NextPlat Reports 474% Increase in Consolidated Q2 Revenues to $17 Million and Record 34.2% Quarterly Margins; $70 Million in 2024 Annual Revenues Expected
Additional Healthcare Services Contracts and E-Commerce Expansion Expected to Drive Continued Growth Supported by Approximately $24.9 Million in Cash
COCONUT GROVE, Fla., Aug. 14, 2024 /PRNewswire/ -- NextPlat Corp (NASDAQ: NXPL, NXPLW) ("NextPlat" or the "Company"), a global e-Commerce provider, today announced record financial results for its second fiscal quarter ended June 30, 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").
"We are pleased with our second quarter performance as our healthcare and global e-commerce technology operations continue to produce strong top-line growth and greatly improved margin performance, driven by new 340B services contracts, increased prescription volumes as well as contributions from our recently acquired Outfitter Satellite operations," said Charles M. Fernandez, Executive Chairman and CEO of NextPlat Corp. "Through the strategic combination with Progressive Care and the further expansion of e-commerce sales in North America and China this year, supported by a solid balance sheet, we believe we created a valuable and sustainable growth platform capable of delivering improved operational and financial results for our shareholders in the months ahead."
Second Quarter 2024 Financial Highlights:
-- Consolidated revenues for the quarter ended June 30, 2024 were
approximately $17.0 million, an increase of over 474% versus revenue of
approximately $3.0 million for the quarter ended June 30, 2023. Results
for the second quarter of 2024 reflect e-commerce revenue of
approximately $3.5 million, including the contribution of Outfitter
Satellite ("Outfitter") acquired in April 2024, and approximately $13.5
million in revenue contributed from the Company's healthcare operations.
Results for the second quarter of 2023 reflect e-commerce revenue only
because the business combination with Progressive Care occurred on July
1, 2023. Based upon current expectations, available product inventory
and the number of new and existing healthcare services contracts, the
Company anticipates full-year revenue of approximately $70 million.
-- Gross margins for the quarter ended June 30, 2024, increased
significantly to a record 34.2%, up from 28.5% reported for the quarter
ended June 30, 2023. The increase is primarily attributable to the
Company's healthcare operations because of the Progressive Care
consolidation. Gross profit margin attributable to our healthcare
operations was approximately 35% for the quarter ended June 30, 2024.
E-commerce profit margins improved to approximately 32% from 29%
reported for the same period in 2023 driven largely by continued
increases in higher margin product sales, recurring airtime revenue, and
Outfitter sales in the second quarter.
-- Operating expenses for the quarter ended June 30, 2024, were
approximately $16.7 million compared to approximately $4.2 million for
the same period in 2023. The increased operating expenses were primarily
attributable to a non-cash impairment loss of approximately $9.8 million
related to intangible assets and goodwill acquired in the Progressive
Care acquisition in 2023.
-- The Company conducts ongoing impairment testing on the estimated
fair value of goodwill and intangible assets in accordance with U.S.
generally accepted accounting principles ("U.S. GAAP"). Fair value
methodologies for intangible assets include estimates of future
cashflows related to the Company's 340B pharmacy service agreements.
These estimates of future cash flows are subject to change due to
multiple external factors including the 340B covered entity's
patient outcomes and adherence with program compliance requirements.
-- The Company believes that annual reductions in operating costs,
especially public company expenses, will contribute to improved
operational profitability following the successful completion of the
merger with Progressive Care.
-- Net loss for the quarter ended June 30, 2024 was approximately $5.3
million or ($0.28) per diluted share compared to a net loss of
approximately $4.3 million or ($0.24) diluted earnings per share
reported for the quarter ended June 30, 2023.
-- The Company ended the second quarter of 2024 with approximately $24.9
million in cash, a sequential increase from approximately $23.5 million
reported for the first quarter of 2024.
Organizational Highlights and Recent Business Developments:
-- Growth at the Company's healthcare business, Progressive Care, saw a 17%
increase in quarterly revenue in the second quarter of 2024, driven by
11% growth in pharmacy prescriptions and a 41% increase in its 340B
contract services business versus its standalone second quarter results
in 2023. Additional 340B contracts and sales efforts targeting long-term
care and assisted living facilities, started late last year and earlier
this year, are contributing to increased revenue and growth in
prescriptions filled.
-- On April 12, 2024, NextPlat announced a proposed merger with Progressive
Care in an all-stock transaction that would result in Progressive Care
becoming a wholly-owned subsidiary of NextPlat which is expected to
provide annual operating cost reductions. On August 6, 2024, the Company
filed the definitive proxy statement/prospectus regarding the proposed
merger and set September 13, 2024, as the Annual Meeting date for the
shareholder vote. If approved by shareholders at the Annual Meeting, and
subject to customary closing conditions and requirements, the Company
anticipates completing the transaction in early October.
