Louisville, Colorado, Nov. 14, 2024 (GLOBE NEWSWIRE) -- CEA Industries Inc. (NASDAQ: CEAD, CEADW) (“CEA Industries” or the “Company”), is reporting results for the three months ended September 30, 2024.
Third Quarter 2024 Financial Summary (in $ thousands, excl. margin items):
Q3 2024 (unaudited)
Q2 2024 (unaudited)
Q3 2023 (unaudited)
Revenue
$
391
$
1,761
$
914
Gross Profit (Loss)
$
(70
)
$
180
$
(104
)
Operating Expenses
$
677
$
657
$
703
Net Income/(Loss)
$
(740
)
$
(470
)
$
(799
)
“Throughout 2024, we have maintained a disciplined approach to cost management, prioritizing capital preservation as we work through our remaining project backlog,” said Tony McDonald, Chairman and CEO of CEA Industries. “In alignment with our commitment to shareholders, during the third quarter we made further reductions in headcount, paused product development, and scaled back business development efforts to maintain our strong balance sheet.
“As previously announced, the Board of Directors continues their examination of strategic alternatives, including a sale, merger, special dividend, or other potential strategic or financial transaction, including a dissolution of the Company whereby cash on the balance sheet would be returned to shareholders after adequate provision for outstanding corporate obligations. We will continue to prudently manage our capital in support of our ongoing strategic review process and look forward to providing an update in the coming months.”
Third Quarter 2024 Financial Results
Revenue in the third quarter of 2024 was $0.4 million compared to $0.9 million for the same period in 2023. The decrease was primarily attributed to lower bookings and a reduced backlog over the past 18 months.
Net bookings in the third quarter of 2024 increased to $0.5 million compared to $0.4 million in the year-ago period. The Company’s quarter-end backlog was $0.4 million compared to $0.5 million for the same period in 2023. The expected decrease in CEA Industries’ backlog was primarily driven by fewer capital expenditures by cannabis operators in the markets served by the Company, in addition to a reduced sales effort.
Gross loss in the third quarter of 2024 improved to $70,000 compared to $104,000 for the same period in 2023. The improvement in gross profit was primarily driven by a reduction in variable costs as a percentage of revenue. Variable costs include the cost of equipment, outside engineering, shipping and handling, travel and warranty.
Operating expenses in the third quarter of 2024 remained flat at $0.7 million compared to the same period in 2023.
Net loss in the third quarter of 2024 improved to $0.7 million or $(0.94) per share, compared to a net loss of $0.8 million or $(1.19) per share for the same period in 2023.
Cash and cash equivalents were $10.3 million at September 30, 2024, compared to $12.5 million on December 31, 2023, while working capital decreased by $2.0 million during this period. At September 30, 2024, the Company remained debt free.
About CEA Industries Inc.
CEA Industries Inc. (www.ceaindustries.com) provides a suite of complementary and adjacent offerings to the controlled environment agriculture industry. The Company’s comprehensive solutions, when aligned with industry operators’ product and sales initiatives, support the development of the global ecosystem for indoor cultivation.
Forward Looking Statements
This press release may contain statements of a forward-looking nature relating to future events. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. These statements reflect our current beliefs, and a number of important factors could cause actual results to differ materially from those expressed in this press release, including the factors set forth in “Risk Factors” set forth in our annual and quarterly reports filed with the Securities and Exchange Commission (“SEC”), and subsequent filings with the SEC. Please refer to our SEC filings for a more detailed discussion of the risks and uncertainties associated with our business, including but not limited to the risks and uncertainties associated with our business prospects and the prospects of our existing and prospective customers; the inherent uncertainty of product development; regulatory, legislative and judicial developments, especially those related to changes in, and the enforcement of, cannabis laws; increasing competitive pressures in our industry; and relationships with our customers and suppliers. Except as required by the federal securities laws, we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise. The reference to CEA’s website has been provided as a convenience, and the information contained on such website is not incorporated by reference into this press release.
Non-GAAP Financial Measures
To supplement our financial results on U.S. generally accepted accounting principles (“GAAP”) basis, we use non-GAAP measures including net bookings and backlog, as well as other significant non-cash expenses such as stock-based compensation and depreciation expenses. We believe these non-GAAP measures are helpful in understanding our past performance and are intended to aid in evaluating our potential future results. The presentation of these non-GAAP measures should be considered in addition to our GAAP results and are not intended to be considered in isolation or as a substitute for financial information prepared or presented in accordance with GAAP. We believe these non-GAAP financial measures reflect an additional way to view aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business.
