- 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
rpondel@pondel.com
SOURCE: Concierge Technologies, Inc.
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https://www.accesswire.com/590110/Concierge-Technologies-Reports-Fiscal-Third-Quarter-Financial-Results
