 million and stockholders' equity attributable to Upexi, In. stockholders of $36.9 million as of December 31, 2022. As of today, February 14, 2023, there are17,960,748 shares of common stock outstanding.
Financial Results Conference Call
Event: | Fiscal 2023 Second Quarter Financial Results Conference Call |
Date: | Tuesday, February 14, 2023 |
Time: | 5:00 p.m. Eastern Time |
Live Call: | 1-877-407-9716 (U.S. Toll-Free) or 1-201-493-6779 (International) |
Webcast: | https://viavid.webcasts.com/starthere.jsp?ei=1596499&tp_key=f546e66677 |
For those unable to join the conference call, a dial-in replay of the call will be available until February 28, 2023 and can be accessed by dialing +1-844-512-2921 (U.S. Toll Free) or +1-412-317-6671 (International) and entering replay pin number: 13736086.
Additional details are available under the Investor Relations section of the Company's website: https://upexi.com/investors.
About Upexi, Inc.:
Upexi is a multi-faceted brand owner with established brands in the health, wellness, pet, beauty and other growing markets. We operate in emerging industries with high growth trends and look to drive organic growth of our current brands. We focus on direct to consumer and Amazon brands that are scalable and have anticipated, high industry growth trends. Our goal is to continue to accumulate consumer data and build out a significant customer database across all industries we sell into. The growth of our current database has been key to the year over year gains in sales and profits. To drive additional growth, we have and will continue to acquire profitable Amazon and eCommerce businesses that can scale quickly and reduce costs through corporate synergies. We utilize our in-house, SaaS programmatic ad technology to help achieve a lower cost per acquisition and accumulate consumer data for increased cross-selling between our growing portfolio of brands.
FORWARD LOOKING STATEMENTS:
This news release contains "forward-looking statements" as that term is defined in Section 27A of the United States Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements in this press release which are not purely historical are forward-looking statements and include any statements regarding beliefs, plans, expectations or intentions regarding the future. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the inherent uncertainties associated with business strategy, potential acquisitions, revenue guidance, product development, integration and synergies of acquiring companies and personnel. These forward-looking statements are made as of the date of this news release, and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Although we believe that the beliefs, plans, expectations and intentions contained in this press release are reasonable, there can be no assurance that such beliefs, plans, expectations or intentions will prove to be accurate. Investors should consult all of the information set forth herein and should also refer to the risk factors disclosure outlined in our annual report on Form 10-K and other periodic reports filed from time-to-time with the Securities and Exchange Commission.
Use of Non-GAAP Financial Measures
The Company discloses and uses the above-mentioned non-GAAP financial measures internally as a supplement to GAAP financial information to evaluate its operating performance, for financial planning purposes, to establish operational goals, for compensation plans, to measure debt service capability, for capital expenditure planning and to determine working capital needs and believes that these are useful financial measures also used by investors. Non-GAAP adjusted EBITDA is defined as GAAP net income or net loss before interest, taxes, depreciation and amortization (EBITDA) adjusted for the non-cash stock compensation and stock option expense, acquisition, integration & restructuring expenses, charges and gains or losses from extinguishment of debt and other non-cash items. Non-GAAP EBITDA and non-GAAP adjusted EBITDA are not terms defined by GAAP and, as a result, the Company's measure of non-GAAP EBITDA and non-GAAP adjusted EBITDA might not be comparable to similarly titled measures used by other companies. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flow that either excludes or includes amounts that are not normally included in the most directly comparable measure calculated and presented in accordance with GAAP. The non-GAAP financial measures discussed above, however, should be considered in addition to, and not as a substitute for, or superior to net income or net loss as reported for GAAP on the Consolidated Statements of Operations, cash and cash flows on the Consolidated Statement of Cash Flows or other measures of financial performance prepared in accordance with GAAP, and as reflected on the Company's financial statements prepared in accordance with GAAP. These non-GAAP financial measures are not a substitute for or presented in lieu of financial measures provided by GAAP and all measures and disclosures of financial information pursuant to GAAP should be read to obtain a comprehensive and thorough understanding of the Company's financial results. The reconciliations of non-GAAP EBITDA and non-GAAP adjusted EBITDA to GAAP operating income (loss) and/or GAAP net income (net loss) referred to in the highlights or elsewhere are provided in the schedules that are a part of this document.
