CEA Industries Inc. Reports Second Quarter 2024 Results
CEA Industries Inc. (NASDAQ: CEAD) reported its Q2 2024 results, showing a 66% increase in revenue to $1.8 million compared to Q2 2023. The company booked and fulfilled a $1.2 million contract in Q2, reducing its net loss to $0.5 million or $(0.66) per share, down from a $0.7 million loss in Q2 2023. Gross profit increased over 2x to $180,000, with gross margin improving by 280 basis points to 10.2%. Operating expenses decreased 16% to $0.7 million due to cost-cutting measures.
CEA Industries continues to operate under a lean cost structure, focusing on expense reduction and capital preservation. The company's cash position stood at $11.3 million as of June 30, 2024. The Board of Directors is exploring strategic alternatives, including a potential sale, merger, or dissolution of the company.
CEA Industries Inc. (NASDAQ: CEAD) ha riportato i risultati del secondo trimestre del 2024, mostrando un incremento del 66% nei ricavi, che hanno raggiunto 1,8 milioni di dollari rispetto al secondo trimestre del 2023. L'azienda ha acquisito e portato a termine un contratto da 1,2 milioni di dollari nel secondo trimestre, riducendo la sua perdita netta a 0,5 milioni di dollari oppure $(0,66) per azione, in calo rispetto a una perdita di 0,7 milioni di dollari nel secondo trimestre del 2023. Il profitto lordo è aumentato di oltre 2 volte, raggiungendo 180.000 dollari, con un miglioramento del margine lordo di 280 punti base, portandolo al 10,2%. Le spese operative sono diminuite del 16% a 0,7 milioni di dollari grazie a misure di contenimento dei costi.
CEA Industries continua a operare con una struttura dei costi snella, focalizzandosi sulla riduzione delle spese e sulla preservazione del capitale. La posizione di liquidità della società ammontava a 11,3 milioni di dollari al 30 giugno 2024. Il Consiglio di Amministrazione sta esplorando alternative strategiche, tra cui una potenziale vendita, fusione o liquidazione dell'azienda.
CEA Industries Inc. (NASDAQ: CEAD) informó sus resultados del segundo trimestre de 2024, mostrando un incremento del 66% en los ingresos, alcanzando 1,8 millones de dólares en comparación con el segundo trimestre de 2023. La empresa firmó y cumplió un contrato de 1,2 millones de dólares en el segundo trimestre, reduciendo su pérdida neta a 0,5 millones de dólares o $(0,66) por acción, disminuyendo de una pérdida de 0,7 millones de dólares en el segundo trimestre de 2023. La ganancia bruta aumentó más de 2 veces a 180.000 dólares, con un aumento del margen bruto de 280 puntos base al 10,2%. Los gastos operativos disminuyeron un 16% a 0,7 millones de dólares debido a las medidas de reducción de costos.
CEA Industries continúa operando bajo una estructura de costos ágil, enfocándose en la reducción de gastos y la preservación de capital. La posición de efectivo de la compañía era de 11,3 millones de dólares al 30 de junio de 2024. La Junta Directiva está explorando alternativas estratégicas, incluyendo una posible venta, fusión o disolución de la compañía.
CEA Industries Inc. (NASDAQ: CEAD)는 2024년 2분기 실적을 발표하며, 2023년 2분기 대비 매출이 66% 증가한 180만 달러에 이르렀습니다. 회사는 2분기에 120만 달러 계약을 체결하고 이행하여 순손실을 50만 달러 또는 주당 $(0.66)로 줄였으며, 이는 2023년 2분기 70만 달러 손실에서 하락한 수치입니다. 총 이익은 18만 달러로 두 배 이상 증가했으며, 총 마진은 280베이시스 포인트 개선되어 10.2%에 달했습니다. 운영 비용은 비용 절감 조치 덕분에 16% 감소하여 70만 달러가 되었습니다.
CEA Industries는 비용 절감 및 자본 보존에 중점을 두고 슬림한 비용 구조로 운영하고 있습니다. 2024년 6월 30일 기준 회사의 현금 잔고는 1130만 달러였습니다. 이사회는 회사의 잠재적 매각, 합병 또는 해산을 포함한 전략적 대안을 탐색하고 있습니다.
CEA Industries Inc. (NASDAQ: CEAD) a annoncé ses résultats du deuxième trimestre 2024, affichant une augmentation de 66 % des revenus, atteignant 1,8 million de dollars par rapport au deuxième trimestre 2023. L'entreprise a conclu et exécuté un contrat de 1,2 million de dollars au deuxième trimestre, réduisant sa perte nette à 0,5 million de dollars ou $(0,66) par action, en baisse par rapport à une perte de 0,7 million de dollars au deuxième trimestre 2023. Le bénéfice brut a plus que doublé pour atteindre 180 000 dollars, avec une amélioration de la marge brute de 280 points de base à 10,2 %. Les dépenses opérationnelles ont diminué de 16 % pour atteindre 0,7 million de dollars grâce à des mesures de réduction des coûts.
