urban-gro, Inc. Awarded Construction Contract to Build New Fogo de Chão Restaurant in Katy, Texas

Rhea-AI Summary

urban-gro, Inc. (NASDAQ:UGRO) has been awarded a construction contract to build a new Fogo de Chão restaurant in Katy, Texas. This comes after more than a year of providing Mechanical, Electrical, and Plumbing (MEP) engineering services to the Brazilian restaurant chain. The contract includes preconstruction, construction, and post-construction services for the retrofit project.

Work is set to begin immediately, with the majority of the undisclosed revenue expected to be recognized by the first quarter of 2025. urban-gro's Chairman and CEO, Bradley Nattrass, expressed gratitude for the opportunity to expand their relationship with Fogo de Chão, which began in 2023 with comprehensive engineering services and now regularly includes construction.

Positive

• Awarded construction contract for new Fogo de Chão restaurant
• Expansion of services from engineering to construction
• Majority of revenue expected to be recognized by Q1 2025
• Strengthening presence in the Texas market

Negative

• None.

Insights

Financial Analyst

This contract award represents a positive development for urban-gro, expanding their relationship with Fogo de Chão from engineering services to full construction. The undisclosed revenue from this project, expected to be recognized by Q1 2025, could provide a boost to the company's financials. However, the impact may be given urban-gro's $15.4 million market cap.

The expansion into construction services for restaurant chains demonstrates urban-gro's ability to diversify beyond its traditional cannabis-focused business. This diversification strategy could help mitigate risks associated with the volatile cannabis industry. The ongoing relationship with an internationally renowned chain like Fogo de Chão also enhances urban-gro's credibility in the broader construction and design sector.

While positive, investors should note that the financial impact of a single restaurant construction project is likely to be modest relative to urban-gro's overall business. The company's ability to secure more such contracts and expand this line of business will be important for long-term growth and profitability.

Construction Industry Expert

This contract award signifies urban-gro's successful expansion into the restaurant construction sector, leveraging their existing MEP engineering expertise. The scope of work, including preconstruction, construction and post-construction services, showcases the company's full-service capabilities in retrofit projects.

The timeline for revenue recognition, with the majority expected by Q1 2025, indicates a relatively quick turnaround for a restaurant construction project. This efficiency could be attractive to other potential clients in the food service industry looking for rapid expansion or remodeling.

urban-gro's ability to transition from providing engineering services to securing full construction contracts demonstrates vertical integration in their service offerings. This approach can lead to improved project coordination, potentially resulting in cost savings and higher quality outcomes for clients. However, it also exposes the company to additional risks and complexities associated with construction management.

LAFAYETTE, CO / ACCESSWIRE / September 27, 2024 / urban-gro, Inc. (NASDAQ:UGRO) ("urban-gro" or the "Company"), an integrated professional services and Design-Build firm offering solutions to multiple sectors, today announced that after more than a year of providing Mechanical, Electrical, and Plumbing (MEP) engineering services for the internationally renowned Brazilian restaurant chain, Fogo de Chão, the firm is excited to announce the award of a construction contract to build a new restaurant in Katy, Texas. The contracted scope of work includes preconstruction, construction, and post-construction services for the retrofit project. Work is commencing immediately, with the majority of the undisclosed revenue expected to be recognized by the first quarter of 2025.

"We are grateful for the opportunity to expand our relationship with Fogo de Chão by taking on this exciting construction project in Katy, Texas," said Bradley Nattrass, Chairman and CEO. "Our relationship with Fogo de Chão started in 2023 with comprehensive engineering services and now regularly includes construction. We are dedicated to assisting Fogo de Chão in efficiently expanding their distinctive dining experience in Texas, while continuing to strengthen our presence in the market as well."

About urban-gro, Inc.
urban-gro, Inc.® (NASDAQ:UGRO) is an integrated professional services and Design-Build firm. We offer value-added architectural, engineering, and construction management solutions to the Controlled Environment Agriculture ("CEA"), industrial, healthcare, and other commercial sectors. Innovation, collaboration, and creativity drive our team to provide exceptional customer experiences. With offices across North America and in Europe, we deliver Your Vision - Built. Learn more by visiting www.urban-gro.com.

