NextPlat Reports $49.8 Million in Consolidated Revenue for the Nine Months Ended September 30, 2024, Representing a 136% Increase Over 2023 Results
PR Newswire
COCONUT GROVE, Fla., Nov. 14, 2024
Company Sees Initial Sales Momentum in China for OPKO Health Products as it Prepares for the Launch of its Florida Sunshine Brand of Vitamins and Supplements
COCONUT GROVE, Fla., Nov. 14, 2024 /PRNewswire/ -- NextPlat Corp (NASDAQ: NXPL, NXPLW) ("NextPlat" or the "Company"), a global e-Commerce provider, today announced results for its third fiscal quarter ended September 30, 2024 which includes the consolidation of the operations of its e-Commerce Operations with the results of its Healthcare Operations from Progressive Care LLC (formerly Progressive Care Inc., or "Progressive Care").
"Top-line results for the first nine months of 2024 reflect the positive contributions of Progressive Care, providing us access into the large healthcare contracted services market, and our most recent acquisition, Outfitter Satellite, bolstering our e-Commerce business. These transactions are expected to bring both significant long-term growth in their respective markets and importantly, drive positive cashflows as our team works to fully integrate them and implement cost-cutting measures through the fourth quarter of 2024, improving efficiencies and removing redundancies across the organization into 2025," said Charles M. Fernandez, Executive Chairman and CEO of NextPlat Corp.
Third Quarter 2024 Financial Highlights:
-- Consolidated revenue for the third quarter of 2024 was approximately
$15.4 million compared to approximately $15.3 million in the same period
last year. Total e-Commerce revenues were approximately $3.8 million and
$2.9 million for the three months ended September 30, 2024, and 2023,
respectively, an increase of approximately 31% mainly due to the
Outfitter acquisition on April 1, 2024. Total Healthcare Operations
revenues were approximately $11.5 million and $12.4 million for the three
months ended September 30, 2024, and 2023, respectively, a decrease
primarily due to a decline in retail pharmacy prescription reimbursement
rates in line with continuing industry trends occurring with U.S.
independent pharmacies. Consolidated revenue for the nine months ended
September 30, 2024, was approximately $49.8 million, an increase of over
136% versus revenue of approximately $21.1 million for the nine months
ended September 30, 2023, primarily attributable to an increase of
approximately $27.3 million from Healthcare Operations as a result of the
Progressive Care acquisition on July 1, 2023. Based upon current
expectations, available product inventory and the number of new and
existing pharmacy service contracts, the Company currently expects
full-year 2024 revenue to be in the range of approximately $60 million to
$65 million.
-- Gross profit margin for the quarter ended September 30, 2024, declined to
22.9% primarily attributable to the decrease in retail prescription drug
reimbursement rates in Healthcare Operations. For the nine months ended
September 30, 2024, overall gross profit margin remained consistent
at approximately 28% when compared to the prior year period. Gross profit
margin for e-Commerce Operations was 28.1%, remaining at near record
levels largely due to continued increases in higher margin recurring
airtime revenue. Gross profit margin for Healthcare Operations in the
third quarter of 2024 was 21.2%. Healthcare Operations continues to
experience pressures from medication price increases despite
reimbursement rates not keeping pace with those increases.
-- Operating expenses for the quarter ended September 30, 2024, were
approximately $11.5 million compared to approximately $8.1 million for
the same period in 2023. A significant 45.2% decrease in recurring
selling, general and administrative expenses in the quarter were offset
by a non-cash impairment loss of approximately $3.7 million related to
intangible assets recognized in the Progressive Care acquisition.
Additional expenses included professional fees of approximately $2.1
million mainly attributable to costs related to the merger with
Progressive Care as well as non-recurring litigation and other legal
fees.
