Bringing Solutions To Controlled Environment Agriculture, This Firm Reports 16% YoY Revenue Increase With No Bank Debt

urban-gro, Inc. UGRO reported its financial results for the quarter that ended June 30, 2023, disclosing revenue of $18.8 million, representing a sequential increase of 12% over $16.8 million and a 16% increase over $16.3 million in the prior year period.

"Our second quarter performance marked another sequential improvement in revenues and Adjusted EBITDA, and as we anticipated, our cash position improved relative to the first quarter,” said Bradley Nattrass, chairman and CEO. “We remain intensely focused on returning to positive Adjusted EBITDA and see a pathway to this through the costs we've driven out of the business, our increasing revenues, and a systems-enhanced insight into project margin.”

Q2 2023 Financial Results

• Gross profit was $2.9 million, or 15% of revenue, as compared to $2.8 million in the first quarter, or 17% of revenue, and $3.5 million, or 22% of revenue in the prior year period.
• Operating expenses were $6.8 million as compared to $7.9 million in the first quarter, representing a sequential decrease of $1.1 million.
• Non-operating expenses were $1.6 million, which includes a $1.5 million legal settlement, as compared to non-operating income of $0.1 million in the prior year.
• Net loss was $5.4 million, or $0.50 loss per share as compared to a net loss of $1.7 million, or $0.17 loss per share in the prior year period.
• Adjusted EBITDA improved by $1.4 million on a sequential basis to negative $2.0 million. As compared to the prior year period, Adjusted EBITDA decreased by $1.5 million, driven by lower gross profit.
• Cash position at the end of the second quarter of 2023 was $8.6 million with no bank debt.

Summary First Six Months 2023 Financial Results:

• Revenue was $35.6 million for the first six months of 2023 compared to $37.3 million in the prior year period, representing a decrease of $1.7 million, or 5%.
• Net loss was $10.6 million, or $0.97 per share, for the first six months of 2023 compared to a net loss of $2.4 million, or $0.23 per share, in the prior year period.
• Adjusted EBITDA was negative $5.5 million for the first six months of 2023 compared to negative $0.1 million in the prior year period.

In addition, the total backlog as of June 30, 2023, was approximately $79 million in contracts, comprised of $70 million in construction design-build, $4 million in professional services, and $5 million in equipment systems.

Revenue and Adjusted EBITDA Guidance - Full Year 2023:

• Consolidated revenue: $90 million to $95 million.
• Adjusted EBITDA: negative $6 million to negative $5 million.

Price Action: UGRO shares were trading 3.26% higher at $1.2185 per share at the time of publishing Monday at market close.

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