1847 LLC(EFSH) - 2024 Q4 - Annual Results

Company Overview and Strategic Highlights 1847 Holdings experienced a transformative 2024 with strategic acquisitions, significant financial growth, and portfolio refinements CEO Commentary and Strategic Direction CEO Roberts highlighted 2024 as transformative, driven by the CMD acquisition and financial growth, with strategic sales planned for Wolo and CMD - 2024 was a transformative year for 1847 Holdings, marked by strategic initiatives and significant financial growth[4] - The company completed the acquisition of CMD, which reported strong pro forma revenues of $30.8 million for 2024, a 13.5% increase, with gross profit up 25.9% and net income up 28.9%[4] - 1847 Holdings is exploring strategic sales for Wolo and strategic alternatives for CMD due to significant inbound interest, aiming to unlock substantial value for shareholders[10] 2024 Operational Achievements and Portfolio Management 2024 operational achievements include the CMD acquisition, strategic sale of High Mountain for $17 million, ICU Eyewear disposition, and Wolo sale engagement - Completed the acquisition of CMD, a Las Vegas-based cabinetry, millwork, and door manufacturer[5] - Sold High Mountain Door & Trim Inc. for approximately $17 million, more than double the original purchase price, valuing the business at nearly seven times adjusted EBITDA[5][6] - Disposed of ICU Eyewear, eliminating $4.5 million of net liabilities from the balance sheet[5] - Engaged Two Roads Advisors to facilitate the sale of Wolo Mfg. Corp[5] Financial Performance Analysis 1847 Holdings saw 10.7% revenue growth and 18.6% gross profit increase, yet incurred a net loss from non-cash warrant liabilities Key Financial Highlights from Continuing Operations 1847 Holdings saw a 10.7% revenue increase to $15.7 million and an 18.6% gross profit increase to $7.8 million in 2024 Key Financial Highlights | Metric | 2024 (USD) | 2023 (USD) | YoY Change | | :----- | :--------- | :--------- | :--------- | | Total Revenue | $15.7M | $14.2M | +10.7% | | Gross Profit | $7.8M | $6.6M | +18.6% | | Gross Margin | 49.5% | 46.2% | +330 bps | Detailed Consolidated Financial Results Total revenues increased to $15.7 million, but a net loss of $106.8 million was reported, primarily due to increased other expenses from warrant liabilities Consolidated Financial Results | Metric | 2024 (USD) | 2023 (USD) | YoY Change | | :-------------------------------- | :--------- | :--------- | :--------- | | Total Revenues | $15,710,330 | $14,190,135 | +10.7% | | Total Cost of Revenues | $7,937,588 | $7,637,496 | +3.9% | | Total Operating Expenses | $27,708,574 | $29,896,962 | -7.3% | | Loss from Operations | $(11,998,244) | $(15,706,827) | -23.6% | | Total Other Expense, Net | $95,508,010 | $8,490,576 | +1024.9% | | Net Loss from Continuing Operations | $(106,804,254) | $(23,988,403) | +345.3% | - The significant increase in Total Other Expense, Net was primarily driven by a $77,638,662 loss on change in fair value of warrant liabilities[15] Segment Performance Construction segment revenue grew 24.1% to $11.96 million, while automotive supplies declined 17.6% to $3.75 million due to inventory constraints Segment Revenue Performance | Segment | 2024 Revenue (USD) | 2023 Revenue (USD) | YoY Change | Primary Reason | | :------------------ | :----------------- | :----------------- | :--------- | :------------- | | Construction | $11,960,884 | $9,639,549 | +24.1% | Increase in new multi-family projects and average customer contract value | | Automotive Supplies | $3,749,446 | $4,550,586 | -17.6% | Working capital constraints on inventory | - Cost of revenues for the construction segment increased by 21.3% to $5,439,723, while for the automotive supplies segment, it decreased by 20.8% to $2,497,865[18] Non-GAAP Financial Measures: EBITDA and Adjusted EBITDA Adjusted EBITDA loss improved slightly to $3.31 million in FY 2024, used by management to assess operating performance excluding non-cash items EBITDA and Adjusted EBITDA Reconciliation | Metric | 2024 (USD) | 2023 (USD) | | :-------------------------------- | :--------- | :--------- | | Net loss from continuing operations | $(106,804,254) | $(23,988,403) | | EBITDA | $(102,588,372) | $(18,406,914) | | Adjusted EBITDA | $(3,309,879) | $(3,455,112) | - Adjusted EBITDA improved slightly from a loss of $3,455,112 in FY 2023 to a loss of $3,309,879 in FY 2024[16][20] - Adjusted EBITDA excludes items such as loss on change in fair value of warrant liabilities, amortization of debt discounts, and impairments of goodwill and intangible assets[19] Impact of Non-Cash and One-Time Items on Net Loss A significant net loss portion stems from non-cash, one-time items, primarily the change in fair value of warrant liabilities due to their variable features - A significant portion of the net loss is driven by non-cash and one-time items, primarily the change in fair value of warrant liabilities[7] - Warrant liabilities are classified as such and remeasured at fair value due to features allowing exercise price decreases and share increases upon certain events, and an alternative cashless exercise option[7] - Excluding these non-cash charges, the company's core performance remains in line with long-term objectives[8] Future Outlook and Projections 1847 Holdings projects a return to net income in 2025, anticipating $1.3 million net income and over $45 million revenue, with accelerated growth in 2026 Future Financial Projections | Metric | 2025 Projection (USD) | 2026 Projection (USD) | | :----- | :-------------------- | :-------------------- | | Net Income | ~$1.3 million | ~$5.0 million | | Revenue | >$45 million | >$60 million | - The company expects to achieve profitability milestones in 2025 and accelerate in 2026, underscoring the success of its strategic vision and disciplined execution[9] - Future growth is supported by a strong pipeline of acquisition opportunities and a relentless focus on high-margin, scalable businesses[9] Corporate Information and Disclosures This section covers 1847 Holdings' investment thesis, regulatory disclosures including going concern, forward-looking statements, and investor contacts About 1847 Holdings LLC 1847 Holdings LLC is a publicly traded acquisition holding company focused on acquiring, strengthening, and monetizing overlooked deep-value businesses - 1847 Holdings LLC is a publicly traded diversified acquisition holding company specializing in identifying over-looked, deep value investment opportunities in middle market businesses[21] - The company's investment thesis involves acquiring businesses at reasonable multiples, deploying resources to strengthen their infrastructure and systems, and then potentially selling, IPOing, or holding them to contribute to shareholder dividends[21] Going Concern Disclosure The FY 2024 audited financial statements will include a going concern qualification, as required by NYSE American Company Guide sections - The audited consolidated financial statements for FY 2024 will contain an audit report with a 'going concern' qualification[17] - This disclosure is made pursuant to NYSE American Company Guide Sections 401(h) and 610(b)[17] Forward-Looking Statements This press release contains forward-looking statements based on management's expectations, subject to risks and uncertainties that may cause actual results to differ - The press release contains forward-looking statements based on management's beliefs, assumptions, and expectations of future economic performance[23] - These statements are subject to factors, risks, and uncertainties that may cause actual results, performance, or financial condition to differ materially from expectations[23] Contact Information Investor relations inquiries for 1847 Holdings LLC can be directed to Crescendo Communications, LLC - Contact Crescendo Communications, LLC for investor inquiries at Tel: +1 (212) 671-1020 or Email: EFSH@crescendo-ir.com[25]