– Q1 Revenue was $8.6 Million, Gross Income $2.5 Million and Net Income $0.5 Million –
– Construction Pipeline Totals $750 Million, Including ~ 4,200 Residential Development Units –
– Company Projects Positive Cash Flow for 2022 –
– Management to Host Conference Call Today at 4:30 p.m. ET –
JACKSONVILLE. Fla.--(BUSINESS WIRE)--SG Blocks, Inc. (Nasdaq: SGBX) (“SG Blocks” or the “Company”), a leading designer, innovator and fabricator of modular structures, today reported financial results for the first quarter ended March 31, 2022.Date: Monday, May 23, 2022 Time: 4:30 p.m. ET / 1:30 p.m. PT Toll Free: 1-877-407-9716 International: 1-201-493-6779 Conference ID: 13730297
Additionally, a webcast of the conference call will be broadcast live and available for replay at the Investors section of the Company’s website at www.sgblocks.com or by following this link: https://viavid.webcasts.com/starthere.jsp?ei=1549472&tp_key=f395862831 A replay of the conference call will be available after 7:30 p.m. Eastern time through Monday, June 6, 2022, 11:59 PM ET.Toll Free: 1-844-512-2921 International: 1-412-317-6671 Replay Pin Number: 13730297
Use of Non-GAAP Financial Information In addition to its results under GAAP, the Company presents EBITDA and Adjusted EBITDA for historical periods. EBITDA and Adjusted EBITDA are non-GAAP financial measures and have been presented as supplemental measures of financial performance that are not required by, or presented in accordance with, GAAP. The Company calculates EBITDA as net income (loss) before interest expense, income tax benefit (expense), depreciation and amortization. It calculates Adjusted EBITDA as EBITDA before certain non-recurring adjustments such stock-based compensation expense. EBITDA and Adjusted EBITDA are presented because they are important metrics used by management as one of the means by which it assesses the Company’s financial performance. EBITDA and Adjusted EBITDA are also frequently used by analysts, investors and other interested parties to evaluate companies in the Company’s industry. These measures, when used in conjunction with related GAAP financial measures, provide investors with an additional financial analytical framework that may be useful in assessing the Company and its results of operations. EBITDA and Adjusted EBITDA have certain limitations. EBITDA and Adjusted EBITDA should not be considered as alternatives to net income (loss), or any other measures of financial performance derived in accordance with GAAP. These measures also should not be construed as an inference that the Company’s future results will be unaffected by unusual or non-recurring items for which these non-GAAP measures make adjustments. Additionally, EBITDA and Adjusted EBITDA are not intended to be liquidity measures because of certain limitations, including, but not limited to: i) they do not reflect the Company’s cash outlays for capital expenditures; They do not reflect changes in, or cash requirements for, working capital; and Although depreciation and amortization are non-cash charges, the assets are being depreciated and amortized and may have to be replaced in the future, and these non-GAAP measures do not reflect cash requirements for such replacements. The non-GAAP information should be read in conjunction with the Company’s consolidated financial statements and related notes. The following is a reconciliation of EBITDA and Adjusted EBITDA to the nearest GAAP measure, net loss:
Three Months Ended March 31, 2022 |
Three Months Ended March 31, 2021 |
|||||||
Net loss |
$ |
(717,177 |
) |
$ |
(2,033,877 |
) |
||
Addback interest expense |
48,849 |
363 |
||||||
Addback interest income |
