- Full Year 2023 Highlighted by Strong Revenue Growth and Profitability -
FT. LAUDERDALE, FL / ACCESSWIRE / March 28, 2024 / Cardiff Lexington Corporation (OTC PINK:CDIX) announced today financial results for its fourth quarter and year ended December 31, 2023.
Fourth Quarter 2023 Financial Highlights
- 4Q23 revenue of $2.4 million was consistent with revenue of $2.5 million in 4Q22
- 59% gross profit margin in 4Q23 increased from 58% in 4Q22
- Operating income was $415,000, or 17% of sales, which compares to $677,000, or 27% of sales in 4Q22
- Net income increased 107% to $0.2 million from a loss of $3.5 million in 4Q22
Full Year 2023 Financial Highlights
- 11% growth in revenue to $11.9 million compared to $10.7 million in FY22
- 70% gross profit margin in FY23 increased from 62% in FY22
- Operating income increased 33% to $5.2 million, or 44% of sales, which compares to $3.9 million, or 37% of sales in FY22
- Net income increased 156% to $3.0 million from a loss of $5.4 million in FY22
- 53% increase in FY23 EBITDA to $5.2 million compared to FY22
Balance Sheet Highlights at December 31, 2023
- 55% increase in total assets to $20.7 million compared to $13.3 million at December 31, 2022
- 142% increase in shareholders' equity to $0.7 million compared to a negative shareholders' equity of $1.7 million at December 31, 2022
Positive working capital compared to a negative working capital at December 31, 2022
Alex Cunningham, Chief Executive Officer of Cardiff Lexington, commented, "2023 was a very strong year for our business highlighted by strong revenue growth of 11% and significantly improved profitability with 26% net income. Operating income increased 33% to $5.2 million in 2023. At the center of this growth is Nova Ortho and Spine, our healthcare subsidiary that provides orthopedic healthcare services to the uninsured patient population. With a unique, asset-light business model we drove significant economic returns and a collection rate of 99.8% - far outpacing the industry average. Nova Ortho and Spine is ideally positioned to benefit from unprecedented demand growth in this market fueled by an aging patient population and rising number of personal injury accidents.
Mr. Cunningham continued, "To capitalize on this opportunity, we're intently focused on building a strong management team and strategically expanding our footprint of Nova Ortho and Spine locations with a near term goal of targeting key population centers throughout Florida and the broader southeast United States. To that end, we've enhanced our executive team with the hiring of a new Chief Financial Officer and Chief Accounting Officer whose backgrounds and skills are closely aligned with our business goals. We've also appointed a new Managing Director of Nova Ortho and Spine with an extensive medical and business background to help facilitate our growth. To date, we've opened a total of eleven Nova Ortho and Spine locations, including our tenth location in Florida in Port St. Lucie, and our first location outside of Florida in Valdosta, Georgia. The opening of the Valdosta location marks a key inflection point in our growth strategy, and we're energized by the demand and opportunity that we're seeing in the market for our services as we expand into the broader southeast United States, with the long-term goal of eventually expanding nationwide.
"Subsequent to the close of the quarter, we implemented a reverse stock split as part of our strategy to meet listing requirements and qualify for an uplisting to a major U.S. exchange during the second quarter of 2024. Uplisting to a major U.S. exchange would allow us to increase access to dedicated funding and reduce the cost of capital to support our growth strategy. To that end, preferred shareholders are currently converting their preferred shares to common stock to increase the number of total outstanding shares and the market value of the public float.
"In 2023, we demonstrated our ability to provide best-in-class care for an underserved population of the orthopedic market and create attractive economic returns for shareholders. We look forward to efficiently expanding our operations and bringing our services and solutions to more patients as we continue to execute on our growth strategy and drive increased value in 2024 and beyond."
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About Cardiff Lexington Corporation:
Cardiff Lexington Corporation is a holding company focused on locating, acquiring, and building middle market, niche companies, primarily in the healthcare industry. Fundamental to the Cardiff Lexington strategy is the service-based partnership culture which emphasizes core values, teamwork, accountability, and performance.
A substantial majority of the Company's revenue is derived from Nova Ortho and Spine, PLLC, which operates a group of regional primary specialty and ancillary care facilities throughout Florida that provide traumatic injury victims with a full range of diagnostic and surgical services, primary care evaluations, interventional pain management, and specialty consultation services.
