Upexi Revenue Increases 144% Year-Over-Year and 53.5% Sequentially to $27.3 Million for Fiscal First Quarter 2024
TAMPA, FL / ACCESSWIRE / November 20, 2023 / 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 first quarter 2024 ending September 30, 2023.
"Revenue for our fiscal first quarter 2024 grew 144% year-over-year and 53.5% sequentially driven by growth in both branded products and re-commerce," commented CEO of Upexi, Allan Marshall. "While our cost cutting measures are now beginning to yield material year-over-year decreases in operating expenses as a percentage of revenue, we have also continued to invest significantly in the future growth of our brands."
Fiscal First Quarter 2024 Financial Highlights:
- Revenue totaled $27.3 million, an increase of 144% year-over-year and 53.5% sequentially.
- Re-commerce revenue, 76% of total revenue, increased 187% and branded product revenue, 24% of total revenue, increased 65.3% year-over-year.
- Gross profit totaled $8.7 million, an increase of 49.7%, as compared to $5.8 million for the same period the prior year.
- Sales and marketing expense totaled $2.9 million, an increase of 65%, as compared to $1.7 million the prior year.
- General and administrative expenses totaled $2.3 million or 8.2% of revenue, an increase of 6%, as compared to $2.1 million or 19% of revenue, for the same period the prior year.
- Adjusted EBITDA was approximately $750 thousand as compared to an Adjusted EBITDA loss of approximately $525 thousand the prior year, approximately a $1.28 million improvement year-over-year.
- Net loss attributable to Upexi, Inc. shareholders was $1.35 million, or $0.07 per basic and diluted share, as compared to a net loss of approximately $2.6 million, or $0.16 per basic and diluted share, for the same period last year.
- Shareholder equity was $27.5 million as of September 30, 2023.
- Cash and cash equivalents totaled $417 thousand as of September 30, 2023, and availability on the line of credit was $6.2 million.
Fiscal First Quarter 2024 and Subsequent Operational Highlights
- Children's toy brand, Tytan Tiles, launched its first licensed Disney Frozen Product on Amazon through its partnership with The Walt Disney Company.
- In the first month of launch on Amazon, Tytan Tiles is on a run rate to move 115 units per day and increased its rank on Amazon from 20,000 to 4,000.
- Disney Frozen product line is the first of several Disney products expected to be launched.
- Pet care brand, Lucky Tail, launched expansion of product line to include all-natural dog supplements offered via subscription and in bundles.
- Vitamedica acne treatment is expecting data from its study in early 2024.
- High-volume re-commerce provider of branded OTC products, Cygnet Online, increased revenue sequentially by approximately $1.5 million, with gross profit margins increasing from 44% to 48%.
Financial Highlights for the Fiscal First Quarter 2024
Revenue totaled $27.4 million, an increase of $16.1 million or 144% as compared to $11.2 million for the same period the prior year. Revenue increased 53.4% sequentially as compared to $17.8 million in fiscal Q4 of 2023. Revenue growth was primarily due to an increase in re-commerce revenue of 187% and branded product revenue of 24% year-over-year. The Company's strategy will continue to focus on the growth of our brands organically and through expansion into additional international markets.
Cost of revenue totaled $18.6 million, an increase of 245% as compared to $5.8 million for the same period the prior year. The cost of revenue increase was primarily related to the acquisition of Neti and the re-commerce business. Gross profit increased by approximately $2.9 million compared to the prior year. The combined re-commerce segment only increased approximately $800 thousand while the branded products increased gross profit by over $2.1 million.
Sales and marketing expenses were approximately $2.9 million, an increase of 65% compared to approximately $1.7 million for the same period the prior year. As a percentage of revenue, sales and marketing expenses were 10.4% for fiscal Q1 2024 as compared to 15.4% for fiscal Q1 2023. The increase in sales and marketing expenses was primarily related to the focus on the branded product revenue growth and strategic marketing to maximize the return on long-term recurring customer growth.
Distribution costs increased $723 thousand or 34% compared with the same period the prior year primarily due to the overall growth of revenue. Management has implemented several consolidation, repackaging and pricing strategies to continue to reduce the overall distribution costs of product sales. Management expects the implementation of its initial strategies to be completed by March of 2024.
