Revenue Performance - Commodity sales for the three months ended September 30, 2024, were $200.9 million, an increase from $180.0 million in the same period of 2023, representing an increase of 11.0%[212] - Company restaurant sales for the three months ended September 30, 2024, were $0.5 million, down from $1.9 million in the same period of 2023, a decrease of 75.0%[212] - Franchise royalties and fees increased to $0.32 million for the three months ended September 30, 2024, compared to $0.25 million in the same period of 2023, an increase of 30.6%[212] - Commodity sales increased to $200.9 million for the three months ended September 30, 2024, up by $20.9 million or 11.6% compared to $179.975 million in 2023[231] - Company restaurant sales, net of discounts, decreased by 75.3% to $0.5 million in Q3 2024 from $1.9 million in Q3 2023, primarily due to the conversion of corporate locations to franchises[234] - Franchise royalties and fees rose to $0.3 million in Q3 2024, an increase of 31.0% from $0.2 million in Q3 2023, attributed to a higher number of Pokemoto franchises[235] - Commodity sales for the nine months ended September 30, 2024, totaled $480.7 million, a decrease of $67.2 million or 12.3% compared to $547.9 million in the same period of 2023[259] - Company restaurant sales, net of discounts, were $2.6 million for the nine months ended September 30, 2024, down $4.1 million or 60.9% from $6.7 million in 2023, primarily due to the conversion of corporate locations to franchise locations[260] - Franchise royalties and fees increased to $1.3 million for the nine months ended September 30, 2024, representing a rise of $0.6 million or 72.0% compared to $0.8 million in 2023[261] Profitability Metrics - Gross profit for the three months ended September 30, 2024, was $2.5 million, down from $2.9 million in the same period of 2023, a decrease of 15.2%[212] - EBITDA for the three months ended September 30, 2024, was $2.9 million, compared to a loss of $4.4 million in the same period of 2023, indicating a significant improvement[212] - Net income for the three months ended September 30, 2024, was $1.1 million, a significant improvement from a net loss of $5.3 million in the same period of 2023, representing a 120.7% increase[228] - Gross profit for the nine months ended September 30, 2024, was $4.6 million, a decrease of $6.0 million or 56.5% from $10.7 million in 2023, mainly due to lower sales[258] - Net income for the nine months ended September 30, 2024, was $3.1 million, compared to a net loss of $6.2 million in the same period of 2023, representing an improvement of $9.3 million[258] Cost and Expenses - Total cost of goods sold for the three months ended September 30, 2024, was $199.3 million, an increase from $179.3 million in the same period of 2023, representing an increase of 11.2%[212] - Stock-based expenses for the three months ended September 30, 2024, were $1.7 million, compared to $1.1 million in the same period of 2023, an increase of 54.5%[218] - Loss from operations for the three months ended September 30, 2024, was $3.6 million, slightly improved from a loss of $4.0 million in the same period of 2023[212] - Cost of goods sold increased to $199.3 million in Q3 2024, up by $20.0 million or 11.2% from $179.3 million in Q3 2023, driven by higher sales[238] - Depreciation and amortization expenses for Q3 2024 totaled $49.0 thousand, a decrease of $394.0 thousand or 89.0% compared to $443.0 thousand in Q3 2023[241] - Stock-based expenses increased by $638.0 thousand or 59.3%, totaling $1.7 million in Q3 2024 compared to $1.1 million in Q3 2023[245] - Sales, general and administrative expenses totaled $4.2 million in Q3 2024, an increase of $935.0 thousand or 28.2% compared to $3.3 million in Q3 2023[246] - Interest expense, net, increased significantly to $3.0 million for the nine months ended September 30, 2024, compared to $0.3 million in 2023, an increase of 827.8%[258] - Stock-based expenses for the nine months ended September 30, 2024 were $4.4 million, down $1.2 million or 21.8% from $5.7 million in 2023, primarily due to consulting fees[272] - Sales, general and administrative expenses increased by $1.6 million or 22.2% to $8.8 million for the nine months ended September 30, 2024, driven by higher consulting fees related to market expansions[273] Financial Position - Total assets as of September 30, 2024, were $171.0 million, an increase from $90.7 million as of September 30, 2023[250] - As of September 30, 2024, total current assets were $159.0 million, an increase from $112.9 million at December 31, 2023, while total current liabilities rose to $140.1 million[278] - Working capital increased to $18.9 million as of September 30, 2024, up $10.7 million from $8.3 million at December 31, 2023, reflecting improved liquidity[279] - The current ratio improved to 1.14 as of September 30, 2024, compared to 1.08 at December 31, 2023, indicating better short-term financial health[279] Other Financial Information - The company recognized $16.0 thousand in other revenues for Q3 2024, with no other revenues reported in Q3 2023, indicating new revenue streams[237] - Total other income for Q3 2024 was $4.7 million, a significant increase of $6.1 million compared to a loss of $1.3 million in Q3 2023[247] - Total other income for the nine months ended September 30, 2024 was $12.3 million, a significant increase of $12.5 million from a loss of $0.2 million in 2023, mainly due to gains on fair value remeasurement[275] - The company recognized a gain on the sale of trading securities amounting to $0.5 million for the nine months ended September 30, 2024, with no such gain reported in 2023[258] Strategic Changes - The company has initiated a transformation from a U.S.-centric restaurant business to a global Agri-foods supply-chain organization as of late 2022[207] - The company is currently evaluating the impact of ASU 2023-07 on its consolidated financial statements, which requires additional disclosures related to reportable segments[289] - The company intends to vigorously defend against a lawsuit seeking damages of $7.4 million related to a commodities transaction[295] - The company has experienced seasonal fluctuations in revenues and net income, typically lower during non-harvest seasons[291] Internal Controls and Future Considerations - There were no changes in internal control over financial reporting that materially affected the company during the three and nine months ended September 30, 2024[293] - The company may need to raise additional capital, which could dilute existing shareholders and may not be available on acceptable terms[281] - The company has no off-balance sheet arrangements that could materially affect its financial condition[292]
Sadot (SDOT) - 2024 Q3 - Quarterly Report