CEA Industries continue d'opérer avec une structure de coûts allégée, se concentrant sur la réduction des dépenses et la préservation du capital. La position de liquidités de l'entreprise s'élevait à 11,3 millions de dollars au 30 juin 2024. Le Conseil d'administration explore des alternatives stratégiques, y compris une vente, une fusion ou une dissolution potentielle de l'entreprise.
CEA Industries Inc. (NASDAQ: CEAD) hat die Ergebnisse des zweiten Quartals 2024 veröffentlicht, die einen Umsatzanstieg von 66% auf 1,8 Millionen Dollar im Vergleich zum zweiten Quartal 2023 zeigen. Das Unternehmen hat einen Vertrag über 1,2 Millionen Dollar im zweiten Quartal abgeschlossen und erfüllt, was den Nettoverlust auf 0,5 Millionen Dollar oder $(0,66) pro Aktie verringerte, nach einem Verlust von 0,7 Millionen Dollar im zweiten Quartal 2023. Der Bruttogewinn ist auf 180.000 Dollar mehr als verdoppelt worden, während sich die Bruttomarge um 280 Basispunkte auf 10,2% verbessert hat. Die Betriebskosten sanken aufgrund von Kostensenkungsmaßnahmen um 16% auf 0,7 Millionen Dollar.
CEA Industries arbeitet weiterhin mit einer schlanken Kostenstruktur, die sich auf Kostenreduzierung und Kapitalerhalt konzentriert. Die Bargeldposition des Unternehmens betrug zum 30. Juni 2024 11,3 Millionen Dollar. Der Vorstand prüft strategische Alternativen, einschließlich eines möglichen Verkaufs, einer Fusion oder einer Auflösung des Unternehmens.
- Revenue increased 66% year-over-year to $1.8 million in Q2 2024
- Gross profit more than doubled to $180,000 compared to Q2 2023
- Gross margin improved by 280 basis points to 10.2%
- Net bookings increased approximately 7x to $1.4 million in Q2 2024
- Operating expenses decreased 16% to $0.7 million due to cost-cutting measures
- Net loss decreased to $0.5 million from $0.7 million in Q2 2023
- Company remains debt-free with $11.3 million in cash and cash equivalents
- Quarter-end backlog decreased to $0.2 million from $1.1 million in Q2 2023
- Working capital decreased by $1.3 million from December 31, 2023 to June 30, 2024
- Company is still operating at a net loss
- Reduced sales effort and fewer capital expenditures by cannabis operators in served markets
- Board of Directors exploring strategic alternatives, including potential dissolution of the company
CEA Industries' Q2 2024 results show mixed signals. While revenue increased
The cost-cutting measures have shown some effect, with operating expenses down
The cannabis industry's capital expenditure slowdown is severely impacting CEA Industries. The company's reduced sales efforts and diminished backlog indicate a strategic shift away from growth and towards survival. The board's consideration of options including dissolution suggests a lack of confidence in near-term market improvement.
While the one-time large contract boosted Q2 results, it masks underlying weakness. The 7x increase in net bookings is misleading given the low base and single contract dominance. Investors should be wary of extrapolating this as a trend. The company's future hinges on either a rapid cannabis market recovery or a successful strategic transaction, both of which carry significant uncertainty.
Louisville, Colorado, Aug. 14, 2024 (GLOBE NEWSWIRE) -- CEA Industries Inc. (NASDAQ: CEAD, CEADW) (“CEA Industries” or the “Company”), is reporting results for the three months ended June 30, 2024.
Second Quarter 2024 Financial Summary (in $ thousands, excl. margin items):
| Q2 2024 (unaudited) | Q1 2024 (unaudited) | Q2 2023 (unaudited) | ||||||||||
| Revenue | $ | 1,761 | $ | 235 | $ | 1,064 | ||||||
| Gross Profit | $ | 180 | $ | (154 | ) | $ | 79 | |||||
| Operating Expenses | $ | 657 | $ | 769 | $ | 783 | ||||||
| Net Income/(Loss) | $ | (470 | ) | $ | (917 | ) | $ | (694 | ) | |||
“We continue to operate under the lean cost structure we implemented last year, with a focus on expense reduction and capital preservation as we work through our remaining backlog of projects,” said Tony McDonald, Chairman and CEO of CEA Industries. “During the quarter, we booked and fulfilled a
Mr. McDonald continued: “As previously announced, the Board of Directors continues their examination of strategic alternatives, including a sale, merger, special dividend, or other potential strategic or financial transaction, including a dissolution of the company whereby cash on the balance sheet would be returned to shareholders after adequate provision for outstanding corporate obligations. We will provide updates on material developments that result from this process.”
