Q1 2023 Revenue Increases 217% to $10.7
Million
Applied UV, Inc. (NasdaqCM: AUVI) (“Applied UV” or the
“Company”), a global leading provider of patented, scientifically
and clinically proven surface and air pathogen elimination and
disinfection technologies (fixed, mobile, and HVAC), LED lighting
products and premium hotel furnishings, announces today its
financial results for Q1 2023.
Recent Business
Highlights
- Q1 2023 Revenue of $10.7M an increase of 217% over Q1
2022
- Completed the 6th strategic acquisition in 18 months
doubling the size of the Company
- Investing in Machine Learning and AI systems to enhance our
IAQ and Food Security technologies
- PURO patent pending next generation FighterFlex pathogen
elimination technology for facilities HVAC systems expected to
launch in late Q3 allowing for international cross market
sales
- Addressing global push to improve Indoor Air Quality (IAQ)
and Food Security technologies
- Crossing the Bridge to the Internet of Things (“IoT”) -
Company expects to incorporate and launch PURONet indoor air
monitoring software across all air disinfection devices within the
Company’s portfolio
- Launched “Farm to Table” Food Preservation and Security
R&D Program addressing the UN Chief Economist estimated Global
$400 billion a year crop loss due to spoilage
- Expanded Strategic Relationship with Canon to include Canon
Financial Services with end user leasing programs
- Cross Marketing Sales Initiatives beginning to ramp with
Multi-million Dollar Order from major Real Estate
Developer
- Global distribution reach now includes 89 dealers and
distributors in 52 countries, 47 manufacturing representatives and
19 U.S. based internal sales representatives
- Launched a research collaboration with Johnson Controls,
USHIO and Applied UV subsidiary Puro Lighting to study the efficacy
and safety of filtered far UV-C disinfection technology (222 Nm
UV}
Max Munn, founder and recently appointed CEO of Applied UV,
Inc., commented, “Q1 2023 was a transformative and pivotal quarter
for Applied UV. Cross-market selling opportunities between
MunnWorks and LED Supply Co are beginning to ramp as a result of
the acquisition, and we fully expect to see further expansion
throughout the remainder of the year. Our expectation for realizing
synergies across the entire business segments remains intact. Our
collaboration with Canon is gaining momentum as we just completed
the first lease for one of our customers, and we expect to announce
additional strategic initiatives expanding our global reach and
market share in food preservation in Q3 2023. Through these
strategic transactions and partnerships, we have positioned the
Company as a fully integrated solutions provider offering total air
and surface pathogen elimination platforms and specialty LED
lighting and custom premium furnishings for multiple sectors with
total top line revenue expected of approximately $45-50 million for
2023.
Munn continued, “As we stated in Q4 2022, we recognized the
accelerating shift in demand for a complete “systems within a
system” solution that plays a more permanent role in improving
Indoor Air Quality (IAQ), standards that were outlined by the U.S.
Government last year. Increasingly, enterprises are seeking
end-to-end systems across entire facilities that include software
monitoring capabilities. Accordingly, we pivoted our marketing,
merger and acquisition strategy, and research and development
activities as well as accelerated our IoT development,
manufacturing processes and next generation product development
roadmap.”
Munn further stated, “Hospitality and LED Supply Co continues to
rebound rapidly as hotels and developers resume schedules of new
construction, project and building upgrades, remodels and repair
and maintenance activities that were postponed due to the pandemic
and subsequent closing of the U.S. economy. Hotels and developers
are seeking onshore manufacturing alternatives to mitigate supply
chain and geopolitical risks, especially in China, and we have
established well-performing manufacturing capabilities that can
meet this demand. Our acquisition of VisionMark further enables us
to design-assist, fabricate, deliver and install high-end hotel
living space furnishings and expands our reach into the luxury
hospitality market, new construction multi-family development
projects and retrofits beyond our core mirror business.”
