PORTLAND, Ore., Jan. 14, 2022 /PRNewswire/ -- Schmitt Industries,
Inc. (NASDAQ: SMIT) (the "Company" or "Schmitt") today announced
its operating results for the fiscal quarter ended November 30, 2021. The operating results for the
three and six months ended November 30,
2021 and 2020 include financial results from Schmitt's
July 9, 2020 acquisition of Ample
Hills Creamery ("Ample Hills").
Highlights of the three and six months ended November 30, 2021
- Consolidated revenues increased $932,253, or 45.9%, to $2,961,965 for the three months ended
November 30, 2021, as compared to
$2,029,712 for the three months ended
November 30, 2020. Consolidated
revenues increased $3,183,943, or
90.0%, to $6,721,140 for the six
months ended November 30, 2021, as
compared to $3,537,197 for the six
months ended November 30, 2020.
- Ice Cream Segment revenue increased $820,627, or 70.8%, to $1,979,616 for the three months ended
November 30, 2021, as compared to
$1,158,989, for the three months
ended November 30, 2020. Ice Cream
Segment revenue increased $3,274,962,
or 197.2%, to $4,935,371 for the six
months ended November 30, 2021, as
compared to $1,660,409 for the six
months ended November 30, 2020. The
increase was primarily due to the inclusion of Ice Cream Segment
revenue for the entire six months ended November 30, 2021 versus partial inclusion for
the six months ended November 30,
2020, as the acquisition of Ample Hills occurred on
July 9, 2020. In addition, the
Company opened an additional retail location on May 28, 2021.
- Measurement Segment revenue increased $111,626, or 12.8%, to $982,349 for the three months ended November 30, 2021, as compared to $870,723 for the three months ended November 30, 2020. Measurement Segment revenue
decreased $91,019, or 4.8%, to
$1,785,769 for the six months ended
November 30, 2021, as compared to
$1,876,788 for the six months ended
November 30, 2020. For the three
months ended November 30, 2021, the
increase is primarily driven by an increase in Acuity and Xact
product revenue of $119,208 and
$25,638, respectively, offset by a
decrease in Xact monitoring revenue of $28,625, or 6.8%.
- Gross margin increased to 54.2% for the three months ended
November 30, 2021, as compared to the
three months ended November 30, 2020
of 47.4%. Gross margin increased to 59.7%, for the six months ended
November 30, 2021, as compared to the
six months ended November 30, 2020 of
44.4%. The Company's gross margin was driven by improved
performance in the Ice Cream Segment due to higher factory
utilization and production efficiencies, as well as a product mix
shift in Measurement Segment.
- Operating expenses increased $1,058,077, or 34.0%, to $4,167,470 for the three months ended
November 30, 2021, as compared to
$3,109,393 for the three months ended
November 30, 2020. Operating expenses
increased $2,968,692, or 55.6%, to
$8,307,421 for the six months ended
November 30, 2021, as compared to
$5,338,729 for the six months ended
November 30, 2020. The increase was
primarily due to the inclusion of the Ample Hills business,
acquired in July 2020, and includes
approximately $350,000 in
non-recurring costs.
- On November 10, 2021, the Company
closed on the sale of its building located at 2451 NW
28th Avenue, Portland,
OR 97210 for $5,100,000 with
net proceeds of $4,723,346. The
Company recorded a gain on sale of property equipment totaling
$4,598,095 on its consolidated
statement of operations.
Net income was $2,187,912, or
$0.57, per fully diluted share, for
the three months ended November 30,
2021, as compared to net loss of ($2,366,469), or ($0.63), per fully diluted share, for the three
months ended November 30, 2020. Net
income was $1,142,873, or
$0.30, per fully diluted share, for
the six months ended November 30,
2021, as compared to net loss of ($2,215,810), or ($0.59), per fully diluted share, for the six
months ended November 30, 2020.
- The Company finished the quarter ended November 30, 2021 with $4,572,774 in cash, as compared to $4,032,690 for the year ended May 31, 2021.
- On November 12, 2021, the Company
signed a retail lease agreement in conjunction with its plans to
open a new location in New York's
Upper West Side. The store is scheduled to open in the spring of
2022.
Michael Zapata, Schmitt's
Chairman and Chief Executive Officer, commented, "We continue to
make progress on our Schmitt business lines with increased revenue
growth and the launching of new products for both Acuity and Xact.
For Ample Hills, we enter the planning season with a focus on plans
for an exciting 2022, where we expect continued expansion for our
retail and wholesale segment. As a starting point, we were pleased
to sign the lease for an iconic Upper West Side location in
New York with an expected store
opening in the Spring of 2022. We are also expanding wholesale and
are excited to now be carried in New
York's D'Agostino's and Gristedes locations as well as
Central Market locations in Texas.
These focused expansions allow us to further serve our communities
as we share Ample Hills joy with our neighborhoods.
