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First Quarter In The Bag: A Look At All The Milestones 1847 Holdings Hit So Far This Year

Thursday, 18 April 2024 09:25 AM

1847 Holdings LLC

NEW YORK, NY / ACCESSWIRE / April 18, 2024 / When it comes to deal-making, capital raises and share buying, 1847 Holdings LLC (AMEX:EFSH) had a busy first quarter of 2024. The New York City publicly traded diversified acquisition holding company is making a name for itself, acquiring small businesses and then deploying resources to strengthen the enterprise and improve operations, with an eye toward spinning them out or growing them internally. All of 1847's hard work is paying off, with the PE firm making a lot of moves that position it for growth this year and beyond.

Take its moves to shore up capital during the first three months of the year, for starters. 1847 kicked off the quarter by securing a $750,000 credit facility for its Wolo Manufacturing Corp. unit, which makes vehicle horns and safety products for cars, trucks, industrial equipment and emergency vehicles. The money went to fulfill orders amid stronger-than-expected demand, strengthen Wolo's liquidity and give it increased financial flexibility, said 1847 CEO Ellery Roberts. "With this enhanced credit capacity, combined with growing customer demand and easing of supply-chain pressure, Wolo has the potential to increase its sales by 50% to 70% year-over-year in 2024," Roberts said. It's already on the road to that. In the first two months of 2024, Wolo's reporting revenue increased 40% year-over-year in both January and February. 1847 also secured a $1 million credit facility for its High Mountain Door & Trim Inc. ("High Mountain") subsidiary, underscoring its focus on growing its portfolio companies.

Then there's the closing of its previously announced public offering of securities in late February, raising $5 million in gross proceeds. The public offering, handled by Spartan Capital Securities, gives 1847 more firepower to make buys and invest in its businesses.

Reigning In Expenses, Debt

Shoring up capital isn't the only way 1847 improved operations during the first quarter. It's also paying off debt and cutting expenses including by divesting 1847 Asien Inc. The unit provides a wide variety of appliance services. By letting go of that asset, 1847 Holdings said it reduces expenses by around $10.9 million a year and should positively impact margins. The divestment also reduces total liabilities by about $4.5 million. The PE firm was also able to pay off $1.95 million in debt, which Roberts said removes a potential equity overhang.

1847 has also been active on the profit-booking front. It recently engaged Spartan Capital Securities, LLC., to pursue a potential spinoff of 1847 Cabinets Inc., a designer, manufacturer and installer of cabinets, doors and millwork for residential construction. 1847 aims to capitalize on the growth and outlook for the company by either a spin-off of 1847 Cabinets into a separate publicly traded company or a sale to a well-paying suitor. 1847 is hoping to replicate the success it had with 1847 Goedeker's. In April 2019, 1847 paid $6.5 million for the online purveyor of appliances, furniture and home goods. By June of 2021 when it went public, the company was valued at roughly $60 million.

Its ICU Eyewear Holdings Inc. subsidiary also grew during the quarter, recently adding two additional manufacturing partners in the Philippines and the U.S. ICU reports it was able to secure favorable rates and eliminate certain tariffs, which it said should "significantly" reduce its cost of goods. The move also reduces its reliance on production in China and enhances operations, which not only makes it more efficient but potentially a more attractive acquisition target, the company said.

CEO Acquires Common Shares At $3.30

CEO Roberts demonstrated his faith in 1847 by purchasing shares of the company's stock in the first quarter. Roberts paid $3.30 per share to acquire 154,364 shares in early March, after acquiring 6,251 shares in late January for $1.353 a share. All told, Roberts owns 169,648 shares in the company he created. When insiders, namely CEOs, buy shares of their company it signals executives have confidence in the business and/or think the stock is undervalued. It's something investors pay close attention to. If insiders were selling shares rather than purchasing them, it could be a red flag that something is amiss.

It's been a busy three months for 1847, and more moves are expected in the months to come. After all, the PE firm is paying down debt, shoring up capital and positioning its portfolio companies for potentially successful exits or to grow internally. What more can investors ask for?

Featured photo by Scott Graham on Unsplash.

Ellery Roberts
[email protected]

SOURCE: 1847 Holdings LLC

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