Financial Performance - Commodity sales for the three months ended June 30, 2024, were $173.3 million, an increase from $157.6 million in the same period of 2023, representing a growth of 9.9%[173] - Gross profit for the three months ended June 30, 2024, was $2.5 million, down from $3.1 million in the same period of 2023, reflecting a decrease of 18.4%[173] - Adjusted EBITDA for the three months ended June 30, 2024, was $60, a significant decline from $1.3 million in the same period of 2023[173] - The company reported a loss from operations of $2.0 million for the three months ended June 30, 2024, compared to a loss of $360,000 in the same period of 2023[173] - Net income for the three months ended June 30, 2024, was $2.3 million, a significant increase from $190,000 in the same period of 2023, representing a growth of 1119.5%[186] - Gross profit for the six months ended June 30, 2024, was $2.2 million, a decline of 72.0% compared to $7.7 million in 2023[203] - Net income for the six months ended June 30, 2024, was $2.0 million, a significant turnaround from a net loss of $0.9 million in the same period of 2023[203] Revenue Sources - Sadot Agri-Foods accounted for 99.0% of total revenues for the three months ended June 30, 2024, compared to 98.3% in the same period of 2023[174] - Franchise royalties and fees increased to $741,000 for the three months ended June 30, 2024, compared to $238,000 in the same period of 2023, marking a growth of 211.3%[173] - Company restaurant sales, net of discounts, decreased to $992,000, down 60.1% from $2.5 million in the prior year, primarily due to the conversion of corporate locations to franchises[190] - Franchise royalties and fees increased to $1.0 million for the six months ended June 30, 2024, up $0.5 million or 91.0% from $0.5 million in 2023[210] Expenses and Costs - Stock-based expenses for the three months ended June 30, 2024, were $1.9 million, up from $1.2 million in the same period of 2023, indicating a rise of 58.3%[177] - Cost of goods sold increased to $172.5 million, up by $15.3 million or 9.7% from $157.2 million in the prior year, correlating with the rise in sales[192] - Sales, general and administrative expenses rose to $2.4 million in Q2 2024, up 36.2% from $1.8 million in Q2 2023, driven by increased consulting fees related to Latin America and Brazil market entry[197] - Stock-based expenses rose to $1.9 million, an increase of 63.5% from $1.2 million in the previous year, reflecting higher compensation costs[186] - Total other income for the six months ended June 30, 2024, was $7.5 million, an increase of $6.4 million or 584.7% compared to $1.1 million in 2023, driven by gains on fair value remeasurement and trading securities[218] Asset and Liquidity Management - Total assets as of June 30, 2024, amounted to $165.8 million, reflecting an increase from $72.3 million in 2023[203] - Total current assets increased to $153.7 million as of June 30, 2024, up from $112.9 million at December 31, 2023, primarily due to an increase in other current assets and cash[223][224] - Working capital improved to $16.1 million as of June 30, 2024, an increase of $7.9 million from $8.3 million at December 31, 2023[224] - The current ratio increased to 1.12 as of June 30, 2024, compared to 1.08 at December 31, 2023, reflecting better liquidity management[224] - Net cash provided by operating activities was $11.0 million for the six months ended June 30, 2024, compared to a use of $4.2 million in the same period of 2023[227] Strategic Initiatives - The company has initiated a transformation from a U.S.-centric restaurant business to a global Agri-foods supply chain organization since late 2022[168] - The company aims to diversify into a sustainable global agri-foods company through its subsidiaries, focusing on farming and commodity trading[169] Accounting Standards - The Company early adopted ASU 2020-06 on January 1, 2023, with no material impact noted[233] - The Company adopted ASU 2021-04 on January 1, 2022, also noting no material impact[234] - The Company is currently evaluating the impact of ASU 2023-07 on its consolidated financial statements, effective for fiscal years beginning after December 15, 2023[235] Seasonal Trends - The farming industry experiences seasonal fluctuations, with lower sales and net income during non-harvest seasons and higher during harvest seasons[236] Off-Balance Sheet Arrangements - The Company has no off-balance sheet arrangements that materially affect its financial condition or results of operations[237]
Sadot (SDOT) - 2024 Q2 - Quarterly Report