VERUS INTERNATIONAL, INC. REPORTS 154% INCREASE IN QUARTERLY REVENUE; FORECASTS CONTINUED TRIPLE-DIGIT GROWTH
September 10, 2019 16:10 ET | Source: Verus International, Inc.
Gaithersburg, MD, Sept. 10, 2019 (GLOBE NEWSWIRE) -- Verus International, Inc. (“Verus” or the “Company”) today announced financial results for its fiscal 2019, third quarter ended July 31, 2019. In conjunction with this release, the Company is also providing additional details on its strategy for the remainder of fiscal 2019.
For Q3 2019, management is noting the following items of importance:
Revenue set an all-time record of $3.48 million in Q3/19, an increase of 154% over the $1.37 million reported in Q3/18
The Company’s gross margin was approximately 14%. Excluding the MLB business, gross margin was 16.4%, consistent with the expected range for the more traditional Gulf Cooperation Council (GCC) product categories
Operating expenses as a percentage of revenue (backing out non-cash, stock-based compensation) increased to 24.8% of revenue compared to 13.8% in the prior quarter (Q2/19), due to start-up costs associated with the Major League Baseball business
Net loss was $1.36 million, primarily due to non-cash stock-based compensation of approximately $900,000, start-up costs, and legal fees associated with financing and acquisition activities
Net income for the nine months ended July 31, 2019 was approximately $469,000, a significant improvement over a net loss of $1.5 million reported for the nine months ended July 31, 2018.
“The Q3/19 results highlighted the growth potential of our business in the GCC, which accounted for the majority of the revenue,” explained Verus CEO Anshu Bhatnagar. “A large portion of the expense to launch our new MLB business fell into this quarter without much of the revenue, so the bottom-line results were affected by timing. Promotional materials and initiatives, coupled with recurring operating expenses, all contributed to a spike in our operating costs, which will continue to be incurred as we grow, but will be outpaced by future revenue increases. To put this in perspective, our MLB business only accounted for 1.6% of revenue in this triple-digit growth quarter.”
On a forward basis, the Company is providing the following update and guidance:
Verus has its largest funded backlog in Company history, currently in excess of $34 million for delivery in the 12 months following commencement of initial shipping schedules
Estimated unfunded backlog continues to grow, leaving room for significant future organic growth
The Company has received interest from major retailers who are exploring carrying the MLB-branded candy and ice cream lines beginning with the 2020 season
Verus is working to secure a second revolving line of credit, targeting its domestic business
In addition to the recently announced french fry acquisition, Verus is actively pursuing other product lines in its frozen food categories
Pending additional funding, the Company is modelling continued triple digit growth over the next six quarters
“It is natural to expect a few hiccups during any product line start-up, but the MLB business progressed rather smoothly through its first production runs,” said CEO Bhatnagar. “So, we are confident that we can ramp up that business in the future. We are in the enviable position of having more backlog than our current capital resources can fulfill, so getting working capital at favorable rates is a top priority. Our acquisition strategy has evolved a bit, due to the robust environment that is bringing us a steady stream of candidates. In our recent french fry deal, we acquired a product line rather than an operating company, so this is a new avenue for growth that we intend to explore in some additional categories. Overall, we ended the quarter with the largest lineup of growth opportunities in company history.”
Financial Results and Corporate Update Conference Call
In conjunction with today’s release of the Company’s third quarter 2019 financial results, Verus management will host a conference call and live webcast for analysts and investors today at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) to discuss the Company's financial results and future business plan.
To listen to the live conference call, parties should dial in approximately 15 minutes prior to the start of the call as follows:
Dial-in number: United States (929) 477-0402 / International (888) 208-1711
Access code: 4291905
A live and archived webcast of the conference call will be accessible on the "Investor Relations" section of the Company's website at www.verusfoods.com. To access the live webcast, please log in 15 minutes prior to the start of the call to download and install any necessary audio software.
In addition to selected corporate commentary, interested investors are encouraged to monitor upcoming product announcements via the official Twitter feed @Verus_Foods and the Big League Foods subsidiary Twitter feed @BigLeagueFo