(12,783 |
) |
(17,470 |
) |
||||
Addback depreciation and amortization |
156,845 |
141,793 |
||||||
EBITDA (non-GAAP) |
(524,266 |
) |
(1,909,191 |
) |
||||
Addback litigation expense |
114,383 |
81,219 |
||||||
Addback stock compensation expense |
649,089 |
286,186 |
||||||
Adjusted EBITDA (non-GAAP) |
$ |
239,206 |
$ |
(1,541,786 |
) |
- Tables Follow –
SG BLOCKS, INC. AND SUBSIDIARIES |
||||||||
Condensed Consolidated Balance Sheets |
||||||||
March 31, |
December 31, |
|||||||
2022 |
2021 |
|||||||
(Unaudited) |
||||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ |
13,146,418 |
$ |
13,024,381 |
||||
Accounts receivable, net |
2,424,501 |
2,917,646 |
||||||
Contract assets |
133,395 |
41,916 |
||||||
Held for sale assets |
4,392,541 |
- |
||||||
Inventories |
1,054,342 |
1,273,825 |
||||||
Prepaid expenses and other current assets |
784,871 |
656,279 |
||||||
Total current assets |
21,119,657 |
17,914,047 |
||||||
Property, plant and equipment, net |
4,080,852 |
6,839,943 |
||||||
Project development costs and other non-current assets |
449,961 |
923,172 |
||||||
Goodwill |
1,309,330 |
1,309,330 |
||||||
Right-of-use asset |
2,902,284 |
1,210,053 |
||||||
Long-term note receivable |
829,384 |
720,137 |
||||||
Intangible assets, net |
2,053,410 |
2,095,232 |
||||||
Deferred contract costs, net |
101,963 |
112,159 |
||||||
Investment in non-marketable securities |
700,000 |
200,000 |
||||||
Investment in and advances to equity affiliates |
3,599,945 |
3,599,945 |
||||||
Total Assets |
$ |
37,963,197 |
$ |
34,924,018 |
||||
Liabilities and Stockholders’ Equity |
||||||||
Current liabilities: |
||||||||
Accounts payable and accrued expenses |
$ |
5,475,882 |
$ |
7,568,851 |
||||
Contract liabilities |
5,205,712 |
1,437,579 |
||||||
Lease liability, current maturities |
481,223 |
337,469 |
||||||
Due to affiliates |
- |
264,451 |
||||||
Assumed liability |
5,795 |
5,795 |
||||||
Short term note payable, net |
1,984,902 |
1,971,960 |
||||||
Total current liabilities |
13,153,514 |
11,586,105 |
||||||
Long-term note payable |
750,000 |
750,000 |
||||||
Lease liability, net of current maturities |
2,427,080 |
872,124 |
||||||
Total liabilities |
16,330,594 |
13,208,229 |
||||||
Stockholders’ equity: |
||||||||
Preferred stock, $1.00 par value, 5,405,010 shares authorized; none issued or outstanding |
||||||||
Common stock, $0.01 par value, 25,000,000 shares authorized; 12,006,873 issued and outstanding as of March 31, 2022 and 11,986,873 issued and outstanding as of December 31, 2021 |
120,069 |
119,869 |
||||||
Additional paid-in capital |
54,030,295 |
53,341,405 |
||||||
Accumulated deficit |
(33,826,401 |
) |
(33,109,220 |
) |
||||
Total SG Blocks, Inc. stockholders’ equity |
20,323,963 |
20,352,054 |
||||||
Non-controlling interest |
1,308,640 |
1,363,735 |
||||||
Total stockholders’ equity |
21,632,603 |
21,715,789 |
||||||
Total Liabilities and Stockholders’ Equity |
$ |
37,963,197 |
34,924,018 |
|||||
SG BLOCKS, INC. AND SUBSIDIARIES |
||||||||
Condensed Consolidated Statements of Operations |
||||||||
For the |
For the |
|||||||
Three Months Ended |
Three Months Ended |
|||||||
March 31, |
March 31, |
|||||||
2022 |
2021 |
|||||||
(Unaudited) |
||||||||
Revenue: | ||||||||
Construction services |
$ |
1,668,384 |
$ |
3,137,715 |
||||
Engineering services |
50,386 |
93,949 |
||||||
Medical revenue |
6,885,828 |
5,955,963 |
||||||
Total |
8,604,598 |
9,187,627 |
||||||
Cost of revenue: | ||||||||
Construction services |
1,677,560 |
4,093,540 |
||||||
Engineering services |
43,153 |
9,770 |
||||||
Medical revenue |
4,397,450 |
4,527,692 |
||||||
Total |
6,118,163 |
8,631,002 |
||||||
Gross profit |
2,486,435 |
556,625 |
||||||
