HOUSTON, TX, May 17, 2023 (GLOBE NEWSWIRE) -- via NewMediaWire - SMG Industries, Inc. ("SMG" or the "Company") (OTCQB: SMGI), a growth-oriented transportation services company focused on the domestic infrastructure logistics market, today announced its unaudited consolidated revenues from operations for first quarter ended March 31, 2023, amounting to $20,869,763. This record revenue represents a 29% increase compared to the $16,181,053 reported in the comparable quarter Q1, 2022. The Company achieved positive Adjusted EBITDA, a non-GAAP measure, amounting to $1,083,610, continuing the upward trend resulting from increased revenues and firm pricing during the period. Additional information regarding Adjusted EBITDA, as well as a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure of net income (loss), is provided in the "Adjusted EBITDA Non-GAAP Net Income (Loss) Reconciliation Table" section below.
The improvement in first quarter ended March 31, 2023 compared to the first quarter 2022 was driven by continued growth in volumes and consistent price improvements in the Company's Industrial Division, supported by increased demand for super heavy haul projects, infrastructure, and additional production hauling revenue lines. The Company's brokerage business, known as 5J Logistics Services, also contributed solid operating revenues. The positive performance of Adjusted EBITDA in Q1 was attributed to consistent sales volume, increased asset usage, and improved diversification of higher-margin revenue lines within the industrial division, as well as ongoing cost-cutting measures.
Mr. Matt Flemming, Chairman of SMG, stated, "The Company continues to experience the benefits of higher activity levels from its customers and is reaping the rewards of its commitment to new end market diversification. Additionally, the Company remains actively engaged in seeking opportunities for acquisitions that are accretive to its business, as well as identifying non-cyclical revenue lines to sustain growth initiatives, enhance competitiveness, and increase its equipment fleet utilization."
For more detailed financial results, management's discussion and analysis, and risk factors, please refer to the Company's Quarterly Report on Form 10-Q for the period ended March 31, 2023, filed on May 15, 2023.
Forward-Looking Statements
This press release contains certain "forward-looking statements" with respect to our financial condition, business strategies, growth opportunities, acquisitions, listing plans and objectives of management, and other matters. Statements in this press release that are not historical facts are "forward-looking statements" for the purpose of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, and involve a number of risks and uncertainties.
Forward-looking statements, including, without limitation, those relating to our future business prospects, listing plans, financial condition and acquisitions, whenever they occur in this press release are necessarily estimates reflecting the best judgment of the Company's senior management at the time such statements were made. There are a number of factors, many of which are beyond the Company's control, which could cause actual results and events to differ materially from those described in the forward-looking statements. These factors include, among others, the risks and uncertainties discussed more fully under the caption "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2022, and in the Company's subsequent filings with the Securities and Exchange Commission. Readers of this press release are cautioned not to place undue reliance on these forward-looking statements, since there can be no assurance that these forward-looking statements will prove to be accurate. The Company disclaims any obligation or undertaking to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made, except as required by law.
About SMG Industries, Inc.: SMG Industries is a growth-oriented transportation services company focused on the domestic infrastructure logistics market. Through several of the Company's wholly-owned subsidiaries branded as the "5J Transportation Group," it offers specialized heavy haul, super heavy haul, flatbed, brokerage, and drilling rig mobilization services. 5J's engineered permitted jobs can support up to 500-thousand-pound loads including infrastructure cargo associated with bridge beams, wind energy, power generation components, compressors, refinery and construction equipment. SMG Industries is headquartered in Houston, Texas and has facilities in Floresville, Hempstead, Henderson, Houston, Odessa, Palestine, Victoria, Texas and Fort Mill, South Carolina. Read more at www.5J-Group.com and www.SMGIndustries.com
Source: SMG Industries, Inc. +1-713-955-3497
Contact:
Stan Abiassi - Market Street Capital, Inc.
