Record Quarterly Net Income of $2.4 million
FORT WORTH, TX / ACCESSWIRE / August 13, 2024 / Sadot Group Inc. (NASDAQ:SDOT) (the "Sadot Group" "Sadot" or the "Company"), an emerging player in the global food supply chain sector, today announced its financial results for the second quarter ended June 30, 2024.
Second Quarter 2024 Financial Highlights
Consolidated revenues of $175.0 million, a 9% increase over the prior year period
Net income of $2.4 million compared to $0.2 million in the prior year period. This was the highest quarterly income in the Company's history
EBITDA of $3.2 million compared to $0.7 million of EBITDA in the prior year period
Cash balance of $10.0 million, up from $1.4 million at December 31, 2023
Working capital surplus of $16.1 million compared to $8.3 million at December 31, 2023
"We delivered record net income in the second quarter as we continued to execute well against key initiatives to transform our business and drive growth and profitability," said Michael Roper, Chief Executive Officer of Sadot Group. "Our goal is to continue to seek to expand the scope and capabilities of our platform and to remain well positioned for significant growth in the nearly $2 trillion global agri-commodities market. I am extremely proud of our results, underscoring our resilience and commitment to operational excellence and our strategic vision."
Strategic and Operational Highlights
Completed 21 transactions of over 525,000 metric tons of agri-commodities throughout eight different countries during the second quarter.
Shipped 2,500 metric tons to date of maize and over 690 metric tons of soya from the Company's farming operations in Zambia during the second quarter.
Established Sadot Canada, a wholly-owned subsidiary of Sadot LLC based in Toronto, Canada, in the second quarter. Canadian operations are led by David Hanna as Executive Vice President/General Manager and Jaime Rueda as Vice President/Head of Feed Ingredients. Both executives bring extensive experience and deep knowledge of the agri-commodity markets, making them invaluable additions to the Company. Their combined leadership will be instrumental in advancing Sadot's global growth agenda by guiding the team in facilitating trade flows to and from North America, Africa, the Black Sea, Indonesia, and Brazil.
Finalized the sale of Superfit Foods, the first of three legacy restaurant concepts the Company is in the process of divesting. Sadot is currently in discussions with potential buyers for the remaining restaurant assets, including Pokémoto and Muscle Maker Grill. Sadot will continue to expect that the divestiture of these non-core assets will drive operational savings and simplification along with ensuring that the Company's resources are firmly aligned around the highest potential opportunities in the agri-commodities market.
Webcast Details
Date: Wednesday, August 14, 2024
Time: 10:30 am EDT/ 7:30 am PDT
To register, please use the following link:
https://audience.mysequire.com/webinar-view?webinar_id=30f0d4d8-1541-4f3b-8924-a11dd7e9b50d
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About Sadot Group Inc.
Sadot Group Inc. has rapidly established itself as an emerging player in the global food supply chain. Sadot Group provides innovative and sustainable supply chain solutions that address the world's growing food security challenges.
Sadot Group currently operates within key verticals of the global food supply chain including global agri-commodity origination and trading operations for food/feed products such as soybean meal, wheat and corn, and farm operations producing grains and tree crops in Southern Africa.
Sadot Group connects producers and consumers across the globe, sourcing agri-commodity products from producing geographies such as the Americas, Africa and the Black Sea and delivering to markets in Central and South America, Southeast Asia, China and the Middle East/North Africa region.
Sadot Group is headquartered in Ft. Worth, Texas with subsidiary operations throughout the United States, Brazil, Canada, Colombia, Dubai, India, Israel, Singapore, Ukraine and Zambia. For more information, please visit www.sadotgroupinc.com. For additional updates, news and general knowledge related to the global Agri-commodity supply-chain, please visit our website at: www.sadotgroupinc.com and our social media postings on Facebook and X (Twitter).
