Financial Data and Key Metrics Changes - Year-over-year CEA revenues decreased by $22 million or 36%, while commercial revenues increased by $27 million or 36%, indicating a reversal from 2022 trends and highlighting the value of diversification [2] - Equipment revenues decreased to a three-year low of $13 million, representing a $21 million or 62% decrease from 2022 and a $43 million or 77% decrease from 2021 [2] - Net loss for Q4 2023 was $4.7 million or a negative $0.40 per diluted share, compared to a net loss of $4.2 million or a negative $0.39 per diluted share in the prior year [11] - Total revenue for the full year 2023 was $71.5 million, a 6.7% increase from $67 million in the prior year [11] Business Line Data and Key Metrics Changes - Construction design build revenue decreased by $1.3 million, professional services revenue decreased by $0.8 million, and equipment systems revenue decreased by $0.2 million in Q4 2023 [55] - The backlog as of December 31, 2023, was approximately $110 million, a $26 million or 40% sequential increase over Q3 2023, with $102 million in construction design build, $7 million in professional services, and $1 million in equipment systems contracts [4] Market Data and Key Metrics Changes - The prolonged multiyear compression of equipment revenues due to continued softness in the CEA sector remains a significant headwind for financial performance [2] - The company has identified significant regulatory changes that could serve as catalysts to reignite the cannabis market, potentially providing a material lift to future financial performance [2] Company Strategy and Development Direction - The company is focused on sector diversification, with significant efforts made to optimize and align SG&A expenses, which are expected to result in positive adjusted EBITDA in 2024 [9][10] - The company plans to continue building out its business development focus in commercial sectors and integrate innovative initiatives [54] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that 2024 will be a step-up year, expecting to deliver positive adjusted EBITDA, with a focus on executing contracts and managing project timelines effectively [9][10] - The management team acknowledged the disappointing performance in Q4 but emphasized that all delayed contracts are still active and expected to generate revenue in 2024 [9][12] Other Important Information - The company has reduced SG&A expenses by more than $8 million on an annualized basis, which is expected to positively impact results in 2024 [4][11] - The company entered 2024 with $1.1 million in cash and $2.5 million drawn on a $10 million working capital line of credit, providing necessary flexibility to manage working capital needs [66] Q&A Session Summary Question: Can you expand on the project delays and cost revisions in the quarter? - Management noted that three projects were delayed, impacting revenue recognition, but all contracts remain active and are expected to generate revenue in Q1 2024 [12][9] Question: How does the recent cannabis legislation in Germany affect your strategy? - Management indicated that while they are pulling back some expenses in Germany, they are maintaining key experts and keeping communication open for future opportunities as the market develops [23][22] Question: What is the outlook for the cannabis sector and potential regulatory catalysts? - Management highlighted the potential impact of the SAFER Banking Act and rescheduling of cannabis, which could significantly improve working capital for operators and lead to increased demand for their services [86][36]

[Financial Performance and Outlook](index=1&type=section&id=Financial%20Performance%20and%20Outlook) This section details urban-gro's 2023 financial performance, including revenue growth, increased losses, and 2024 guidance [2023 Financial Highlights & 2024 Guidance](index=1&type=section&id=2023%20Financial%20Highlights%20%26%202024%20Guidance) Urban-gro reported increased 2023 revenue but wider losses, while forecasting 2024 revenue growth and a return to positive Adjusted EBITDA Full Year 2023 Results vs. 2022 | Metric | FY 2023 | FY 2022 | | :--- | :--- | :--- | | Revenue | $71.5 million | $67.0 million | | Net Loss | $(18.7) million | $(15.3) million | | Adjusted EBITDA | $(9.7) million | $(3.9) million | 2024 Guidance and Q1 2024 Preliminary Guidance | Period | Metric | Guidance/Preliminary Result | | :--- | :--- | :--- | | **Full Year 2024** | Revenue | > $84.0 million (>17.4% growth) | | | Adjusted EBITDA | Positive | | **Q1 2024** | Revenue | ≥ $15.0 million | | | Adjusted EBITDA | ≥ $(0.5) million | [Management Commentary](index=1&type=section&id=Management%20Commentary) Management