March 25, 2019 17:30 ET | Source: Verus International, Inc.
Gaithersburg, MD, March 25, 2019 (GLOBE NEWSWIRE) -- Verus International, Inc. (“Verus” or the “Company”) today announced financial results for its fiscal 2019 first quarter ended January 31, 2019. In conjunction with this release, the Company is also providing a more detailed description of its strategy for fiscal 2019.
For Q1 2019, management is noting the following items of importance:
Revenue set an all-time record of $2.4 million in Q1/19, an increase of 145% over the $996,125 logged in Q1/18.
The company’s gross margin was approximately 15%, in the higher expected range for the current product mix.
Operating expenses increased 43.3% in the quarter due to extensive legal and other costs related to the recapitalization, but will normalize in future quarters.
Despite extensive one-time costs, the Net Loss showed a 45.8% improvement over Q1/18
Payroll expense fell 33% to $98,223 in Q1/19 compared to Q1/18, an indication of the leverage in the current operational model when coupled with record sales.
“The Q1/19 results showed more of the growth that is coming, but also had the heavy legal and other expenses associated with the recapitalization effort that was announced just eleven days after the quarter’s end,” explained Verus CEO Anshu Bhatnagar. “These are one-time charges associated with what was a very challenging multiparty negotiation. Legal and G&A accounted for nearly 80% of our operating expenses during the quarter, so these line items are going to be dramatically reduced in the next quarter. Without these one-time expenses, Q1/19 would have been a profitable quarter.”
On a forward basis, the Company would like to provide the following update:
Verus has its largest funded backlog in Company history, currently at $24 million for delivery over the next 12 months
The Company’s unfunded backlog continues to be very large, but management has elected to discontinue publishing this estimate pending additional trade or working capital financing
All of the announced orders to date, along with orders under negotiation, are reported at base rates, with the potential for considerable expansion
The Company is in very late stage talks with commercial sources of credit to unlock a portion of the unfunded backlog
In terms of potential mergers and acquisitions, Verus is conducting due diligence on eight candidates and is moving forward on several of these companies. Two of these negotiations are at the final negotiation stage. It is not possible to say how many of these candidates will become operating subsidiaries until final contracts are completed.
In response to numerous investor questions, the Company does not have a reverse split planned at this time, but intends to grow organically to reach the necessary market cap level required for an uplisting to a major exchange
Verus continues to aim for an uplisting during calendar year 2019
“We have decided not to conduct a traditional earnings call this quarter, but will resume that practice next quarter when our financials return to a more normal spacing. Quite frankly, I have so many projects at critical phases, that I want to get these across the finish line as quickly as possible,” said CEO Bhatnagar. “I am currently working on M&A, new orders, and commercial credit arrangements for new business both overseas and, for the first time, here in the U.S.”
“In terms of the just reported quarter, investors should note that costs surrounding the recap were extraordinarily high and those expenses will normalize in the next quarter, making for some dramatic decreases on some of the expense lines. Because of that, we expect to begin generating an operating profit in future quarters, with bottom line profitability coming as well. In terms of calendar year 2019, our growth rate will continue to accelerate in each successive quarter as we layer on additional business. Based on our discussions with new sources of growth, we also anticipate significant product line and geographic expansion during 2019, with the potential to enter new countries and add higher margin consumer product categories. This is shaping up to be a watershed year for Verus.”
Interested investors are reminded to watch for product updates on the official Twitter feed @Verus_Foods.
About Verus International, Inc.
Verus International operates an international food subsidiary (Verus Foods) that sells branded consumer products to customers worldwide. The Company trades on the OTC market (OTC:VRUS). Investors can find Real-Time quotes and market information for the Company on www.otcmarkets.com
