Nature's Miracle Reports Second Quarter 2024 Financial Update

Rhea-AI Summary

Nature's Miracle (NASDAQ: NMHI) reported a significant financial update for the second quarter of 2024. Revenue surged by 75% YoY and 54% sequentially, reaching $3.4 million. The company experienced an 800 basis point improvement in gross margin, now at 13.3%. This growth was propelled by strong demand for Efinity LED light products in the energy rebate market and increased marketing efforts.

The quarter also saw the launch and first shipment of the Efinity brand Smart Dehumidifier. Nature's Miracle developed a robust pipeline of grow light orders, totaling $5 million in July. However, selling, general, and administrative expenses rose to $1.5 million due to public company costs and higher staffing-related fees.

Despite the revenue growth, Nature's Miracle reported a net loss of $1.8 million, or $(0.07) per share, compared to a net loss of $0.4 million, or $(0.02) per share in the prior year. Cash and cash equivalents stood at $30,532 as of June 30, 2024. Subsequent to the quarter-end, the company raised $1.2 million through a public offering.

Positive

• Revenue increased by 75% YoY and 54% sequentially to $3.4 million.
• Gross margin improved by 800 basis points to 13.3%.
• Developed a strong pipeline of grow light orders totaling $5 million.

Negative

• Net loss increased to $1.8 million, or $(0.07) per share.
• Selling, general, and administrative expenses rose to $1.5 million.
• Cash and cash equivalents decreased to $30,532.

Insights

Financial Analyst

Nature's Miracle's Q2 2024 results show significant revenue growth but with concerning financial metrics. The $3.4 million revenue, up 75% YoY, is promising. However, the gross margin of 13.3%, while improved, remains low for a technology company. The net loss widened to $1.8 million from $0.4 million YoY, indicating scaling challenges.

The $30,532 cash balance is alarmingly low, especially considering the $1.5 million quarterly SG&A expenses. The subsequent $1.2 million public offering provides some relief but may not be sufficient for long-term operations. Investors should monitor cash burn and future financing needs closely.

Market Research Analyst

Nature's Miracle's focus on the energy rebate market for LED grow lights is a smart strategic move. The $5 million in July purchase orders indicates strong market demand. However, reliance on rebates could pose risks if policies change.

The company's expansion into complementary products like smart dehumidifiers shows potential for portfolio diversification. This could help mitigate risks and tap into the broader Controlled Environment Agriculture (CEA) market. The emphasis on becoming a fully integrated provider of vertical farms could be a key differentiator, but execution will be important given the company's financial constraints.

Second Quarter Revenue Increased 75% YoY and 54% Sequentially to $3.4 Million

New Distribution Agreements for Complementary Products and Product Launches Enhance Portfolio

ONTARIO, Calif., Aug. 16, 2024 /PRNewswire/ -- Nature's Miracle Holding Inc. (NASDAQ: NMHI) ("Nature's Miracle" or the "Company"), a leader in vertical farming technology and infrastructure, today reported its financial and operational update for the second quarter ended June 30, 2024.

Second Quarter 2024 and Subsequent Business Updates

• Revenue of $3.4 million, a 75% increase from the same period in 2023, and a 54% increase compared to the first quarter of 2024.
• Gross margin improved 800 basis points to 13.3% from the same period in 2023.
• Launched and completed first shipment of Efinity brand Smart Dehumidifier product.
• Developed a strong pipeline of grow light orders within the energy rebate market with total grow light purchase orders of $5 million in July.

Management Commentary

James Li, Chairman and Chief Executive Officer of Nature's Miracle, commented, "During the first full quarter as a public company, Nature's Miracle recognized significant revenue growth, strong new order trends for our existing products and diversification of our portfolio with the launch of new products and new distribution partners. In the second quarter, we achieved revenue growth of 75% from the prior year period, which was driven by strong demand from the energy rebate market for LED grow light products and increases in our marketing team and efforts. Our 800-basis point expansion of gross margin was the result of higher margins realized through the Company's Efinity brand products, favorable pricing trends from Asian manufacturers and incentive costs to the Company for operating in the energy rebate market. Taken together, we are rapidly growing our footprint across the North American market with our vertically integrated approach of products and solutions for the CEA market."

