Urban-gro, Inc. (NASDAQ:UGRO), a design-build provider to the cannabis industry released its financial results for the quarter ended March 31, 2024 and reaffirmed full year 2024 guidance. The Colorado-based company reported quarterly revenue of $15.5 million, compared to $16.8 million in the same period a year ago.
"I'm pleased with the progress of our diversification strategy that leverages our professional services talent and continues to drive our evolution into the multi-sector focused professional services consulting firm that we are today," stated Bradley Nattrass, chairman and CEO. "Our performance in the first quarter reflected solid bottom-line improvement on both a sequential and year-over-year basis and was enhanced by our targeted actions to reduce our operating expenses. We remain focused on the elements of the business that we can control and are pushing ahead with our growth strategies to ensure that we can recapture sustained positive Adjusted EBITDA1 in the near term."
Pro tip: Learn all about the future of the cannabis industry at the Benzinga Cannabis Capital Conference this October in Chicago. Hear directly from key industry players and policymakers. Get your tickets now by following this link, and access a 20% discount using the code JAVI20.
Q1 2024 Financial Summary
- Gross profit increased to $3.1 million, or 20% of revenue, as compared to $1.7 million in the fourth quarter of 2023, or 11% of revenue, and to $2.8 million, or 17% of revenue in the prior year period.
- Operating expenses were $5.2 million, or 33.3% as a percentage of revenue as compared to $6.4 million, or 42.3%in the fourth quarter of 2023, representing a sequential decrease of $1.2 million, or 900 basis points as a percentage of revenue.
- Net loss was $2.1 million, or $0.18 net loss per share as compared to a net loss of $5.1 million, or $0.48 net loss per share in the prior year period.
- Adjusted EBITDA was a loss of $300,000 representing a $2.7 million improvement on a sequential basis and a $3.1 million improvement compared to the prior year.
- Cash was $700,000 versus $1.1 million at the end of the prior quarter, and the balance drawn on the $10 million lending facility was $2.0 million, a sequential decrease of $500,000 versus $2.5 million.
Nattrass also commented on this week's DEA's announcement that it supports cannabis reclassification from Schedule I to Schedule III of the US Controlled Substances Act.
"We are encouraged by several credible reports in the media indicating that the U.S. Drug Enforcement Agency is supporting the U.S. Department of Health's recommendation to reclassify cannabis from the most stringent schedule I to the less stringent schedule III," he said. "The successful rescheduling of Cannabis would serve as a long-awaited catalyst that we've anticipated to reinvigorate the industry through increased operator working capital that could be reinvested in facility upgrades and build-outs."
Price Action
Urban-gro shares closed Thursday's market session 3.53% lower at $1.93 per share.
Photo: Courtesy of Rex Medlen via Pixabay