Munn concluded, “Integration of the six companies we acquired
continues, and we are beginning to experience the expected cost
savings across all our divisions. Looking ahead in pathogen
elimination and disinfection, we are building a pipeline of new
opportunities across a number of verticals including, food
preservation, cannabis, wineries and education, which we believe
will drive future growth and improved financial results.”
Segments
The Company has three reportable segments: the design,
manufacture, assembly and distribution of disinfecting pathogen
elimination systems for use in food preservation, healthcare,
hospitality, education and public spaces, cannabis, correctional
facilities, and commercial, municipal and residential markets
(Disinfection/Healthy Building Technologies segment); the
manufacture of fine mirrors and custom furniture specifically for
the hospitality industry (Hospitality segment); and the Corporate
Segment, which includes expenses primarily related to corporate
governance, such as board fees, legal expenses, audit fees,
executive management, and listing costs.
Q1 2023 Summary Financial Results
Net Sales
Net sales of $10.7 million represented an increase of $7.3
million, or 217.5% for the three months ended March 31, 2023, as
compared to net sales of $3.4 million for the three months ended
March 31, 2022. This increase was primarily attributable to the
Hospitality segment, which increased $4.7 million, largely as a
result of the strategic acquisition on March 25, 2022, of the
operations of VisionMark in Brooklyn, NY, which contributed $3.9
million of the increase, and also due to the organic growth of our
legacy MunnWorks business, which contributed $0.8 million of the
increase. The Disinfection/Healthy Building Technologies segment
increased $2.6 million, primarily due the acquisition of PURO
Lighting and LED Supply Co. on January 26, 2023.
Gross Profit
Gross profit increased $0.8 million from $1.1m, or 34% vs.
sales, for the three months ended March 31, 2022, to $1.9m, or 18%
vs. sales for the three months ended March 31, 2023. The decrease
from 34% to 18% was driven primarily by the higher sales mix of our
Hospitality segment as compared to the same period last year. For
Q1 2023, Hospitality accounted for 57% of total sales for the
quarter as compared to 42% in the prior year quarter. The last of
the lower margin projects that we acquired that were in process
from the VisionMark asset acquisition have been substantially
completed. Additionally, Q1 2023 was impacted by “one-time” lower
margins in our Disinfection/Healthy Building Technologies segment
as we sold approximately half of our consumer Airocide inventory at
special discounted pricing.
Operating Expenses
Selling, General, and
Administrative – S,G&A costs for the three months ended
March 31, 2023, increased to $5.3 million as compared to $3.1
million for the three months ended March 31, 2022. This increase of
$2.2 million was driven primarily by the expansion of the
Disinfection/Healthy Building Technologies segment with the
acquisitions of PURO Lighting and LED Supply Co. These acquisitions
accounted for $1.4 million of the increase. In Corporate, legal
expenses increased $0.6 million primarily as the result of a
“one-time” arbitration case.
Operating Loss
The Company recorded an operating loss of $3.5 million for the
three months ended March 31, 2023, compared to an operating loss of
$3.1 million for the three months ended March 31, 2022. The
increase of $0.4 million in the operating loss was primarily due to
the decrease in the gross profit percentage year over year as
explained above, and the impairment charge of $1.1 million that was
incurred last year. On a percentage basis, the operating loss
improved to 33% in the first quarter of 2023 as compared to 94% in
the first quarter of 2022.
Other Income/Expense
The Company incurred interest expense of $0.4 million due to the
borrowings of Streeterville Capital and Pinnacle Bank., primarily
to help fund the acquisitions of PURO Lighting and LED Supply Co.
and to also fund additional working capital requirements.
The Company incurred a non-cash loss on change in fair market
value of contingent consideration of $0.6 million because of the
make whole provision within the PURO Lighting and LED Supply Co.
merger agreement. The change related to the decrease in our stock
price from the date of acquisition of January 26, 2023, as compared
to March 31, 2023.