Adjusted EBITDA | |||
Three Months Ended | Six Months Ended | ||
30-Sep-22 | 31-Dec-22 | 31-Dec-22 | |
Net income (Net loss) GAAP | (2,597,515) | 2,669,679 | 72,164 |
Interest expense, net | 435,826 | 1,790,147 | 2,225,973 |
Depreciation and amortization | 1,075,393 | 1,204,628 | 2,280,021 |
Income Tax | (708,201) | 755,253 | 47,052 |
Stock Compensation | 927,326 | 1,052,847 | 1,980,173 |
Gain on sale of asset | - | (7,564,363) | (7,564,363) |
Change in derivative liability | (1,770) | 3,540 | 1,770 |
Loss from discontinued operations | 45,511 | 292,907 | 338,418 |
Loss attributable to non-controlling interest | (148,005) | (85,581) | (233,586) |
(971,435) | 119,057 | (852,378) |
Company Contact
Andrew Norstrud, Chief Financial Officer
Email: andrew.norstrud@upexi.com
Phone: (702) 332-5591
Investor Relations Contact
KCSA Strategic Communications
Valter Pinto or Jack Perkins
Email: Upexi@KCSA.com
Phone: (212) 896-1254
UPEXI, INC. | ||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | ||||||||||||||||
Three Month's Ended | Six Month's Ended | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Revenue | ||||||||||||||||
Revenue | $ | 27,086,672 | $ | 4,983,557 | $ | 38,643,683 | $ | 8,853,667 | ||||||||
Cost of Revenue | 16,773,493 | 711,246 | 22,289,773 | 1,982,975 | ||||||||||||
Gross profit | 10,313,179 | 4,272,311 | 16,353,910 | 6,870,692 | ||||||||||||
Operating expenses | ||||||||||||||||
Sales and marketing | 3,707,925 | 1,735,194 | 5,733,385 | 2,735,258 | ||||||||||||
Distribution costs | 3,575,545 | 821,630 | 6,063,379 | 933,463 | ||||||||||||
General and administrative expenses | 2,910,655 | 3,003,919 | 5,409,524 | 4,586,351 | ||||||||||||
Share-based compensation | 1,052,847 | 852,455 | 1,980,173 | 1,479,293 | ||||||||||||
Amortization of acquired intangible assets | 962,077 | 236,001 | 1,842,973 | 304,835 | ||||||||||||
Depreciation | 242,551 | 159,073 | 437,048 | 246,579 | ||||||||||||
12,451,600 | 6,808,272 | 21,466,482 | 10,285,779 | |||||||||||||
Loss from operations | (2,138,421) | (2,535,960) | (5,112,572) | (3,415,086) | ||||||||||||
Other income (expense), net | ||||||||||||||||
Interest (expense) income, net | (1,790,144) | (48,541) | (2,225,973) | (41,994) | ||||||||||||
Change in derivative liability | (3,540) | - | (1,770) | - | ||||||||||||
Gain on sale of Infusionz and select assets | 7,564,363 | - | 7,564,363 | - | ||||||||||||
Gain on SBA PPP loan extinguishment | - | - | - | 300,995 | ||||||||||||
Other income (expense), net | 5,770,679 | (48,541) | 5,336,620 | 259,001 | ||||||||||||
Income (loss) on operations before income tax | 3,632,258 | (2,584,501) | 224,048 | (3,156,085) | ||||||||||||
Income tax expense | (755,253) | (493,936) | (47,052) | (235,033) | ||||||||||||
Net income (loss) from continuing operations | 2,877,005 | (3,078,437) | 176,996 | (3,391,118) | ||||||||||||
(Loss) income from discontinued operations | (292,907) | 2,820,190 | (338,418) | 3,967,662 | ||||||||||||
Net loss attributable to non-controlling interest | (85,581) | - | (233,586) | - | ||||||||||||
Net income (loss) attributable to Upexi, Inc. | $ | 2,669,679 | $ | (258,247) | $ | 72,164 | $ | 576,544 | ||||||||
Basic income (loss) per share: | ||||||||||||||||
