Tuesday, 18 February 2020 08:00 AM
Earnings
- Strategic Initiatives to Drive Diversification and Long-Term Shareholder Value -
- Balance Sheet Remains Strong, with Essentially No Debt -
SAN CLEMENTE, CA / ACCESSWIRE / February 18, 2020 / Concierge Technologies, Inc. (OTCQB:CNCG), a diversified global holding firm, today announced financial results for the second fiscal quarter ended December 31, 2019.
"Results for the quarter were in line with expectations, as we continued to invest in growth initiatives for each of our core business segments," said Nicholas Gerber, chairman and chief executive officer.
"In financial services, progress was made during the quarter developing a new fintech product that we expect to launch this spring under the name, ‘Marygold'. Our hair and skin care company completed the development of a new, branded line of vegan haircare products, ‘Worry Free,' and subsequent to the end of the second quarter launched the line at a large national retailer, representing entry into a new channel for us. We also built a solid backlog for our Brigadier Security business, and in alignment with our strategic growth initiatives, we continued to explore acquisition targets.
"Concierge Technologies has had excellent growth since its formation as a holding company, just five years ago," added Gerber. "We are staying true to our mission of not being reliant on any one business or sector by building a profitable, diverse organization through organic growth, acquisitions and new ventures, and creating tangible long-term value for all of our stakeholders."
For the three months ended December 31, 2019, revenues were $5.8 million, compared with $6.7 million for the prior year. Net loss for the most recent three-month period amounted to $74,914, equal to break-even per share, versus income of $88,518, also equal to break-even per share, for the comparable prior year period.
Results for the fiscal 2020 second quarter, as anticipated, were impacted primarily by lower assets under management (AUM) at the company's USCF Investments fund management subsidiary as compared to the prior year. USCF Investments manages nine commodity-oriented and two equity exchange-traded funds (ETFs) that are listed on the New York Stock Exchange, currently with approximately $2.2 billion in assets under management.
The company's Other business segment, which comprised approximately 51 percent of total revenues in the most recent second quarter vs 41 percent of total revenues in last year's second quarter, achieved a 7% improvement in revenues for the fiscal 2020 period. The Other segment is comprised of Gourmet Foods, Brigadier Security Systems and Original Sprout.
Concierge's balance sheet further strengthened at the end of the second fiscal quarter. Cash and cash equivalents remained steady at approximately $6.5 million, after the cash investment in our the new fintech venture and payment of annual employee incentive rewards at the subsidiary level. Total stockholders' equity increased to $17.5 million at December 31, 2019 from $17.2 million at June 30, 2019. The company has essentially no debt.
"Operating results for USCF held fairly steady throughout the second quarter," said Stuart Crumbaugh, chief financial officer of Concierge Technologies. "We believe the downward trend cycle in assets under management is coming to an end, with the eventual up-swing anticipated as the historical nature of commodities in general would suggest. Regardless, our business model operates well in fluctuating markets, since many of our expenses are variable in nature and move in concert with revenues to sustain profitability at lower levels of AUM."
"Our ‘Other' operating units had a productive quarter despite some one-time expenses," said David Neibert, Concierge Technologies' Chief Operations Officer. "Original Sprout successfully made the transition to nationwide retail distribution for their new ‘Worry Free' line of hair care products, and Gourmet Foods had a near-record holiday season of sales. Brigadier Security Systems was seasonally hampered by frigid cold in Saskatoon, which, in turn, helped build a solid backlog for the next quarter. Our Other operating units were all cash flow positive, and we only posted a small net loss on a consolidated basis, due, in part, to non-cash expenses, including $150,000 in depreciation expense for the quarter," Neibert said.
Business Units
Gourmet Foods, https://gourmetfoodsltd.co.nz/, acquired in August 2015, is a commercial-scale bakery that produces and distributes iconic meat pies and pastries throughout New Zealand under the brand names Pat's Pantry and Ponsonby Pies.
Brigadier Security Systems, www.brigadiersecurity.com, acquired in June 2016 and headquartered in Saskatoon, Canada, provides comprehensive security solutions to homes and businesses, government offices, schools and other public buildings throughout the province.
The company's USCF Investments operation, www.uscfinvestments.com, acquired as part of the Wainwright Holdings transaction in December 2016 and based in Walnut Creek, Calif., serves as manager, operator or investment adviser to 13 exchange traded products, structured as limited partnerships or investment trusts that issue shares trading on the NYSE Arca.
