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Concierge Technologies Reports Fiscal Third Quarter Financial Results

Friday, 15 May 2020 05:50 PM

Concierge Technologies, Inc.

Topic:
Earnings

- Company continues to invest in long-term growth initiatives, with strong balance sheet, and essentially no debt -

SAN CLEMENTE, CA / ACCESSWIRE / May 15, 2020 / Concierge Technologies, Inc. (OTCQB:CNCG), a diversified global holding firm, today announced financial results for the third fiscal quarter ended March 31, 2020.

"Results for our third quarter improved over the preceding second quarter, although were slightly below the corresponding third quarter a year ago," said Nicholas Gerber, chairman and chief executive officer.

"As compared with last year, the company's financial performance was principally impacted by lower average assets under management (AUM) in our USCF Investments subsidiary for most of the quarter, although AUM finished the quarter significantly higher. It was a busy period, as we continued to execute strategies to expand our business. During the third quarter, we further advanced the development of our new consumer fintech app, which we expect to launch through our recently formed Marygold & Co. subsidiary this summer. We also completed the development and launched a new Original Sprout product line, ‘Worry Free,' which is now available at select Target stores nationwide. These growth initiatives took some up-front capital, but they are expected to produce handsome returns. We had the cash reserves in the bank to make them happen, with no borrowings or equity raises.

"We also signed a definitive agreement to acquire Printstock Products, one of the product packaging suppliers to our Gourmet Foods subsidiary in New Zealand. Unfortunately, the onset of COVID-19 has now delayed the expected closing of this proposed transaction until later this year, when travel restrictions are eased," said Gerber. "Lastly, subsequent to the close of the third quarter, we were pleased to announce that Original Sprout entered a major new retail sales channel with introduction of select products on the e-commerce site of Costco.

"While the long-term impact of the COVID-19 pandemic on the company is still unknown, we have taken stringent cautionary steps to assure the protection of all employees, as we continue to plan for the future," Gerber added.

For the three months ended March 31, 2020, net revenues amounted to $5.9 million, compared with $6.3 million for the prior year. Net loss for the most recent three-month period amounted to $17,236, equal to break-even per share, versus income of $75,884, also equal to break-even per share, for the comparable prior-year period.

The company's largest operating unit, USCF Investments, posted revenues of $3.0 million for the 2020 third quarter, versus $3.6 million a year ago, principally reflecting average AUM of $2.3 billion for the 2020 third quarter, versus average AUM of $2.6 billion in the same period last year. By the close of the 2020 third quarter, however, AUM had increased to $3.0 billion. USCF Investments manages nine commodity-oriented exchange-traded funds ("ETFs") and one equity traded ETF that are listed on the New York Stock Exchange.

The company's ‘Other' business segment, which comprised approximately 50% of total revenues in the most recent third-quarter vs 42% at the same time last year, achieved a 5% 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 remained strong at quarter's end, with cash and cash equivalents of approximately $6.0 million, total stockholders' equity of $17.2 million, and essentially no debt.

"During the third quarter, Original Sprout paced the growth rate within our ‘Other' business segment, with a 57% increase in revenues over the prior year, followed by an 18% revenue increase at Gourmet Foods," said David Neibert, Concierge Technologies' Chief Operations Officer. "Revenues were negatively impacted at our Brigadier Security Systems business by the usual Canadian winter weather disruptions, but also by adopted COVID-19 preventative measures, hampering our ability to complete installations, and resulting in a slump of approximately 20%. Overall, our diversification strategy is working quite well."

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" sunscreen, sold throughout the U.S. and distributed globally through a network of international distributors.

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, the launch of the company's fintech product through its Marygold & Co. subsidiary and closing the acquisition of Printstock Products, 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)

 

 
  March 31, 2020     June 30, 2019  
 
        (AUDITED)  
ASSETS
     
 
 
           
CURRENT ASSETS
           
Cash and cash equivalents
  6,029,164     6,481,815  
Accounts receivable, net
    804,545       939,649  
Accounts receivable - related parties
    1,062,166       1,037,146  
Inventories
    1,108,434       1,008,662  
Prepaid income tax and tax receivable
    1,573,834       1,754,369  
Investments
    3,765,105       3,756,596  
Other current assets
    384,758       546,105  
Total current assets
    14,728,006       15,524,342  
 
               
Restricted cash
    12,016       13,436  
Property and equipment, net
    1,135,049       757,014  
Operating lease right-of-use asset
    809,990       -  
Goodwill
    915,790       915,790  
Intangible assets, net
    2,624,932       2,659,723  
Deferred tax assets, net
    859,696       859,696  
Other assets, long - term
    523,607       523,607  
Total assets
  21,609,086     21,253,608  
 
               
LIABILITIES AND STOCKHOLDERS' EQUITY
               
CURRENT LIABILITIES
               
Accounts payable and accrued expenses
  2,055,110     2,867,081  
Expense waivers - related parties
    382,786       325,821  
Current portion operating lease liabilities
    342,869       -  
Notes payable - related parties
    3,500       3,500  
Loans - property and equipment, current portion
    12,536       26,241  
Total current liabilities
    2,796,801       3,222,643  
 
               
LONG TERM LIABILITIES
               
Notes payable - related parties
    600,000       600,000  
Loans - property and equipment, net of current portion
    348,614       61,057  
Long-term operating lease liabilities, net of current portion
    504,334       -  
Deferred tax liabilities
    176,578       176,578  
Total long-term liabilities
    1,629,526       837,635  
Total liabilities
    4,426,327       4,060,278  
 
