Safe & Green Holdings Corp. (NASDAQ: SGBX) (“Safe &
Green Holdings” or the “Company”), a leading developer,
designer, and fabricator of modular structures, reported results
for the three months ended June 30, 2024.
Key Highlights:
- Record sales
pipeline in excess of $25 million and positive outlook for H2
2024
- Gross profit
margin in Q2 2024 increased to 12.7% compared to 0.7% for Q2
2023
- Operating
expenses declined by $2.7 million in Q2 2024 versus the same period
last year
- Company
reaffirms guidance it is on track to achieve positive cash flow
before year-end
- Received a term
sheet from a premier lender to refinance the Waldron facility on
favorable terms; expected to provide non-dilutive working
capital
- Expected receipt
of Employee Retention Tax Credit (ERTC) payment within the next
year, which would provide $1.4 million of non-dilutive working
capital
- Promoted David
Cross to Executive Vice President of SG Echo, LLC
- Completed 2024
annual audit by International Code Council (ICC) Evaluation Service
and granted recertification of ESR for certification and use of
shipping containers in modular construction
- Expanded
agreement to manufacture seven additional container-based
electrical distribution centers as part of a multi-unit order for a
client serving the big box retailer market
- Granted an
expanded contract, valued in excess of $1 million, to construct an
additional 11 container modules and related services for a
government contractor to be used by a major U.S. government
agency
Paul Galvin, Chairperson and Chief Executive
Officer of Safe & Green Holdings commented, “We continue to
execute our business strategy with a focus on profitable revenue
growth and operational efficiency. I am pleased to report we have
been awarded several important contracts, including expanded
agreements with existing customers, that highlight both our quality
and exceptional customer service. In addition, I’m pleased to
report that our sales pipeline has grown significantly during the
quarter and is now in excess of $25 million—a record for the
Company, which we expect to be reflected, in part, in our revenue
during the second half of 2024. Moreover, by strategically managing
our resources and focusing on high-margin projects, we have
increased our gross profit more than four-fold and reduced our
operating expenses by 48%. We remain committed to driving
sustainable growth and delivering value to our shareholders.”
Tricia Kaelin, Chief Financial Officer of Safe
& Green Holdings, further noted, “The financial discipline we
have instilled across the organization is yielding tangible
results. Our ability to enhance gross profit while reducing
operating expenses is a clear indication of our focus on creating a
leaner, more profitable company. As a result, we remain on track to
achieve positive cash flow before year end. In addition, we will
continue to optimize our cost structure and prioritize investments
that drive long-term returns.”
Financial Results for the Three Months
Ended June 30, 2024
Revenue for the three months ended June 30,
2024, was $1.3 million, compared to $5.1 million for the three
months ended June 30, 2023, reflecting a decrease in construction
services revenue.
Gross profit for the three months ended June 30,
2024, was $159 thousand, compared to $34 thousand for three months
ended June 30, 2023.
Operating expenses for three months ended June
30, 2024 were $3.0 million, compared to $5.6 million for the 2023
comparable quarter.
The net loss attributable to common shareholders
was approximately ($3.9) million, or ($2.66) per share in the three
months ended June 30, 2024, compared to a net loss of ($5.6)
million, or $(7.46) per share for the three months ended June 30,
2023.
The Company’s Adjusted EBITDA loss for the three
months ended June 30, 2024, was approximately ($1.4) million as
compared to Adjusted EBITDA loss of approximately ($2.3) million
for the three months ended June 30, 2023. Both EBITDA and Adjusted
EBITDA are non-GAAP financial measures. The Company defines EBITDA
as GAAP net income (loss) attributable to common stockholders
before interest expense, income tax benefit (expense), depreciation
and amortization. Adjusted EBITDA is defined as EBITDA before
certain non-recurring, unusual or non-operational items, such as
litigation expense, stock issuance expense and stock compensation
expense. The Company believes that adjusting EBITDA to exclude the
effects of these items that are not closely associated with ongoing
corporate operations provides management and investors with a
meaningful measure that increases period-to-period comparability of
the Company’s operating performance.
The Company believes the presentation of EBITDA
and Adjusted EBITDA is relevant and useful by enhancing the
readers’ ability to understand the Company’s operating performance.
The Company’s management utilizes EBITDA and Adjusted EBITDA as a
means to measure performance.
The Company’s measurements of EBITDA and
Adjusted EBITDA may not be comparable to similar titled
measurements reported by other companies. EBITDA and Adjusted
EBITDA are not measurements of financial performance under GAAP and
should not be considered as an alternative to net income (loss)
attributable to common stockholders or as an indication of
operating performance or any other measures of financial
performance derived in accordance with GAAP. The Company does not
consider these non-GAAP measures to be substitutes for or superior
to the information provided by its GAAP financial results. The
non-GAAP information should be read in conjunction with our
consolidated financial statements and related notes. These measures
also should not be construed as an inference that our future
results will be unaffected by the non-recurring, unusual or
non-operational items for which these non-GAAP measures make
adjustments.