-- The Company's technology e-commerce business continued to see increased
global demand for satellite-enabled communications devices, producing
sales to customers in 92 countries. Demand for high margin, recurring
airtime contracts remains at record levels increased further by the
positive contribution of Outfitter, which predominately sells
connectivity products compatible with the Iridium satellite network.
Under its North American expansion plan, its website was updated, and an
Amazon storefront was launched, generating new online sales in late
July. Also, during the quarter, the Company expanded its portfolio of
satellite-based connectivity solutions as a reseller of SpaceX's
Starlink through a joint venture agreement with Pivotel Solutions Inc.
-- The Company advanced its e-commerce development program for OPKO
Healthcare ("OPKO")-branded products in China on Alibaba's Tmall Global
platform following longer than expected regulatory clearance, recording
its first product sales in late July. In July, the Company also began
promoting select OPKO products in China through its new marketing and
distribution partner ("the Marketing Partner") who is providing access
to additional e-commerce sites including JD and Temu and is currently
developing new digital and social media marketing programs expected to
launch later this year.
-- To support the pending launch of NextPlat's Florida Sunshine line of
branded vitamins and supplements, initial products have been shipped to
the Marketing Partner in China for marketing program development. It is
expected that Florida Sunshine products will be made available to
Chinese consumers on multiple online marketplaces and be featured in
campaigns conducted by social media influencers and bloggers starting
later in the fourth quarter.
David Phipps, President of NextPlat and CEO of Global Operations, added, "Our successes in the second quarter reflect continued fundamental strength across our healthcare services and technology e-commerce portfolio, helping us to achieve several financial and operational performance milestones. Our ability to quicky expand our platform with the addition of Outfitters and comprehensive marketing and sales capabilities for healthcare and wellness products in China, uniquely positions NextPlat to deliver value to our global base of customers, partners and brands."
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 June 30, 2024, which were filed with the Securities and Exchange Commission earlier today.
For more information regarding the financial results of Progressive Care Inc. for the quarter ended June 30, 2024, investors should refer to its Quarterly Report on Form 10-Q which were filed with the Securities and Exchange Commission earlier today.
About NextPlat Corp
NextPlat is a global e-commerce platform company created to capitalize on multiple high-growth sectors and markets including technology and healthcare. Through acquisitions, joint ventures and collaborations, the Company intends to assist businesses in selling their goods online, domestically, and internationally, allowing customers and partners to optimize their e-commerce presence and revenue. NextPlat currently operates an e-commerce communications division offering voice, data, tracking, and IoT products and services worldwide as well as pharmacy and healthcare data management services in the United States through its subsidiary, Progressive Care Inc. (OTCQB: RXMD).
Important Information About the Merger and Where to Find It
In connection with the proposed merger between NextPlat and Progressive Care, NextPlat has filed a joint proxy statement/prospectus with the SEC which has been declared effective, and each of NextPlat and Progressive Care have mailed the joint proxy statement/prospectus relating to the proposed business combination to their respective stockholders. NextPlat may also file other relevant documents regarding the proposed transaction with the SEC.
NextPlat's and Progressive Care's shareholders and other interested persons are advised to read the joint proxy statement/prospectus and the amendments thereto and documents incorporated by reference therein filed in connection with the Merger, as these materials will contain important information about NextPlat, Progressive Care, and the Merger. INVESTORS AND SECURITY HOLDERS OF NEXTPLAT ARE URGED TO READ THESE MATERIALS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS IN CONNECTION WITH THE TRANSACTION THAT PROGRESSIVE CARE WILL FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT PROGRESSIVE CARE, NEXTPLAT AND THE MERGER. Shareholders will also be able to obtain copies of the proxy statement/prospectus and other documents filed with the SEC that will be incorporated by reference therein, without charge, once available, at the SEC's web site at 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
NextPlat and its directors and executive officers may be deemed participants in the solicitation of proxies from NextPlat's shareholders with respect to the Merger. A list of the names of those directors and executive officers and a description of their interests in NextPlat is contained in NextPlat's Annual Report on Form 10-K filed with the SEC on April 11, 2024 and is available free of charge at the SEC's web site at 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 is included in the joint proxy statement/prospectus.