"For our SMS business lines the new product launches by Acuity
and Xact combined with a stronger customer environment is showing a
positive impact on revenue. This is an important year for both
business lines with a focus on revenue generation and cost
management. From a cash management perspective, we had roughly
$350k in one-time costs this quarter
from continued spending for our financial and IT system support
structures. For funding future growth, we were pleased to complete
the $5.1m sale of the 28th
Street building that was previously used by the balancer business
that we sold in 2019. We are also currently exploring the
sale/leaseback for our Nicolai
Street building."
Summary data for the three months November 30, 2021 and November 30, 2020
|
|
Three Months Ended
|
|
|
|
|
November
30,
|
|
Change
|
|
|
|
|
2021
|
|
2020
|
|
$
|
|
%
|
|
|
Net sales
|
|
$
|
2,961,965
|
|
|
100%
|
|
|
|
$
|
2,029,712
|
|
|
|
100.0%
|
|
|
$
|
932,253
|
|
45.9%
|
|
|
Gross
margin
|
|
|
54.2%
|
|
|
-
|
|
|
|
|
47.4%
|
|
|
|
-
|
|
|
|
-
|
|
-
|
|
|
Operating
expenses
|
|
$
|
4,167,470
|
|
|
140.7%
|
|
|
|
$
|
3,109,393
|
|
|
|
153.2%
|
|
|
$
|
1,058,077
|
|
34.0%
|
|
|
Net income
(loss)
|
|
$
|
2,187,912
|
|
|
73.9%
|
|
|
|
$
|
(2,366,469)
|
|
|
|
(116.6%)
|
|
|
$
|
4,554,381
|
|
192.5%
|
|
|
Net income (loss) per
common share, diluted
|
|
$
|
0.57
|
|
|
|
|
|
|
$
|
(0.63)
|
|
|
|
-
|
|
|
$
|
-
|
|
-
|
|
|
Summary data for the six months November 30, 2021 and November 30, 2020
|
|
Six Months
Ended
|
|
|
|
|
November
30,
|
|
Change
|
|
|
|
|
2021
|
|
2020
|
|
$
|
|
%
|
|
|
Net sales
|
|
$
|
6,721,140
|
|
|
100.0%
|
|
|
|
$
|
3,537,197
|
|
|
|
100.0%
|
|
|
$
|
3,183,943
|
|
90.0%
|
|
|
Gross
margin
|
|
|
59.7%
|
|
|
-
|
|
|
|
|
44.4%
|
|
|
|
-
|
|
|
|
-
|
|
-
|
|
|
Operating
expenses
|
|
$
|
8,307,421
|
|
|
123.6%
|
|
|
|
$
|
5,338,729
|
|
|
|
150.9%
|
|
|
$
|
2,968,692
|
|
55.6%
|
|
|
Net income
(loss)
|
|
$
|
1,142,873
|
|
|
17.0%
|
|
|
|
$
|
(2,215,810)
|
|
|
|
(62.6%)
|
|
|
$
|
3,358,683
|
|
151.6%
|
|
|
Net income (loss) per
common share, diluted
|
|
$
|
0.30
|
|
|
-
|
|
|
|
$
|
(0.59)
|
|
|
|
-
|
|
|
$
|
-
|
|
-
|
|
|
Reconciliation of Adjusted EBITDA for the Three Months Ended
November 30, 2021 and 2020
Three
Months Ended November 30,
|
|
|
2021
|
|
|
|
2020
|
|
Income (loss)
before income taxes
|
$
|
2,190,687
|
|
|
$
|
(2,364,832)
|
|
Depreciation
and amortization
|
|
145,118
|
|
|
|
100,724
|
|
EBITDA
|
$
|
2,335,805
|
|
|
$
|
(2,264,108)
|
|
|
|
|
|
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
|
|
Gain on
sale of property and equipment
|
|
(4,598,095)
|
|
|
|
-
|
|
Adjustment to bargain purchase gain
|
|
-
|
|
|
|
82,103
|
|
Stock-based compensation
|
|
42,442
|
|
|
|
68,549
|
|
Income
from discontinued product line
|
|
-
|
|
|
|
(18,852)
|
|
Adjusted
EBITDA
|
$
|
(2,219,848)
|
|
|
$
|
(2,132,308)
|
|
Reconciliation of Adjusted EBITDA for the Six Months Ended
November 30, 2021 and 2020
Six Months Ended November 30,
|
|
|
2021
|
|
|
|
2020
|
|
Income (loss)
before income taxes
|
$
|
1,149,223
|
|
|
$
|
(2,618,840)
|
|
Depreciation
and amortization
|
|
294,597
|
|
|
|
187,114
|
|
EBITDA
|
$
|
1,443,820
|
|
|
$
|
(2,431,726)
|
|
|
|
|
|
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
|
|
Gain on
sale of property and equipment
|
|
(4,598,095)
|
|
|
|
-
|
|
Bargain
purchase gain
|
|
-
|
|
|
|
(1,189,512)
|
|
Stock-based compensation
|
|
69,369
|
|
|
|
251,371
|
|
Income
from discontinued product line
|
|
-
|
|
|
|
(57,139)
|
|
Transaction fees and reorganization expenses
|
|
-
|
|
|
|
125,167
|
|
Adjusted
EBITDA
|
$
|
(3,084,906)
|
|
|
$
|
(3,301,839)
|
|
Reconciliation of Adjusted Net income (Loss) and Non-GAAP EPS
for the Three Months Ended November 30,
2021 and 2020:
Three Months Ended November 30,
|
|
|
2021
|
|
|
|
2020
|
|
Net income
(loss)
|
$
|
2,187,912
|
|
|
$
|
(2,366,469)
|
|
Adjusted
for:
|
|
|
|
|
|
|
|
Gain on sale of property and