"We are pleased with our progress through the first half of 2024, and at this early stage of development as a public company. Our strategic focus is on continuing to build a foundation of existing, new and licensed products as catalysts for revenue growth in the second half of 2024 and beyond. The record purchase orders received in July are an indication that Nature's Miracle is well positioned in the market and with our effective sales and marketing channels, we will seek to further capitalize on this momentum. A defining component of our sales and marketing efforts focuses on reinforcing our distinct position as a fully integrated provider of comprehensive vertical farms," concluded Mr. Li.

Second Quarter 2024 Financial Summary

For the second quarter of 2024, revenue totaled $3.4 million, increasing 75% from $1.9 million in the prior year period. The increase was primarily attributable to an increase in demand of our Efinity LED light products from the energy rebate market and the increases in our sales force as catalyst for this growth.

Gross profit for the second quarter of 2024 totaled $0.5 million or 13.3% of revenue, as compared to $0.1 million or 5.2% of revenue in the prior year period. The increase in gross profit as a percentage of revenue was primarily attributable to the higher margin component of our Efinity brand products and the finance structure of the energy rebate market.

Selling, general and administrative expenses increased to $1.5 million compared to $0.5 million in the prior year period. The increase was primarily due to public company costs, higher spend on staffing related, legal, accounting and other professional fees as well as stock compensation charges.

Net loss for the second quarter of 2024 totaled $1.8 million, or $(0.07) per share, and net loss of $0.4 million, or $(0.02) per share in the prior year period.

Cash and cash equivalents totaled $30,532 at June 30, 2024, compared to $221,760 at December 31, 2023. Subsequent to quarter end, on July 29, 2024, the company closed a public offering for aggregate gross proceeds of $1.2 million.

About Nature's Miracle Holding Inc.

Nature's Miracle (NASDAQ: NMHI) is a growing agriculture technology company providing equipment and services to growers in the Controlled Environment Agriculture ("CEA") industry which also includes vertical farming in North America. Nature's Miracle offers hardware to design, build and operate various indoor growing settings including greenhouse and indoor-growing spaces. Nature's Miracle, through its two wholly-owned subsidiaries Visiontech Group, Inc. and Hydroman, Inc., provides grow lights as well as other hydroponic products to hundreds of indoor growers in North America. For more information visit  www.Nature-Miracle.com.

Forward-Looking Statements

The information in this press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements regarding expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words "anticipate," "believe," "contemplate," "continue," "could," "estimate," "expect," "forecast," "intends," "may," "will," "might," "plan," "possible," "potential," "predict," "project," "should," "would" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this press release may include, for example: the intended use of proceeds from the offering; successful launch and implementation of Nature's Miracle's joint projects with manufacturers and other supply chain participants of steel, rubber and other materials; changes in Nature's Miracle's strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans; Nature's Miracle's ability to develop and launch new products and services; Nature's Miracle's ability to successfully and efficiently integrate future expansion plans and opportunities; Nature's Miracle's ability to grow its business in a cost-effective manner; Nature's Miracle's product development timeline and estimated research and development costs; the implementation, market acceptance and success of Nature's Miracle's business model; developments and projections relating to Nature's Miracle's competitors and industry; and Nature's Miracle's approach and goals with respect to technology. These forward-looking statements are based on information available as of the date of this press release, and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing views as of any subsequent date, and no obligation is undertaken to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. As a result of a number of known and unknown risks and uncertainties, actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include: the ability to maintain the listing of the Company's shares on Nasdaq; changes in applicable laws or regulations; the effects of the coronavirus (COVID-19) and any future outbreaks on Nature's Miracle's business; the ability to implement business plans, forecasts, and other expectations, and identify and realize additional opportunities; the risk of downturns and the possibility of rapid change in the highly competitive industry in which Nature's Miracle's operates; the risk that Nature's Miracle's and its current and future collaborators are unable to successfully develop and commercialize Nature's Miracle's products or services, or experience significant delays in doing so; the risk that the Company may never achieve or sustain profitability; the risk that the Company will need to raise additional capital to execute its business plan, which may not be available on acceptable terms or at all; the risk that the Company experiences difficulties in managing its growth and expanding operations; the risk that third-party suppliers and manufacturers are not able to fully and timely meet their obligations; the risk that Nature's Miracle's is unable to secure or protect its intellectual property; the possibility that Nature's Miracle's may be adversely affected by other economic, business, and/or competitive factors; and other risks and uncertainties described in Nature's Miracle's filings from time to time with the SEC.