Second Quarter 2024 Financial Results
Revenue in the second quarter of 2024 increased
Net bookings in the second quarter of 2024 increased approximately 7x to
Gross profit in the second quarter of 2024 increased more than 2x to
Operating expenses in the second quarter of 2024 decreased
Net loss in the second quarter of 2024 decreased to
Cash and cash equivalents were
About CEA Industries Inc.
CEA Industries Inc. (www.ceaindustries.com) provides a suite of complementary and adjacent offerings to the controlled environment agriculture industry. The Company’s comprehensive solutions, when aligned with industry operators’ product and sales initiatives, support the development of the global ecosystem for indoor cultivation.
Forward Looking Statements
This press release may contain statements of a forward-looking nature relating to future events. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. These statements reflect our current beliefs, and a number of important factors could cause actual results to differ materially from those expressed in this press release, including the factors set forth in “Risk Factors” set forth in our annual and quarterly reports filed with the Securities and Exchange Commission (“SEC”), and subsequent filings with the SEC. Please refer to our SEC filings for a more detailed discussion of the risks and uncertainties associated with our business, including but not limited to the risks and uncertainties associated with our business prospects and the prospects of our existing and prospective customers; the inherent uncertainty of product development; regulatory, legislative and judicial developments, especially those related to changes in, and the enforcement of, cannabis laws; increasing competitive pressures in our industry; and relationships with our customers and suppliers. Except as required by the federal securities laws, we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise. The reference to CEA’s website has been provided as a convenience, and the information contained on such website is not incorporated by reference into this press release.
Non-GAAP Financial Measures
To supplement our financial results on U.S. generally accepted accounting principles (“GAAP”) basis, we use non-GAAP measures including net bookings and backlog, as well as other significant non-cash expenses such as stock-based compensation and depreciation expenses. We believe these non-GAAP measures are helpful in understanding our past performance and are intended to aid in evaluating our potential future results. The presentation of these non-GAAP measures should be considered in addition to our GAAP results and are not intended to be considered in isolation or as a substitute for financial information prepared or presented in accordance with GAAP. We believe these non-GAAP financial measures reflect an additional way to view aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business.
Investor Contact:
Sean Mansouri, CFA
Elevate IR
info@ceaindustries.com
(720) 330-2829
CEA Industries Inc.
Condensed Consolidated Balance Sheets
(in US Dollars except share numbers)
| June 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 11,325,387 | $ | 12,508,251 | ||||
| Accounts receivable, net | 32,158 | 18,655 | ||||||
| Contract assets, net | 224,414 | 224,414 | ||||||
| Inventory, net | 23,670 | 296,404 | ||||||
| Prepaid expenses and other | 614,724 | 313,115 | ||||||
| Total Current Assets | 12,220,353 | 13,360,839 | ||||||
| Noncurrent Assets | ||||||||
| Property and equipment, net | 14,312 | 38,558 | ||||||
| Intangible assets, net | 1,830 | 1,830 | ||||||
| Deposits | 14,747 | 14,747 | ||||||
| Operating lease right-of-use asset | 301,214 | 356,109 | ||||||
| Total Noncurrent Assets | 332,103 | 411,244 | ||||||
| TOTAL ASSETS | $ | 12,552,456 | $ | 13,772,083 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| LIABILITIES | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | 886,395 | $ | 624,724 | ||||
| Deferred revenue | 393,358 | 499,800 | ||||||
| Current portion of operating lease liability | 130,973 | 126,724 | ||||||
| Total Current Liabilities | 1,410,726 | 1,251,248 | ||||||
| Noncurrent Liabilities | ||||||||
| Operating lease liability, net of current portion | 197,946 | 259,627 | ||||||
| Total Noncurrent Liabilities | 197,946 | 259,627 | ||||||
| TOTAL LIABILITIES | 1,608,672 | 1,510,875 | ||||||
| Commitments and Contingencies (Note 6) | - | - | ||||||
| SHAREHOLDERS’ EQUITY | ||||||||
| Preferred stock, | - | - | ||||||
| Common stock, | 8 | 7 | ||||||
| Additional paid in capital | 49,520,970 | 49,451,493 | ||||||
| Accumulated deficit | (38,577,194 | ) | (37,190,292 | ) | ||||
| Total Shareholders’ Equity | 10,943,784 | 12,261,208 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 12,552,456 | $ | 13,772,083 | ||||
CEA Industries Inc.