equipment
|
|
(4,598,095)
|
|
|
|
-
|
|
Adjustment to bargain
purchase gain
|
|
-
|
|
|
|
82,103
|
|
Stock-based
compensation
|
|
42,442
|
|
|
|
68,549
|
|
Income from discontinued
product line
|
|
-
|
|
|
|
(18,852)
|
|
Tax effect of
adjustments
|
|
(1,138,913)
|
|
|
|
32,950
|
|
Adjusted loss
(Non-GAAP)
|
$
|
(3,506,654)
|
|
|
|
(2,201,719)
|
|
Non-GAAP loss per
fully diluted share
|
$
|
(0.92)
|
|
|
$
|
(0.59)
|
|
Reconciliation of Adjusted Net Income (Loss) and Non-GAAP EPS
for the Six Months Ended November 30,
2021 and 2020:
Six Months Ended November 30,
|
|
|
2021
|
|
|
|
2020
|
|
Net income
(loss)
|
$
|
1,142,873
|
|
|
$
|
(2,215,810)
|
|
Adjusted
for:
|
|
|
|
|
|
|
|
Gain on sale of property and
equipment
|
|
(4,598,095)
|
|
|
|
-
|
|
Bargain purchase
gain
|
|
-
|
|
|
|
(1,189,512)
|
|
Transaction fees and
re-organization expenses
|
|
-
|
|
|
|
125,167
|
|
Stock-based
compensation
|
|
69,369
|
|
|
|
251,371
|
|
Income from discontinued
product line
|
|
-
|
|
|
|
(57,139)
|
|
Tax effect of
adjustments
|
|
(1,132,182)
|
|
|
|
(217,528)
|
|
Adjusted loss
(Non-GAAP)
|
$
|
(4,518,035)
|
|
|
$
|
(3,303,451)
|
|
Non-GAAP loss per
fully diluted share
|
$
|
(1.18)
|
|
|
$
|
(0.88)
|
|
Use of Non-GAAP Financial Measures by Schmitt
Industries
This release presents the non-GAAP financial measures "Adjusted
EBITDA", "Adjusted net loss (Non-GAAP)", and "Non-GAAP loss per
fully diluted share." The most directly comparable measure for
these non-GAAP financial measures are net income and basic and
diluted net income per share. The Company presents adjusted EBITDA
after excluding the bargain purchase gain related to the Ample
Hills acquisition, related transaction and re-organization
expenses, income from discontinued product line and stock-based
compensation.
About Schmitt Industries
Schmitt is a holding company owning subsidiaries engaged in
diverse business activities. The Company was originally
incorporated under the laws of British
Columbia, Canada, in 1984 and was reincorporated under the
laws of the State of Oregon in
1995. Schmitt's operating businesses include propane tank
monitoring solutions, precision measurement solutions and ice cream
production and distribution. The Company operates as two reportable
segments: the Measurement Segment ("SMS") and the Ice Cream
Segment, which is comprised of Ample Hills Creamery, a beloved ice
cream manufacturer and retailer based in Brooklyn, NY.
FORWARD-LOOKING STATEMENTS
This document may contain forward-looking statements made
pursuant to the Private Securities Litigation Reform Act of 1995.
These statements are not guarantees of future performance and
involve risks and uncertainties that are difficult to predict.
Actual outcomes and results may differ materially from what is
expressed or forecasted in such forward-looking statements due to
numerous factors. A complete discussion of the risks and
uncertainties that may affect Schmitt's business, including the
business of its subsidiary, is included in "Risk Factors" in the
Company's most recent Annual Report on Form 10-K as filed by the
Company with the Securities and Exchange Commission.
For further information regarding risks and uncertainties
associated with the Company's business, please refer to Schmitt's
SEC filings, including, but not limited to, its Forms 10-K, 10-Q
and 8-K.
The forward-looking statements in this release speak only as of
the date on which they were made, and the Company does not
undertake any obligation to update any forward-looking statement to
reflect events or circumstances after the date of this release, or
for changes to this document made by wire services or internet
service providers.
For more information
contact:
|
Michael R. Zapata,
President and CEO
Philip Bosco, CFO and
Treasurer
(503) 227-7908 or
visit our website at www.schmitt-ind.com
|
|
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SOURCE Schmitt Industries, Inc.