PORTLAND, Ore., April 14,
2022 /PRNewswire/ -- Schmitt Industries, Inc.
(NASDAQ: SMIT) (the "Company" or "Schmitt") today announced its
results for the third quarter of fiscal year 2022. In addition, the
Company announced its intention to focus on Ample Hills Creamery
("Ample Hills") as its core business. This focus will enable
Schmitt to accelerate its Ample Hills growth strategy while saving
costs and focusing resources on Ample Hills as an independent
company.
"The Board and I are excited about the potential for Ample
Hills. Given this potential and in line with our long-term strategy
to increase shareholder value, we believe a strategic focus on the
Ample Hills business will allow us to accelerate growth," said
Michael R. Zapata, Executive
Chairman, President and CEO of Schmitt. "Even in the seasonally
slow months for the Ample Hills business we are seeing results from
our increased focus," Zapata added.
Ample Hills has signed four new leases, including the recently
announced Upper West Side location in Manhattan, New York. The Company will provide
further details on these new locations in the coming weeks and
months as we move towards opening dates.
In conjunction with the focus on Ample Hills, Schmitt is
announcing a strategic review of its Schmitt Measurement Systems
("SMS") business lines based in Portland,
Oregon.
"In line with the Board's announcement, we are pursuing a
strategic review of both the Xact and Acuity business lines," said
Mr. Zapata. ""The purpose of this review is to identify the right
strategy and structure for each of the SMS businesses and ensure
strong support for our employees, customers, and business partners
- our business lines have done an incredible job navigating the
challenges of the unprecedented Covid-19 environment, and we are
committed to supporting their future potential as we explore the
best vehicle for their continued success."
Schmitt will provide further details when available on the
transition plan. The full transition of Ample Hills and SMS is
expected to take place in the 2022 calendar year.
FY22 3Q Earnings Highlights
Schmitt announced its operating results for the fiscal quarter
ended February 28, 2022. Highlights
and year-over-year changes include:
- Consolidated revenues increased $180,469, or 10.8%, to $1,848,913.
- Ice Cream Segment revenue increased $351,190, or 56.5%, to $972,920.
- Gross margin increased to 50.7% for the three months ended
February 28, 2022, as compared to
49.8% for the three months ended February
28, 2021.
- Operating expenses decreased $12,491, or 0.4% to $3,323,159.
- Operating loss was ($2,386,322)
for the three months ended February 28,
2022, as compared to ($2,504,460) for the three months ended
February 28, 2021.
- Net loss was ($893,244), or
($0.24), per fully diluted share, for
the three months ended February 28,
2022.
- The Company finished the quarter with $1,999,241 in cash, as compared to $4,032,690 for the year ended May 31, 2021.
"Ample Hills continues to perform well with increased revenue
performance on a same store basis. The team is driving forward with
our growth plans and we are excited to continue to open new
locations this year while bringing our unique and best in class ice
cream to our fans and the neighborhoods we serve," said Mr.
Zapata.
"As we look ahead, I want to thank all of our Schmitt team
members for their passion and commitment. We are excited for our
business lines as we evaluate the best vehicles for each to
maximize their potential and better serve our customers and
business partners while enhancing value for our team and all
stakeholders."
Summary data for the three months ended February 28, 2022 and 2021:
|
|
Three Months
Ended
|
|
|
|
|
|
February
28,
|
|
Change
|
|
|
2022
|
|
2021
|
|
$
|
|
%
|
Net sales
|
|
$
|
1,848,913
|
|
|
100.0%
|
|
|
|
$
|
1,668,444
|
|
|
|
100.0%
|
|
|
$
|
180,469
|
|
10.8%
|
|
|
|
Gross margin
|
|
|
50.7%
|
|
|
-
|
|
|
|
|