               
STOCKHOLDERS' EQUITY
               
Preferred stock, $0.001 par value; 50,000,000 authorized
               
Series B: 53,032 issued and outstanding at March 31, 2020 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 March 31, 2020 and 37,237,519 at June 30, 2019
    37,412       37,237  
Additional paid-in capital
    9,330,913       9,178,838  
Accumulated other comprehensive loss
    (301,222 )     (175,659 )
Retained earnings
    8,115,603       8,152,861  
Total stockholders' equity
    17,182,759       17,193,330  
Total liabilities and stockholders' equity
  21,609,086     21,253,608  

 

 

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

 
  For the Three-Month Periods Ended     For the Nine-Month Periods Ended  
 
  March 31,     March 31,  
 
  2020     2019     2020     2019  
 
                       
Net revenue
                       
Fund management - related party
  2,986,503     3,567,702     8,866,790     11,729,689  
Food products
    1,257,205       1,114,958       3,827,564       3,471,776  
Security systems
    606,268       819,695       2,110,526       2,378,421  
Beauty products and other
    1,051,980       749,889       2,918,582       2,549,674  
Net revenue
    5,901,956       6,252,244       17,723,462       20,129,560  
 
                               
Cost of revenue
    1,750,845       1,637,694       5,243,803       5,233,458  
 
                               
Gross profit
    4,151,111       4,614,550       12,479,659       14,896,102  
 
                               
 
                               
Operating expense
                               
General and administrative expense
    1,098,721       997,321       3,207,762       3,153,638  
Fund operations
    695,529       1,130,070       2,232,816       3,540,458  
Marketing and advertising
    604,163       678,664       1,811,249       2,313,322  
Depreciation and amortization
    148,131       173,387       447,955       523,595  
Salaries and compensation
    1,785,913       1,473,004       5,002,617       4,578,376  
Total operating expenses
    4,332,457       4,452,446       12,702,399       14,109,389  
 
                               
(Loss) income from operations
    (181,346 )     162,104       (222,740 )     786,713  
 
                               
 
                               
Other (expense) income:
                               
Other (expense) income
    (40,224 )     1,731       (61,797 )     (508,543 )
Interest and dividend income
    23,806       3,011       76,078       358,425  
Interest expense
    (9,979 )     (7,064 )     (31,219 )     (22,436 )
Total other expense, net
    (26,397 )     (2,322 )     (16,938 )     (172,554 )
 
                               
(Loss) income before income taxes
    (207,743 )     159,782       (239,678 )     614,159  
 
                               
Benefit (provision) of income taxes
    190,507       (83,898 )     202,420       (189,608 )
 
                               
Net (loss) income
  (17,236 )   75,884     (37,258 )   424,551  
 
                               
Weighted average shares of common stock
                               
Basic
    37,412,519       34,045,383       37,383,246       31,021,688  
Diluted
    37,412,519       38,298,159       37,383,246       38,298,159  
 
                               
Net (loss) 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)

 

 
  For the Three-Month Periods Ended     For the Nine-Month Periods Ended  
 
  March 31,     March 31,  
 
  2020     2019     2020     2019  
 
                       
Net (loss) income
  (17,236 )   75,884     (37,258 )   424,551  
 
                               
Other comprehensive (loss) income:
                               
Foreign currency translation (loss) gain
    (295,100 )     44,912       (125,563 )     (13,796 )
Comprehensive (loss) income
  (312,336 )   120,796     (162,821 )   410,755  

 

 

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 
  For the Nine-Month Periods Ended  
 
  March 31,  
 
  2020     2019  
CASH FLOWS FROM OPERATING ACTIVITIES:
           
Net (loss) income
  (37,258 )   424,551  
Adjustments to reconcile net income to net cash provided by operating activities
               
Depreciation and amortization
    447,955       523,595  
Stock based vendor compensation
    152,250       -  
Bad debt recovery
    (197 )     -  
Unrealized loss (gain) on investments
    44,409       (29,463 )
Loss (gain) on disposal of equipment
    -       (3,381 )
Operating lease right-of-use asset - non-cash lease cost
    303,851       -  
Decrease (increase) in current assets:
               
Accounts receivable
    77,244       11,381  
Accounts receivable - related party
    (25,020 )     250,798  
Prepaid income taxes and tax receivable
    196,670       110,124  
Inventories
    (155,644 )     (284,506 )
Other current assets
    (18,910 )     (109,728 )
Decrease (increase) in current liabilities:
               
Accounts payable and accrued expenses
    (715,356 )     (350,473 )
Operating lease liabilities
    (303,714 )     -  
Expense waivers - related party
    56,965       (200,187 )
Net cash provided by operating activities
    23,245       342,711  
 
               
CASH FLOWS FROM INVESTING ACTIVITIES:
               
Cash paid for acquisition of business assets
    -       (1,205,000 )
Cash paid for internally developed software
    (217,990 )     -  
Purchase of property and equipment - net of disposal
    (455,064 )     (26,985 )
Sale of investments
    1,000,000       3,197,479  
Purchase of investments
    (1,040,767 )     (1,000,000 )
Net cash (used in) provided by investing activities
    (713,821 )     965,494  
 
               
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Proceeds from property and equipment loans
    370,220       -  
Repayment of property and equipment loans
    (89,666 )     (104,272 )
Net cash provided by (used in) financing activities
    280,554       (104,272 )
 
               
Effect of exchange rate change on cash and cash equivalents
    (44,049 )     3,256  
 
               
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
    (454,071 )     1,207,189  
 
               
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING BALANCE
    6,495,251       7,524,114  
 
               
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, ENDING BALANCE
  6,041,180     8,731,303  
 
               
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
               
Cash paid during the period for:
               
Interest paid
  12,926     -  
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     -  

 

CONTACT:

Roger S. Pondel
PondelWilkinson Inc.
310-279-5980
[email protected]

SOURCE: Concierge Technologies, Inc.

Topic:
Earnings
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