Sadot Group, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
|
| June 30, 2024 |
|
| December 31, 2023 |
| ||
|
| $'000 |
|
| $'000 |
| ||
ASSETS |
|
|
|
|
|
| ||
Current assets: |
|
|
|
|
|
| ||
Cash |
|
| 9,956 |
|
|
| 1,354 |
|
Accounts receivable, net of allowance for doubtful accounts of $0.3 million and $0.2 million as of June 30, 2024 and December 31, 2023, respectively |
|
| 24,907 |
|
|
| 52,920 |
|
Inventory |
|
| 2,528 |
|
|
| 2,561 |
|
Assets held for sale |
|
| 6,335 |
|
|
| - |
|
Other current assets |
|
| 110,004 |
|
|
| 56,016 |
|
Total current assets |
|
| 153,730 |
|
|
| 112,851 |
|
Right to use assets |
|
| 142 |
|
|
| 1,284 |
|
Property and equipment, net |
|
| 11,888 |
|
|
| 12,883 |
|
Goodwill |
|
| - |
|
|
| 1,798 |
|
Intangible assets, net |
|
| - |
|
|
| 2,833 |
|
Other non-current assets |
|
| 14 |
|
|
| 46,442 |
|
Total assets |
|
| 165,774 |
|
|
| 178,091 |
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
| 30,548 |
|
|
| 50,167 |
|
Notes payable, current, net of discount of $0.1 million and $0.2 million as of June 30, 2024 and December 31, 2023, respectively |
|
| 3,708 |
|
|
| 6,531 |
|
Operating lease liability, current |
|
| 21 |
|
|
| 385 |
|
Deferred revenue, current |
|
| 7,932 |
|
|
| 1,229 |
|
Liabilities held for sale |
|
| 3,111 |
|
|
| - |
|
Other current liabilities |
|
| 92,278 |
|
|
| 46,270 |
|
Total current liabilities |
|
| 137,598 |
|
|
| 104,582 |
|
Contract liability, non-current |
|
| - |
|
|
| 46,048 |
|
Notes payable, non-current |
|
| - |
|
|
| 622 |
|
Operating lease liability, non-current |
|
| 123 |
|
|
| 1,027 |
|
Deferred revenue, non-current |
|
| - |
|
|
| 1,555 |
|
Total liabilities |
|
| 137,721 |
|
|
| 153,834 |
|
Equity: |
|
|
|
|
|
|
|
|
Common stock, $0.0001 par value, 200 million shares authorized, 45,965,155 and 40,464,720 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively |
|
| 5 |
|
|
| 4 |
|
Additional paid-in capital |
|
| 109,962 |
|
|
| 107,988 |
|
Accumulated deficit |
|
| (85,075 | ) |
|
| (87,179 | ) |
Accumulated other comprehensive (loss) / income |
|
| (175 | ) |
|
| 8 |
|
Total Sadot Group Inc. shareholders' equity |
|
| 24,717 |
|
|
| 20,821 |
|
Non-controlling interest |
|
| 3,336 |
|
|
| 3,436 |
|
Total stockholders' equity |
|
| 28,053 |
|
|
| 24,257 |
|
Total liabilities and stockholders' equity |
|
| 165,774 |
|
|
| 178,091 |
|
Sadot Group, Inc.
Condensed Consolidated Statement of Operations and Other Comprehensive Income/ (Loss)
(Unaudited)
|
| Three Months Ended June 30, |
|
| Six Months Ended June 30, |
| ||||||||||
|
| 2024 |
|
| 2023 |
|
| 2024 |
|
| 2023 |
| ||||
|
| $'000 |
|
| $'000 |
|
| $'000 |
|
| $'000 |
