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Upexi Revenue Increases 199% Year-Over-Year to $11.6 Million for Fiscal 2023 First Quarter

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Upexi, Inc. (NASDAQ: UPXI) reported a strong fiscal 2023 first quarter, achieving revenues of $11.6 million, a 199% increase year-over-year, and a gross profit of $6 million with a gross margin of 52%. However, the company faced a net loss of $2.7 million, contrasting with net income of $512,000 in the prior year. Key growth drivers included acquisitions, notably the entry into the pet market through LuckyTail. Upexi's cash reserves stood at $3.3 million, with projections of $100 million in sales for calendar 2023.

Positive
  • Revenue increased by 199% year-over-year, reaching $11.6 million.
  • Gross profit rose by 132%, totaling $6 million.
  • Entered the $200 billion pet market with the acquisition of LuckyTail.
  • Eliminated $15 million in senior secured debt, reducing annual interest expenses by approximately $900,000.
  • Robust acquisition pipeline aligns with strategic growth initiatives.
Negative
  • Net loss from continued operations was $2.7 million, compared to net income of $512,000 last year.
  • Gross profit margin decreased to 52% due to increased lower-margin sales and distribution costs.
  • Operating expenses surged by 159% to $9 million, influenced by various growth-related factors.

HENDERSON, Nev., Nov. 14, 2022 /PRNewswire/ -- Upexi, Inc. (NASDAQ: UPXI) (the "Company" or "Upexi"), a multi-faceted Amazon and Direct to Consumer brand owner and innovator in aggregation, today announced its financial results for the fiscal 2023 first quarter ending September 30, 2022.

Fiscal 2023 First Quarter Financial Highlights:
  • Revenue totaled $11.6 million, an increase of 199% year-over-year.
  • Gross profit totaled $6 million, an increase of 132% year-over-year.
  • Gross profit margin was 52%.
  • Net loss from continued operations was $2.7 million compared to net income of approximately $512,000 for the same period in the prior year.
  • Cash and cash equivalents totaled $3.3 million as of September 30, 2022.

"Our revenue growth year-over-year was predominantly driven by multiple accretive acquisitions. Moving forward, our growth strategy will continue to focus on both acquisitions and organic growth, while also expanding to international markets," said Allan Marshall, Upexi's Chief Executive Officer. "During the quarter we entered the more than $200 billion pet market through the acquisition of LuckyTail, a balanced business, with direct-to-consumer and Amazon distribution, and double-digit year-over-year growth. Going forward, our acquisition pipeline remains robust with valuations in line with our strategic guidelines. We have made significant strides over the last two years and the Company today is in the best position for growth and profitability in its history, with approximately $100 million in sales projected for calendar 2023."

Fiscal 2023 First Quarter and Subsequent Operational Highlights:
  • Acquired international pet care brand, LuckyTail, Inc.
  • Saas ad-tech division, Interactive Offers, filed a patent for its single click-to-opt-in technology.
  • Closed on sale of select CBD assets for $23.5 million.
  • Closed on acquisition of E-Core and its subsidiaries, Tytan Products, a children's toy brand and maker of popular magnetic tiles and building blocks, and New England Technology, Inc., a national distributor for branded consumer products.
  • Eliminated outstanding balance of $15 million senior secured debt facility with expectation to reduce annualized interest expense by approximately $900,000.
Financial Highlights for Fiscal 2023 First Quarter

Revenue for the three months ended September 30, 2022 totaled $11.6 million, an increase of 199% as compared to $3.9 million for the same period the year prior. The revenue growth was primarily driven by four acquisitions, including VitaMedica, Interactive, Cygnet, and LuckyTail, and offset by the sale of Infusionz. The Company's growth strategy will continue to focus on both acquisition and organic growth, while also expanding to international markets.

Cost of revenue during the quarter totaled $5.5 million, an increase of 334% as compared to $1.3 million for the same period the prior year. The cost of revenue increase was primarily related to the acquisition of four companies and offset with the sale of Infusionz.

Gross profit for the quarter was $6 million, an increase of $3.4 million compared to the same period in the prior year. Gross margins declined to 52% as a result of significant increases in lower margin sales to distributors and the use of third-party distribution of our direct-to-consumer sales.

