urban-gro(US:UGRO)2022-03-30 03:07Financial Data and Key Metrics Changes - In 2021, the company achieved revenues of just over $62 million, representing a growth of 140% compared to 2020 [17] - The company generated positive adjusted EBITDA of approximately $2.7 million, an increase of $3.3 million versus 2020 [38] - As of December 31, 2021, the backlog was just over $30 million, with a cash position of just under $35 million and zero debt [17][39] Business Line Data and Key Metrics Changes - In Q4 2021, revenue was $19 million, compared to $9.2 million in the prior year period, representing an increase of 106% [32] - The increase in equipment systems revenue was driven by a $7.2 million increase, while services revenue increased by $2.6 million, primarily due to the acquisition of 2WR [32][33] - Gross profit was $4.9 million or 26% of revenue in Q4 2021, compared to $1.7 million or 18% of revenue in the prior year period [34] Market Data and Key Metrics Changes - The company is focused on geographic expansion in core cannabis and food-focused vertical farming markets, with progress in the EMEA region [20][21] - The company signed approximately 20 project contracts with 10 vertical farming operators in North America since the start of 2021 [22] Company Strategy and Development Direction - The company aims to provide a complete turnkey design build solution for the global indoor Controlled Environment Agriculture (CEA) market [11] - The acquisition of Emerald Construction Management is expected to enhance service offerings and diversify revenue streams [13][24] - The company is focused on three key growth areas: geographic expansion, extension within the CEA sector, and diversification of service capabilities [19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting strong growth momentum and a solid foundation for continued expansion [29] - The company anticipates consolidated revenues of approximately $110 million for full year 2022, including contributions from the pending Emerald acquisition [42] - Management acknowledged potential gross margin pressure due to the revenue mix but remains confident in long-term growth and efficiency improvements [45] Other Important Information - The company has a strong balance sheet with cash of $34.6 million and no debt, providing flexibility for growth strategies [41] - The company plans to continue its digital marketing strategy and participation in trade shows to drive business growth [73] Q&A Session Summary Question: Thoughts on potential further acquisitions - The company is looking for synergistic service companies, particularly in architecture, engineering, and construction management [52] Question: Perception by larger players in the market - The company believes its comprehensive service solutions and strong balance sheet position it favorably among larger players [54] Question: Update on exposure to oversupply in mature markets - The company is not significantly impacted by oversupply in California, focusing instead on optimizing client facilities [85] Question: Guidance on revenue composition - The company expects to remain heavily weighted towards CEA, particularly in the cannabis sector, while gradually expanding into non-CEA markets [65] Question: Update on waterfall revenues from the 2WR acquisition - The company reported over 50 service contracts and over 60 equipment contracts in Q1, indicating strong cross-selling opportunities [76]