| ||||
Commodity sales |
|
| 173,293 |
|
|
| 157,559 |
|
|
| 279,800 |
|
|
| 367,925 |
|
Company restaurant sales, net of discounts |
|
| 992 |
|
|
| 2,487 |
|
|
| 2,149 |
|
|
| 4,788 |
|
Franchise royalties and fees |
|
| 741 |
|
|
| 238 |
|
|
| 997 |
|
|
| 522 |
|
Franchise advertising fund contributions |
|
| 13 |
|
|
| 20 |
|
|
| 28 |
|
|
| 36 |
|
Other revenues |
|
| - |
|
|
| 13 |
|
|
| - |
|
|
| 13 |
|
Cost of goods sold |
|
| (172,527 | ) |
|
| (157,239 | ) |
|
| (280,804 | ) |
|
| (365,535 | ) |
Gross profit |
|
| 2,512 |
|
|
| 3,078 |
|
|
| 2,170 |
|
|
| 7,749 |
|
Depreciation and amortization expenses |
|
| (92 | ) |
|
| (441 | ) |
|
| (372 | ) |
|
| (1,074 | ) |
Franchise advertising fund expenses |
|
| (13 | ) |
|
| (20 | ) |
|
| (28 | ) |
|
| (36 | ) |
Pre-opening expenses |
|
| - |
|
|
| - |
|
|
| - |
|
|
| (36 | ) |
Post-closing expenses |
|
| (10 | ) |
|
| (19 | ) |
|
| (29 | ) |
|
| (113 | ) |
Stock-based expenses |
|
| (1,921 | ) |
|
| (1,175 | ) |
|
| (2,717 | ) |
|
| (4,593 | ) |
Sales, general and administrative expenses |
|
| (2,429 | ) |
|
| (1,783 | ) |
|
| (4,524 | ) |
|
| (3,864 | ) |
Loss from operations |
|
| (1,953 | ) |
|
| (360 | ) |
|
| (5,500 | ) |
|
| (1,967 | ) |
Other income |
|
| 19 |
|
|
| 251 |
|
|
| 19 |
|
|
| 251 |
|
Interest expense |
|
| (761 | ) |
|
| (22 | ) |
|
| (1,251 | ) |
|
| (19 | ) |
Change in fair value of stock-based compensation |
|
| 1,214 |
|
|
| 324 |
|
|
| 1,691 |
|
|
| 865 |
|
Gain on fair value remeasurement |
|
| 3,275 |
|
|
| - |
|
|
| 6,534 |
|
|
| - |
|
Gain on sale of trading securities |
|
| 528 |
|
|
| - |
|
|
| 518 |
|
|
| - |
|
Income / (Loss) Before Income Tax |
|
| 2,322 |
|
|
| 193 |
|
|
| 2,011 |
|
|
| (870 | ) |
Income tax expense |
|
| (5 | ) |
|
| (3 | ) |
|
| (7 | ) |
|
| (6 | ) |
Net income / (loss) |
|
| 2,317 |
|
|
| 190 |
|
|
| 2,004 |
|
|
| (876 | ) |
Net loss attributable to non-controlling interest |
|
| 52 |
|
|
| - |
|
|
| 100 |
|
|
| - |
|
Net income / (loss) attributable to Sadot Group Inc. |
|
| 2,369 |
|
|
| 190 |
|
|
| 2,104 |
|
|
| (876 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net Income / (Loss) Per Share attributable to Sadot Group Inc.: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
| 0.05 |
|
|
| 0.01 |
|
|
| 0.05 |
|
|
| (0.03 | ) |
Diluted |
|
| 0.05 |
|
|
| 0.01 |
|
|
| 0.04 |
|
|
| (0.03 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Weighted-Average # of Common Shares Outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
| 44,234,315 |
|
|
| 33,362,887 |
|
|
| 43,058,217 |
|
|
| 31,407,362 |
|
Diluted |
|
| 50,092,282 |
|
|
| 33,567,719 |
|
|
| 48,987,759 |
|
|
| 31,407,362 |
|
Sadot Group, Inc.