emphasizes 2023 diversification, $110 million backlog, cost reductions, and optimism for cannabis regulatory catalysts - In 2023, revenue sources reversed from 2022, with **70% from commercial sectors** and **30% from Controlled Environment Agriculture (CEA)**, demonstrating the success of the company's diversification strategy[2](index=2&type=chunk) - The company implemented annualized cost reductions of **over $8 million** to better align its cost structure, which is expected to help generate sustained positive Adjusted EBITDA in 2024[2](index=2&type=chunk) - The company sees potential industry catalysts from the rescheduling of cannabis, the SAFER Banking Act, and new state approvals for adult-use cannabis, which could drive demand for Design-Build projects[2](index=2&type=chunk)[5](index=5&type=chunk) [Fourth Quarter 2023 Financial Results](index=3&type=section&id=Fourth%20Quarter%202023%20Financial%20Results) Q4 2023 revenue declined to $15.0 million, gross profit fell, and both net and Adjusted EBITDA losses increased Q4 2023 vs. Q4 2022 Financial Performance | Metric | Q4 2023 | Q4 2022 | | :--- | :--- | :--- | | Revenue | $15.0 million | $17.3 million | | Gross Profit | $1.7 million | $3.2 million | | Gross Margin | 11% | 19% | | Net Loss | $(4.7) million | $(4.2) million | | Adjusted EBITDA | $(3.0) million | $(1.7) million | - The decrease in Q4 revenue was driven by a **$1.3 million decline in construction Design-Build revenue** and a **$0.8 million decline in professional services revenue**[5](index=5&type=chunk) - Operating expenses increased by **$0.2 million to $6.4 million**, primarily due to higher legal expenses[7](index=7&type=chunk) [Full Year 2023 Financial Results](index=3&type=section&id=Summary%20Full%20Year%202023%20Financial%20Results) Full year 2023 revenue grew to $71.5 million, but gross profit declined, and net and Adjusted EBITDA losses expanded Full Year 2023 vs. 2022 Financial Performance | Metric | FY 2023 | FY 2022 | | :--- | :--- | :--- | | Revenue | $71.5 million | $67.0 million | | Gross Profit | $10.3 million | $14.2 million | | Gross Margin | 14.4% | 21.0% | | Net Loss | $(18.7) million | $(15.3) million | | Adjusted EBITDA | $(9.7) million | $(3.9) million | - The revenue increase was driven by a **$26.4 million rise in construction revenue**, offset by a **$20.7 million drop in equipment systems revenue** due to reduced demand in the CEA market[10](index=10&type=chunk) - Operating expenses remained flat at approximately **$27.0 million**, as a **$3.8 million increase in G&A expenses** was offset by a **$3.3 million reduction in a one-time business development expense** from the prior year[12](index=12&type=chunk) [Backlog Analysis](index=5&type=section&id=Backlog%20as%20of%20December%2031%2C%202023) Total backlog increased to **$110 million** as of December 31, 2023, primarily driven by construction Design-Build contracts Backlog Change from Dec 31, 2022 to Dec 31, 2023 (in millions) | Category | Beginning Backlog (2022) | Revenue Recognized | Backlog Additions | Ending Backlog (2023) | | :--- | :--- | :--- | :--- | :--- | | Equipment Systems | $5 | $(13) | $9 | $1 | | Services | $6 | $(12) | $13 | $7 | | Construction Design-Build | $82 | $(46) | $66 | $102 | | **Total Backlog** | **$93** | **$(71)** | **$88** | **$110** | - Total backlog as of December 31, 2023, was approximately **$110 million**, a sequential increase of **$26 million from Q3 2023** and an increase from **$93 million at the end of 2022**[1](index=1&type=chunk)[16](index=16&type=chunk)[17](index=17&type=chunk) [2024 Financial Guidance](index=5&type=section&id=Revenue%20and%20Adjusted%20EBITDA%20Guidance%20-%20Full%20Year%202024%20and%20First%20Quarter%202024) The company forecasts 2024 revenue exceeding $84 million and positive Adjusted EBITDA, with strong Q1 professional services 2024 Financial Guidance | Period | Metric | Guidance | | :--- | :--- | :--- | | **Full Year 2024** | Revenue | > $84 million | | | Adjusted EBITDA | Positive | | **First Quarter 2024** | Revenue | > $15 million | | | Adjusted EBITDA | > $(0.5) million | - Robust professional services revenues are expected in Q1 2024, which is considered a strong leading indicator of future construction and equipment demand[19](index=19&type=chunk) - Gross margins are expected to improve year-over-year in 2024 as a result of expense reductions implemented in 2023[19](index=19&type=chunk) [Consolidated Financial Statements](index=9&type=section&id=Consolidated%20Financial%20Statements) This section presents the company's consolidated balance sheets and statements of operations, detailing financial position and performance [Consolidated Balance