Contacts
George Yutuc
Chief Financial Officer
George.Yutuc@nature-miracle.com

MZ North America
Shannon Devine / Rory Rumore
Main: 203-741-8811
NMHI@mzgroup.us 

 

NATURE'S MIRACLE HOLDING INC., SUBSIDIARIES AND VIE
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
					For the Three Months Ended						For the Three Months Ended				For the Six Months Ended				For the Six Months Ended
					June 30,						June 30,				June 30,				June 30,
					2024						2023				2024				2023
					(Unaudited)						(Unaudited)				(Unaudited)				(Unaudited)
REVENUE					$		3,404,967				$		1,943,528		$		5,609,687		$		4,910,200
COST OF REVENUE							2,952,747						1,843,257				4,845,150				4,512,669
GROSS PROFIT							452,220						100,271				764,537				397,531
OPERATING EXPENSES:
	Selling, general and administrative						1,540,983						458,037				2,684,120				1,015,046
	Stock compensation expenses						195,908						-				367,805				-
		Total operating expenses					1,736,891						458,037				3,051,925				1,015,046
LOSS FROM OPERATIONS							(1,284,671)						(357,766)				(2,287,388)				(617,515)
OTHER EXPENSES
	Interest (expense) income, net						(486,586)						38,890				(788,975)				(360,020)
	Non cash finance expense						-						-				(1,000,000)				-
	Loss on loan extinguishment						-						(233,450)				-				(233,450)
	Other expenses						3,738						6,716				3,738				6,346
		Total other expense, net					(482,848)						(187,844)				(1,785,237)				(587,124)
LOSS BEFORE INCOME TAXES							(1,767,519)						(545,610)				(4,072,625)				(1,204,639)
PROVISION FOR (BENEFIT OF) INCOME TAXES							800						(139,040)				2,500				(230,690)
NET LOSS					$		(1,768,319)				$		(406,570)		$		(4,075,125)		$		(973,949)
OTHER COMPREHENSIVE LOSS
	Foreign currency translation adjustment						(83)						(65)				(33)				791
COMPREHENSIVE LOSS					$		(1,768,402)				$		(406,635)		$		(4,075,158)		$		(973,158)
WEIGHTED AVERAGE NUMBER OF COMMON STOCK*
	Basic and diluted						26,458,515						22,272,478				24,793,466				22,272,478
LOSS PER SHARE
	Basic and diluted				$		(0.07)				$		(0.02)		$		(0.16)		$		(0.04)

 

 

UNAUDITED CONDENSED BALANCE SHEET
					As of June 30,			As of Dec 31,
					2024			2023
					(Unaudited)
ASSETS
CURRENT ASSETS
	Cash and cash equivalent				$	30,532		$	221,760
	Accounts receivable, net					2,053,678			1,236,248
	Accounts receivable - related parties, net					717,835			305,669
	Inventories, net					4,169,333			5,046,084
	Prepayments and other current assets					347,465			139,734
	Loans receivable - related parties					-			460,000
		Total Current Assets				7,318,843			7,409,495
NON-CURRENT ASSETS
	Security deposit					27,633			47,633
	Right-of-use assets, net					578,179			503,089
	Cost method investment					1,000,000			1,000,000
	Property and equipment, net					4,326,552			4,406,272
	Deferred offering costs					-			833,932
			Total Assets		$	13,251,207		$	14,200,421
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
	Short-term loans				$	2,928,183		$	509,443
	Short-term loans - related parties					908,255			783,255
	Current portion of long-term debts					284,493			268,805
	Accounts payable					8,875,916			8,034,044
	Accounts payable - related parties					2,713,074			2,758,074
	Other payables and accrued liabilities					3,385,079			1,351,951
	Other payables - related parties					292,157			257,954
	Operating lease liabilities - current					460,311			359,459
	Tax accrual					452,725			340,628
	Deferred income - Contract liabilities					64,069			118,909
		Total Current Liabilities				20,364,262			14,782,522
NON-CURRENT LIABILITIES
	Long-term debts, net of current portion					5,833,562			5,979,939
	Operating lease liabilities, net of current portion					184,147			157,897
		Total Non-Current Liabilities				6,017,709			6,137,836
			Total Liabilities			26,381,971			20,920,358
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' DEFICIT
	Preferred Stock ($0.0001 par value, 1,000,000 shares authorized, none issued and
		outstanding at June 30, 2024 and December 31, 2023, respectively)				-			-
	Common Stock ($0.0001 par value,100,000,000 shares authorized, 26,456,764 and 22,272,478
		shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively)*				2,645			2,227
	Additional paid-in capital					1,894,563			1,526,773
	Accumulated deficit					(15,026,864)			(8,247,862)
	Accumulated other comprehensive loss					(1,108)			(1,075)
		Total Stockholders' Deficit				(13,130,764)			(6,719,937)
			Total Liabilities and Stockholders' Deficit		$	13,251,207		$	14,200,421