-- As a result of acquiring a controlling interest in Progressive Care on
July 1, 2023, under U.S. GAAP for mergers and acquisitions, the Company
recorded previously unrecognized goodwill and other intangibles which
were recorded at fair values based on Progressive Care's stock price on
July 1, 2023 as well as estimates of future book of business. Declines in
Progressive Care's stock price and changes in its estimated book of
business caused a decline in the fair value of the goodwill and
intangibles. Thus, under U.S. GAAP, the Company was required to adjust
its fair value estimates for goodwill and the intangibles resulting in
non-cash impairment losses totaling $13.7 million recognized during the
nine months ended September 30, 2024. The Company now expects no further
impairment losses from the acquisition of Progressive Care.
-- Year-to-date, the Company recorded a total of approximately $34.9
million in operating expenses, which included non-recurring
expenses of approximately $13.7 million in non-cash impairment
losses and approximately $3.4 million in expenses related to the
merger with Progressive Care.
-- The Company expects significant annual reductions in operating
costs through cost savings from ongoing integration efforts of
Progressive Care. These efforts include trimming delivery costs,
rightsizing staffing, and removing duplicated public company
expenses including professional services such as legal and
accounting services, as well as the reduction of other selling,
general and administrative costs by eliminating existing
redundancies.
-- Net loss attributable to NextPlat Corp common shareholders for the
quarter ended September 30, 2024, was approximately $4.2 million, or
($0.22) per diluted share, compared to a net income attributable to
NextPlat Corp common shareholders of approximately $3.4 million, or $0.17
diluted earnings per share, reported for the quarter ended September 30,
2023. For the nine months ended September 30, 2024, net loss attributable
to NextPlat Corp common shareholders was approximately $11.0 million, or
($0.58) per diluted share, compared to a net loss attributable to
NextPlat Corp common shareholders of approximately $2.1 million, or
($0.12) per diluted share.
-- The Company ended the third quarter of 2024 with approximately $20.4
million in cash representing a net cash burn of approximately $5.9
million year-to-date. The use of cash primarily consisted of
approximately $3.4 million in non-recurring operating expenses plus
approximately $1.0 million related to the Outfitter acquisition, and
approximately $1.5 million used in recurring operating expenses.
Organizational Highlights and Recent Business Developments:
-- On October 1, 2024, the Company completed its proposed merger with
Progressive Care in an all-stock transaction, resulting in Progressive
Care becoming a wholly owned subsidiary of NextPlat. Representing the
Company's Healthcare Operations, Progressive Care continues to support
the needs of a growing number of 340B contracted healthcare entities as
well as long-term care and assisted living facilities.
-- In the third quarter, Healthcare Operations filled approximately 128,000
pharmacy prescriptions, a 5% increase from the 122,000 pharmacy
prescriptions filled in the year-ago quarter. The Company continues to
add pharmacy service contracts with 340B covered entities which are
expected to represent a greater proportion of Healthcare Operations
revenue going forward, contributing to increased services and
prescription revenues throughout the remainder of fiscal 2024 and into
fiscal 2025. These contracts have a greater profit margin than the
Company's traditional retail pharmacy business.
-- The Company's technology e-commerce business continued to see increased
global demand for satellite-enabled communications devices, producing
sales to customers in 95 countries during the third quarter. Recurring,
high-margin airtime revenue in the third quarter of 2024 increased to
record levels, reflecting growth of 94% vs. 2023 levels driven by both
organic growth and the addition of Outfitter Satellite which was acquired
in April 2024.
-- In July, the Company significantly expanded the scope of its e-commerce
program in China to include broad retail distribution and digital/social
media marketing capabilities through a new partner. Several online and
offline marketing programs in support of the OPKO Healthcare (Nasdaq:
OPK) ("OPKO")-branded site on Alibaba Group Holding Limited's (NYSE:
BABA) ("Alibaba") Tmall Global have already been conducted and product
interest and sales continue to grow as in-country product availability
increases. Recently, OPKO's "Artilane$(R)$" joint care product was featured
as a Tmall "Top 10 Most Popular New Products For Healthcare" list based
upon comprehensive data such as product clicks, collections, and
purchases. In October, NextPlat was awarded a four-year extension of the
OPKO Healthcare e-commerce program for China which was expanded to
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