Operating expenses totaled $9 million, an increase of 159% as compared to $3.5 million for the same period in the prior fiscal year.  This was primarily related to a $ 1 million increase in sales, an increase in distribution costs, including the use of third-party distributors of $2.4 million, an increase in general and administrative costs of $900,000 to support the growth of the business, and an increase of $1.2 million increase in non-cash expenses of share-based compensation, the amortization of acquired intangible assets and depreciation. These costs were offset by the sale of Infusionz and the classification of these expenses as part of discontinued operations.

The Company had a net loss from continued operations of $2.7 million compared to net income of approximately $512,000 for the three months ended September 30, 2022 and 2021, respectively. The decrease in net income is primarily related to the above-mentioned changes.

The Company had cash and cash equivalents of $3.3 million and stockholders' equity of $27 million as of September 30, 2022. As of November 11, 2022 there were 17,960,748 shares of common stock outstanding.

Financial Results Conference Call

Event:

Upexi Fiscal 2023 First Quarter Financial Results Conference Call

Date:

Monday, November 14, 2022

Time:

4:30 p.m. Eastern Time

Live Call:

1-877-550-1707 (U.S. Toll-Free) or 1-848-488-9020 (International)

Webcast:

https://viavid.webcasts.com/starthere.jsp?ei=1580183&tp_key=e897d16fbb

For interested individuals unable to join the conference call, a dial-in replay of the call will be available until November 28, 2022 and can be accessed by dialing + 1-844-512-2921 (U.S. Toll Free) or + 1-412-317-6671 (International) and entering replay pin number: 11152754.

Additional details are available under the Investor Relations section of the Company's website: https://upexi.com/investors.

About Upexi, Inc.:

Upexi is a multi-faceted brand owner with established brands in the health, wellness, pet, beauty and other growing markets. We operate in emerging industries with high growth trends and look to drive organic growth of our current brands. We focus on direct to consumer and Amazon brands that are scalable and have anticipated, high industry growth trends. Our goal is to continue to accumulate consumer data and build out a significant customer database across all industries we sell into. The growth of our current database has been key to the year over year gains in sales and profits. To drive additional growth, we have and will continue to acquire profitable Amazon and eCommerce businesses that can scale quickly and reduce costs through corporate synergies. We utilize our in-house, SaaS programmatic ad technology to help achieve a lower cost per acquisition and accumulate consumer data for increased cross-selling between our growing portfolio of brands.

FORWARD LOOKING STATEMENTS:

This news release contains "forward-looking statements" as that term is defined in Section 27A of the United States Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements in this press release which are not purely historical are forward-looking statements and include any statements regarding beliefs, plans, expectations or intentions regarding the future. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the inherent uncertainties associated with business strategy, potential acquisitions, revenue guidance, product development, integration and synergies of acquiring companies and personnel. These forward-looking statements are made as of the date of this news release, and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Although we believe that the beliefs, plans, expectations and intentions contained in this press release are reasonable, there can be no assurance that such beliefs, plans, expectations or intentions will prove to be accurate. Investors should consult all of the information set forth herein and should also refer to the risk factors disclosure outlined in our annual report on Form 10-K and other periodic reports filed from time-to-time with the Securities and Exchange Commission.

Company Contact
Andrew Norstrud, Chief Financial Officer
Email: andrew.norstrud@upexi.com
Phone: (702) 332-5591

Investor Relations Contact
KCSA Strategic Communications
Valter Pinto or Jack Perkins
Email: Upexi@KCSA.com
Phone: (212) 896-1254

UPEXI, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)





Three Months Ended September 30,




2022



2021


Revenue







Revenue


$

11,557,011



$

3,870,110











Cost of Revenue



5,516,280




1,271,729











Gross profit



6,040,731




2,598,381











Operating expenses









Sales and marketing



2,025,460




1,000,064


Distribution costs



2,487,834




111,833


General and administrative expenses



2,498,869




1,582,432


Share-based compensation



927,326




626,838


Amortization of acquired intangible assets



880,896




68,834


Depreciation



194,497




87,506





9,014,882




3,477,507











Loss from operations



(2,974,151)




(879,126)











Other expense (income), net









Change in derivative liability



(1,770)




-


Interest expense, net



435,829




15,538











Other expense (income), net



434,059




15,538











Loss from operations before income tax



(3,408,210)




(894,664)


(Loss) income from discontinued operations



(45,511)




1,147,472


Income tax benefit



708,201




258,903


Net (loss) income from continuing operations



(2,745,520)




511,711




















Net loss attributable to noncontrolling interest



148,005




-











Net (loss) income attributable to Upexi, Inc.