Condensed Consolidated Statements of Operations
(in US Dollars except share numbers)
(Unaudited)
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Revenue | $ | 1,760,700 | $ | 1,063,714 | $ | 1,995,206 | $ | 5,746,287 | ||||||||
| Cost of revenue | 1,580,900 | 985,021 | 1,969,781 | 4,814,318 | ||||||||||||
| Gross profit | 179,800 | 78,693 | 25,425 | 931,969 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Advertising and marketing expenses | 3,855 | 33,091 | 13,179 | 235,414 | ||||||||||||
| Product development costs | - | 74 | - | 76,487 | ||||||||||||
| Selling, general and administrative expenses | 653,150 | 750,156 | 1,413,260 | 1,770,858 | ||||||||||||
| Total operating expenses | 657,005 | 783,321 | 1,426,439 | 2,082,759 | ||||||||||||
| Operating loss | (477,205 | ) | (704,628 | ) | (1,401,014 | ) | (1,150,790 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Other income (expense), net | - | 2,074 | - | 7,778 | ||||||||||||
| Interest income (expense), net | 6,906 | 8,979 | 14,112 | 17,999 | ||||||||||||
| Total other income (expense) | 6,906 | 11,053 | 14,112 | 25,777 | ||||||||||||
| Loss before provision for income taxes | (470,299 | ) | (693,575 | ) | (1,386,902 | ) | (1,125,013 | ) | ||||||||
| Income taxes | - | - | - | - | ||||||||||||
| Net loss | $ | (470,299 | ) | $ | (693,575 | ) | $ | (1,386,902 | ) | $ | (1,125,013 | ) | ||||
| Loss per common share – basic and diluted | $ | (0.66 | ) | $ | (1.03 | ) | $ | (1.99 | ) | $ | (1.67 | ) | ||||
| Weighted average number of common shares outstanding, basic and diluted | 711,530 | 673,031 | 697,867 | 672,839 | ||||||||||||
CEA Industries Inc.
Condensed Consolidated Statements of Cash Flows
(in US Dollars except share numbers)
(Unaudited)
| For the Six Months Ended June 30, | ||||||||
| 2024 | 2023 | |||||||
| Cash Flows From Operating Activities: | ||||||||
| Net loss | $ | (1,386,902 | ) | $ | (1,125,013 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and intangible asset amortization expense | 11,621 | 14,988 | ||||||
| Share-based compensation | 69,478 | 162,260 | ||||||
| Provision for doubtful accounts (bad debt recovery) | (36,489 | ) | 2,096 | |||||
| Provision for excess and obsolete inventory | 37,781 | 60,574 | ||||||
| Loss on disposal of assets | 12,625 | 100 | ||||||
| Operating lease expense | 54,895 | 52,893 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 22,986 | (293,214 | ) | |||||
| Inventory | 234,953 | (109,318 | ) | |||||
| Prepaid expenses and other | (301,609 | ) | 969,665 | |||||
| Accounts payable and accrued liabilities | 261,671 | (408,634 | ) | |||||
| Deferred revenue | (106,442 | ) | (3,712,659 | ) | ||||
| Operating lease liability, net | (57,432 | ) | (53,567 | ) | ||||
| Net cash used in operating activities | (1,182,864 | ) | (4,439,829 | ) | ||||
| Cash Flows From Investing Activities | ||||||||
| Proceeds from the sale of property and equipment | - | 200 | ||||||
| Net cash provided by investing activities | - | 200 | ||||||
| Cash Flows From Financing Activities | - | - | ||||||
| Net cash provided by financing activities | - | - | ||||||
| Net change in cash and cash equivalents | (1,182,864 | ) | (4,439,629 | ) | ||||
| Cash and cash equivalents, beginning of period | 12,508,251 | 18,637,114 | ||||||
| Cash and cash equivalents, end of period | $ | 11,325,387 | $ | 14,197,485 | ||||
| Supplemental cash flow information: | ||||||||
| Interest paid | $ | - | $ | - | ||||
| Income taxes paid | $ | - | $ | - | ||||
| Non-cash investing and financing activities: | ||||||||
| Options issued for accrued equity compensation liability | $ | - | $ | 89,970 | ||||
FAQ
What was CEA Industries' (CEAD) revenue for Q2 2024?
How much was the net loss for CEA Industries (CEAD) in Q2 2024?
What was the value of the major contract CEA Industries (CEAD) fulfilled in Q2 2024?
How much cash did CEA Industries (CEAD) have as of June 30, 2024?
What strategic alternatives is CEA Industries (CEAD) considering as of Q2 2024?
