OM Holdings International, Inc. Announces Robust Q3 2023 Results, Reports Unprecedented 29.6% YoY Growth and Unveils Strategy to Utilize Generative AI to Transform E-Commerce in Emerging Markets
Miami, July 20, 2023 (GLOBE NEWSWIRE) -- OM Holdings International, Inc. (OMHI), a leading provider of products and services in emerging markets, today reported financial results for the third quarter ending May 31, 2023, and unveiled its strategic plan for the next twelve months.
Key Financial Highlights
Revenue for Q3 reached $12.43 million, a growth of 29.6% compared to $9.59 million for the same period in 2022.
Gross margin increased to $3.39 million from $2.89 million Year on Year (YoY) demonstrating operational efficiency and strong cost control.
Despite a drop in net income from $699,664 in Q3 2022 to $357,479 in Q3 2023, OMHI continues to maintain profitability.
Total assets and shareholders' equity increased to $58.45 million and $18.41 million respectively, underlining the company's commitment to enhancing shareholder value.
Revenues and Cost of Revenue
We reported a robust increase in our revenue, growing by 29.6% to $12,429,310 for Q3 2023, up from $9,592,490 in the same period of 2022. This solid growth in our top-line numbers reflects the strength of our business model, the appeal of our product offerings, and the resilience of our operations amid this challenging economic environment. The resurgence of the foodservice sector as restaurants reopened post-lockdown significantly bolstered our revenue growth.
However, it's important to note that our cost of revenue also increased from $6,693,296 in Q3 2022 to $9,035,977 in Q3 2023. This rise can be attributed to the costs associated with scaling our operations, expanding our product range, and substantial investment in personnel to cater to the evolving needs of our customers. Despite the increase in costs, our consistent revenue growth underlines the effectiveness of our strategic initiatives.
Operating Expenses
During Q3 2023, we saw an increase in our operating expenses. Notably, professional fees and payroll expenses witnessed significant upticks, driven by the increase in management fees and our continued investment in talent to support our growth and expansion plans.
Lease expenses also saw a rise, following our strategic decision to add two new supermarket leases in the latter part of last year. This expansion is a crucial part of our ongoing efforts to extend our footprint and better serve our customers.
General and administrative expenses also edged higher due to increases in promotional expenses, utilities, and depreciation expenses. These are necessary expenses associated with our growth strategy and maintaining the competitiveness of our operations.
Other Income/Expenses and Net Income
In Q3 2023, total other expenses were higher due to increased interest expenses. Despite these additional costs, we are pleased to report that we remained profitable, posting a net income of $357,479 for Q3 2023.
While this represents a decrease compared to the same period last year, it's worth noting that our ability to maintain profitability in a challenging environment demonstrates the resilience of our business model and the strength of our ongoing operations.
Nine Month Performance and Liquidity
Looking at the broader nine-month period ending May 31, 2023, we reported an increase in revenue of 30.8% Year on Year. Our cost of revenue also increased in line with the expansion of our operations.
Our net income for the nine months was $1,030,653. Despite being lower than the same period in the previous year, it underscores our continued profitability in this difficult period of investment and growth.
Finally, as of May 31, 2023, our liquidity position remained healthy with cash of $355,252, accounts receivable of $4,088,350, and a working capital of $4,241,599. This strong financial position provides a solid foundation for our future growth plans and strategic initiatives.
Financial Nuances and Strategic Insight
While we are proud of the significant growth and accomplishments, we've achieved in Q3 2023, we also recognize there are areas of our performance that require a nuanced understanding. We wish to openly address these and provide context for our responses and provide strategic insight.
Decrease in Net Income: We acknowledge a decrease in our net income from Q3 2022 to Q3 2023. While we understand this might raise concerns among our stakeholders, we would like to emphasize that this decrease is part of a strategic investment phase. Instead of resorting to dilution or loans, we consciously chose to reinvest profits into expanding our product range and scaling operations, a decision we believe aligns with our commitment to shareholder value. We are confident that these strategic investments will fuel our long-term growth and enhance profitability.
Increased Operating Expenses: We have consciously decided to increase our operating expenses, particularly in professional fees and payroll. This surge is a part of our commitment to investing in top talent and strategic expansion initiatives that are key to our long-term growth. We are confident these decisions will yield positive results and strengthen our position in the market.
Higher Cost of Revenue: Our cost of revenue has increased due to costs associated with scaling our operations, expanding our product range, and our substantial investment in personnel to cater to our customers' evolving needs. We consider these as strategic investments essential for maintaining our competitive edge and driving sustainable growth.
Nine Month Performance and Liquidity: We acknowledge that our net income for the nine months ended May 31, 2023, was lower than the same period in the previous year. However, we have maintained profitability throughout this period of strategic investment and growth. Furthermore, our strong liquidity position and healthy cash reserves provide a solid foundation for our future growth plans and strategic initiatives.