Acquired by Concierge at the end of 2017, California-based Original Sprout, www.originalsprout.com, produces and distributes a full line of vegan, safe, non-toxic hair and skin care products, including a "reef safe" sun screen, in the U.S. and its territories, the U.K., E.U., Turkey, Middle East, Africa, Taiwan, Singapore, Hong Kong, Malaysia, New Zealand, Australia and Canada. A second line of products, "Worry Free" was created to target mainstream U.S. nationwide consumers and began distribution in January 2020.
About Concierge Technologies, Inc.
Concierge Technologies, originally founded in 1996, was repositioned as a global holding firm in 2015, and currently has operating subsidiaries in financial services, food manufacturing, security systems and beauty products. Offices and manufacturing operations are in the U.S., New Zealand and Canada. For more information, visit www.conciergetechnology.net.
Forward-Looking Statements
This press release may contain "forward-looking statements" that include information relating to Concierge Technologies' future events and future financial and operating performance. Such forward-looking statements, including, but not limited to, adding new distribution channels and an expectation for the USCF operating subsidiary to benefit when the cyclical trend for commodities shifts upward, should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which that performance or those results will be achieved. Forward-looking statements are based on information available at the time they are made and/or management's good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements.
For a more detailed description of the risk factors and uncertainties affecting Concierge Technologies or its subsidiary companies, and more detailed information about the individual operating entities, please refer to the Company's Securities and Exchange Commission filings, which are available on the Company's website, (http://www.conciergetechnology.net), or at www.sec.gov.
Financial Tables Follow:
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
|
|
December 31, 2019 |
June 30, 2019 |
|||||||||
|
|
(AUDITED) | ||||||||||
| ASSETS | |||||||||||
|
|
|||||||||||
|
CURRENT ASSETS
|
|||||||||||
|
Cash and cash equivalents
|
$ | 6,532,285 | $ | 6,481,815 | |||||||
|
Accounts receivable, net
|
811,699 | 939,649 | |||||||||
|
Accounts receivable - related parties
|
1,002,708 | 1,037,146 | |||||||||
|
Inventories
|
1,219,403 | 1,008,662 | |||||||||
|
Prepaid income tax and tax receivable
|
1,346,703 | 1,754,369 | |||||||||
|
Investments
|
3,792,918 | 3,756,596 | |||||||||
|
Other current assets
|
272,814 | 546,105 | |||||||||
|
Total current assets
|
14,978,530 | 15,524,342 | |||||||||
|
|
|||||||||||
|
Restricted cash
|
13,468 | 13,436 | |||||||||
|
Property and equipment, net
|
1,298,455 | 757,014 | |||||||||
|
Operating lease right-of-use asset
|
928,964 | - | |||||||||
|
Goodwill
|
915,790 | 915,790 | |||||||||
|
Intangible assets, net
|
2,490,590 | 2,659,723 | |||||||||
|
Deferred tax assets, net
|
859,696 | 859,696 | |||||||||
|
Other assets, long - term
|
523,607 | 523,607 | |||||||||
|
Total assets
|
$ | 22,009,100 | $ | 21,253,608 | |||||||
|
|
|||||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
|
|
|||||||||||
|
CURRENT LIABILITIES
|
|||||||||||
|
Accounts payable and accrued expenses
|
$ | 2,118,950 | $ | 2,867,081 | |||||||
|
Expense waivers - related parties
|
288,119 | 325,821 | |||||||||
|
Current portion operating lease liabilities
|
366,617 | - | |||||||||
|
Notes payable - related parties
|
3,500 | 3,500 | |||||||||
|
Loans - property and equipment, current portion
|
13,556 | 26,241 | |||||||||
|
Total current liabilities
|
2,790,742 | 3,222,643 | |||||||||
|
|
|||||||||||
|
LONG TERM LIABILITIES
|
|||||||||||
|
Notes payable - related parties
|
600,000 | 600,000 | |||||||||
|
Loans - property and equipment, net of current portion
|
384,412 | 61,057 | |||||||||