Sheets](index=9&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) As of December 31, 2023, total assets increased slightly, cash decreased, and liabilities rose while equity declined Key Balance Sheet Items (As of December 31) | Account | 2023 | 2022 | | :--- | :--- | :--- | | Cash | $1.1 million | $12.0 million | | Total Current Assets | $41.0 million | $34.6 million | | Total Assets | $64.4 million | $62.1 million | | Accounts Payable | $25.4 million | $10.0 million | | Total Current Liabilities | $42.1 million | $24.3 million | | Total Liabilities | $44.3 million | $27.3 million | | Total Shareholders' Equity | $20.1 million | $34.7 million | [Consolidated Statements of Operations and Comprehensive Loss](index=10&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS%20AND%20COMPREHENSIVE%20LOSS) Total revenues increased to $71.5 million in 2023, but gross profit declined, and net loss widened to $18.7 million Revenue by Segment (For the Years Ended December 31) | Revenue Segment | 2023 | 2022 | | :--- | :--- | :--- | | Equipment systems | $12,675,645 | $33,333,574 | | Services | $11,923,920 | $12,862,308 | | Construction design-build | $46,254,967 | $19,822,901 | | **Total revenues** | **$71,542,773** | **$67,029,934** | Profitability Summary (For the Years Ended December 31) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Gross Profit | $10,291,562 | $14,205,719 | | Loss from Operations | $(16,677,437) | $(12,636,985) | | Net Loss | $(18,681,061) | $(15,277,909) | | Loss per share | $(1.66) | $(1.44) | [Non-GAAP Financial Measures](index=7&type=section&id=Non-GAAP%20Financial%20Measures) This section provides reconciliations of GAAP net loss to non-GAAP Adjusted EBITDA and adjusted net loss [Reconciliation of Net Loss to Adjusted EBITDA](index=11&type=section&id=NON-GAAP%20ADJUSTED%20EBITDA%20RECONCILIATION%20TO%20NET%20LOSS) Adjusted EBITDA loss widened to $9.7 million in 2023, with key adjustments including stock-based compensation - Adjusted EBITDA is defined as net income (loss) excluding items like interest, taxes, depreciation, amortization, stock-based compensation, and other non-recurring expenses that management believes do not reflect core operating performance[21](index=21&type=chunk) Adjusted EBITDA Reconciliation Summary (For the Years Ended December 31) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Net Loss | $(18,681,061) | $(15,277,909) | | EBITDA | $(16,976,557) | $(14,375,116) | | **Adjusted EBITDA** | **$(9,712,173)** | **$(3,887,049)** | [Reconciliation of GAAP Net Loss to Non-GAAP Adjusted Net Loss and EPS](index=13&type=section&id=NET%20LOSS%20%28GAAP%29%20RECONCILIATION%20TO%20ADJUSTED%20NET%20LOSS%20%28NON-GAAP%29%20AND%20EPS) Non-GAAP adjusted net loss for 2023 was $13.6 million, or $(1.21) per share, after adjusting for non-recurring items GAAP vs. Non-GAAP Net Loss and EPS (For the Year Ended December 31, 2023) | Metric | GAAP | Non-GAAP (Adjusted) | | :--- | :--- | :--- | | Net Loss | $(18,681,061) | $(13,615,723) | | Loss per Share | $(1.66) | $(1.21) | GAAP vs. Non-GAAP Net Loss and EPS (For the Year Ended December 31, 2022) | Metric | GAAP | Non-GAAP (Adjusted) | | :--- | :--- | :--- | | Net Loss | $(15,277,909) | $(4,880,852) | | Loss per Share | $(1.44) | $(0.46) |

Financial Data and Key Metrics Changes - Revenue for Q3 2023 was $20.9 million, representing an 11% sequential increase from $18.8 million in Q2 2023 and a 69% increase from $12.4 million in Q3 2022 [36][28] - Adjusted EBITDA improved by $0.7 million sequentially to negative $1.3 million in Q3 2023, which is an improvement of $1.0 million compared to the prior year period [20][28] - Net loss for Q3 2023 was $3.4 million, or a negative $0.29 per diluted share, compared to a net loss of $8.7 million, or a negative $0.081 per diluted share in the prior year period [38][28] Business Line Data and Key Metrics Changes - The increase in revenue was driven by a $9.4 million increase in organic growth of construction design build revenue, reflecting increases in the number of projects and average project size outside of the Controlled Environment Agriculture (CEA) sector [18][28] - More than two-thirds of revenue this quarter was generated from sectors outside of CEA, indicating a successful diversification strategy [10][28] Market Data and Key Metrics Changes - The backlog as of September 30, 2023, was approximately $84 million, reflecting a 6% sequential increase and a 25% increase compared to the prior year [40][28] - The CEA sector continues to face challenges, with equipment revenues compressed by a weak cannabis market, resulting in a decline of over $20 million in revenue during the first nine months of 2023 [30][28] Company Strategy and