Condensed Consolidated Statement of Operations and Other Comprehensive Income/ (Loss) (Continued)
(Unaudited)
|
| Three Months Ended June 30, |
|
| Six Months Ended June 30, |
| ||||||||||
|
| 2024 |
|
| 2023 |
|
| 2024 |
|
| 2023 |
| ||||
|
| $'000 |
|
| $'000 |
|
| $'000 |
|
| $'000 |
| ||||
Net income / (loss) |
|
| 2,317 |
|
|
| 190 |
|
|
| 2,004 |
|
|
| (876 | ) |
Other comprehensive income / (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange translation adjustment |
|
| 3 |
|
|
| - |
|
|
| 3 |
|
|
| - |
|
Unrealized loss, net of income tax |
|
| (126 | ) |
|
| - |
|
|
| (186 | ) |
|
| - |
|
Total other comprehensive loss |
|
| (123 | ) |
|
| - |
|
|
| (183 | ) |
|
| - |
|
Total comprehensive income / (loss) |
|
| 2,194 |
|
|
| 190 |
|
|
| 1,821 |
|
|
| (876 | ) |
Comprehensive income attributable to non-controlling interest |
|
| 52 |
|
|
| - |
|
|
| 100 |
|
|
| - |
|
Total Comprehensive income / (loss) attributable to Sadot Group Inc. |
|
| 2,246 |
|
|
| 190 |
|
|
| 1,921 |
|
|
| (876 | ) |
Sadot Group, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
| Six Months Ended June 30, |
| |||||
|
| 2024 |
|
| 2023 |
| ||
|
| $'000 |
|
| $'000 |
| ||
Cash Flows from Operating Activities |
|
|
|
|
|
| ||
Net income / (loss) |
|
| 2,004 |
|
|
| (876 | ) |
Adjustments to reconcile net income / (loss) to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
| 372 |
|
|
| 1,074 |
|
Stock-based expenses |
|
| 2,717 |
|
|
| 4,593 |
|
Change in fair value of compensation |
|
| (1,691 | ) |
|
| (865 | ) |
Unrealized loss, net of income tax |
|
| (186 | ) |
|
| - |
|
Foreign exchange translation adjustment |
|
| 3 |
|
|
| - |
|
Loss on disposal of assets |
|
| 188 |
|
|
| 53 |
|
Bad debt expense |
|
| - |
|
|
| 34 |
|
Transfer to assets held for sale |
|
| (198 | ) |
|
| - |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable, net |
|
| 27,876 |
|
|
| (47,401 | ) |
Inventory |
|
| (78 | ) |
|
| (9 | ) |
Other current assets |
|
| (53,473 | ) |
|
| (1 | ) |
Other non-current assets |
|
| 46,375 |
|
|
| - |
|
Accounts payable and accrued expenses |
|
| (19,166 | ) |
|
| 39,166 |
|
Other current liabilities |
|
| 46,241 |
|
|
| 22 |
|
Contract liability, non-current |
|
| (46,048 | ) |
|
| - |
|
Operating right to use assets and lease liabilities, net |
|
| (68 | ) |
|
| (21 | ) |
Deferred revenue |
|
| 6,175 |
|
|
| 17 |
|
Total adjustments |
|
| 9,039 |
|
|
| (3,338 | ) |
Net cash provided by (used in) operating activities |
|
| 11,043 |
|
|
| (4,214 | ) |
Cash Flows from Investing Activities |
|
|
|
|
|
|
|
|
Deposit on farmland |
|
| (672 | ) |
|
| (3,888 | ) |
Purchases of property and equipment |
|
| (31 | ) |
|
| (247 | ) |
Disposal of property and equipment |
|
| 57 |
|
|
| 110 |
|
Net cash used in investing activities |
|
| (646 | ) |
|
| (4,025 | ) |
Cash Flows from Financing Activities |
|
|
|
|
|
|
|
|
Proceeds from notes payable |
|
| 3,580 |
|
|
| 3,500 |
|
Repayments of notes payable |
|
| (5,375 | ) |
|
| (69 | ) |
Net cash (used in) provided by financing activities |
|
| (1,795 | ) |
|
| 3,431 |
|
Net Increase (Decrease) in Cash |
|
| 8,602 |
|
|
| (4,808 | ) |
Cash - beginning of period |
|
| 1,354 |
|
|
| 9,898 |
|
Cash - end of period |
|
| 9,956 |
|
|
| 5,090 |
|
Reconciliations of EBITDA, Adjusted EBITDA and Other Non-GAAP Measures
EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin are non-GAAP measures. The Company defines EBITDA as Net loss, adjusted for depreciation, amortization, interest income / (expense), and income taxes. The Company defines Adjusted EBITDA as Net loss, adjusted for depreciation, amortization, net interest (income) expense, income taxes, impairment expenses, stock-based consulting expense, derived from amounts presented in the Unaudited Condensed Consolidated Statement of Operations. The Company believes that EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin, (collectively, the "Non-GAAP Measures") are useful metrics for investors to understand and evaluate its operating results and ongoing profitability because they permit investors to evaluate its recurring profitability from its ongoing operating activities.
EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin, have certain limitations, and you should not consider them in isolation or as a substitute for analysis of its results of operations as reported under U.S. GAAP. The Company cautions investors that amounts presented in accordance with its definitions of any of the Non-GAAP Measures may not be comparable to similar measures disclosed by other issuers, because some issuers calculate certain of the Non-GAAP Measures differently or not at all, limiting their usefulness as direct comparative measures.
The following table presents a reconciliation of EBITDA and Adjusted EBITDA from the most comparable U.S. GAAP measure, Net loss, and the calculations of the Net loss margin and Adjusted EBITDA Margin for the three and six months ended June 30, 2024 and 2023:
| Three Months Ended June 30, |
|
| Six Months Ended June 30, |
| |||||||||||
| 2024 |
|
| 2023 |
|
| 2024 |
|
| 2023 |
| |||||
| $'000 |
|
| $'000 |
|
| $'000 |
|
| $'000 |
| |||||
Net income / (loss) |
|
| 2,317 |
|
|
| 190 |
|
|
| 2,004 |
|
|
| (876 | ) |
Adjustments to EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization expenses |
|
| 92 |
|
|
| 441 |
|
|
| 372 |
|
|
| 1,074 |
|
Interest (income) / expense, net |
|
| 761 |
|
|
| 22 |
|
|
| 1,251 |
|
|
| 19 |
|
Income tax expense |
|
| 5 |
|
|
| 3 |
|
|
| 7 |
|
|
| 6 |
|
EBITDA |
|
| 3,175 |
|
|
| 656 |
|
|
| 3,634 |
|
|
| 223 |
|
Adjustments to Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income |
|
| (19 | ) |
|
| (251 | ) |
|
| (19 | ) |
|
| (251 | ) |
Change in fair value of stock-based compensation |
|
| (1,214 | ) |
|
| (324 | ) |
|
| (1,691 | ) |
|
| (865 | ) |
Gain on fair value remeasurement |
|
| (3,275 | ) |
|
| - |
|
|
| (6,534 | ) |
|
| - |
|
Stock-based expenses |
|
| 1,921 |
|
|
| 1,175 |
|
|
| 2,717 |
|
|
| 4,593 |
|
Gain on sale of trading securities |
|
| (528 | ) |
|
| - |
|
|
| (518 | ) |
|
| - |
|
Adjusted EBITDA |
|
| 60 |
|
|
| 1,256 |
|
|
| (2,411 | ) |
|
| 3,700 |
|
Adjusted EBITDA attributable to non-controlling interest |
|
| 52 |
|
|
| - |
|
|
| 100 |
|
|
| - |
|
Adjusted EBITDA attributable to Sadot Group Inc. |
|
| 112 |
|
|
| 1,256 |
|
|
| (2,311 | ) |
|
| 3,700 |
|
Gross Profit |
|
| 2,512 |
|
|
| 3,078 |
|
|
| 2,170 |
|
|
| 7,749 |
|
Gross Profit attributable to Sadot Group Inc. |
|
| 2,564 |
|
|
| 3,078 |
|
|
| 2,270 |
|
|
| 7,749 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net income / (loss) margin attributable to Sadot Group Inc. |
|
| 1.3 | % |
|
| 0.1 | % |
|
| 0.7 | % |
|
| (0.2 | )% |
Adjusted EBITDA margin attributable to Sadot Group Inc. |
|
| 0.1 | % |
|
| 0.8 | % |
|
| (0.8 | )% |
|
| 1.0 | % |
Forward-Looking Statements
This press release may include "forward-looking statements" pursuant to the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. To the extent that the information presented in this press release discusses financial projections, information, or expectations about our business plans, results of operations, products, or markets, or otherwise makes statements about future events, such statements are forward-looking. Such forward-looking statements can be identified by the use of words such as "should", "may," "intends," "anticipates," "believes," "estimates," "projects," "forecasts," "expects," "plans," and "proposes." Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. You are urged to carefully review and consider any cautionary statements and other disclosures, including the statements made under the heading "Risk Factors" and elsewhere in documents that we file from time to time with the SEC. Forward-looking statements speak only as of the date of the document in which they are contained, and Sadot Group, Inc., does not undertake any duty to update any forward-looking statements except as may be required by law.
Investor Relations:
Frank Pogubila
SVP
Integrous Communications
W - 951.946.5288
E - [email protected]
SOURCE: Sadot Group Inc.