Proposed Merger Agreement with Progressive Care Inc., Launch of its E-Commerce Development Program with Alibaba's Tmall Global and Acquisition of Outfitters Expected to Drive Continued Top-Line Growth
COCONUT GROVE, Fla., May 15, 2024 /PRNewswire/ -- NextPlat Corp (NASDAQ: NXPL, NXPLW) ("NextPlat" or the "Company"), a global e-Commerce provider, today announced record financial results for the first fiscal quarter ended March 31, 2024 which includes the consolidation of the operations of its e-commerce business with the results of its healthcare operations, Progressive Care Inc. (OTCQB: RXMD) ("Progressive Care").
"First quarter results continued to demonstrate the fundamental strength of NextPlat's focus on the large healthcare services and global e-commerce technology markets and further demonstrates our team execution against its global growth plans," said Charles M. Fernandez, Executive Chairman and CEO of NextPlat Corp. "Throughout the remainder of 2024, we are committed to maximizing and unlocking the unrealized value in our business, further building upon the strong financial and technical foundation we have created and our growing list of global partners and customers. We intend to achieve our near-term goals by capitalizing on our ability to significantly improve the efficiency of our business through our proposed merger with Progressive Care and the opportunity to add multiple new high value healthcare and e-commerce revenue streams to our platform."
First Quarter 2024 Financial Highlights:
- Consolidated revenues for the quarter ended March 31, 2024, were approximately $17.5 million, an increase of over 508% versus revenue of approximately $2.9 million for the quarter ended March 31, 2024. Results for the first quarter of 2024 reflect e-commerce revenue of approximately $2.9 million and approximately $14.6 million in revenue contributed from the Company's healthcare operations (specifically, Progressive Care whose results are consolidated as of July 1, 2023).
- Gross margins for the quarter ended March 31, 2024, increased significantly to 27.5%, up from 21.6% reported for the quarter ended March 31, 2023, primarily attributable to the healthcare operations because of the Progressive Care consolidation. Gross profit margin attributable to our healthcare operations was approximately 27% (for the consolidation period). Our e-commerce profit margins improved to 28% from 22% reported in the quarter ended March 2024, driven largely by continued increases in the sales of higher margin, recurring airtime revenue.
- Operating expenses for the quarter ended March 31, 2024, were approximately $6.7 million compared to approximately $1.9 million in the year-ago period, an increase of approximately $4.8 million. Selling, general and administrative ("SG&A") increased by approximately $1.2 million and was mainly attributable to the increase in stock-based compensation of approximately $0.4 million, other operating expenses as it relates to the e-Commerce operations of approximately $0.4 million, and approximately $0.4 million as it relates to operating expenses of the healthcare operations as a result of the Progressive Care acquisition on July 1, 2023. Salaries, wages and payroll taxes increased by $2.0 million and was mainly attributable to the healthcare operations as a result of the Progressive Care acquisition as of July 1, 2023. Professional fees, primarily legal and consulting, increased by approximately $0.7 million, and depreciation and amortization expenses increased by approximately $0.7 million.
- Net loss for the quarter ended March 31, 2024, was approximately $1.5 million, or ($0.08) per diluted share compared to a net loss of approximately $1.2 million, or ($0.08) diluted earnings per share reported for the quarter ended March 31, 2023.
- The Company ended the first quarter of 2024 with approximately $23.5 million in cash.
Organizational Highlights and Recent Business Developments:
- In the first quarter, the Company's technology e-commerce business saw positive sequential quarterly improvement including positive increases in global transaction volumes for satellite phones and tracking devices despite the expected seasonality in the business and continued tight inventory and product availability. Demand for high margin, recurring airtime contracts remains at monthly record levels, driving quarterly margins on airtime sales to near record levels. On April 1, 2024, NextPlat completed the acquisition of Outfitter Satellite Inc. ("Outfitter"), significantly expanding its North American technology e-commerce business. The Company is actively supporting Outfitter's new and existing customers while it quickly works to expand and modernize its e-commerce presence including integrating its operations onto its global ERP system expected to be completed by the end of the second quarter.
- The Company's healthcare business, Progressive Care, saw a significant 28% increase in revenue in the first quarter of 2024, driven by 16% growth in pharmacy prescriptions and a 110% increase in its 340B contract services business versus the first quarter of 2023.