Income (loss) per share from continuing operations | $ | 0.16 | $ | (0.32) | $ | 0.01 | $ | (0.22) | ||||||||
(Loss) income per share from discontinued operations | $ | (0.02) | $ | 0.29 | $ | (0.02) | $ | 0.26 | ||||||||
Total income (loss) per share | $ | 0.16 | $ | (0.32) | $ | 0.01 | $ | (0.22) | ||||||||
Diluted income (loss) per share: | ||||||||||||||||
Income (loss) per share from continuing operations | $ | 0.15 | $ | (0.32) | $ | 0.01 | $ | (0.20) | ||||||||
(Loss) income per share from discontinued operations | $ | (0.02) | $ | 0.29 | $ | (0.02) | $ | 0.23 | ||||||||
Total income (loss) per share | $ | 0.15 | $ | (0.32) | $ | 0.01 | $ | (0.20) | ||||||||
Basic weighted average shares outstanding | 17,540,427 | 9,755,663 | 17,126,886 | 15,452,453 | ||||||||||||
Fully diluted weighted average shares outstanding | 19,030,705 | 9,755,663 | 18,617,164 | 17,220,564 |
UPEXI, INC. | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) | ||||||||
December 31, | June 30, | |||||||
2022 | 2022 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash | $ | 4,508,161 | $ | 7,149,806 | ||||
Accounts receivable | 8,869,297 | 1,137,637 | ||||||
Inventory | 6,779,997 | 4,725,685 | ||||||
Deferred tax asset, current | - | 462,070 | ||||||
Prepaid expenses and other receivables | 1,967,088 | 840,193 | ||||||
Assets of discontinued operations, net | - | 6,449,210 | ||||||
Total current assets | 22,124,543 | 20,764,601 | ||||||
Property and equipment, net | 7,231,404 | 7,343,783 | ||||||
Intangible assets, net | 18,712,409 | 10,641,382 | ||||||
Goodwill | 15,342,089 | 5,887,393 | ||||||
Deferred tax asset | 2,479,918 | 2,002,759 | ||||||
Investments - Bloomios | 10,081,255 | - | ||||||
Other assets | 56,703 | 100,372 | ||||||
Right-of-use asset | 608,488 | 926,570 | ||||||
Total other assets | 54,512,266 | 26,902,259 | ||||||
Total assets | $ | 76,636,809 | $ | 47,666,860 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 4,162,121 | $ | 2,018,541 | ||||
Accrued compensation | 718,764 | 531,259 | ||||||
Deferred revenue | 31,724 | 105,848 | ||||||
Accrued liabilities | 3,898,318 | 955,327 | ||||||
Acquisition payable | 3,978,523 | - | ||||||
Current portion of notes payable | 2,117,683 | 5,424,752 | ||||||
Current portion of operating lease payable | 187,777 | 267,029 | ||||||
Total current liabilities | 15,094,910 | 9,302,756 | ||||||
Operating lease payable, net of current portion | 375,552 | 700,411 | ||||||
Notes payable, net of current portion | 24,420,152 | 8,876,949 | ||||||
Total long-term liabilities | 24,795,704 | 9,577,360 | ||||||
Commitments and contingencies | - | - | ||||||
Stockholders' equity | ||||||||
Preferred stock, $0.001 par value, 100,000,000 shares authorized, and | 500 | 500 | ||||||
Common stock, $0.001 par value, 100,000,000 shares authorized, and | 17,960 | 16,713 | ||||||
Additional paid in capital | 43,105,223 | 34,985,597 | ||||||
Accumulated deficit | (6,198,722) | (6,270,886) | ||||||
Total stockholders' equity attributable to Upexi, Inc. | 36,924,961 | 28,731,924 | ||||||
Non-controlling interest in subsidiary | (178,766) | 54,820 | ||||||
Total stockholders' equity | 36,746,195 | 28,786,744 | ||||||
Total liabilities and stockholders' equity | $ | 76,636,809 | $ | 47,666,860 |
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SOURCE Upexi, Inc.