On Wednesday, Urban Gro, Inc. UGRO released first quarter results and reiterated full-year 2023 guidance.

CEO Bradley Nattrass highlighted the company’s focus on creating a durable and diversified organization.

“Our first quarter performance is in line with our expectations as we continue to demonstrate that the acquisitions and investments we have made have created a more durable and uniquely diversified business. We continue to see demand for our solutions across all industries,” said Nattrass.

Financial results for the first quarter of 2023

• Revenue for the first quarter was $16.8 million compared to $21.1 million a year earlier. However, the company offset some of the declines with revenue growth of $10.2 million from acquisition-related engineering and construction services.
• Gross profit was $2.8 million, or 17% of revenue, compared to $4.9 million, or 23% of revenue, in the prior-year period.
• Operating expenses were $7.9 million compared to $5.8 million in the same period last year, an increase of $2.1 million. In addition, operating expenses increased due to organic growth, acquisitions, royalties and expansion into the European market.
• Non-operating expenses were $0.2 million compared to non-operating income of $0.1 million in the prior year.
• Net loss was $5.1 million, or $0.48 loss per share, compared to a net loss of $0.7 million, or $0.07 loss per share, in the prior-year period.
• Adjusted EBITDA was a negative $3.4 million compared to a positive $0.4 million in the prior year period.
• Cash at the end of Q1 2023 was $7.3 million excluding bank debt. Per a press release.

2023 Backlog & Forecast

Additionally, as of March 31, 2023, UGRO’s consolidated backlog was approximately $105 million in contracts, “consisting of $96 million in construction design, $4 million in professional services, and $5 million in equipment systems”.

Full-year 2023 guidance reiterates sales in the $100-$120 range…