NextPlat Reports Consolidated Year-End 2023 Results with Increased Revenues of $37.8 Million, Record Annual Margins of 30% and $26.3 Million in Cash
- Consolidated revenues increased to $37.8 million for the fiscal year-ended December 31, 2023.
- Gross margins rose to 30%, driven by healthcare operations contributing 32% and e-commerce profit margins improving to 26%.
- Operating expenses increased to $34.5 million, primarily due to expenses related to the Progressive Care acquisition.
- Net loss for 2023 was $3.8 million, with the company ending the year with $26.3 million in cash.
- Recent business developments include the launch of an OPKO Healthcare storefront in China and the acquisition of Outfitter Satellite Inc.
- Operating expenses significantly increased to $34.5 million, impacting the company's financials.
- A non-cash goodwill impairment charge of approximately $13.9 million was recorded related to the Progressive Care acquisition.
- Net loss for 2023 was $3.8 million, indicating a decrease in profitability compared to the previous year.
Insights
The expansion of NextPlat Corp into the high-growth healthcare sector and its strategic investment in Progressive Care Inc. suggests a diversification strategy that could mitigate risks associated with their core e-commerce business. The reported increase in consolidated revenues and improved gross margins, particularly from the healthcare operations, indicates a potentially successful integration of Progressive Care. However, the notable increase in operating expenses and a non-cash goodwill impairment charge raise questions about the long-term sustainability of this growth. The healthcare industry typically offers higher margins than retail, but it also comes with regulatory challenges and a need for constant innovation to stay competitive.
NextPlat's entry into the Chinese market via Alibaba's Tmall Global platform represents an aggressive move to tap into one of the world's largest markets. While this offers significant revenue potential, it also exposes the company to geopolitical risks and the complexities of operating in a market with different consumer behaviors and regulatory frameworks. The addition of OPKO Healthcare's products could be beneficial if the demand for health and wellness products continues to rise in China, but this will depend on successful marketing and the ability to navigate China's stringent e-commerce and health product regulations.
The acquisition of Outfitter Satellite Inc. and the subsequent expected doubling of North American technology e-commerce product sales is a bullish sign for revenue growth. Yet, acquisitions can be double-edged swords, potentially leading to integration challenges and unforeseen costs that could affect profitability.
The significant year-over-year increase in revenue and the improvement in gross profit margin are positive indicators of NextPlat's performance. However, the substantial net loss, even though reduced from the previous year and the goodwill impairment charge associated with the Progressive Care acquisition could be a concern for investors. Goodwill impairment suggests that the acquired assets may not generate future benefits as initially expected, which could impact investor confidence.
The one-time gain on remeasurement of fair value related to the Progressive Care consolidation is a non-cash item that investors should consider when evaluating the company's operational performance. While the cash position at the end of the fiscal year appears strong, it is important to monitor how this liquidity is managed, especially in light of the increased operating expenses and expansion initiatives.
Investors should also consider the company's strategy of diversifying into healthcare and the potential for synergies between its e-commerce and healthcare operations. While diversification can lead to revenue growth, it also requires careful management to ensure that the company's core competencies are not diluted.
NextPlat's partnership with Alibaba to launch an OPKO-branded storefront on Tmall Global is a strategic move that leverages Alibaba's vast e-commerce infrastructure and consumer base. The focus on health and wellness products aligns with a global trend towards healthier living and could capture a lucrative market segment. However, the success of this venture will heavily rely on effective localization strategies and understanding of Chinese consumer preferences.
The e-commerce landscape, especially in China, is highly competitive with local giants like JD.com and Pinduoduo. NextPlat will need to differentiate its offerings and ensure seamless logistics and customer service to build brand loyalty. Additionally, the expansion into veterinary and animal health products is an interesting choice, as this niche market has been growing steadily, driven by the increasing pet ownership and care investment. If NextPlat can secure the necessary government approvals, this could open up another revenue channel.
It's also worth noting the resilience of NextPlat's technology e-commerce business, which has continued to experience transaction volume growth despite economic headwinds. This suggests a strong market position and a potentially robust recurring revenue stream from airtime contracts, which is key for long-term financial stability.
Company Expands Healthcare and Technology Focus Through the Launch of its E-Commerce Development Program with Alibaba's Tmall Global and Strategic Investment in Progressive Care Inc.
