Insignia(LDWY) - 2025 Q1 - Quarterly Results

Overview and Management Commentary Lendway reported strong Q1 2025 financial performance driven by a robust spring tulip season and Bloomia's full-quarter contribution, with a fiscal year-end change to June 30 - Strong financial performance in Q1 2025 is attributed to a successful spring tulip season, with expectations for these positive trends to continue due to upcoming holiday sales[3] - The upcoming quarter will be the first to provide a direct year-over-year comparison of Bloomia's operations under Lendway's ownership, without the distortion of acquisition-related costs and partial quarter results[3] - The company's board of directors has approved a change in the fiscal year-end from December 31 to June 30, with a six-month transition period ending June 30, 2025[3] Quarterly Financial Performance The company achieved a significant financial turnaround in Q1 2025, driven by Bloomia's full contribution and improved margins, shifting to profitability Q1 2025 vs. Q1 2024 Key Financial Highlights | Financial Metric | Q1 2025 (million $) | Q1 2024 (million $) | Change | | :--- | :--- | :--- | :--- | | Net Revenue | $12.4 | $8.0 | +55.0% | | Gross Profit | $3.9 | $1.7 | +129.4% | | Gross Margin | 31.3% | 21.7% | +9.6 p.p. | | Operating Income (Loss) | $1.4 | ($1.6) | Turnaround to Profit | | Net Income (Loss) Attributable to Lendway | $0.4 | ($1.2) | Turnaround to Profit | | EPS (basic and diluted) | $0.25 | ($0.67) | Turnaround to Profit | | Adjusted EBITDA | $2.6 | $1.6 | +62.5% | Net Revenue Net revenue increased to $12.4 million in Q1 2025, primarily due to a full quarter of Bloomia's revenue contribution Net Revenue Comparison | Period | Net Revenue (million $) | | :--- | :--- | | Q1 2025 | $12.4 | | Q1 2024 | $8.0 | - All revenue was generated by Bloomia. The year-over-year increase reflects three full months of revenue in 2025 compared to about six weeks in 2024[4] Gross Profit Gross profit rose significantly to $3.9 million (31.3% margin) in Q1 2025, driven by higher sales efficiency and no prior-year amortization costs Gross Profit and Margin Comparison | Period | Gross Profit (million $) | Gross Margin | | :--- | :--- | :--- | | Q1 2025 | $3.9 | 31.3% | | Q1 2024 | $1.7 | 21.7% | - The 2024 period included $1.4 million of amortization costs from an inventory write-up to fair value related to the Bloomia acquisition, which negatively impacted the gross margin in that quarter[6] Operating Income (Loss) Operating income reached $1.4 million in Q1 2025, a turnaround from a $1.6 million loss, due to Bloomia's full contribution and no prior-year acquisition costs Operating Income (Loss) Comparison | Period | Operating Income (Loss) (million $) | | :--- | :--- | | Q1 2025 | $1.4 | | Q1 2024 | ($1.6) | Net Income (Loss) Attributable to Lendway Net income attributable to Lendway was $0.4 million ($0.25 per share) in Q1 2025, a recovery from a $1.2 million loss, driven by Bloomia and reduced transaction costs Net Income (Loss) and EPS Comparison | Metric | Q1 2025 (million $) | Q1 2024 (million $) | | :--- | :--- | :--- | | Net Income (Loss) Attributable to Lendway | $0.4 | ($1.2) | | EPS (basic and diluted) | $0.25 | ($0.67) | Adjusted EBITDA Adjusted EBITDA increased to $2.6 million in Q1 2025, primarily due to a full quarter of Bloomia's operating income Adjusted EBITDA Comparison | Period | Adjusted EBITDA (million $) | | :--- | :--- | | Q1 2025 | $2.6 | | Q1 2024 | $1.6 | - Bloomia generated $3.0 million of adjusted EBITDA in Q1 2025, compared to $2.2 million from its acquisition date through March 31, 2024[11] Balance Sheet Summary As of March 31, 2025, Lendway reported $1.3 million in cash, $6.3 million in working capital, and reduced total debt to $40.6 million Selected Balance Sheet Data | Account | March 31, 2025 (million $) | December 31, 2024 (million $) | | :--- | :--- | :--- | | Cash and cash equivalents | $1.3 | $1.8 | | Working capital | $6.3 | $11.0 | | Total debt | $40.6 | $42.1 | | Total assets | $100.5 | $100.0 | | Stockholders' equity | $12.6 | $11.9 | - The decrease in cash and total debt during the quarter was primarily due to debt repayments[12] Financial Statements This section presents the unaudited Condensed Consolidated Statements of Operations and selected balance sheet data for the specified periods Condensed Consolidated Statements of Operations The consolidated statement of operations shows a shift to net income in Q1 2025, with $12.4 million net revenue and $0.4 million net income, contrasting with Q1 2024's loss Condensed Consolidated Statement of Operations (in thousands) | Line Item | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :--- | :--- | :--- | | Revenue, net | $12,443 | $8,033 | | Gross profit | $3,889 | $1,744 | | Operating income (loss) | $1,432 | ($1,644) | | Net income (loss) from continuing operations | $617 | ($1,486) | | Net income (loss) attributable to Lendway, Inc. | $449 | ($1,163) | | Basic and diluted earnings per share | $0.25 | ($0.67) | Selected Balance Sheet Data The balance sheet as of March 31, 2025, shows total assets of $100.5 million, with reduced cash, working capital, and total debt compared to year-end 2024 Balance Sheet Data Summary (in thousands) | Line Item | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $1,308 | $1,759 | | Working capital | $6,274 | $11,026 | | Total assets | $100,514 | $99,985 | | Total debt | $40,562 | $42,090 | Non-GAAP Reconciliations Lendway provides non-GAAP reconciliations for Adjusted EBITDA and Bloomia Adjusted EBITDA, offering a clearer view of core operating performance by excluding non-recurring items - The company uses non-GAAP measures like Adjusted EBITDA to eliminate the effects of non-recurring transactions and provide supplemental information about core operating performance[19][20] Reconciliation of Net Income to Adjusted EBITDA Q1 2025 Net Income of $0.6 million is reconciled to Adjusted EBITDA of $2.6 million, reflecting adjustments for interest, taxes, D&A, and non-recurring costs Reconciliation to Adjusted EBITDA (in thousands) | Line Item | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :--- | :--- | :--- | | Net income (loss) from continuing operations | $617 | $(1,486) | | Interest expense, net | $970 | $225 | | Income tax expense (benefit) | $156 | $(347) | | Depreciation and amortization | $835 | $300 | | EBITDA | $2,578 | $(1,308) | | Acquisition and integration-related costs | $24 | $1,542 | | Non-cash step-up inventory write-off | $— | $1,360 | | Adjusted EBITDA | $2,641 | $1,594 | Reconciliation of Bloomia Adjusted EBITDA This reconciliation shows Bloomia's Q1 2025 Adjusted EBITDA of $3.0 million, contributing significantly to the total company's $2.6 million Adjusted EBITDA after corporate overhead Bloomia vs. Lendway Overhead Adjusted EBITDA for Q1 2025 (in thousands) | Segment | Adjusted EBITDA (in thousands) | | :--- | :--- | | Bloomia | $2,981 | | Lendway Overhead | ($340) | | Total Company | $2,641 |