Net Loss
The Company recorded a net loss of $4.5 million for the three
months ended March 31, 2023, compared to a net loss of $1.6 million
for the three months ended March 31, 2022. The increase of $2.9
million in the net loss was mainly due to the $1.4 million increase
in S,G&A costs incurred as a result of the acquisitions of PURO
Lighting and LED Supply Co. in support of the expansion to the
Disinfection/Healthy Building Technologies segment; the $0.6
million increase in Corporate legal expenses largely as a result of
a “one-time” arbitration case and the non-cash loss on change in
fair market value of contingent consideration of $0.6 million
because of the make whole provision within the PURO Lighting and
LED Supply Co. merger agreement (see comment above in Other
Income/Expense).
Liquidity
On July 1, 2022, the Company filed a $50,000,000 mixed use shelf
registration (Form S‑3) and entered into an At The Market sales
agreement ("ATM") with Maxim Group, LLC for a total of $9,000,000,
as a readily available source of funding if needed. During the year
ended December 31, 2022, the Company sold 804,811 ATM shares
through the sales agent with gross proceeds of $964,083. In
connection with the sale of these ATM Shares, the compensation paid
by the Company to the Sales Agent was $28,922. As of March 31,
2023, an additional 1,764,311 shares have been sold for gross
proceeds of $2,314,860, and the compensation paid by the Company to
the Sales Agent was $69,446, leaving a balance of $5,721,057 on the
ATM facility. The shelf registration statement will expire on July
12, 2025.
The Company has filed a Registration Statement with the
Securities and Exchange Commission with its plans to commence a
public offering of its securities for an amount that satisfies the
Company’s’ current working capital needs.
The Company believes our sources of liquidity and capital will
be sufficient to finance our continued operations and growth
strategy.
Conference Call/Webcast Information
Applied UV's management team will host an investor conference
call and live webcast on May 23, 2023, at 9:00 am ET. Investors can
access the live webcast via a link on Applied UV's web site or at
https://www.webcaster4.com/Webcast/Page/2626/48458 . For those
planning to participate on the call, please dial +1-888-506-0062
(for domestic calls), or +1-973-528-0011 (for international calls),
passcode 837349.
A replay of the conference call will be available online on the
Applied UV web site, and a dial-in replay will be available for one
week following the call at +1-877-481-4010 (for domestic calls) or
+1-919-882-2331 (for international calls), replay passcode
48458.
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About Applied UV
Applied UV, Inc. (“AUVI”) provides proprietary surface and air
pathogen elimination and disinfection technology focused on
Improving Indoor Air Quality (IAQ), specialty LED lighting and
luxury mirrors and commercial furnishings all of which serves
clients globally in both the commercial and retail segments.
Our products address the needs in the healthcare, hospitality,
food preservation, cannabis, education, winery vertical markets.
The Company has established strategic manufacturing partnerships
and alliances including Canon Virginia Inc, Acuity Brands Lighting,
Johnson Controls International, Siemens, W.W. Grainger, and a
global network of 89 dealers and distributors in 52 countries,
offering a complete suite of products through its two wholly owned
subsidiaries - SteriLumen, Inc. (“SteriLumen”) and Munn Works, LLC
(“MunnWorks”). SteriLumen owns brands and markets a portfolio of
clinically proven products utilizing advanced UVC Carbon, Broad
Spectrum UVC LED’s, Photo-catalytic oxidation (PCO) pathogen
elimination technology, branded Airocide ™, Scientific Air™,
Airoclean™ 420, Lumicide™, PUROHealth, PURONet, and LED Supply Co.