- On April 12, 2024, NextPlat announced a proposed business combination with Progressive Care Inc. in an all-stock transaction which is expected to provide revenue synergies and significant annual operating cost reductions. Effective as of July 1, 2023, Progressive Care became a consolidated subsidiary of NextPlat for accounting purposes as a result of the controlling interest in Progressive Care obtained by the Company in concert with the Company's Executive Chairman and CEO, Charles M. Fernandez, and its Director, Rodney Barreto.
- The Company's exclusive OPKO Healthcare ("OPKO")-branded storefront in China on Alibaba's Tmall Global platform, was launched on March 1, 2024. Since its initial launch, the Company has continued to enhance the OPKO storefront with additional product listings. At launch, the OPKO-branded storefront initially listed health and wellness products including an assortment of nutraceuticals for bone, joint and eye health as well as supplements for nutrition and immunity defense. The OPKO online storefront will see significant expansion with the addition of a wide array of veterinary and animal health products starting in the second quarter of 2024 subject to receipt of the final government approvals. Product marketing programs supported by Alibaba's local trading partner is expected to commence later in the second quarter.
- During the quarter, the Company continued to make progress as it prepares for the formal introduction of its Florida Sunshine line of branded vitamins and supplements. This new commerce development program is expected to be launched on Alibaba's Tmall Global platform in China in the third quarter of 2024, further expanding its e-commerce and healthcare offerings.
David Phipps, President of NextPlat and CEO of Global Operations, added, "Healthcare, technology and e-commerce continue to be among the largest and most important sectors of the global economy today and is why NextPlat is committed to investing into near-term opportunities and launching multiple new offerings this year. By leveraging our e-commerce development program with Alibaba and its Tmall Global platform in China, expanding our healthcare footprint for services and products, and adding complementary connectivity offerings to our growing product portfolio, we will continue to demonstrate the strength and value of our diversified business model."
The financial information included in this press release should be read in conjunction with the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, which will be filed with the Securities and Exchange Commission later today.
For more information regarding the financial results of Progressive Care Inc. for the quarter ended March 31, 2024, investors should refer to its Quarterly Report on Form 10-Q which will be filed with the Securities and Exchange Commission later today.
About NextPlat Corp
RXMD).
Important Information About the Merger and Where to Find It
www.sec.gov, or by directing a request to: NextPlat Corp, 3250 Mary St., Suite 410, Coconut grove, FL 33133, Attention: Chief Financial Officer, Telephone: (305) 560-5355.
Participants in the Solicitation
www.sec.gov, or by directing a request to NextPlat Corp, 3250 Mary St., Suite 410, Coconut grove, FL 33133, Attention: Chief Financial Officer, Telephone: (305) 560-5355. Additional information regarding the interests of such participants will be contained in the proxy statement for the Merger when available.
Progressive Care and its directors and executive officers may also be deemed to be participants in the solicitation of proxies from the shareholders of NextPlat in connection with the Merger. A list of the names of such directors and executive officers and information regarding their interests in the Merger will be included in the proxy statement for the Merger when available.
No Offer or Solicitation
This Current Report on Form 8-K shall not constitute a solicitation of a proxy, consent or authorization with respect to any securities or in respect of the Merger. This Current Report on Form 8-K shall also not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any states or jurisdictions in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act, or an exemption therefrom.