Our focus remains on executing our strategic plan and delivering value to our shareholders. We are committed to maintaining transparency and will continue to keep our stakeholders informed about our progress as we navigate through our rapid expansion and embark on the path of sustained growth.
Management’s Discussion and Analysis and 12-Month Strategic Plan
In summary, our performance in Q3 2023 and over the past nine months reflects a period of strong revenue growth and strategic investment in our operations. While certain costs have risen, these are reflective of our ambitious growth strategy and the steps we are taking to ensure the future success of our business. We remain confident in the resilience of our business model and our ability to deliver long-term value to our shareholders.
As we reflect on our Q3 performance and look ahead to the next 12 months, we remain committed to our mission of serving underserved regions and creating long-term shareholder value. To this end, we've developed a strategic plan centered on expansion, both in terms of our product offerings and geographical reach based on these five initiatives.
Product Expansion: Our intention for the coming year is to broaden our product range, drawing on regional data to identify key items that resonate with local market demands. Specifically, we plan to introduce the AI-driven DoGetPro Omnichannel platform in the Caribbean in 2024. This novel innovation will utilize generative AI to empower local businesses of all sizes, enabling them to instantly establish robust e-commerce operations, regardless of their level of digital literacy.
Retail Expansion: Parallel to our product expansion, we also aim to grow our physical footprint. As demand for quality products and services continues to increase across the Caribbean, we see an opportunity to meet these needs through the opening of new retail stores in strategic locations. Our intention is to primarily grow through acquisitions, which we are actively pursuing in the Bahamas, St. Thomas, Jamaica, and the Cayman Islands. In cases where acquisitions are not feasible, we have a proven model for constructing new retail outlets.
Market Expansion: We further plan to extend the reach of our DoGetGo app and our DoGetPro e-commerce platform into new markets. This expansion will allow us to bring our innovative solutions to a larger pool of businesses and customers, further demonstrating our commitment to empowering underserved regions. Currently, we are actively exploring potential partnerships in the Bahamas, St. Thomas, Jamaica, and the Cayman Islands.
Building Partnerships: Another critical facet of our growth strategy is the formation of strategic collaborations with local businesses, community leaders, and influencers. We anticipate that such partnerships will extend the reach and impact of our platform, thereby enabling us to deliver an enhanced Omnichannel retail experience to the Caribbean market.
Financing the Growth: To finance this ambitious growth, we anticipate receiving a capital infusion of approximately $10M. The board of directors are finalizing a decision on potential options, including a 506 Reg C private placement, a TSX-V secondary listing, and an uplisting on NASDAQ. Our aim in this regard is to secure the required funding with minimal dilution to our existing shareholders, thereby protecting and enhancing shareholder value. We expect to announce a detailed financial strategic plan to our shareholders in the coming months.
As we move into the next fiscal year, OMHI remains steadfast in its mission to empower emerging markets through advanced technological solutions. By adhering to this mission, we anticipate that OMHI will be well-positioned to revolutionize the digital services landscape and generate lasting value for all our stakeholders.
"We are thrilled with our financial performance and the opportunities that lie ahead," said Mark Vanterpool, CEO of OM Holdings International. "Our strategic growth plan is designed to drive long-term success and create value for our shareholders. By focusing on the unique needs of emerging markets and leveraging advanced technologies, we are confident in our ability to continue delivering strong financial results."
About OM Holdings International, Inc.
OM Holdings International, Inc. (OTC: OMHI), founded in 1986 in the British Virgin Islands (BVI) by Mark Vanterpool, operates delivery services and grocery stores in the Caribbean, with a mobile application delivery platform that provides an expedient, contactless option for the transportation of people and essential goods. The company's storefront, OneMart, is the second-largest grocery store in the BVI. OHMI's delivery subsidiary, Rydeum, founded by Mark Hannah in 2019, has partnered with Jamaica’s largest taxicab union, JUTA. The company also provides lumber and other construction supplies to contractors throughout the Caribbean. For more information, please visit https://omholdingsinc.com.
Forward-Looking Statements
With the exception of the historical information contained in this news release, the matters described herein, may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements preceded by, followed by, or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans,” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may,” and “could” are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing. These statements involve unknown risks and uncertainties that may individually or materially impact the matters discussed herein for a variety of reasons that are outside the control of the company, including, but not limited to, the company’s ability to raise sufficient financing to implement its business plan, the impact of the COVID-19 pandemic on the company’s business, operations, and the economy in general, and the company’s ability to successfully develop and commercialize its proprietary products and technologies. Readers are cautioned not to place undue reliance on these forward-looking statements, as actual results could differ materially from those described in the forward-looking statements contained herein. Readers are urged to read the risk factors set forth in the company’s filings with the SEC, which are available at the SEC’s website (www.sec.gov). The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
Contact:
Mark Vanterpool Chief Executive Officer T: 305-901-1497 Email: us.info@omholdingsinc.com