General and administrative expenses totaled $2.3 million or 8.2% of revenue, an increase of 6%, as compared to $2.1 million or 19% of revenue, for the same period the prior year. Management continues to operate the Company efficiently to enable sales growth without significant increases in general and administrative costs.
Adjusted EBITDA was approximately $750 thousand as compared to an Adjusted EBITDA loss of approximately $525 thousand the prior year, approximately a $1.2 million improvement year-over-year.
The Company had a net loss from continued operations of $1.35 million as compared to a loss of $2.6 million for the same period the prior year. The decrease in the net loss from continuing operations is primarily related to the above-mentioned changes.
As of September 30, 2023, the Company had cash of $417 thousand, availability on the line of credit of $6.2 million, and stockholders' equity attributed to Upexi stockholders of approximately $27.5 million.
As of today, November 20, 2023, there are 20,306,870 shares of common stock outstanding.
Financial Results Conference Call
| Event: | First Quarter 2024 Financial Results Conference Call |
| Date: | Monday, November 20, 2023 |
| Time: | 4:30 p.m. Eastern Time |
| Live Call: | 1-877-300-8521 (U.S. Toll-Free) or 1-412-317-6026 (International) |
| Webcast: | https://viavid.webcasts.com/starthere.jsp?ei=1641098&tp_key=e91f34a943 |
For those unable to join the conference call, a dial-in replay of the call will be available until December 4, 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: 10183924. 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.
Adjusted EBITDA
| Three Months Ended | ||||||||
| September 30, | ||||||||
| 2023 | 2022 | |||||||
Net income (Net loss) GAAP | $ | (1,356,388 | ) | $ | (2,597,515 | ) | ||
Interest expense, net | 874,185 | 433,478 | ||||||
Depreciation and amortization | 1,472,905 | 924,406 | ||||||
Income Tax | (472,367 | ) | (708,201 | ) | ||||
Stock Compensation | 421,887 | 927,326 | ||||||
Gain on sale of Interactive Offers | (380,624.00 | ) | - | |||||
Change in derivative liability | - | (1,770 | ) | |||||
Loss from discontinued operations | 193,040 | 644,615 | ||||||
Loss attributable to non-controlling interest | - | (148,005 | ) | |||||
| $ | 752,638 | $ | (525,666 | ) | ||||
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.
Company Contact
Andrew Norstrud, Chief Financial Officer
Email: [email protected]
Phone: (702) 332-5591
Investor Relations Contact
KCSA Strategic Communications
Valter Pinto or Jack Perkins
Email: [email protected]
Phone: (212) 896-1254
UPEXI, INC.
CONDENSED CONSOLDIATED BALANCE SHEETS (UNAUDITED)
| September 30, | June 30, | |||||||
| 2023 | 2023 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash | $ | 417,108 | $ | 4,492,291 | ||||
Accounts receivable | 9,756,622 | 7,163,564 | ||||||
Inventory | 13,786,262 | 11,557,128 | ||||||
Due from Bloomios | - | 845,443 | ||||||
Prepaid expenses and other receivables | 957,584 | 1,307,299 | ||||||
Current assets of discontinued operations | - | 89,989 | ||||||
Total current assets | 24,917,576 | 25,455,714 | ||||||
Property and equipment, net | 7,744,874 | 7,526,463 | ||||||
Intangible assets, net | 12,385,139 | 13,571,960 | ||||||
Goodwill | 11,719,155 | 10,251,281 | ||||||
Deferred tax asset | 6,076,423 | 5,604,056 | ||||||
Other assets | 365,060 | 96,728 | ||||||
Assets held for sale | - | 936,054 | ||||||
Right-of-use asset | 2,037,515 | 410,811 | ||||||
Total other assets | 40,328,166 | 38,397,353 | ||||||
Total assets | $ | 65,245,742 | $ | 63,853,067 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 4,638,195 | $ | 3,969,746 | ||||
Accrued compensation | 513,934 | 533,842 | ||||||
Deferred revenue | 153,769 | - | ||||||