|
Long-term operating lease liabilities
|
600,231 | - | |||||||||
|
Deferred tax liabilities
|
176,578 | 176,578 | |||||||||
|
Total long-term liabilities
|
1,761,221 | 837,635 | |||||||||
|
Total liabilities
|
4,551,963 | 4,060,278 | |||||||||
|
|
|||||||||||
|
STOCKHOLDERS' EQUITY
|
|||||||||||
|
Preferred stock, $0.001 par value; 50,000,000 authorized
|
|||||||||||
|
Series B: 53,032 issued and outstanding at December 31, 2019 and at June 30, 2019
|
53 | 53 | |||||||||
|
Common stock, $0.001 par value; 900,000,000 shares authorized; 37,412,519 shares issued and outstanding at December 31, 2019 and 37,237,519 at June 30, 2019
|
37,412 | 37,237 | |||||||||
|
Additional paid-in capital
|
9,292,955 | 9,178,838 | |||||||||
|
Accumulated other comprehensive (loss)
|
(6,122 | ) | (175,659 | ) | |||||||
|
Retained earnings
|
8,132,839 | 8,152,861 | |||||||||
|
Total stockholders' equity
|
17,457,137 | 17,193,330 | |||||||||
|
Total liabilities and stockholders' equity
|
$ | 22,009,100 | $ | 21,253,608 | |||||||
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
|
|
For the Three-Month Periods Ended | For the Six-Month Periods Ended | ||||||||||||||
|
|
December 31, | December 31, | ||||||||||||||
|
|
2019 | 2018 | 2019 | 2018 | ||||||||||||
|
|
||||||||||||||||
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Net revenue
|
||||||||||||||||
|
Fund management - related party
|
$ | 2,839,718 | $ | 3,939,004 | $ | 5,880,287 | $ | 8,161,988 | ||||||||
|
Food products
|
1,320,357 | 1,145,410 | 2,570,334 | 2,339,704 | ||||||||||||
|
Security systems
|
733,533 | 714,069 | 1,506,753 | 1,561,100 | ||||||||||||
|
Beauty products and other
|
902,928 | 897,457 | 1,866,601 | 1,799,786 | ||||||||||||
|
Net revenue
|
5,796,536 | 6,695,940 | 11,823,975 | 13,862,578 | ||||||||||||
|
|
||||||||||||||||
|
Cost of revenue
|
1,724,507 | 1,751,280 | 3,493,827 | 3,584,431 | ||||||||||||
|
|
||||||||||||||||
|
Gross profit
|
4,072,029 | 4,944,660 | 8,330,148 | 10,278,147 | ||||||||||||
|
|
||||||||||||||||
|
|
||||||||||||||||
|
Operating expense
|
||||||||||||||||
|
General and administrative expense
|
986,392 | 1,076,585 | 2,106,392 | 2,148,468 | ||||||||||||
|
Fund operations
|
727,450 | 1,144,734 | 1,537,287 | 2,410,388 | ||||||||||||
|
Marketing and advertising
|
634,871 | 762,742 | 1,210,003 | 1,634,484 | ||||||||||||
|
Depreciation and amortization
|
150,485 | 174,657 | 300,148 | 349,096 | ||||||||||||
|
Salaries and compensation
|
1,673,443 | 1,721,688 | 3,216,485 | 3,104,842 | ||||||||||||
|
Total operating expenses
|
4,172,641 | 4,880,406 | 8,370,315 | 9,647,278 | ||||||||||||
|
|
||||||||||||||||
|
(Loss) Income from operations
|
(100,612 | ) | 64,254 | (40,167 | ) | 630,869 | ||||||||||
|
|
||||||||||||||||
|
|
||||||||||||||||
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Other (expense) income:
|
||||||||||||||||
|
Other (expense) income
|
(31,347 | ) | (320,048 | ) | (22,458 | ) | (493,083 | ) | ||||||||
|
Interest and dividend income
|
26,403 | 351,582 | 52,239 | 355,364 | ||||||||||||
|
Interest expense
|
(10,246 | ) | (7,269 | ) | (21,248 | ) | (15,377 | ) | ||||||||
|
Total other (expense) income, net
|
(15,190 | ) | 24,265 | 8,533 | (153,096 | ) | ||||||||||
|
|
||||||||||||||||
|
(Loss) Income before income taxes
|
(115,802 | ) | 88,519 | (31,634 | ) | 477,773 | ||||||||||
|
|
||||||||||||||||
|
Benefit (Provision) of income taxes
|
40,888 | (25,358 | ) | 11,612 | (129,106 | ) | ||||||||||
|
|
||||||||||||||||
|
Net (loss) income
|
$ | (74,914 | ) | $ | 63,161 | $ | (20,022 | ) | $ | 348,667 | ||||||
|
|
||||||||||||||||
|
Weighted average shares of common stock
|
||||||||||||||||
|
Basic
|
37,412,519 | 29,559,139 | 37,368,769 | 29,559,139 | ||||||||||||
|
Diluted
|
37,412,519 | 38,298,159 | 37,368,769 | 38,298,159 | ||||||||||||
|
|
||||||||||||||||
|
Net income per common share
|
||||||||||||||||
|
Basic
|
(0.00 | ) | $ | 0.00 | $ | (0.00 | ) | $ | 0.01 | |||||||
|
Diluted
|