"Central to our growth plans for NextPlat in 2023 were efforts to increase our long-term participation in the high growth healthcare and consumer products sectors and the expansion of our business into large new international markets such as in
Full Year 2023 Financial Highlights:
- Consolidated revenues for the full year ended December 31, 2023, were approximately
$37.8 million 222% versus revenue of approximately$11.7 million $11.0 million $26.8 million - Gross margins for the full year ended December 31, 2023, increased significantly to
30% , up from21% reported for the year ended December 31, 2022, primarily attributable to the healthcare operations because of the Progressive Care consolidation. Gross profit margin attributable to our healthcare operations was approximately32% (for the consolidation period). Our e-commerce profit margins improved to26% from21% reported in the year ended December 2022, driven largely by continued increases in the sales of higher margin, recurring airtime revenue. - Operating expenses for the year ended December 31, 2023, were approximately
$34.5 million $9.7 million $2.4 million $2.4 million $4.1 million $1.6 million $0.4 million $13.9 million - Net loss for the year ended December 31, 2023, was approximately
$3.8 million $0.22 $9.2 million $0.96 $11.4 million - The Company ended the 2023 fiscal year with approximately
$26.3 million
Organizational Highlights and Recent Business Developments:
- The Company's technology e-commerce business continued to see positive increases in global transaction volumes for satellite phones and tracking devices as demand for high margin, recurring airtime contracts remained at record monthly levels. Transaction volume growth in 2023 largely offset the unprecedented surge in demand for connectivity solutions following the outbreak of war in
Ukraine in 2022 and economic weakness in certain European markets. - The Company's healthcare business, Progressive Care, saw continued growth driven by significant increases in its pharmacy prescription volumes as well as multiple new 340B services contracts secured in the fourth quarter of 2023.
- Effective as of July 1, 2023, Progressive Care became a consolidated subsidiary of NextPlat for accounting purposes as a result of the controlling interest in Progressive Care obtained by the Company in concert with the Company's Executive Chairman and CEO, Charles M. Fernandez, and its Director, Rodney Barreto.
- On March 1, 2024, NextPlat launched the exclusive OPKO Healthcare ("OPKO")-branded storefront in
China on Alibaba's Tmall Global platform. The OPKO storefront initially lists health and wellness products including an assortment of nutraceuticals for bone, joint and eye health as well as supplements for nutrition and immunity and defense, the sales of which will create a new international e-commerce revenue stream for the Company. NextPlat intends to significantly expand the OPKO online storefront with a wide array of veterinary and animal health products early in the second quarter of 2024 subject to receipt of the final government approvals. - On March 26, 2024, NextPlat expanded its North American technology e-commerce business with acquisition of Outfitter Satellite Inc. This accretive acquisition is expected to more than double the Company's North American technology e-commerce product sales and recurring revenue, driving increased profitability through improved business efficiencies and shared resources while supporting future domestic operations and distribution.
David Phipps, President of NextPlat and CEO of Global Operations, added, "With a global presence in 18 countries across 5 continents, which enables us to serve customers in more than 165 countries, we are providing unmatched global reach for our partners and customers. We are encouraged by the continued ability of our platform to support our customers and through our e-commerce development program with Alibaba and its Tmall Global platform in
The financial information included in this press release should be read in conjunction with the Company's Form 10-K report for the year ended December 31, 2023, as filed with the Securities and Exchange Commission.
For more information regarding the financial results of Progressive Care Inc. for the year ended December 31, 2023, investors should refer to its Form 10-K as filed with the Securities and Exchange Commission.
About NextPlat Corp
NextPlat is a global e-commerce platform company created to capitalize on multiple high-growth sectors and markets including technology and healthcare. Through acquisitions, joint ventures and collaborations, the Company intends to assist businesses in selling their goods online, domestically, and internationally, allowing customers and partners to optimize their e-commerce presence and revenue. NextPlat currently operates an e-commerce communications division offering voice, data, tracking, and IoT products and services worldwide as well as pharmacy and healthcare data management services in
Forward-Looking Statements
Certain statements in this release constitute forward-looking statements. These statements include the capabilities and success of the Company's business and any of its products, services or solutions. The words "believe," "forecast," "project," "intend," "expect," "plan," "should," "would," and similar expressions and all statements, which are not historical facts, are intended to identify forward-looking statements. These forward-looking statements involve and are subject to known and unknown risks, uncertainties and other factors, including the Company's ability to launch additional e-commerce capabilities for consumer and healthcare products and its ability to grow and expand as intended, any of which could cause the Company to not achieve some or all of its goals or the Company's previously reported actual results, performance (finance or operating), including those expressed or implied by such forward-looking statements. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company's filings with the Securities and Exchange Commission (the "SEC"), copies of which may be obtained from the SEC's website at www.sec.gov. The Company assumes no, and hereby disclaims any, obligation to update the forward-looking statements contained in this press release.
Media and Investor Contact for NextPlat Corp:
Michael Glickman
MWGCO, Inc.