Accrued liabilities | 3,883,842 | 3,365,562 | ||||||
Acquisition payable | 300,000 | - | ||||||
Current portion of notes payable | 4,255,357 | 1,302,021 | ||||||
Current portion of convertible notes payable | - | 1,254,167 | ||||||
Current portion of acquisition note payable | 5,656,620 | 5,656,620 | ||||||
Current portion of related party note payable | - | 1,429,356 | ||||||
Line of Credit | 118,001 | 882,845 | ||||||
Current portion of operating lease payable | 517,099 | 419,443 | ||||||
Current liabilities of discontinued operations | - | 792,408 | ||||||
Total current liabilities | 20,036,817 | 19,606,010 | ||||||
Operating lease payable, net of current portion | 1,600,489 | 163,359 | ||||||
Related party note payable | 1,444,493 | - | ||||||
Convertible notes payable | 2,150,000 | 895,833 | ||||||
Acquisition notes payable, net of current | 7,968,497 | 7,605,085 | ||||||
Notes payable, net of current portion | 4,475,450 | 7,746,157 | ||||||
Total long-term liabilities | 17,638,929 | 16,410,434 | ||||||
Commitments and contingencies | ||||||||
Stockholders' equity | ||||||||
Preferred stock, $0.001 par value, 100,000,000 shares authorized, and 500,000 and 500,000 shares issued and outstanding, respectively | 500 | 500 | ||||||
Common stock, $0.001 par value, 100,000,000 shares authorized, and 20,397,779 and 16,713,345 shares issued and outstanding, respectively | 20,307 | 20,216 | ||||||
Additional paid in capital | 52,106,752 | 51,522,229 | ||||||
Accumulated deficit | (24,557,563 | ) | (23,201,175 | ) | ||||
Total stockholders' equity attributable to Upexi, Inc. | 27,569,996 | 28,341,770 | ||||||
Non-controlling interest in subsidiary | (505,147 | ) | ||||||
Total stockholders' equity | 27,569,996 | 27,836,623 | ||||||
Total liabilities and stockholders' equity | $ | 65,245,742 | $ | 63,853,067 | ||||
UPEXI, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
| Three Month's Ended March 31, | ||||||||
| 2021 | 2020 | |||||||
Revenue | ||||||||
Revenue | $ | 27,347,642 | $ | 11,218,799 | ||||
Cost of Revenue | 18,639,793 | 5,401,316 | ||||||
Gross profit | 8,707,849 | 5,817,483 | ||||||
Operating expenses | ||||||||
Sales and marketing | 2,848,667 | 1,727,469 | ||||||
Distribution costs | 2,850,616 | 2,487,834 | ||||||
General and administrative expenses | 2,255,928 | 2,127,846 | ||||||
Share-based compensation | 421,887 | 927,326 | ||||||
Amortization of acquired intangible assets | 1,186,821 | 729,909 | ||||||
Depreciation | 286,084 | 194,497 | ||||||
| 9,850,003 | 8,194,881 | |||||||
Loss from operations | (1,142,154 | ) | (2,377,398 | ) | ||||
Other expense (income), net | ||||||||
Change in derivative liability | - | (1,770 | ) | |||||
Interest expense, net | 874,185 | 433,478 | ||||||
Other expense (income), net | 874,185 | 431,708 | ||||||
Loss from operations before income tax | (2,016,339 | ) | (2,809,106 | ) | ||||
Gain (Loss) from the sale of Interactive Offers | 380,624 | - | ||||||
(Loss) income from discontinued operations | (193,040 | ) | (644,615 | ) | ||||
Income tax benefit | 472,367 | 708,201 | ||||||
Net loss | (1,356,388 | ) | (2,745,520 | ) | ||||
Net loss attributable to noncontrolling interest | - | 148,005 | ||||||
Net loss attributable to Upexi, Inc. | $ | (1,356,388 | ) | $ | (2,597,515 | ) | ||
Basic and Diluted loss per share: | ||||||||
(Loss) per share from continuing operations | $ | (0.07 | ) | $ | (0.16 | ) | ||
(Loss) per share from discontinued operations | $ | (0.01 | ) | $ | (0.04 | ) | ||
Total loss per share | $ | (0.07 | ) | $ | (0.16 | ) | ||
Basic weighted average shares outstanding | 20,244,618 | 16,713,345 | ||||||
Fully diluted weighted average shares outstanding | 20,244,618 | 16,713,345 | ||||||
SOURCE: Upexi, Inc.
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