$ | (0.00 | ) | $ | 0.00 | $ | (0.00 | ) | $ | 0.01 | ||||||
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
|
|
Three Months Ended December 31, | Six Months Ended December 31, | ||||||||||||||
|
|
2019 | 2018 | 2019 | 2018 | ||||||||||||
|
|
||||||||||||||||
|
Net (loss) income
|
$ | (74,914 | ) | $ | 63,161 | $ | (20,022 | ) | $ | 348,667 | ||||||
|
|
||||||||||||||||
|
Other comprehensive income (loss):
|
||||||||||||||||
|
Foreign currency translation gain (loss)
|
135,588 | (47,125 | ) | 169,537 | (58,708 | ) | ||||||||||
|
Comprehensive income
|
$ | 60,674 | $ | 16,036 | $ | 149,515 | $ | 289,959 | ||||||||
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
|
For the Six-Month Periods Ended | |||||||
|
|
December 31, | |||||||
|
|
2019 | 2018 | ||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
|
Net (loss) income
|
$ | (20,022 | ) | $ | 348,667 | |||
|
Adjustments to reconcile net income to net cash provided by operating activities
|
||||||||
|
Depreciation and amortization
|
300,148 | 349,096 | ||||||
|
Stock based vendor compensation
|
114,292 | - | ||||||
|
Bad debt expense
|
91 | - | ||||||
|
Unrealized loss on investments
|
688 | 314,313 | ||||||
|
Loss on disposal of equipment
|
- | 1,434 | ||||||
|
Operating lease right-of-use asset - Non-cash lease cost
|
184,876 | - | ||||||
|
|
||||||||
|
Decrease (increase) in current assets:
|
||||||||
|
Accounts receivable, net
|
130,917 | 142,174 | ||||||
|
Accounts receivable - related party
|
34,437 | 226,377 | ||||||
|
Prepaid income taxes and tax receivable
|
427,260 | (64,010 | ) | |||||
|
Inventories
|
(207,324 | ) | (306,271 | ) | ||||
|
Other current assets
|
94,986 | 178,635 | ||||||
|
Increase (decrease) in current liabilities:
|
||||||||
|
Accounts payable and accrued expenses
|
(781,736 | ) | (309,587 | ) | ||||
|
Operating lease liabilities
|
(184,068 | ) | - | |||||
|
Expense waivers - related party
|
(37,702 | ) | (273,655 | ) | ||||
|
Net cash provided by operating activities
|
56,843 | 607,173 | ||||||
|
|
||||||||
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
|
Cash paid for acquisition of business assets
|
- | (45,000 | ) | |||||
|
Purchase of real estate and equipment - net of disposal
|
(495,579 | ) | (8,984 | ) | ||||
|
Sale of investments
|
- | 180,000 | ||||||
|
Purchase of investments
|
(29,060 | ) | (346,759 | ) | ||||
|
Net cash (used in) investing activities
|
(524,639 | ) | (220,743 | ) | ||||
|
|
||||||||
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
|
Loans - real estate, property and equipment
|
404,518 | - | ||||||
|
Repayment of equipment loan
|
(94,613 | ) | (96,525 | ) | ||||
|
Net cash provided by (used in) financing activities
|
309,905 | (96,525 | ) | |||||
|
|
||||||||
|
Effect of exchange rate change on cash and cash equivalents
|
208,393 | (30,515 | ) | |||||
|
|
||||||||
|
NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
|
50,502 | 259,390 | ||||||
|
|
||||||||
|
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING BALANCE
|
6,495,251 | 7,524,114 | ||||||
|
|
||||||||
|
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, ENDING BALANCE
|
$ | 6,545,753 | $ | 7,783,504 | ||||
|
|
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|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
|
||||||||
|
Cash paid during the period for:
|
||||||||
|
Interest paid
|
$ | 8,990 | $ | - | ||||
|
Income taxes-U.S.
|
$ | 159,363 | $ | 43,000 | ||||
|
Non-Cash financing and investing activities:
|
||||||||
|
Acquisition of operating right-of-use assets through operating lease obligations
|
$ | 1,150,916 | $ | - | ||||
|
Reclassification of deposit from other current assets to property and equipment
|
$ | 178,276 | $ | - | ||||
The accompanying notes are an integral part of these consolidated financial statements.
Investors and media, for more information, contact:
Roger S. Pondel
PondelWilkinson Inc.
310-279-5980
[email protected]
SOURCE: Concierge Technologies, Inc.