Exhibit 99.1

 

 

 

SMG Industries, Inc. Reports 2020 Second Quarter and Six-Month Financial Results

 

HOUSTON, TX, Aug. 17, 2020 (GLOBE NEWSWIRE) -- via NEWMEDIAWIRE -- SMG Industries, Inc. (the “Company”) (OTCQB:SMGI), a growth-oriented transportation services and industrial services business operating in the Southwest United States, today reported financial results for its second quarter and six month period ended June 30, 2020.

 

Second Quarter Financial Highlights:

 

•           Revenues increased approximately 671% to $8,439,366 for the 3 months ended June 30, 2020, compared to the three months ended June 30, 2019,

 

•           Net loss was $3,258,985 for the 3 months ended June 30, 2020, compared to a net loss of $980,910 for the 3 months ended June 30, 2019,

 

•           Total Assets grew 408% to $32,717,859 in the second quarter ended June 30, 2020 compared to $6,431,384 at year ended 2019, and,

 

•           The Company continues to move forward with its “buy and build” growth strategy seeking to acquire additional transportation and industrial services companies that are immediately accretive.

 

Mr. Matt Flemming, Chief Executive Officer of SMG, stated, “While the Company generated substantial increase in its revenues of over 600% during the second quarter 2020, resulting from the February 27, 2020 acquisition of 5J, the second quarter was significantly affected by the COVID-19 pandemic, declining oil prices and lower economic activity during the period, partially offset by the Company’s shift in focus to transportation services including the heavy haul trucking business.” Mr. Flemming continued, “The Company currently anticipates improved results in the third quarter 2020 based on customer feedback, its diversification further into the heavy haul trucking, the establishment of a super heavy haul division and the benefits from the business realignment into two segments of Transportation Services and Industries Services.”

 

Selected Three Months Ended June 30, 2020 data

 

Sales for the three months ended June 30, 2020 were $8,439,366, an increase of approximately 671%, from $1,094,181 for the three months ended June 30, 2019. The increase in revenues for the three months ended June 30, 2020 was primarily attributable to the additional revenues of the 5J acquisition, not present in the year ago comparable period.

 

During the three months ended June 30, 2020, cost of sales increased as a percentage of sales to 110% of revenues, or $9,310,712, compared to 82% of revenues or $896,600 for the comparable 2019 period. The increase in cost of sales as a percentage of revenues is primarily the result of the increased non-cash depreciation cost added from the asset heavy 5J acquisition not present in the year ago comparable period. Non-cash depreciation expense within cost of sales was approximately

$1,540,000.

 

For the three months ended June 30, 2020, selling, general and administrative expenses were $1,271,366, or 15% of sales representing an increase of $446,552 from $824,814 or 75% of sales for the three months ended June 30, 2019. This decrease in selling, general and administrative expenses in the second quarter of 2020 over the second quarter of 2019 was primarily due to higher sales covering more fixed cost within selling, general and administration expenses, partially offset by higher insurance expenses, professional fees and bad debt expense of $100,690 during second quarter ended June 30, 2020.

 

During the three months ended June 30, 2020, we incurred a net loss attributable to common shareholders of $3,347,958 or $0.19 per basic and diluted earnings per share. For the three months ended June 30, 2019, we incurred a net loss attributable to common shareholders of $980,910 or $0.07 per basic and diluted earnings per share. The net loss in the three months ended June 30, 2020, resulted primarily from higher cost of revenues and resulting in a loss from operations as well as higher interest expenses, compared to the three-month period ended June 30, 2019. The basic weighted average number of shares of common stock outstanding was 17,380,108 and 13,935,281 for the three months ended June 30, 2020 and 2019, respectively.

 

Selected Six Months Ended June 30, 2020 data

 

Sales for the six months ended June 30, 2020 were $14,415,766, an increase of 406%, from $2,846,885 for the six months ended June 30, 2019. The increase in revenue for the six months ended June 30, 2020 is primarily attributable to the additional revenues of the 5J acquisition, not present in the year ago comparable period.

 

During the six months ended June 30, 2020 we incurred a net loss of $6,238,216, or $0.39 per basic and diluted earnings per share. For the six months ended June 30, 2019 we incurred a net loss of $1,691,172 or $0.13 per basic and diluted earnings per share. The net loss in the six month period ended June 30, 2020 resulted primarily from higher cost of revenue resulting in loss from operations as well as higher interest expenses including higher non-cash expenses of depreciation and amortization of debt discount, compared to six month period ended June 30, 2019.

 

As of June 30, 2020, our total assets were $32,635,683, comprised of $954,016 in cash and restricted cash, $6,011,962 in accounts receivable, $192,077 in inventory, other current assets of $681,437, $21,604,795 in net property and equipment, and $126,244 in net intangible assets. This is an increase in total assets of $26,204,299 over the total assets at December 31, 2019 of $6,431,384.

 

Our net increase in cash for the six months ended June 30, 2020 was $923,662, as compared to a net cash increase of $110,438 in the six months ended June 30, 2019.

 

At June 30, 2020 and December 31, 2019, we had cash and cash equivalents of $954,016 and $112,046, respectively. Based on the company’s recent acquisition of 5J, current revenue trends, customer feedback, anticipated gross margin improvement from cost cutting measures implemented, along with anticipated new growth from cross selling our customers, we believe cash flow is likely to improve during the remainder of 2020. Currently, the Company is pursuing additional and potentially accretive acquisitions in 2020 targeting Transportation and Industrial Services.

 

Additional information including the Company’s financial statements, footnotes and management’s discussion and analysis can be found in the second quarter 2020 report filed in the Form 10-Q on August 14, 2020.

 


The following information was filed by Smg Industries Inc. (SMGI) on Tuesday, August 25, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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