SteriLumen’s proprietary platform suite of patented, surface and
air technologies offers, the most complete pathogen disinfection
platform including mobile, fixed and HVAC systems and software
solutions interconnecting its entire portfolio suite into the IoT
allowing customers to implement, manage and monitor IAQ measures
recommended by the EPA across any enterprise. SteriLumen’s
Lumicide™ platform applies the power of ultraviolet light (UVC) to
destroy pathogens automatically, addressing the challenge of
healthcare-acquired infections (HAIs) in several patented designs
for infection control in healthcare. LED Supply Co, is a
full-service, wholesale distributor of LED lighting and controls
used throughout facilities in North America.
MunnWorks manufactures and sells custom luxury and backlit
mirrors, and conference room and living spaces furnishings.
Our global list of Fortune 100 end users including Kaiser
Permanente, NY Health+Hospitals, MERCY Healthcare, Baptist Health
South Florida, New York City Transit, Samsung, JB Hunt, Boston Red
Sox’s Fenway Park, JetBlue Park, France’s Palace of Versailles,
Whole Foods, Del Monte Foods, U.S. Department of Veterans Affairs,
Marriott, Hilton, Four Seasons and Hyatt, and more. For information
on Applied UV, Inc., and its subsidiaries, please visit
https://www.applieduvinc.com.
Forward-Looking Statements
The information contained herein may contain “forward‐looking
statements.” Forward‐looking statements reflect the current view
about future events. When used in this press release, the words
“anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,”
“plan,” or the negative of these terms and similar expressions, as
they relate to us or our management, identify forward‐looking
statements. Such statements include, but are not limited to,
statements contained in this press release relating to the view of
management of Applied UV concerning its business strategy, future
operating results and liquidity and capital resources outlook.
Forward‐looking statements are based on the Company’s current
expectations and assumptions regarding its business, the economy
and other future conditions. Because forward–looking statements
relate to the future, they are subject to inherent uncertainties,
risks and changes in circumstances that are difficult to predict.
The Company’s actual results may differ materially from those
contemplated by the forward‐looking statements. They are neither
statements of historical fact nor guarantees of assurance of future
performance. We caution you therefore against relying on any of
these forward‐looking statements. Factors or events that could
cause the Company’s actual results to differ may emerge from time
to time, and it is not possible for the Company to predict all of
them. The Company cannot guarantee future results, levels of
activity, performance, or achievements. Except as required by
applicable law, including the securities laws of the United States,
the Company does not intend to update any of the forward‐looking
statements. References and links to websites have been provided as
a convenience, and the information contained on such websites is
not incorporated by reference into this press release.
Applied UV, Inc. and
Subsidiaries
Consolidated Balance
Sheets
As of March 31, 2023 and
December 31, 2022
2023
2022
Assets
Current Assets
Cash and cash equivalents
$
2,081,886
$
2,734,485
Accounts receivable, net of allowance for
doubtful accounts
4,758,883
1,508,239
Costs and estimated earnings in excess of
billings
2,087,553
1,306,762
Inventory, net
8,609,494
5,508,086
Vendor deposits
1,313,244
75,548
Prepaid expense and other current
assets
2,208,058
1,187,223
Total Current Assets
21,059,118
12,320,343
Property and equipment, net of accumulated
depreciation
1,243,800
1,133,468
Other assets
-
153,000
Goodwill
17,809,235
3,722,077
Other intangible assets, net of
accumulated amortization
28,629,853
11,354,430
Right of use assets
4,211,326
4,044,109
Total Assets
$
72,953,332
$
32,727,427
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable and accrued expenses
$
8,855,698
$
2,982,760
Contingent consideration
18,995,673
-
Deferred revenue
6,555,496
4,730,299
Due to landlord
244,532
229,234
Warrant liability
7,685
9,987
Financing lease obligations
47,608
33,712
Operating lease liability
1,645,250
1,437,308
Notes payable, net
4,469,196
2,098,685
Total Current Liabilities
40,821,138
11,521,985
Long‑Term Liabilities
Due to landlord ‑ less current portion
325,557
393,230
Notes payable, net ‑ less current
portion
5,448,572
765,144
Financing lease obligations ‑ less current
portion
160,871
158,070
Operating lease liability ‑ less current
portion
2,625,952
2,655,103
Total Long‑Term Liabilities
8,560,952
3,971,547
Total Liabilities
49,382,090
15,493,532
Redeemable Preferred Stock
Preferred Stock, Series B Cumulative
Perpetual, $0.0001 par value, 1,250,000
shares authorized, 1,250,000 shares issued
and outstanding as of March 31, 2023 and no shares issued and
outstanding as of December 31, 2022
3,712,500
-
Preferred Stock, Series C Cumulative
Perpetual, $0.0001 par value, 2,500,000
shares authorized, 399,996 shares issued
and outstanding as of March 31, 2023 and no shares issued and
outstanding as of December 31, 2022
1,063,989
-
Total Redeemable Preferred Stock
4,776,489
-
Equity
Preferred Stock, Series A Cumulative
Perpetual, $0.0001 par value, 1,250,000
shares authorized, 552,000 shares issued
and outstanding as of March 31, 2023 and December 31, 2022.