For more information on Cardiff Lexington Corporation, you may access the company's website at https://cardifflexington.com/
FORWARD LOOKING STATEMENT: This news release contains forward looking statements within the meaning of the Securities Litigation Reform Act. The statements reflect the Company's current views with respect to future events that involve risks and uncertainties. These risks include the failure to meet schedule or performance requirements of the Company's business, the Company's liquidity position, the Company's ability to obtain new business, the emergence of competitors with greater financial resources, and the impact of competitive pricing. In the light of these uncertainties the forward-looking events referred to in this release might not occur.
Cardiff Lexington Investor Relations
investorsrelations@cardifflexington.com
(800) 628-2100 ext. 705
or
IMS Investor Relations
cardifflexington@imsinvestorrelations.com
(203) 972-9200
CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2023 AND 2022
(UNAUDITED)
| For the Three Months Ended | For the Years Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
Total revenue | $ | 2,376,502 | $ | 2,538,262 | $ | 11,853,266 | $ | 10,693,196 | ||||||||
Total cost of sales | 971,217 | 1,077,616 | 3,560,624 | 4,060,034 | ||||||||||||
Gross profit | 1,405,285 | 1,460,646 | 8,292,642 | 6,633,162 | ||||||||||||
Operating expenses | ||||||||||||||||
Depreciation expense | 9,412 | 5,783 | 20,777 | 23,132 | ||||||||||||
Selling, general and administrative | 981,209 | 777,757 | 3,076,820 | 2,703,141 | ||||||||||||
Total operating expenses | 990,621 | 783,540 | 3,097,597 | 2,726,273 | ||||||||||||
Income from continuing operations | 414,664 | 677,106 | 5,195,045 | 3,906,889 | ||||||||||||
Other income (expense) | ||||||||||||||||
Other income (expense) | (50,000 | ) | 150,250 | (49,795 | ) | 150,250 | ||||||||||
Gain on debt refinance and forgiveness | 115,058 | - | 115,448 | 1,397,271 | ||||||||||||
Penalties and fees | (5,000 | ) | (2,063,916 | ) | (53,000 | ) | (2,063,916 | ) | ||||||||
Interest expense | (192,567 | ) | 296,885 | (1,956,266 | ) | (6,387,309 | ) | |||||||||
Amortization of debt discounts | (41,854 | ) | (4,703 | ) | (136,518 | ) | (253,823 | ) | ||||||||
Total other income expense | (174,363 | ) | (1,621,484 | ) | (2,080,131 | ) | (7,157,527 | ) | ||||||||
Net income (loss) before discontinued operations | 240,301 | (944,378 | ) | 3,114,914 | (3,250,638 | ) | ||||||||||
Loss from discontinued operations | - | (2,267,736 | ) | - | (2,178,883 | ) | ||||||||||
Income (Loss) from disposal of discontinued operations | 6,485 | (328,353 | ) | (86,520 | ) | - | ||||||||||
Net income (loss) | $ | 246,786 | $ | (3,540,467 | ) | $ | 3,028,394 | $ | (5,429,521 | ) | ||||||
CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2023 AND DECEMBER 31, 2022
(UNAUDITED)
| December 31, | ||||||||
| 2023 | 2022 | |||||||
| (Restated) | ||||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash | $ | 866,943 | $ | 219,085 | ||||
Accounts receivable-net | 13,305,254 | 6,603,920 | ||||||
Prepaid and other current assets | 5,000 | 5,000 | ||||||
Total current assets | 14,177,197 | 6,828,005 | ||||||
Property and equipment, net | 34,661 | 55,439 | ||||||
Land | 540,000 | 540,000 | ||||||
Goodwill | 5,666,608 | 5,666,608 | ||||||
Right of use - assets | 289,062 | 218,926 | ||||||
Due from related party | 4,979 | 4,979 | ||||||
Other assets | 33,304 | 30,823 | ||||||
Total assets | $ | 20,745,811 | $ | 13,344,780 | ||||
LIABILITIES, MEZZANINE EQUITY AND DEFICIENCY IN STOCKHOLDERS' EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable and accrued expense | $ | 2,047,131 | $ | 1,915,920 | ||||
Accrued expenses - related parties | 4,733,057 | 3,750,557 | ||||||
Accrued interest | 620,963 | 350,267 | ||||||
Right of use - liability | 157,669 | 142,307 | ||||||
Due to director and officer | 120,997 | 123,192 | ||||||
Notes payable | 2,136,077 | 15,809 | ||||||
Convertible notes payable, net of debt discounts of $24,820 and $46,797, respectively | 3,807,030 | 3,515,752 | ||||||