Operating expenses: | ||||||||
Payroll and related expenses |
1,144,187 |
827,522 |
||||||
General and administrative expenses |
780,021 |
809,800 |
||||||
Marketing and business development expense |
143,335 |
70,627 |
||||||
Pre-project expenses |
- |
10,133 |
||||||
Total |
2,067,543 |
1,718,082 |
||||||
Operating profit/(loss) |
418,892 |
(1,161,457 |
) |
|||||
Other income (expense): | ||||||||
Interest expense |
(48,849 |
) |
(363 |
) |
||||
Interest income |
12,783 |
17,470 |
||||||
Other income |
118,902 |
- |
||||||
Total |
82,836 |
17,107 |
||||||
Income (loss) before income taxes |
501,728 |
(1,144,350 |
) |
|||||
Income tax expense |
- |
— |
||||||
Income (loss) |
501,728 |
(1,144,350 |
) |
|||||
Add: net income attributable to noncontrolling interests |
1,218,905 |
889,527 |
||||||
Net loss attributable to common stockholders of SG Blocks, Inc. |
$ |
(717,177 |
) |
$ |
(2,033,877 |
) |
||
Net loss per share attributable to SG Blocks, Inc. | ||||||||
Basic and diluted |
$ |
(0.06 |
) |
$ |
(0.23 |
) |
||
Weighted average shares outstanding: | ||||||||
Basic and diluted |
11,998,334 |
8,744,469 |
||||||
SG BLOCKS, INC. AND SUBSIDIARIES |
||||||||
Condensed Consolidated Statements of Cash Flows |
||||||||
For the |
For the |
|||||||
Three Months Ended |
Three Months Ended |
|||||||
31-Mar-22 |
31-Mar-21 |
|||||||
(Unaudited) |
||||||||
Cash flows from operating activities: |
||||||||
Net income (loss) |
$ |
501,728 |
$ |
(1,144,350 |
) |
|||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
||||||||
Depreciation expense |
104,825 |
91,190 |
||||||
Amortization of intangible assets |
41,823 |
40,407 |
||||||
Amortization of deferred license costs |
10,196 |
10,196 |
||||||
Amortization of Debt Issuance Costs |
8,628 |
- |
||||||
Bad Debt Expense |
7,024 |
- |
||||||
Interest income on long-term note receivable |
(9,247 |
) |
(9,247 |
) |
||||
Stock-based compensation |
689,090 |
286,186 |
||||||
Loss on asset disposal |
241 |
- |
||||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
486,117 |
(581,299 |
) |
|||||
Contract assets |
3,768,133 |
(599,441 |
) |
|||||
Inventories |
219,483 |
(155,935 |
) |
|||||
Prepaid expenses and other current assets |
(128,592 |
) |
(679,540 |
) |
||||
Right of use asset |
109,308 |
97,846 |
||||||
Accounts payable and accrued expenses |
(2,092,971 |
) |
(2,062,776 |
) |
||||
Contract liabilities |
(91,479 |
) |
(641,412 |
|||||
Due to affiliates |
(264,451 |
) |
(863,151 |
) |
||||
Lease liability |
(102,829 |
) |
(97,342 |
) |
||||
Net cash provided by (used in) operating activities |
3,257,027 |
(2,183,116 |
) |
|||||
Cash flows from investing activities: |
||||||||
Purchase of property, plant and equipment |
(922,865 |
) |
(862,090 |
) |
||||
Purchase of intangible asset |
- |
(42,500 |
) |
|||||
Proceeds from sale of equipment |
760 |
- |
||||||
Repayment of promissory note |
(100,000 |
) |
- |
|||||
Payment on assumed liability of acquired assets |
- |
(85,798 |
) |
|||||
Project Development Costs |
(338,885 |
) |
- |
|||||
Investment in non-marketable securities |
(500,000 |
) |
- |
|||||
Net cash (used in) investing activities |
(1,860,990 |
) |
(990,388 |
) |
||||
Cash flows from financing activities: |
||||||||
Proceeds from conversion of warrants to common stock |
- |
703,438 |
||||||
Distribution paid to NCI |
(1,274,000 |
) |
- |
|||||
Net cash (used in) provided by financing activities |
(1,274,000 |
) |
703,438 |
|||||
Net increase (decrease) in cash and cash equivalents |
122,037 |
(2,470,066 |
) |
|||||
Cash and cash equivalents - beginning of period |
13,024,381 |
13,010,356 |
||||||
Cash and cash equivalents - end of period |
$ |
13,146,418 |
$ |
10,540,290 |
||||