917-397-2272
mike@mwgco.net
NEXTPLAT CORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (In thousands, except per shares data) | ||||||||
For the Years Ended | ||||||||
December 31, | ||||||||
2023 | 2022 | |||||||
Sales of products, net | $ | 32,389 | $ | 11,710 | ||||
Revenues from services | 5,367 | - | ||||||
Revenue, net | 37,756 | 11,710 | ||||||
Cost of products | 26,313 | 9,221 | ||||||
Cost of services | 132 | - | ||||||
Cost of revenue | 26,445 | 9,221 | ||||||
Gross profit | 11,311 | 2,489 | ||||||
Operating expenses: | ||||||||
Selling, general and administrative | 9,910 | 5,085 | ||||||
Salaries, wages and payroll taxes | 6,643 | 2,565 | ||||||
Goodwill impairment | 13,895 | - | ||||||
Professional fees | 1,981 | 1,552 | ||||||
Depreciation and amortization | 2,110 | 490 | ||||||
Total operating expenses | 34,539 | 9,692 | ||||||
Loss before other (income) expense | (23,228) | (7,203) | ||||||
Other (income) expense: | ||||||||
Interest expense | 79 | 24 | ||||||
Interest earned | (620) | (21) | ||||||
Asset write-off | 28 | - | ||||||
Other income | (317) | - | ||||||
Foreign currency exchange rate variance | (107) | 129 | ||||||
Total other (income) expense | (937) | 132 | ||||||
Loss before income taxes and equity in net loss of affiliate | (22,291) | (7,335) | ||||||
Income taxes | (28) | (87) | ||||||
Loss before equity in net loss of affiliate | (22,319) | (7,422) | ||||||
Gain on remeasurement of fair value of equity interest in affiliate prior to acquisition | 11,352 | - | ||||||
Equity in net loss of affiliate | (1,440) | (1,739) | ||||||
Net loss | (12,407) | (9,161) | ||||||
Net loss attributable to noncontrolling interest | 8,629 | - | ||||||
Net loss attributable to NextPlat Corp | $ | (3,778) | $ | (9,161) | ||||
Comprehensive loss: | ||||||||
Net loss | $ | (12,407) | $ | (9,161) | ||||
Foreign currency loss | (22) | (44) | ||||||
Comprehensive loss | $ | (12,429) | $ | (9,205) | ||||
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ | (3,778) | $ | (9,161) | ||||
Weighted number of common shares outstanding – basic | 17,494 | 9,592 | ||||||
Weighted number of common shares outstanding – diluted | 17,494 | 9,592 | ||||||
Basic loss per share | $ | (0.22) | $ | (0.96) | ||||
Diluted loss per share | $ | (0.22) | $ | (0.96) | ||||
NEXTPLAT CORP AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except shares and par data) | ||||||||
December 31, | ||||||||
2023 | 2022 | |||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash | $ | 26,307 | $ | 18,891 | ||||
Accounts receivable, net | 8,923 | 384 | ||||||
Receivables - other, net | 1,846 | - | ||||||
Inventory, net | 5,135 | 1,287 | ||||||
Unbilled revenue | 189 | 142 | ||||||
VAT receivable | 342 | 433 | ||||||
Prepaid expenses | 640 | 46 | ||||||
Notes receivable due from related party | 256 | - | ||||||
Total Current Assets | 43,638 | 21,183 | ||||||
Property and equipment, net | 3,989 | 1,246 | ||||||
Goodwill | 731 | - | ||||||
Intangible assets, net | 14,423 | 50 | ||||||
Operating right of use assets, net | 1,566 | 855 | ||||||
Finance right-of-use assets, net | 22 | - | ||||||
Equity method investment | - | 5,261 | ||||||
Deposits | 39 | - | ||||||
Prepaid expenses, net of current portion | 61 | 49 | ||||||
Total Other Assets | 16,842 | 6,215 | ||||||
Total Assets | $ | 64,469 | $ | 28,644 | ||||
LIABILITIES AND EQUITY | ||||||||
Current Liabilities | ||||||||
Accounts payable and accrued expenses | $ | 13,176 | $ | 1,523 | ||||
Contract liabilities | 42 | 36 | ||||||
Notes payable | 312 | 60 | ||||||
Due to related party | 18 | 28 | ||||||
Operating lease liabilities | 532 | 209 | ||||||
Finance lease liabilities | 18 | - | ||||||
Income taxes payable | 139 | 94 | ||||||
Liabilities from discontinued operations | - | 112 | ||||||
Total Current Liabilities | 14,237 | 2,062 | ||||||
Long Term Liabilities: | ||||||||
Notes payable, net of current portion | 1,211 | 156 | ||||||
Operating lease liabilities, net of current portion | 929 | 650 | ||||||
Finance lease liabilities, net of current portion | 5 | - | ||||||
Total Liabilities | 16,382 | 2,868 | ||||||
Commitments and Contingencies | - | - | ||||||
Equity | ||||||||
Preferred stock ( | - | - | ||||||
Common stock ( | 2 | 1 | ||||||
Additional paid-in capital | 67,170 | 56,963 | ||||||
Accumulated deficit | (34,925) | (31,147) | ||||||
Accumulated other comprehensive loss | (63) | (41) | ||||||
Equity attributable to NextPlat Corp stockholders | 32,184 | 25,776 | ||||||
Equity attributable to noncontrolling interests | 15,903 | - | ||||||
Total Equity | 48,087 | 25,776 | ||||||
Total Liabilities and Equity | $ | 64,469 | $ | 28,644 | ||||
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SOURCE NextPlat Corp.
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