 

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
					For the Six Months Ended			For the Six Months Ended
					June 30,			June 30,
					2024			2023
					(Unaudited)			(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
	Net loss				$	(4,075,125)		$	(973,949)
	Adjustments to reconcile net income to net cash used in
		operating activities:
			Depreciation expense			79,720			83,388
			Allowance for credit losses			24,391			789
			Amortization of operating right-of-use asset			155,295			204,732
			Amortization of debt issuance cost			-			73,782
			Deferred taxes benefits			-			(242,908)
			Loss on loan extinguishment			-			233,450
			Loss on early termination of right-of-use asset			-			33,423
			Stock compensation expenses			367,805			-
			Non cash finance expense			1,000,000			-
		Change in operating assets and liabilities:
			Accounts receivable			(1,253,986)			(105,364)
			Inventories			876,751			2,242,101
			Prepayments and other current assets			(207,731)			89,676
			Security deposit			20,000			49,960
			Accounts payable			796,876			(1,775,240)
			Other payables and accrued liabilities			485,314			(68,251)
			Accrued interest payable - related parties			34,203			26,033
			Operating lease liabilities			(103,284)			(260,484)
			Tax accrual			112,097			12,597
			Deferred income - Contract liabilities			(54,841)			(121,006)
				Net cash used in operating activities		(1,742,515)			(497,271)
CASH FLOWS FROM INVESTING ACTIVITIES:
	Proceeds from the reverse recapitalization					1,120,177			-
	Payments of transaction costs incurred by Lakeshore					(1,044,980)			-
	Repayments of promissory note – related party of Lakeshore					(75,000)			-
	Loan to related parties					-			(150,000)
	Loan to Lakeshore					(40,000)			-
	Loan repayment from third parties					-			132,913
				Net cash used in investing activities		(39,803)			(17,087)
CASH FLOWS FROM FINANCING ACTIVITIES:
	Payments of deferred offering costs					(266,925)			(533,929)
	Long-term loan borrowing					-			3,338,546
	Repayments on long-term loan					(130,689)			(54,999)
	Short-term loan borrowing from third parties					2,487,500			4,812
	Repayments on short-term loan from third parties					(498,760)			(1,763,814)
	Short-term loan borrowing from related parties					-			773,255
	Repayments on short-term loan from related parties					-			(700,000)
	Borrowings from other payables - related parties					-			1,000
				Net cash provided by financing activities		1,591,126			1,064,871
EFFECT OF FOREIGN EXCHANGE ON CASH						(36)			792
CHANGES IN CASH						(191,228)			551,305
CASH AND CASH EQUIVALENT, beginning of period						221,760			810,371
CASH AND CASH EQUIVALENT, end of period					$	30,532		$	1,361,676

 

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SOURCE Nature's Miracle Holding Inc.

FAQ

What was Nature's Miracle's revenue for Q2 2024?

Nature's Miracle reported a revenue of $3.4 million for the second quarter of 2024.

How much did Nature's Miracle's revenue increase in Q2 2024?

Revenue increased by 75% year-over-year and 54% sequentially.

What is the net loss reported by NMHI for Q2 2024?

Nature's Miracle reported a net loss of $1.8 million, or $(0.07) per share, for Q2 2024.

What was the gross margin improvement for NMHI in Q2 2024?

Gross margin improved by 800 basis points to 13.3%.

How much did Nature's Miracle raise in the latest public offering?

Nature's Miracle raised $1.2 million through a public offering subsequent to the quarter-end.