No Offer or Solicitation
This communication shall not constitute a solicitation of a proxy, consent or authorization with respect to any securities or in respect of the Merger. This communication 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
Certain statements in this release constitute forward-looking statements. These statements include the capabilities and success of the Company's business and any of its products, services or solutions. The words "believe," "forecast," "project," "intend," "expect," "plan," "should," "would," and similar expressions and all statements, which are not historical facts, are intended to identify forward-looking statements. These forward-looking statements involve and are subject to known and unknown risks, uncertainties and other factors, including the Company's ability to launch additional e-commerce capabilities for consumer and healthcare products and its ability to grow and expand as intended, any of which could cause the Company to not achieve some or all of its goals or the Company's previously reported actual results, performance (finance or operating), including those expressed or implied by such forward-looking statements. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company's filings with the Securities and Exchange Commission (the "SEC"), copies of which may be obtained from the SEC's website at www.sec.gov. The Company assumes no, and hereby disclaims any, obligation to update the forward-looking statements contained in this press release.
Media and Investor Contact for NextPlat Corp:
Michael Glickman
MWGCO, Inc.
917-397-2272
mike@mwgco.net
NEXTPLAT CORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands, except per shares data)
Three Months Ended Three Months Ended Six Months Ended Six Months Ended
June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Sales of products, net $
14,030 $
2,957 $
28,150 $
5,834
Revenues from services 2,959 6,332
Revenue, net 16,989 2,957 34,482 5,834
Cost of products 11,120 2,113 23,741 4,369
Cost of services 63 126
Cost of revenue 11,183 2,113 23,867 4,369
Gross profit 5,806 844 10,615 1,465
Operating expenses:
Selling, general and administrative 2,218 2,519 4,220 3,308
Salaries, wages and payroll taxes 2,785 968 5,409 1,556
Impairment loss 9,792 9,924
Professional fees 1,004 544 1,989 865
Depreciation and amortization 903 168 1,810 330
Total operating expenses 16,702 4,199 23,352 6,059
Loss before other (income) expense (10,896) (3,355) (12,737) (4,594)
Other (income) expense:
Gain on sale or disposal of property and equipment (1)
Interest expense 19 5 41 10
Interest earned (197) (172) (412) (183)
Other income (266) (316)
Foreign currency exchange rate variance 5 (40) 31 (69)
Total other income (173) (473) (341) (558)
Loss before income taxes and equity in net loss of affiliate (10,723) (2,882) (12,396) (4,036)
Income taxes (20) (52) (47) (52)
Loss before equity in net loss of affiliate (10,743) (2,934) (12,443) (4,088)
Equity in net loss of affiliate (1,407) (1,440)
Net loss (10,743) (4,341) (12,443) (5,528)
Net loss attributable to non-controlling interest 5,432 5,652
Net loss attributable to NextPlat Corp $
(5,311) $
(4,341) $
(6,791) $
(5,528)
Comprehensive loss:
Net loss $
(10,743) $
(4,341) $
(12,443) $
(5,528)
Foreign currency loss (27) (12) (9) (35)
Comprehensive loss $
(10,770) $
(4,353) $
(12,452) $
(5,563)
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS $
(5,311) $
(4,341) $
(6,791) $
(5,528)
Weighted number of common shares outstanding - basic and diluted 18,824 18,072 18,774 16,254
Loss per share - basic and diluted $
(0.28) $
(0.24) $
(0.36) $
(0.34)
NEXTPLAT CORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except shares and par data)
June 30, 2024 December 31, 2023
(Unaudited) (Audited)
ASSETS
Current Assets
Cash $
24,877 $
26,307
Accounts receivable, net 10,369 8,923
Receivables - other, net 1,013 1,846
Inventories, net 4,701 5,135
Unbilled revenue 206 189
VAT receivable 333 342
Prepaid expenses 273 640
Notes receivable due from related party 265 256
Total Current Assets 42,037 43,638
Property and equipment, net 3,694 3,989
Goodwill 156 731
Intangible assets, net 4,564 14,423
Operating right of use assets, net 887 1,566
Finance right-of-use assets, net 18 22
Deposits 39 39
Prepaid expenses, net of current portion 66 61
Total Other Assets 5,730 16,842
Total Assets $
51,461 $
64,469
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable and accrued expenses $
11,894 $
13,176
Contract liabilities 142 42
Notes payable 205 312
Due to related party 23 18
Operating lease liabilities 380 532
Finance lease liabilities 13 18
Income taxes payable 93 139
Total Current Liabilities 12,750 14,237
Long Term Liabilities:
Notes payable, net of current portion 1,120 1,211
Operating lease liabilities, net of current portion 619 929
Finance lease liabilities, net of current portion 5
Total Liabilities 14,489 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, 18,973,146 and 18,724,596 2 2
shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively)
Additional paid-in capital 68,348 67,170
Accumulated deficit (41,717) (34,925)
Accumulated other comprehensive loss (99) (63)
Equity attributable to NextPlat Corp stockholders 26,534 32,184
Equity attributable to non-controlling interests 10,438 15,903
Total Equity 36,972 48,087
Total Liabilities and Equity $
51,461 $
64,469
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SOURCE NextPlat Corp.
