Urban-gro, Inc. (NASDAQ:UGRO), an integrated professional services and design-build firm offering solutions to the Controlled Environment Agriculture reported its quarterly financial results Thursday afternoon.
Bradley Nattrass, chairman and CEO commented: “We are pleased that our third quarter performance exceeded our guidance (...) We are extremely encouraged by the significant backlog we’ve been able to build in this subdued environment, which is a direct result of our strategic efforts to diversify our business, capabilities, and end markets. We believe this is a clear indication that the services delivery model we’ve established over the last 18 months is working as intended.”
Mr. Nattrass added, "The demand for our professional services remains strong and combined with the increased demand for our construction design-build solutions within the commercial sector (...).”
Third Quarter 2022 Financial Results
Revenue was $12.4 million in the third quarter of 2022, as compared to $18.3 million in the prior year period, representing a decrease of $5.9 million, or 32%. Urban-gro explained the decrease was driven by a decrease in cultivation equipment systems revenue of $12.6 million, “primarily reflecting significantly reduced equipment demand in the U.S. cannabis market (...) as well as the lack of movement on passing key industry financial support models such as the SAFE Banking Act.”
Gross profit was $2.6 million, or 21% of revenue, in the third quarter of 2022, as compared to $4.3 million, or 23% of revenue in the prior year period. Meanwhile, operating expenses were $9.5 million in the third quarter of 2022 compared to $4.2 million in the prior year period, representing an increase of $5.3 million.
Net loss was $8.7 million, or $0.81 per share, in the third quarter of 2022, and adjusted EBITDA was $2.3 million, compared to $1.0 million in the prior year period.
Cash position entering the fourth quarter was $18.6 million “with no debt,” per the release.
During the third quarter, the Company repurchased $183,270 of UGRO stock at an average price per share of $2.90.
Backlog
“Consolidated backlog is unrealized revenue represented by contractually committed construction design-build, equipment systems, and service orders. As of September 30, 2022, the total backlog was approximately $67 million, comprising $56 million in construction design-build, $5 million of equipment systems, and $6 million of professional services contracts.,” per the release.
Price Action
UGRO shares were trading 4.02 % higher at $ 4.14 per share at the time of market close.
Photo by Richard T On Unsplash.