stan@marketstreetcp.com
713-338-9415
| SMG INDUSTRIES, INC. | ||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||
| (Unaudited) | ||||||||||
| March 31, | December 31, | |||||||||
| 2023 | 2022 | |||||||||
| ASSETS | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 313,595 | $ | 127,225 | ||||||
| Restricted cash | 1,105,818 | 1,105,818 | ||||||||
| Accounts receivable, net of allowance for doubtful accounts of $1,244,852 and $855,832 | ||||||||||
| as of March 31, 2023 and December 31, 2022, respectively | 12,565,878 | 12,185,792 | ||||||||
| Prepaid expenses and other current assets | 2,100,032 | 2,308,067 | ||||||||
| Total current assets | 16,085,323 | 15,726,902 | ||||||||
| Property and equipment, net of accumulated depreciation of $16,116,896 and $15,329,817 | ||||||||||
| as of March 31, 2023 and December 31, 2022, respectively | 4,950,858 | 5,414,830 | ||||||||
| Right of use assets - operating lease | 615,051 | 734,504 | ||||||||
| Other assets | 227,801 | 305,451 | ||||||||
| Total assets | $ | 21,879,033 | $ | 22,181,687 | ||||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable | $ | 3,501,082 | $ | 3,014,598 | ||||||
| Accounts payable - related party | 853,092 | 565,603 | ||||||||
| Accrued expenses and other liabilities | 3,452,804 | 2,850,547 | ||||||||
| Right of use liabilities - operating leases short term | 688,803 | 650,945 | ||||||||
| Deferred revenue | - | 128,000 | ||||||||
| Secured line of credit | 9,699,648 | 10,623,887 | ||||||||
| Current portion of unsecured notes payable | 2,947,790 | 2,465,445 | ||||||||
| Current portion of secured notes payable, net | 7,913,546 | 6,990,486 | ||||||||
| Current portion of convertible note, net | 8,679,893 | 7,327,288 | ||||||||
| Current liabilities of discontinued operations | 185,994 | 200,994 | ||||||||
| Total current liabilities | 37,922,652 | 34,817,793 | ||||||||
| Long term liabilities: | ||||||||||
| Convertible note payable, net | 491,926 | - | ||||||||
| Notes payable - secured, net of current portion | 12,508,420 | 13,307,309 | ||||||||
| Right of use liabilities - operating leases, net of current portion | 169,361 | 278,137 | ||||||||
| Long term liabilities of discontinued operations | 289,321 | 300,586 | ||||||||
| Total liabilities | 51,381,680 | 48,703,825 | ||||||||
| Commitments and contingencies | ||||||||||
| Stockholders' deficit | ||||||||||
| Preferred stock 1,000,000 shares authorized: | ||||||||||
| Series A preferred stock - $0.001 par value; 2,000 shares authorized; 0 shares issued | - | - | ||||||||
| and outstanding at March 31, 2023 and December 31, 2022, respectively | ||||||||||
| Series B convertible preferred stock - $0.001 par value; 6,000 shares authorized; 0 shares issued | ||||||||||
| and outstanding at March 31, 2023 and December 31, 2022, respectively | - | - | ||||||||
| Common stock - $0.001 par value; 250,000,000 shares authorized; 48,747,530 and 39,180,297 shares | ||||||||||
| issued and outstanding at March 31, 2023 and December 31, 2022, respectively | 48,748 | 39,181 | ||||||||
| Additional paid in capital | 15,131,534 | 18,081,457 | ||||||||
| Accumulated deficit | (44,682,929 | ) | (44,642,776 | ) | ||||||
| Total stockholders' deficit | (29,502,647 | ) | (26,522,138 | ) | ||||||
| Total liabilities and stockholders' deficit | $ | 21,879,033 | $ | 22,181,687 | ||||||
| The accompanying notes are an integral part of these unaudited consolidated financial statements | ||||||||||
| - | - | - | ||||||||
| SMG INDUSTRIES INC. | ||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
| For the three months ended March 31, 2023 and 2022 | ||||||||||||
| (Unaudited) | ||||||||||||
| March 31, 2023 | March 31, 2022 | |||||||||||
| REVENUES | $ | 20,869,763 | $ | 16,181,053 | ||||||||
| COST OF REVENUES | 18,240,360 | 14,725,105 | ||||||||||
| GROSS PROFIT | 2,629,403 | 1,455,948 | ||||||||||
| OPERATING EXPENSES: | ||||||||||||
| Selling, general and administrative | 3,062,601 | 2,463,881 | ||||||||||
| Total operating expenses | 3,062,601 | 2,463,881 | ||||||||||
| LOSS FROM OPERATIONS | (433,198 | ) | (1,007,933 | ) | ||||||||
| OTHER INCOME (EXPENSE) | ||||||||||||
| Interest expense, net | (2,897,167 | ) | (2,619,037 | ) | ||||||||
| Other income | 8,634 | - | ||||||||||
| Other expense | (203,474 | ) | (9,048 | ) | ||||||||
| Total other income (expense) | (3,092,007 | ) | (2,628,085 | ) | ||||||||
| NET LOSS FROM CONTINUING OPERATIONS | (3,525,205 | ) | (3,636,018 | ) | ||||||||
| Income (loss) from discontinued operations | (1,835 | ) | 4,888 | |||||||||
| NET LOSS | $ | (3,527,040 | ) | $ | (3,631,130 | ) | ||||||
| Net loss per common share | ||||||||||||
| Continuing operations | $ | (0.08 | ) | $ | (0.11 | ) | ||||||
| Discontinued operations | $ | (0.00 | ) | $ | (0.00 | ) | ||||||
| Net loss attributable to common shareholders | $ | (0.08 | ) | $ | (0.11 | ) | ||||||
| Weighted average common shares outstanding | ||||||||||||
| Basic | 45,503,728 | 34,311,688 | ||||||||||
