HOUSTON, TX, Oct. 02, 2023 (GLOBE NEWSWIRE) -- via NewMediaWire -- SMG Industries Inc. (“SMG” or the “Company”) ( SMGI), a growth-oriented transportation services company specializing in the full-service logistics market, today reported its pro forma financial results in connection with its July 7, 2023, acquisition of the Barnhart family of companies.
On September 15, 2023, the Company amended its Current Report on Form 8-K originally filed with the Securities and Exchange Commission (the “SEC”) on July 12, 2023, which amendment included the financial statements and pro forma financial information required by Item 9.01 of Form 8-K in connection with its recent acquisition of the Barnhart family of companies that closed July 7, 2023.
As illustrated in the Current Report on Form 8-K/A filed with the SEC on September 15, 2023, on a pro forma combined basis for fiscal year 2022, revenues were $152,771,088, gross profit was $16,770,897, net loss from continuing operations was $5,296,586 (which included non-cash expenses of $13,930,353 in depreciation and amortization expenses), generating a net loss of $5,156,039 including those non-cash items. In addition, as disclosed in further detail below, pro forma Adjusted EBITDA, a non-GAAP measure, for fiscal year 2022 was $15,046,814 (see reconciliation table below).
Timothy Barnhart, CFO of SMG said, “Our team is excited about our future growth prospects and new critical mass in size given the July 7th closing of the Barnhart family of companies and its added cash flow. In addition to realizing cost synergies, the Company has been very busy with internal integration of its business and is fortunate to have transportation management systems (TMS) and related infrastructure that are similar and pair well together. Currently, the team believes this integration, including accounting and information technology, will be concluded prior to the year-end 2023. We have executed on several of the expense saving initiatives, including national account buying for fuel and other expenses.” Timothy continued, “The Company’s next Quarterly Report on Form 10-Q for the third quarter 2023 will include the financial results from the Barnhart acquisition from its effective date of July 7, 2023, through September 30, 2023, within SMG’s consolidated financial results for the third quarter.”
“We have hundreds of customers between the legacy business of SMG and the Barnhart family of companies that can be cross-referred to generate growth. Structurally, we have combined the brokerage business of 5J Logistics Services into the larger Lake Shore Logistics operations, which has generated positive feedback from our customers accessing expanded transportation service lines,” stated Bryan Barnhart, CEO of SMG. Bryan continued, “The Company has several revenue synergies underway, including cross-fertilizing customers, introducing additional services lines from the Barnhart family of companies and SMG/5J companies expanding solutions by building a “one stop shop,” full-service logistics provider for our customers and delivering seamless logistics solutions spanning the globe. We continue to enjoy diversification in our end market customer focus with industrial, oilfield and intermodal benefiting from additional activity in the market.”
Select pro forma information from the Company’s Current Report on Form 8-K/A filed with the SEC on September 15, 2023 is set forth below:
| SMG Industries Inc. | |||||||||||||||||||
| Pro Forma Combined Statement of Operations | |||||||||||||||||||
| For the Year Ended December 31, 2022 | |||||||||||||||||||
| (unaudited) | |||||||||||||||||||
| SMG | Barnhart Companies | Other Transaction Adjustments | Pro Forma Adjustments | Pro Forma Combined | |||||||||||||||
| REVENUE TOTAL | 71,021,862.00 | 81,749,226.00 | - | - | 152,771,088.00 | ||||||||||||||
| COST OF REVENUE | 65,285,261.00 | 67,980,193.00 | - | 2,734,737.00 | (j) | 136,000,191.00 | |||||||||||||
| GROSS PROFIT | 5,736,601.00 | 13,769,033.00 | - | (2,734,737.00 | ) | 16,770,897.00 | |||||||||||||
| Selling, General & Administrative | 9,079,344.00 | 8,332,154.00 | 1,482,000.00 | (k) | 18,893,498.00 | ||||||||||||||
| Gain on disposal of assets | (330,499.00 | ) | - | - | (632,524.00 | ) | (l) | (963,023.00 | ) | ||||||||||
| Total operating expenses | 8,748,845.00 | 8,332,154.00 | - | 849,476.00 | 17,930,475.00 | ||||||||||||||
| Income (loss) from operations | (3,012,244.00 | ) | 5,436,879.00 | - | (3,584,213.00 | ) | (1,159,578.00 | ) | |||||||||||
| Other Income (Expense) | |||||||||||||||||||
| Interest Income | - | 46,225.00 | - | - | 46,225.00 | ||||||||||||||
| Interest Expense | (9,431,681.00 | ) | (142,532.00 | ) | 4,486,540.00 | (h) | 142,532.00 | (m) | (4,945,141.00 | ) | |||||||||
| Gain on extinguishment of debt | 564,814.00 | - | 564,814.00 | ||||||||||||||||
| Gain on disposal of assets | 632,524.00 | - | (632,524.00 | ) | (l) | - | |||||||||||||
| Other income | 228,689.00 | 68,770.00 | - | - | 297,459.00 | ||||||||||||||
| Other expense | (100,365.00 | ) | - | - | - | (100,365.00 | ) | ||||||||||||
| Total other income (expense) | (8,738,543.00 | ) | 604,987.00 | 4,486,540.00 | (489,992.00 | ) | (4,137,008.00 | ) | |||||||||||
| Net loss from continuing operations | (11,750,787.00 | ) | 6,041,866.00 | 4,486,540.00 | (4,074,205.00 | ) | (5,296,586.00 | ) | |||||||||||
| Income (loss) from discontinued operations | 140,547.00 | - | - | - | 140,547.00 | ||||||||||||||
| Net income (loss) | (11,610,240.00 | ) | 6,041,866.00 | 4,486,540.00 | (4,074,205.00 | ) | (5,156,039.00 | ) | |||||||||||
| dividends | - | - | (250,000.00 | ) | (i) | (250,000.00 | ) | (n) | (500,000.00 | ) | |||||||||
| Net income (loss) available to common shareholders | (11,610,240.00 | ) | 6,041,866.00 | 4,236,540.00 | (4,324,205.00 | ) | (5,656,039.00 | ) | |||||||||||
| Net income (loss) per common share | |||||||||||||||||||
| Continuing operations | (0.32 | ) | (0.02 | ) | |||||||||||||||
| Discontinued operations | (0.00 | ) | (0.00 | ) | |||||||||||||||
| Net loss attributable to common shareholders | (0.32 | ) | (0.02 | ) | |||||||||||||||
| Weighted Average Shares Outstanding | |||||||||||||||||||
| Basic | 36,399,788.32 | 254,107,078.32 | |||||||||||||||||
| Diluted | 36,399,788.32 | 254,107,078.32 | |||||||||||||||||
| Pro Forma Adjusted EBITDA SMG defines pro forma Adjusted EBITDA as net loss plus (i) depreciation, (ii) income taxes, (iii) interest expense, (iv) non-cash stock option expense, (v) non-cash stock option expense, (vi) transaction-related expenses, (vii) expenses for contract Chief Financial Officer consulting services and Chief Transition Officer services and (vii) discontinued operations costs. | |||||||||||||||||||
| Net income (loss) | (11,610,240.00 | ) | 6,041,866.00 | 4,486,540.00 | (4,074,205.00 | ) | (5,156,039.00 | ) | |||||||||||
| Plus: | |||||||||||||||||||
| Depreciation and amortization | 5,328,366.00 | 4,385,250.00 | 4,216,737.00 | 13,930,353.00 | |||||||||||||||
| Interest expense | 9,431,681.00 | ||||||||||||||||||