$

(2,597,515)



$

511,711











Basic (loss) income per share:









(Loss) income per share from continuing operations


$

(0.16)



$

0.03


(Loss) income per share from discontinued operations


$

(0.00)



$

0.07


Total (loss) income per share


$

(0.16)



$

0.03











Diluted (loss) income per share:









(Loss) income per share from continuing operations


$

(0.16)



$

0.03


(Loss) income per share from discontinued operations


$

(0.00)



$

0.07


Total (loss) income per share


$

(0.16)



$

0.03











Basic weighted average shares outstanding



16,713,345




15,452,453


Fully diluted weighted average shares outstanding



16,713,345




17,220,564


The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

UPEXI, INC.

CONDENSED CONSOLDIATED BALANCE SHEETS (UNAUDITED)



September 30,



June 30,




2022



2022


ASSETS







Current assets







Cash


$

3,298,663



$

7,149,806


Accounts receivable



1,315,933




1,137,637


Inventory



6,090,242




4,725,685


Deferred tax asset, current



462,070




462,070


Prepaid expenses and other receivables



1,231,941




840,193


Assets of discontinued operations, net



6,404,209




6,157,543


Total current assets



18,803,058




20,472,934











Property and equipment, net



7,367,844




7,343,783


Intangible assets, net



12,716,153




10,933,049


Goodwill



6,223,393




5,887,393


Deferred tax asset



2,732,242




2,002,759


Other assets



413,956




100,372


Right-of-use asset



843,901




926,570


Total other assets



30,297,489




27,193,926











Total assets


$

49,100,547



$

47,666,860











LIABILITIES AND STOCKHOLDERS' EQUITY









Current liabilities









Accounts payable


$

2,092,122



$

2,018,541


Accrued compensation



695,278




531,259


Deferred revenue



120,973




105,848


Accrued liabilities



1,769,989




955,327


Acquisition payable



1,351,589




-


Current portion of notes payable



5,424,752




5,424,752


Current portion of operating lease payable



274,847




257,029


Total current liabilities



11,729,550




9,292,756











Notes payable, net of current portion



9,743,104




8,886,949


Operating lease payable, net of current portion



588,993




700,411


Total long-term liabilities



10,332,097




9,587,360











Commitments and contingencies



-




-











Stockholders' equity









Preferred stock, $0.001 par value, 100,000,000 shares authorized, and 500,000 and 500,000 shares issued and outstanding, respectively



500




500


Common stock, $0.001 par value, 100,000,000 shares authorized, and 16,713,345 and 16,713,345 shares issued and outstanding, respectively



16,713




16,713


Additional paid in capital



35,983,273




34,985,597


Accumulated deficit



(8,868,401)




(6,270,886)


Total stockholders' equity attributable to Upexi, Inc.



27,132,085




28,731,924


Non-controlling interest in subsidiary



(93,185)




54,820


Total stockholders' equity



27,038,900




28,786,744











Total liabilities and stockholders' equity


$

49,100,547



$

47,666,860


The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

Cision View original content:https://www.prnewswire.com/news-releases/upexi-revenue-increases-199-year-over-year-to-11-6-million-for-fiscal-2023-first-quarter-301677382.html

SOURCE Upexi, Inc.

FAQ

What were Upexi's Q1 2023 revenue results?

Upexi reported Q1 2023 revenues of $11.6 million, a 199% increase year-over-year.

What caused Upexi's net loss in Q1 2023?

Upexi experienced a net loss of $2.7 million in Q1 2023, primarily due to increased operating expenses and lower gross profit margins.

What major acquisition did Upexi make recently?

Upexi acquired LuckyTail, entering the pet market, which is valued over $200 billion.

What is Upexi's expected sales projection for 2023?

Upexi projects sales of approximately $100 million for the calendar year 2023.

How much cash did Upexi have as of September 30, 2022?

As of September 30, 2022, Upexi had $3.3 million in cash and cash equivalents.

Upexi, Inc.

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