About Fogo de Chão
Fogo de Chão (fogo-dee-shown) is an internationally renowned restaurant from Brazil that elevates the culinary art of churrasco - the art of roasting high-quality cuts of meat over an open flame - into a cultural dining experience. Fogo is famed for its prix fixe Full Churrasco Experience that offers a continuous selection of premium cuts butchered daily by gaucho chefs, simply seasoned and grilled to create a craveable salty bark, then carved tableside. The naturally gluten-free Market Table offers a selection of seasonal salads, charcuterie, exotic fruit, superfoods and more. From celebratory to everyday occasions, Fogo provides selections for every daypart, including All-Day Happy Hour at Bar Fogo, Weekday Lunch, Dinner, and Weekend Brazilian Brunch. Guests can enhance their experience with offerings ranging from a shareable Wagyu New York Strip, South American wines, and more. For locations and to book a reservation to experience the fire of Fogo, visit fogo.com.

Safe Harbor Statement
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. When used in this release, terms such as "believes," "will," "expects," "anticipates," "may," "projects" and similar expressions and variations as they relate to the Company or its management are intended to identify forward-looking statements. The forward-looking statements in this press release include, without limitation, financial projections, financial guidance, future events, business strategy, future performance, future operations, future demand, backlog, financial position, estimated revenues, losses, adjusted EBITDA, prospects, plans and objectives of management, including the future ability to position the Company for long-term profitable growth. These and other forward-looking statements are based on current expectations, forecasts, and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially from those anticipated or expected, including, among others, our ability to successfully manage and integrate acquisitions, our ability to accurately forecast revenues and costs, competition for projects in our markets, our ability to predict and respond to new laws and governmental regulatory actions, including delays granting licenses to clients or potential clients and delays in passage of legislation expected to benefit our clients or potential clients, our ability to successfully develop new and/or enhancements to our product offerings and develop a product mix to meet demand, risks related to adverse weather conditions, supply chain issues, rising interest rates, economic downturn or other factors that could cause delays or the cancellation of projects in our backlog or our ability to secure future projects, our ability to maintain favorable relationships with suppliers, risks associated with reliance on key customers and suppliers, our ability to attract and retain key personnel, results of litigation and other claims and insurance coverage issues, risks related to our information technology systems and infrastructure, risks associated with climate change and ESG matters, our ability to maintain effective internal controls, our ability to execute on our strategic plans, our ability to achieve and maintain cost savings, the sufficiency of our liquidity and capital resources, and our ability to achieve our key initiatives for 2023, particularly our growth initiatives. A more detailed description of these and certain other factors that could affect actual results is included in the Company's filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date hereof, except as may be required by law.

Investor Contacts:
Dan Droller - urban-gro, Inc.
-or-
Jeff Sonnek - ICR, Inc.
(720) 730-8160
investors@urban-gro.com

Media Contact:
Barbara Graham - urban-gro, Inc.
(720) 903-1139
media@urban-gro.com

SOURCE: urban-gro, Inc.

View the original press release on accesswire.com

FAQ

What construction contract has urban-gro (UGRO) been awarded?

urban-gro has been awarded a construction contract to build a new Fogo de Chão restaurant in Katy, Texas.

When is the revenue from UGRO's Fogo de Chão project expected to be recognized?

The majority of the undisclosed revenue is expected to be recognized by the first quarter of 2025.

What services will urban-gro (UGRO) provide for the Fogo de Chão project in Katy, Texas?

urban-gro will provide preconstruction, construction, and post-construction services for the retrofit project.

How long has urban-gro (UGRO) been working with Fogo de Chão?

urban-gro has been providing Mechanical, Electrical, and Plumbing (MEP) engineering services to Fogo de Chão for more than a year, starting in 2023.