The following is a reconciliation of EBITDA and
Adjusted EBITDA to the nearest GAAP measure, net gain (loss)
attributable to common stockholders:
|
|
|
Three Months Ended June 30, 2024 |
|
|
|
Three Months Ended June 30, 2023 |
|
|
|
Six Months Ended June 30, 2024 |
|
|
|
Six Months Ended June 30, 2023 |
|
Net loss attributable to
common stockholders of Safe & Green Holdings Corp. |
|
$ |
(3,858,693 |
) |
|
$ |
(5,555,524 |
) |
|
$ |
(8,528,857 |
) |
|
$ |
(9,074,964 |
) |
Addback interest
expense |
|
|
1,889,328 |
|
|
|
523,971 |
|
|
|
3,172,084 |
|
|
|
811,343 |
|
Addback interest income |
|
|
— |
|
|
|
(9,454 |
) |
|
|
(9,570 |
) |
|
|
(18,816 |
) |
Addback
depreciation and amortization |
|
|
15,125 |
|
|
|
160,455 |
|
|
|
91,512 |
|
|
|
298,767 |
|
EBITDA (non-GAAP) |
|
|
(1,954,240 |
) |
|
|
(4,880,552 |
) |
|
|
(5,274,831 |
) |
|
|
(7,983,670 |
) |
Common stock
deemed dividend |
|
|
- |
|
|
|
— |
|
|
|
670,881 |
|
|
|
— |
|
Addback litigation expense |
|
|
168,500 |
|
|
|
— |
|
|
|
312,245 |
|
|
|
17,361 |
|
Addback stock issued for
services |
|
|
— |
|
|
|
47,500 |
|
|
|
251,361 |
|
|
|
484,825 |
|
Addback
stock compensation expense |
|
|
348,308 |
|
|
|
2,554,262 |
|
|
|
527,336 |
|
|
|
3,210,631 |
|
Adjusted EBITDA
(non-GAAP) |
|
$ |
(1,437,432 |
) |
|
$ |
(2,278,790 |
) |
|
$ |
(3,513,008 |
) |
|
$ |
(4,270,853 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At June 30, 2024, the Company had cash and cash
equivalents of $1.0 million compared to $17 thousand at December
31, 2023. As of June 30, 2024, stockholders’ equity was ($4.8)
million compared to ($6.3) million as of December 31, 2023.
About Safe & Green Holdings Corp.
Safe & Green Holdings Corp., a leading
modular solutions company, operates under core capabilities which
include the development, design, and fabrication of modular
structures, meeting the demand for safe and green solutions across
various industries. The firm supports third-party and in-house
developers, architects, builders, and owners in achieving faster
execution, greener construction, and buildings of higher value. The
Company’s subsidiary, Safe and Green Development Corporation, is a
leading real estate development company. Formed in 2021, it focuses
on the development of sites using purpose-built, prefabricated
modules built from both wood and steel, sourced from one of SG
Holdings’ factories and operated by the SG Echo subsidiary. For
more information, visit
https://www.safeandgreenholdings.com/ and follow us at
@SGHcorp on Twitter.
Safe Harbor Statement
Certain statements in this press release
constitute "forward-looking statements" within the meaning of the
federal securities laws. Words such as "may," "might," "will,"
"should," "believe," "expect," "anticipate," "estimate,"
"continue," "predict," "forecast," "project," "plan," "intend" or
similar expressions, or statements regarding intent, belief, or
current expectations, are forward-looking statements. These
forward-looking statements are based upon current estimates and
assumptions and include statements regarding the Company’s
financial results for the three months ended June 30, 2024, the
Company’s guidance it is on track to achieve positive cash flow
before year-end, the Company’s receipt of a term sheet from a
premier lender to refinance the Waldron facility to provide
non-dilutive working capital, the Company’s expected receipt of the
Employee Tax Retention Credit (ERTC) payment within the next year,
which would provide $1.4 million of non-dilutive working capital,
the Company’s expanded agreement to manufacture seven additional
container-based electrical distribution centers as part of a
multi-unit order for a client serving the big box retailer market,
and the Company’s expanded contract, valued in excess of $1
million, to construct an additional 11 container modules and
related services for a government contractor to be used by a major
U.S. government agency. These forward-looking statements are
subject to various risks and uncertainties, many of which are
difficult to predict that could cause actual results to differ
materially from current expectations and assumptions from those set
forth or implied by any forward-looking statements. Important
factors that could cause actual results to differ materially from
current expectations include, among others, the Company’s ability
to achieve positive cash flow before year-end, the Company’s
ability to complete the refinance of its Waldron facility, the
Company’s receipt of the Employee Tax Retention Credit (ERTC)
payment within the next year, which would provide $1.4 million of
non-dilutive working capital the Company’s ability to fulfill the
expanded agreement to manufacture seven additional container-based
electrical distribution centers, the Company’s ability to fulfill
the expanded contract for a government contractor to construct an
additional 11 container modules to be used by a major U.S.
government agency, the effect of government regulation, the
Company’s ability to maintain compliance with the NASDAQ listing
requirements, and the other factors discussed in the Company’s
Annual Report on Form 10-K for the year ended December 31, 2023 and
its subsequent filings with the SEC, including subsequent periodic
reports on Forms 10-Q and 8-K. The information in this release is
provided only as of the date of this release, and we undertake no
obligation to update any forward-looking statements contained in
this release on account of new information, future events, or
otherwise, except as required by law.
Investor Relations:
Crescendo Communications, LLC(212)
671-1020sgbx@crescendo-ir.com
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