55
55
Preferred Stock, Series X, $0.0001 par
value, 10,000 shares authorized,
10,000 shares issued and outstanding as of
March 31, 2023 and December 31, 2022 respectively
1
1
Common Stock $0.0001 par value,
150,000,000 shares authorized 19,370,758 shares issued and
19,257,273 shares outstanding as of March 31, 2023 and 13,676,450
shares issued and 13,562,965 shares outstanding as of December 31,
2022
1,937
1,368
Additional paid‑in capital
52,084,048
45,619,670
Treasury stock at cost, 113,485 shares,
respectively
(149,686
)
(149,686
)
Accumulated deficit
(33,141,602
)
(28,237,513
)
Total Equity
18,794,753
17,233,895
Total Liabilities, Redeemable Preferred
Stock and Stockholders' Equity
$
72,953,332
$
32,727,427
The accompanying notes are an integral part of these unaudited
interim consolidated financial statements.
Applied UV, Inc. and
Subsidiaries
Consolidated Statements of
Operations
For the Three Months Ended
March 31, 2023 and 2022
2023
2022
Net Sales
$
10,654,483
$
3,356,090
Cost of Goods Sold
8,732,097
2,206,991
Gross Profit
1,922,386
1,149,099
Operating Expenses
Research and development
189,210
59,314
Selling General and Administrative
Expenses
5,264,379
3,101,226
Loss on impairment of goodwill and
intangibles
-
1,138,203
Total Operating Expenses
5,453,589
4,298,743
Operating Loss
(3,531,203
)
(3,149,644
)
Other Income (Expense)
Change in Fair Market Value of Warrant
Liability
2,302
43,828
Interest expense
(392,939
)
(4,056
)
Loss on change in Fair Market Value of
Contingent Consideration
(619,999
)
(240,000
)
Gain on Settlement of Contingent
Consideration
-
1,700,000
Total Other Income (Expense)
(1,010,636
)
1,499,772
Loss Before Provision for Income Taxes
(4,541,839
)
(1,649,872
)
Benefit from Income Taxes
-
-
Net Loss
$
(4,541,839
)
$
(1,649,872
)
Net Loss attributable to common
stockholders:
Dividends to preferred shareholders
(362,250
)
(362,250
)
Net Loss attributable to common
stockholders
(4,904,089
)
(2,012,122
)
Basic and Diluted Loss Per Common
Share
$
(0.28
)
$
(0.16
)
Weighted Average Shares Outstanding ‑
basic and diluted
17,328,564
12,928,174
The accompanying notes are an integral part of these unaudited
interim consolidated financial statements.
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version on businesswire.com: https://www.businesswire.com/news/home/20230522005690/en/
Applied UV Inc. Max Munn Applied UV Founder, CEO &
Director irinfo@applieduvinc.com
Brett Maas, Managing Principal Hayden IR brett@haydenir.com
(646) 536-7331
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