NextPlat Reports Consolidated Third Quarter 2023 Results with Increased Revenues of $15.3 Million, Margins Improve to 30% and $2.7 Million Net Income
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"The third quarter of 2023 marks an inflection point for NextPlat as we report the consolidation of our global e-commerce and Progressive Care healthcare operations. As a unified business, our teams are focused on maximizing the value of each of its operations through the launch of new online storefronts for customers including OPKO Health into China's multi-billion dollar marketplace on Alibaba's Tmall Global, and the further expansion of Progressive Care's services for both patients and providers," said Charles M. Fernandez, Executive Chairman and CEO of NextPlat Corp. "The intersection of technology, global e-commerce, and healthcare, creates tremendous opportunities for NextPlat. Our continued growth is supported by strong, debt-free balance sheets with sufficient cash to invest both internally and in acquisitions that can quickly add scale to our platform. It is through these investments that we intent to create greater synergies in our business as we seek to unlock valuable new benefits for our customers, partners, patients, and shareholders."
Third Quarter 2023 Financial Highlights:
Consolidated revenues for the third quarter were approximately $15.3 million, an increase of over 481% versus revenue of approximately $2.6 million in the third quarter of 2022. Our third quarter 2022 revenues only reflect the results of the Company's e-commerce operations. e-Commerce revenues were approximately $2.9 million, reflecting growth of 11% when compared to its reported revenues in the third quarter of 2022. The contribution of the Company's healthcare operations were approximately $12.4 million for the third quarter of 2023 and is a result of the Progressive Care consolidation as of July 1, 2023.
Gross margins increased significantly to 30% for the quarter ended September 30, 2023, up from 26% reported for the quarter ended September 30, 2022, primarily attributable to the healthcare operations because of the Progressive Care consolidation. Gross profit margin attributable to our healthcare operations were approximately 31%. Our e-commerce profit margins improved to over 27% from under 26% reported in the third quarter of 2022.
Operating expenses for the quarter ended September 30, 2023, were approximately $8.1 million, an increase of approximately $5.2 million compared to approximately $2.8 million in the year-ago period. The increase was primarily driven by expenses including stock-based compensation of approximately $1.2 million (non-cash expense), salaries and wages of approximately $1.8 million, amortization expense of approximately $0.7 million, and net other operating expense of approximately $1.5 million.
Net income for the quarter ended September 30, 2023, was approximately $2.6 million, or $0.17 diluted earnings per share compared to a net loss of approximately $5.7 million, or $0.60 diluted earnings per share reported for the quarter ended September 30, 2022. Net income in the third quarter of 2023 includes a one-time, gain on equity method investment of approximately $6.1 million (non-cash expense) related to the change in accounting method due to the Progressive Care consolidation as of July 1, 2023. The net loss in 2022 includes an equity in net loss of affiliate expense of approximately $3.4 million (non-cash expense) for its strategic investment in Progressive Care prior to the consolidation on July 1, 2023.
The Company ended the third quarter of 2023 with approximately $26.3 million in cash.
Organizational Highlights and Recent Business Developments:
Effective on July 1, 2023, NextPlat, together with its Executive Chairman and CEO, Charles M. Fernandez, and its Director, Rodney Barreto, acquired a controlling interest in Progressive Care, Inc. As such, Progressive Care is now a consolidated subsidiary of the Company for accounting purposes. The Company intends to support Progressive Care's continued rapid growth through a series of business development and expansion activities designed to boost the continued expansion of Progressive Care's healthcare offerings.
NextPlat announced its first customer for its Florida e-commerce development program, agreeing to exclusively launch the online sales of OPKO Healthcare ("OPKO") products in China on Alibaba's Tmall Global platform. OPKO is a global diversified diagnostic and pharmaceutical healthcare company with over 5,500 employees spanning nine countries. Through this new e-commerce agreement, NextPlat will develop and launch an OPKO-branded storefront on Tmall Global and offer select nutraceutical and veterinary products for sale to potentially millions of Chinese consumers starting in the first quarter of 2024.
The Company is also currently developing a full-line of premium-grade vitamins and dietary supplements under the Florida Sunshine brand name which it can sell to domestic and international markets, including China via the Tmall Global platform.
David Phipps, President of NextPlat and CEO of Global Operations, added, "Supported by the reach of our global platform and network of key partners, we see an increasing number of opportunities to leverage our capabilities to assist businesses across multiple high-growth domestic and international markets, to grow their online presence and e-commerce revenue. Our unique expertise and access into large markets such as China through Alibaba's Tmall Global, positions us well to penetrate several additional consumer and commercial sectors with a broad array of products and high-value services starting in 2024."
The financial information included in this press release should be read in conjunction with the Company's Form 10-Q report for the quarter ended September 30, 2023, as filed with the Securities and Exchange Commission.
For more information regarding the financial results of Progressive Care Inc. for the quarter ended September 30, 2023, investors should refer to its Form 10-Q as filed with the Securities and Exchange Commission.
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