| Diluted | 45,503,728 | 34,311,688 | ||||||||||
| The accompanying notes are an integral part of these unaudited consolidated financial statements | ||||||||||||
| - | ||||||||||||
| SMG INDUSTRIES INC. | |||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
| For the three months ended March 31, 2023 and 2022 | |||||||||||
| (Unaudited) | |||||||||||
| March 31, 2023 | March 31, 2022 | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
| Net loss from continuing operations | $ | (3,525,205 | ) | $ | (3,636,018 | ) | |||||
| Adjustments to reconcile net loss to net | |||||||||||
| cash used in operating activities: | |||||||||||
| Share based compensation | 30,554 | 15,605 | |||||||||
| Depreciation and amortization | 787,079 | 1,357,401 | |||||||||
| Amortization of deferred financing costs | 326,372 | 1,497,032 | |||||||||
| Amortization of right of use assets - operating leases | 119,453 | 114,044 | |||||||||
| Shares issued for debt extension | 1,180,618 | - | |||||||||
| Bad debt expense | 402,160 | 153,801 | |||||||||
| Changes in: | |||||||||||
| Accounts receivable | (782,246 | ) | (1,023,905 | ) | |||||||
| Prepaid expenses and other current assets | 862,472 | 1,484,614 | |||||||||
| Other assets | 77,650 | (598,625 | ) | ||||||||
| Accounts payable | 736,483 | (1,656,889 | ) | ||||||||
| Accounts payable - related party | 287,489 | 46,716 | |||||||||
| Accrued expenses and other liabilities | 602,257 | 50,256 | |||||||||
| Right of use operating lease liabilities | (70,918 | ) | 29,037 | ||||||||
| Deferred revenue | (128,000 | ) | - | ||||||||
| Net cash provided by (used in) operating activities from continuing operations | 906,218 | (2,166,931 | ) | ||||||||
| Net cash provided by operating activities from discontinued operations | (28,100 | ) | - | ||||||||
| Net cash provided by (used in) operating activities | 878,118 | (2,166,931 | ) | ||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
| Cash procceds from disposal of purchase of property and equipment | 1,500 | - | |||||||||
| Cash paid for purchase of property and equipment | (6,189 | ) | (37,022 | ) | |||||||
| Net cash used in investing activities from continuing operations | (4,689 | ) | (37,022 | ) | |||||||
| Net cash used in investing activities from discontinued operations | - | - | |||||||||
| Net cash used in investing activities | (4,689 | ) | (37,022 | ) | |||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
| Payment of deferred financing costs | - | - | |||||||||
| Proceeds on secured line of credit, net | (952,667 | ) | 180,830 | ||||||||
| Payments on secured line of credit, net | - | - | |||||||||
| Proceeds from notes payable | 2,000,000 | 5,229,098 | |||||||||
| Payments on notes payable | (2,156,338 | ) | (1,035,443 | ) | |||||||
| Payments on convertible notes payable | - | - | |||||||||
| Proceeds from convertible notes payable | 421,946 | - | |||||||||
| Net cash provided by (used in) financing activities from continuing operations | (687,059 | ) | 4,374,485 | ||||||||
| Net cash provided by (used in) financing activities from discontinued operations | - | - | |||||||||
| Net cash provided by (used in) financing activities | (687,059 | ) | 4,374,485 | ||||||||
| NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 186,370 | 2,170,532 | |||||||||
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period | 1,233,043 | 1,116,176 | |||||||||
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period | $ | 1,419,413 | $ | 3,286,708 | |||||||
| Supplemental disclosures: | |||||||||||
| Cash paid for income taxes | $ | - | $ | - | |||||||
| Cash paid for interest | $ | 2,192,989 | $ | 1,144,694 | |||||||
| Noncash investing and financing activities | |||||||||||
| Prepaid expenses financed with note payable | $ | 645,194 | $ | 1,353,151 | |||||||
| Shares issued for deferred financing costs | $ | 543,136 | $ | 397,773 | |||||||
| Convertible notes payable issued to settle accounts payable and accrued expenses | $ | 250,000 | $ | - | |||||||
| Note receivable for property and equipment | $ | 9,243 | $ | 275,000 | |||||||
| Equipment financed with note payable | $ | 327,661 | $ | 843,844 | |||||||
| The accompanying notes are an integral part of these unaudited consolidated financial statements | |||||||||||
| - | - | ||||||||||
| SMG Industries, Inc. Non-GAAP Reconciliation of | ||||
| Adjusted EBITDA Schedule for Q1 2023 | ||||
| For the Quarter Ended March 31, 2023 | ||||
| Net Income (Loss) | $ | (3,525,205 | ) | |
| Depreciation | $ | 787,079 | ||
| Taxes | $ | 7,500 | ||
| Interest | $ | 1,417,895 | ||
| Amortization expenses | $ | 1,479,272 | ||
| Non cash Stock options expense | $ | 30,554 | ||
| Transaction related expenses | $ | 82,478 | ||
| Contract CFO Consulting Services | $ | 23,080 | ||
| CTO Services | $ | 62,499 | ||
| Other One-time/Non-Cash charges | $ | 501,454 | ||
| Out of Period Costs/Insurance Adjustments | $ | 217,004 | ||
| Total Adjusted EBITDA for the Quarter ended March 31, 2023 | $ | 1,083,610 | ||