49.8%
|
|
|
|
-
|
|
|
|
-
|
|
-
|
|
|
|
Operating
expenses
|
|
$
|
3,323,159
|
|
|
179.7%
|
|
|
|
$
|
3,335,650
|
|
|
|
199.9%
|
|
|
$
|
(12,491)
|
|
(0.4%)
|
|
|
|
Net loss
|
|
$
|
(893,244)
|
|
|
(48.3)%
|
|
|
|
$
|
(2,419,797)
|
|
|
|
145.0%
|
|
|
$
|
1,526,553
|
|
63.1%
|
|
|
|
Net loss per common
share,
diluted
|
|
$
|
(0.24)
|
|
|
-
|
|
|
|
$
|
(0.64)
|
|
|
|
-
|
|
|
$
|
0.41
|
|
63.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary data for the nine months ended February 28, 2022 and 2021:
|
|
Nine Months
Ended
|
|
|
|
|
|
February
28,
|
|
Change
|
|
|
|
|
2022
|
|
2021
|
|
$
|
|
%
|
|
|
Net sales
|
|
$
|
8,570,053
|
|
|
100.0%
|
|
|
|
$
|
5,205,641
|
|
|
|
100.0%
|
|
|
$
|
3,364,412
|
|
64.6%
|
|
|
Gross margin
|
|
|
57.8%
|
|
|
-
|
|
|
|
|
46.1%
|
|
|
|
-
|
|
|
|
-
|
|
-
|
|
|
Operating
expenses
|
|
$
|
11,630,580
|
|
|
135.7%
|
|
|
|
$
|
8,674,379
|
|
|
|
166.6%
|
|
|
$
|
2,956,201
|
|
34.1%
|
|
|
Net income
(loss)
|
|
$
|
249,629
|
|
|
2.9%
|
|
|
|
$
|
(4,635,607)
|
|
|
|
(89.0%)
|
|
|
$
|
4,885,236
|
|
105.4%
|
|
|
Net income (loss) per
common
share, diluted
|
|
$
|
0.07
|
|
|
-
|
|
|
|
$
|
(1.23)
|
|
|
|
-
|
|
|
$
|
1.30
|
|
105.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Adjusted EBITDA for the Three Months Ended
February 28, 2022 and 2021:
Three Months Ended
February 28,
|
|
|
2022
|
|
|
|
2021
|
|
Income (loss)
before income taxes
|
$
|
(884,976)
|
|
|
$
|
(2,421,434)
|
|
Depreciation and amortization
|
|
106,851
|
|
|
|
120,647
|
|
Interest expense
|
|
8,232
|
|
|
|
5,400
|
|
EBITDA
|
$
|
(769,893)
|
|
|
$
|
(2,295,387)
|
|
|
|
|
|
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
|
|
Bargain purchase gain
|
|
-
|
|
|
|
(2,277)
|
|
Stock-based compensation
|
|
25,647
|
|
|
|
(82,936)
|
|
Adjusted
EBITDA
|
$
|
(744,246)
|
|
|
$
|
(2,380,600)
|
|
Reconciliation of Adjusted EBITDA for the Nine Months Ended
February 28, 2022 and 2021:
Nine Months Ended February 28,
|
|
|
2022
|
|
|
|
2021
|
|
Income (loss)
before income taxes
|
$
|
264,247
|
|
|
$
|
(5,040,274)
|
|
Depreciation and amortization
|
|
401,448
|
|
|
|
307,732
|
|
Interest expense
|
|
37,811
|
|
|
|
12,854
|
|
EBITDA
|
$
|
703,506
|
|
|
$
|
(4,719,688)
|
|
|
|
|
|
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
|
|
Gain on
sale of property and equipment
|
|
(4,598,095)
|
|
|
|
-
|
|
Bargain
purchase gain
|
|
-
|
|
|
|
(1,187,235)
|
|
Stock-based compensation
|
|
95,016
|
|
|
|
168,435
|
|
Transaction fees and reorganization expenses
|
|
-
|
|
|
|
125,167
|
|
Adjusted
EBITDA
|
$
|
(3,799,573)
|
|
|
$
|
(5,613,321)
|
|
Reconciliation of Adjusted Net loss and Non-GAAP EPS for the
Three Months Ended February 28, 2022
and 2021:
Three Months Ended February 28,
|
|
|
2022
|
|
|
|
2021
|
|
Net loss
|
$
|
(893,244)
|
|
|
$
|
(2,419,797)
|
|
Adjusted
for:
|
|
|
|
|
|
|
|
Bargain purchase
gain
|
|
-
|
|
|
|
(2,277)
|
|
Stock-based
compensation
|
|
25,647
|
|
|
|
(82,936)
|
|
Tax effect of
adjustments
|
|
(6,412)
|
|
|
|
21,303
|
|
Adjusted loss
(Non-GAAP)
|
$
|
(874,009)
|
|
|
$
|
(2,483,707)
|
|
Non-GAAP loss per fully
diluted share
|
$
|
(0.23)
|
|
|
$
|
(0.66)
|
|
Reconciliation of Adjusted Net income (loss) and Non-GAAP EPS
for the Nine Months Ended February 28,
2022 and 2021:
Nine Months Ended February 28,
|
|
|
2022
|
|
|
|
2021
|
|
Net income
(loss)
|
$
|
249,629
|
|
|
$
|
(4,635,607)
|
|
Adjusted
for:
|
|
|
|
|
|
|
|
Gain on sale of property and
equipment
|
|
(4,598,095)
|
|
|
|
-
|
|
Bargain purchase
gain
|
|
-
|
|
|
|
(1,187,235)
|
|
Stock-based
compensation
|
|
95,016
|
|
|
|
168,435
|
|
Tax effect of
adjustments
|
|
1,125,770
|
|
|
|
254,700
|
|
Adjusted loss
(Non-GAAP)
|
$
|
(3,127,680)
|
|
|
$
|
(5,399,707)
|
|
Non-GAAP loss per fully
diluted share
|
$
|
(0.82)
|
|
|
$
|
(1.44)
|
|
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 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,
Executive Chairman, 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.