Development Direction - The company has evolved into a multi-sector focused professional services consulting firm, leveraging its professional services to build additional revenue streams [27][28] - The diversification strategy has insulated the company from broader weaknesses in the cannabis and vertical farming segments, allowing it to maintain a strong team and prepare for future demand [9][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to positive adjusted EBITDA, supported by an increasing backlog and pipeline [22][28] - The company anticipates revenues of approximately $30 million in Q4 2023, which would represent a new record, and expects to achieve breakeven to slightly positive adjusted EBITDA [33][28] Other Important Information - The company entered into a nondilutive asset-based lending facility for up to $8 million, primarily backed by construction receivables, to better manage working capital [24][59] - The leadership team demonstrated commitment by voluntarily opting to take stock instead of up to 50% of their base salary during Q3 [15][28] Q&A Session Summary Question: Details on the nondilutive asset-backed facility - The facility is backed by receivables, primarily construction receivables, and is for up to $8 million [24] Question: Insights on end markets and backlog allocation - More than two-thirds of the backlog is still in the controlled farming space, but the company anticipates growth on both CEA and non-CEA sides [48] Question: Confidence in achieving $30 million in quarterly revenue - Management indicated that there are many projects in the sales funnel expected to come to fruition, supporting the revenue target [49] Question: Potential inflection points in the cannabis market - Management noted that regulatory delays are a significant barrier, but they remain optimistic about future opportunities as licenses are awarded [51][105] Question: Update on international market focus - The company is focusing on the Netherlands, the U.K., and Germany, with ongoing discussions about design and build projects [81][109] Question: Future M&A activity - Currently, the focus is on generating cash and growing organically, with M&A not being a near-term priority [85] Question: Ability to win contracts outside of CEA - The company is successfully winning contracts by leveraging expertise and providing comprehensive service packages [90]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________. Commission File Number: 001-39933 URBAN-GRO, INC. (Exact name of registrant as specified in its charter) | Delaware | | 46-5158469 | | --- | ...

urban-gro, Inc. (NASDAQ:UGRO) Q2 2023 Earnings Conference Call August 14, 2023 4:30 PM ET Company Participants Dan Droller - EVP-Corporate Development & Investor Relations Brad Nattrass - Chairman & Chief Executive Officer Dick Akright - Chief Financial Officer Conference Call Participants Eric Beder - SCC Research Eric Des Lauriers - Craig-Hallum Brian Wright - ROTH MKM Thomas McGovern - Maxim Group Operator Hello, and welcome to the urban-gro 2023 Second Quarter Earnings Conference Call. As a brief remind ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during ...

urban-gro, Inc. (NASDAQ:UGRO) Q1 2023 Earnings Conference Call May 10, 2023 4:30 PM ET Company Participants Dan Droller - Executive Vice President-Corporate Development & Investor Relations Brad Nattrass - Chairman & Chief Executive Officer Dick Akright - Chief Financial Officer Conference Call Participants Eric Des Lauriers - Craig-Hallum Eric Beder - SCC Research Brian Wright - ROTH MKM Operator Hello, and welcome to the urban-gro Inc. 2023 First quarter Earnings Conference Call. As a brief reminder, all ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________. Commission File Number: 001-39933 URBAN-GRO, INC. (Exact name of registrant as specified in its charter) | Delaware | | 46-5158469 | | --- | --- ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2022 or o TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-39933 URBAN-GRO, INC. (Exact name of registrant as specified in its charter) Delaware 46-5158469 | 1751 Panorama Point, Unit G, Lafayette, CO | 80026 | (720) 390-3880 | | --- | --- | ...

urban-gro, Inc. (NASDAQ:UGRO) Q3 2022 Earnings Conference Call November 10, 2022 4:30 PM ET Company Participants Dan Droller - EVP of Corporate Development and IR Brad Nattrass - Chairman and CEO Richard Akright - CFO Conference Call Participants Eric Des Lauriers - Craig-Hallum Capital Group Brian Wright - ROTH Capital Eric Beder - SCC Research Thomas McGovern - Maxim Group Aaron Grey - Alliance Global Partners Operator Hello, and welcome to the urban-gro 2022 Third Quarter Earnings Conference Call. As a b ...