Forward-Looking Statements
Media and Investor Contact for NextPlat Corp:
[email protected]
NEXTPLAT CORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (In thousands, except per shares data) | ||||||||
Three Months Ended | Three Months Ended | |||||||
March 31, 2024 | March 31, 2023 | |||||||
(Unaudited) | (Unaudited) | |||||||
Sales of products, net | $ | 14,120 | $ | 2,876 | ||||
Revenues from services | 3,373 | - | ||||||
Revenue, net | 17,493 | 2,876 | ||||||
Cost of products | 12,620 | 2,255 | ||||||
Cost of services | 63 | - | ||||||
Cost of revenue | 12,683 | 2,255 | ||||||
Gross profit | 4,810 | 621 | ||||||
Operating expenses: | ||||||||
Selling, general and administrative | 2,005 | 788 | ||||||
Salaries, wages and payroll taxes | 2,624 | 588 | ||||||
Impairment loss | 132 | - | ||||||
Professional fees | 985 | 321 | ||||||
Depreciation and amortization | 906 | 162 | ||||||
Total operating expenses | 6,652 | 1,859 | ||||||
Loss before other (income) expense | (1,842) | (1,238) | ||||||
Other (income) expense: | ||||||||
Interest expense | 21 | 5 | ||||||
Interest earned | (215) | (10) | ||||||
Other income | - | (50) | ||||||
Foreign currency exchange rate variance | 26 | (28) | ||||||
Total income expense | (168) | (83) | ||||||
Loss before income taxes and equity in net loss of affiliate | (1,674) | (1,155) | ||||||
Income taxes | (27) | - | ||||||
Loss before equity in net loss of affiliate | (1,701) | (1,155) | ||||||
Equity in net loss of affiliate | - | (32) | ||||||
Net loss | (1,701) | (1,187) | ||||||
Net loss attributable to noncontrolling interest | 220 | - | ||||||
Net loss attributable to NextPlat Corp | $ | (1,481) | $ | (1,187) | ||||
Comprehensive income (loss): | ||||||||
Net loss | $ | (1,701) | $ | (1,187) | ||||
Foreign currency loss | (27) | (23) | ||||||
Comprehensive loss | $ | (1,728) | $ | (1,210) | ||||
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ | (1,481) | $ | (1,187) | ||||
Weighted number of common shares outstanding - basic and diluted | 18,725 | 14,415 | ||||||
Loss per share - basic and diluted | $ | (0.08) | $ | (0.08) | ||||
NEXTPLAT CORP AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except shares and par data) | ||||||||
March 31, 2024 | December 31, 2023 | |||||||
(Unaudited) | (Audited) | |||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash | $ | 23,526 | $ | 26,307 | ||||
Accounts receivable, net | 12,928 | 8,923 | ||||||
Receivables - other, net | 2,068 | 1,846 | ||||||
Inventory, net | 5,610 | 5,135 | ||||||
Unbilled revenue | 185 | 189 | ||||||
VAT receivable | 357 | 342 | ||||||
Prepaid expenses | 404 | 640 | ||||||
Notes receivable due from related party | 260 | 256 | ||||||
Total Current Assets | 45,338 | 43,638 | ||||||
Property and equipment, net | 3,846 | 3,989 | ||||||
Goodwill | 731 | 731 | ||||||
Intangible assets, net | 13,725 | 14,423 | ||||||
Operating right of use assets, net | 1,303 | 1,566 | ||||||
Finance right-of-use assets, net | 18 | 22 | ||||||
Deposits | 39 | 39 | ||||||
Prepaid expenses, net of current portion | 61 | 61 | ||||||
Total Other Assets | 15,877 | 16,842 | ||||||
Total Assets | $ | 65,061 | $ | 64,469 | ||||
LIABILITIES AND EQUITY | ||||||||
Current Liabilities | ||||||||
Accounts payable and accrued expenses | $ | 14,893 | $ | 13,176 | ||||
Contract liabilities | 140 | 42 | ||||||
Notes payable | 233 | 312 | ||||||
Due to related party | 42 | 18 | ||||||
Operating lease liabilities | 532 | 532 | ||||||
Finance lease liabilities | 20 | 18 | ||||||
Income taxes payable | 90 | 139 | ||||||
Total Current Liabilities | 15,950 | 14,237 | ||||||
Long Term Liabilities: | ||||||||
Notes payable, net of current portion | 1,165 | 1,211 | ||||||
Operating lease liabilities, net of current portion | 853 | 929 | ||||||
Finance lease liabilities, net of current portion | - | 5 | ||||||
Total Liabilities | 17,98 | 16,382 | ||||||
Commitments and Contingencies | - | - | ||||||
Equity | ||||||||
Preferred stock ($0.0001 par value; 3,333,333 shares authorized) | - | - | ||||||
Common stock ($0.0001 par value; 50,000,000 shares authorized, 18,724,596 and 18,724,596 shares issued and | 2 | 2 | ||||||
Additional paid-in capital | 67,717 | 67,170 | ||||||
Accumulated deficit | (36,406) | (34,925) | ||||||
Accumulated other comprehensive loss | (90) | (63) | ||||||
Equity attributable to NextPlat Corp stockholders | 31,223 | 32,184 | ||||||
Equity attributable to noncontrolling interests | 15,870 | 15,903 | ||||||
Total Equity | 47,093 | 48,087 | ||||||
Total Liabilities and Equity | $ | 65,061 | $ | 64,469 | ||||
SOURCE NextPlat Corp.