Net liabilities of discontinued operations | 237,643 | 151,123 | ||||||
Total current liabilities | 13,860,567 | 9,964,927 | ||||||
Other liabilities | ||||||||
Notes payable | 144,666 | 139,789 | ||||||
Operating lease liability - long term | 119,056 | 84,871 | ||||||
Total liabilities | 14,124,289 | 10,189,587 | ||||||
Mezzanine equity | ||||||||
Redeemable Series N Senior Convertible Preferred Stock - 3,000,000 shares authorized, $0.001 par value, stated value $4.00, 868,056 shares issued and outstanding at December 31, 2023 and 2022 | 3,891,439 | 3,125,002 | ||||||
Redeemable Series R Senior Convertible Preferred Stock - 5,000 shares authorized, $0.001 par value, stated value of $1,200, 165 shares issued and outstanding at December 31, 2023 and 2022 | 307,980 | 274,982 | ||||||
Redeemable Series X Senior Convertible Preferred Stock - 5,000,000 shares authorized, $0.001 par value, stated value of $4.00 par value; 375,000 shares issued and outstanding at December 31, 2023 and 2022 | 1,690,685 | 1,500,000 | ||||||
Total Mezzanine Equity | 5,890,104 | 4,899,984 | ||||||
Stockholders' equity (deficit) | ||||||||
Series B Preferred Stock - 3,000,000 shares authorized, $0.001 par value, stated value of $4.00, 2,139,478 and 2,131,328 shares issued and outstanding at December 31, 2023 and 2022, respectively | 8,537,912 | 8,525,312 | ||||||
Series C Preferred Stock - 500 shares authorized, $0.001 par value, stated value of $4.00, 123 shares issued and outstanding at December 31, 2023 and 2022 | 488 | 488 | ||||||
Series E Preferred Stock - 1,000,000 shares authorized, $0.001 par value, stated value $4.00, 155,750 and 150,750 shares issued and outstanding at December 31, 2023 and 2022, respectively | 623,000 | 603,000 | ||||||
Series F-1 Preferred Stock - 50,000 shares authorized, $0.001 par value, stated value $4.00, 35,752 shares issued and outstanding at December 31, 2023 and 2022 | 143,008 | 143,008 | ||||||
Series I Preferred Stock - 15,000,000 shares authorized, $0.001 par value, stated value $4.00, 14,885,000 issued and outstanding at December 31, 2023 and 2022 | 59,540,000 | 59,540,000 | ||||||
Series J Preferred Stock - 2,000,000 shares authorized, $0.001 par value, stated value $4.00, 1,713,584 shares issued and outstanding at December 31, 2023 and 2022 | 6,854,336 | 6,854,336 | ||||||
Series L Preferred Stock - 400,000 shares authorized, $0.001 par value, stated value $4.00, 319,493 shares issued and outstanding at December 31, 2023 and 2022 | 1,277,972 | 1,277,972 | ||||||
Common Stock; 7,500,000,000 shares authorized, $0.001 par value; 24,065 and 10,997 shares issued and outstanding at December 31, 2023 and 2022, respectively | 1,804,799 | 824,793 | ||||||
Additional paid-in capital | (9,365,982 | ) | (8,581,265 | ) | ||||
Accumulated deficit | (68,684,115 | ) | (70,932,435 | ) | ||||
Total stockholders' equity | 731,418 | (1,744,791 | ) | |||||
Total liabilities, mezzanine equity and stockholders' equity | $ | 20,745,811 | $ | 13,344,780 | ||||
CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2023 AND 2022
(UNAUDITED)
The following table reconciles Net income (loss) before discontinued operations (a GAAP measure) to EBITDA (a non-GAAP measure)
| For the Three Months Ended | For the Years Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
EBITDA (1) | ||||||||||||||||
Net income (loss) before discontinued operations | $ | 240,301 | $ | (944,378 | ) | $ | 3,114,914 | $ | (3,250,638 | ) | ||||||
Add: | ||||||||||||||||
Interest | 192,567 | (296,885 | ) | 1,956,266 | 6,387,309 | |||||||||||
Taxes | 0 | 0 | 0 | 0 | ||||||||||||
Depreciation | 9,412 | 5,783 | 20,777 | 23,132 | ||||||||||||
Amortization | 41,854 | 4,703 | 136,518 | 253,823 | ||||||||||||
EBITDA (1) | $ | 484,134 | $ | (1,230,777 | ) | $ | 5,228,475 | $ | 3,413,626 | |||||||
(1) EBITDA is a non-GAAP measure defined as Earnings Before Interest, Income Tax, Depreciation and Amortization.
SOURCE: Cardiff Lexington Corporation
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