Improved Gross Margins to 8.3%
PINE BROOK, NJ / ACCESSWIRE / August 15, 2019 / Bantek, Inc. (OTC PINK:BANT) (“Bantek” or the “Company”), a distributor of products to the U.S. Government, an environmental services provider and reseller of drones and drone training, today announced the Company's financial results for the second quarter ended June 30, 2019.
Key Financial Highlights for Q3 FY 2019:
- Revenues of $2.2 million
- Improved gross profit margin of 8.3%, from 4.5% in the year ago period
- Operating loss of $0.5 million
Key Business Highlights for Q3 FY 2019:
- Awarded $825,000 contract from the Department of Defense
- Awarded drone contract by New Haven County Connecticut Police Department
- Opened Howco Distributing Co. New Jersey office
Management Commentary
“Our third quarter results reflect the continued shift in our business to higher margin products and services,” commented, Michael Bannon, Bantek’s Chief Executive Officer. “During the third quarter, we signed some significant contracts, such as the Department of Defense, which we expect will lead to future revenue growth.”
Financial Results for the Three Months Ended June 30, 2019:
We generated sales of $2,176,773 and $3,951,254 for the three months ended June 30, 2019 and 2018, respectively, a decrease of $1,774,481, or 45%. For the three months ended June 30, 2019 and 2018, we reported cost of goods sold of $1,995,511 and $3,772,882, respectively, a decrease of $1,777,371, or 47%. The decrease in sales and cost of goods sold for the 2019 period as compared to the 2018 period is due to lower sales in current period and to lesser extent by our efforts to increase gross margins by reducing sales of lower margin products. Lower sales has in large part been related to supplier constraints. Gross profit rose 2% due to higher margins. While management’s focus on increasing gross margins has impacted sales levels, we believe that the Company is situated to capture greater sales without incurring significant fixed costs through three initiatives. Efforts are underway to market an expanded suite of Howco product lines on the east coast. We are expanding product offerings with high tech tactical gear to regular federal government entities (Howco lines of business), adding the high tech tactical gear to our traditional drone assemblies along with newer more rapidly deployed drones focused on municipalities and lastly we are adding lighting maintenance services under the thermal jackets initiative for large institutional clients. All of these initiatives focus on current market segments to synergistically leverage our capabilities.
For the three months ended June 30, 2019 and 2018, we reported selling, general, and administrative expenses of $657,883 as compared to $557,515, an increase of $100,368, or 18%. For the three months ended June 30, 2019 and 2018, selling, general, and administrative expenses consisted of the following:
The increase in selling, general, and administrative costs for the 2019 period as compared to the 2018 period was due increase in professional fees and in other selling, general and administrative partially offset by lower compensation related costs due to a reduction in employees.
As a result, we reported net losses of $1,650,147, or $0.0007 per common share, and $770,495, or $0.01 per common share, for the three months ended June 30, 2019 and 2018, respectively.
Financial Results for the Nine Months Ended June 30, 2019:
We generated sales of $8,589,148 and $12,986,657 for the nine months ended June 30, 2019 and 2018, respectively, a decrease of $4,397,509, or 34%. For the nine months ended June 30, 2019 and 2018, we reported cost of goods sold of $7,745,605 and $11,860,851, respectively, a decrease of $4,115,246, or 35%. The decrease in sales and cost of goods sold for the 2019 period as compared to the 2018 period is due to us ceasing our sales of certain products from certain vendors and supplier constraints. While management’s focus on increasing gross margins has impacted sales levels, we believe that the Company is situated to capture greater sales without incurring significant fixed costs through three initiatives. Efforts are underway to market an expanded suite of Howco product lines on the east coast. We are expanding product offerings with high tech tactical gear to regular federal government entities (Howco lines of business), adding the high tech tactical gear to our traditional drone assemblies along with newer more rapidly deployed drones focused on municipalities and lastly we are adding lighting maintenance services under the thermal jackets initiative for large institutional clients. All of these initiatives focus on current market segments to synergistically leverage our capabilities.
For the nine months ended June 30, 2019 and 2018, we reported selling, general, and administrative expenses of $2,338,524 as compared to $2,028,309, an increase of $310,215, or 15%. For the nine months ended June 30, 2019 and 2018, selling, general, and administrative expenses consisted of the following:
The increase in selling, general, and administrative costs for the 2019 period as compared to the 2018 period was due to an increase in professional fees, partially offset due to a reduction in compensation costs, and a reduction in other selling, general and administrative due to changes in staff mix. Certain professional staff positions were placed with 3 rd party professional resources. For the nine months ended June 30, 2019, professional fees amounted to $876,056 and compared to $237,637, an increase of $638,419. Professional fees increased due to higher legal charges incurred for suit by a former officer, increased fees for accounting services and general business consulting. Additionally, during the nine months ended June 30, 2018, we recorded a reversal of stock-based consulting fee of $160,279 caused by the revaluation of the fair value of non-employee options in accordance with ASC 505-50 - “Equity-Based Payments to Non-Employees.
As a result, we reported a net loss of $3,732,559 or $0.0025 per common share, and $3,792,303, or $0.05 per common share, for the nine months ended June 30, 2019 and 2018, respectively.
About Howco Distributing Co.
Howco Distributing, a subsidiary of Bantek, Inc., is a premier supplier of spare and replacement parts to a wide variety of Federal Government agencies, U.S. military prime contractors and commercial customers worldwide. Founded in 1990 and located in Vancouver, Washington, Howco's services encompass bid solicitation, contract management, packaging and logistics for construction, transportation, mining and heavy equipment spare and replacement parts to customers worldwide utilizing a wide variety of supply chain solutions. Howco was the winner of 2017 United States Department of Defense Logistics Agency’s Commander’s Choice Supplier Award and the 2012 United States Department of Defense Logistics Agency’s Bronze Supplier Award.
About Bantek, Inc, Inc.
Bantek, Inc. (OTC Pink:BANT), headquartered in Pine Brook, NJ., consists of three separate divisions. First, through Howco Distributing Co., we sell products primarily to U.S. Department of Defense. Second, through Drone USA we sell drone programs, which consists of drones, training, COA's and waivers and other drone-related services, to law enforcement, firefighters, security companies, local, state and our US government. Third, we sell insulation jackets, slates, and insulation services to hospitals, universities, and manufacturers.
For additional information about Bantek, Inc. and its businesses, please visit:
www.bantekinc.com
www.droneusainc.com
www.howcodistributing.com
Forward-Looking Statements
Certain statements in this press release may be considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may include projections of matters that affect revenue, operating expenses or net earnings; projections of growth; and assumptions relating to the foregoing. Such forward-looking statements are generally qualified by terms such as: “plans, “anticipates,” “expects,” “believes” or similar words. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or qualified. Future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward-looking information. These factors are discussed in greater detail in our Form 10 filed with the U.S. Securities and Exchange Commission.
Contact Information
SOURCE: Bantek, Inc.