80% organic rev growth from San Diego Farmers Outlet; outperforming growth of newly acquired Seaport Meats validates M&A strategy
LOS ANGELES, CA / ACCESSWIRE / August 26, 2020 / Pacific Ventures Group, Inc. (OTC PINK:PACV) (the "Company"), a food and beverage holding company specializing in the distribution of consumer food, beverage and alcohol-related products, is pleased to announce the Company's financial results for the second quarter ended June 30, 2020.
Key Financial Highlights for Q2 2020:
- Revenues increased 671% over Q2 2019 to $8.7 million
- Gross profit increased 145% to $1.0 million
Key Financial Highlights for 1st Half 2020:
- Revenues increased 536% over 1st Half 2019 to $15.4 million
- Gross profit increased 193% to $2.0 million
Revenue growth was driven by 80% increase from San Diego Farmers Outlet and the acquisition of Seaport Meat Company, which closed in December 2019. Because Seaport Meat Company can efficiently add new product lines, it is expected that this will expand the distribution of San Diego Farmers Outlet and SnoBar product line, thereby accelerating Pacific Ventures' revenue growth. We believe this combination of a distribution and product company is unique in the San Diego area and will accelerate our growth.
Of note, from January 1, 2020 through June 30, 2020, the Company issued 0 shares of its common stock.
Management Commentary
Ms. Shannon Masjedi, Pacific Venture Group's Chief Executive Officer, commented, "I am extremely pleased with our first half 2020 results, as we continue to execute on our plans since integrating Seaport Meat Company, implementing efficiencies and executing growth initiatives. Our strategic plan is proving itself with the dramatic revenue increase to $15.4 million in the first half of 2020."
Masjedi, continued, "Our Company is well-positioned for further growth in 2020 and 2021. We intend to achieve operating cash flow breakeven in the next 12 months. Our team and advisors continue work on further improving our balance sheet and positioning us for an uplist to a major national stock exchange in 2021.
Masjedi, concluded, "We have a three-prong growth strategy (1) incrementally accelerate sales and improve profitability of San Diego Farmers Outlet and Seaport Meat Company, (2) expand Snöbar production and distribution and (3) acquire additional food production or distribution companies synergistic with existing assets. Our management team and Board continue to assess and vet a robust potential M&A pipeline to complement our organic growth. We look forward to reporting our progress as it unfolds throughout the remainder of 2020."
Snobar Update
As of today, Snöbar products are currently being sold in the east coast of United States by the Company's distributor. We have been actively constructing an online platform that will allow Snöbar distribution on a national level. The Company's platform is complete and ready to "go live" and, with the aim of purchasing inventory as well as increasing sales and marketing efforts.
The Company has recently signed an agreement with a new co-packer to produce and manufacture the Snobar Product Line. The new factory will produce the Snobar Product Line for a reduced price which will allow for greater profitability for the company. The new factory has all of the necessary licensing in place required to manufacture the Snobar Product Line.
In addition, the Company is planning to offer distribution rights throughout the country which will allow the Snöbar Product Line to expand its footprint very rapidly. The distribution rights will also bring in additional revenue to the Company.
Financial Results for the Three Months Ended June 30, 2020:
Revenue for the three months ended June 30, 2020 was $8.7 million, an increase of $7.6 million, or 671%, as compared to $1.1 million for the three months ended June 30, 2019. The increase in revenue was driven by 80% organic growth at San Diego Farmers Outlet and the acquisition of Seaport Meat Company, which closed in December 2019.
Gross profit for the three months ended June 30, 2020 was $1.0 million, compared to $0.3 million for the three months ended June 30, 2019. The resulting gross margin was 11.6% for the three months ended June 30, 2020, compared to 36.4% for the three months ended June 30, 2019. The increase in gross profit and decline in gross margin is due to the higher revenue but lower margin business model of Seaport Meat Company.
Operating expenses for the three months ended June 30, 2020 were $1.7 million, an increase of $1.2 million, or 247%, compared to $0.5 million for the three months ended June 30, 2019. The increase primarily related to an increase in operating activities and an increase in salaries and wages due to the acquisition of Seaport Meat Company, which closed in December 2019.
Operating loss for the three months ended June 30, 2020 was $0.7 million, an increase of $0.6 million, or 836%, compared to $0.1 million for the three months ended June 30, 2019.
Interest expense for the three months ended June 30, 2020 was $0.4 million, an increase of $0.2 million, or 150%, compared to $0.2 million for the three months ended June 30, 2019.
Net loss for the three months ended June 30, 2020 was $1.1 million, an increase of $0.8 million, or 352%, compared to $0.2 million for the three months ended June 30, 2019. The resulting loss per share for the three months ended June 30, 2020 was ($0.94) per diluted share, compared to ($0.00) per diluted share for the three months ended June 30, 2019.
Financial Results for the Six Months Ended June 30, 2020:
Revenue for the six months ended June 30, 2020 was $15.4 million, an increase of $13.0 million, or 536%, as compared to $2.4 million for the six months ended June 30, 2019. The increase in revenue was driven by 80% organic growth at San Diego Farmers Outlet and the acquisition of Seaport Meat Company, which closed in December 2019.
Gross profit for the six months ended June 30, 2020 was $2.0 million, compared to $0.7 million for the six months ended June 30, 2019. The resulting gross margin was 13.1% for the six months ended June 30, 2020, compared to 28.5% for the six months ended June 30, 2019.
Operating expenses for the six months ended June 30, 2020 were $3.1 million, an increase of $2.2 million, or 249%, compared to $0.9 million for the six months ended June 30, 2019. The increase primarily related to an increase in operating activities and an increase in salaries and wages due to the acquisition of Seaport Meat Company, which closed in December 2019.
Operating loss for the six months ended June 30, 2020 was $1.1 million, an increase of $0.9 million, or 446%, compared to $0.2 million for the six months ended June 30, 2019.
Interest expenses for the six months ended June 30, 2020 was $0.8 million, an increase of $0.4 million, or 126%, compared to $0.4 million for the six months ended June 30, 2019.
Net loss for the six months ended June 30, 2020 was $1.9 million, an increase of $1.3 million, or 244%, compared to $0.5 million for the six months ended June 30, 2019. The resulting loss per share for the six months ended June 30, 2020 was ($1.63) per diluted share, compared to ($0.00) per diluted share for the six months ended June 30, 2019.
About Pacific Ventures Group, Inc.
Pacific Ventures Group, Inc. (OTC PINK:PACV) is focused on expansion within the consumer products, food, beverage and alcohol-related industries. For more information on PACV, please visit www.pacvgroup.com. (You need to be at least 21 years of age (legal age to consume alcohol) to visit the section of the web site dedicated to SnöBar.)
Safe Harbor Statement
Forward-Looking Statement: This press release may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Investors are cautioned that such forward-looking statements involve risks and uncertainties, which include but are not limited to, the inability of the company to obtain financing sufficient to maintain its operations and execute its acquisition strategy; the inherent uncertainties associated with smaller reporting companies; and other risks detailed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission.
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SOURCE: Pacific Ventures Group INC