- Company Reports Sequential Revenue Growth of 12% Over Q4 2023 and Strong Gross Margins of 64% -
FT. LAUDERDALE, FL / ACCESSWIRE / May 13, 2024 / Cardiff Lexington Corporation (OTC PINK:CDIX) announced today financial results for its first quarter ended March 31, 2024.
First Quarter 2024 Financial Highlights
- 1Q24 revenue of $2.7 million was consistent with revenue of $2.7 million in 1Q23; 1Q24 revenue increased sequentially by 12% compared to $2.4 million in 4Q23.
- 64% gross profit margin in 1Q24 was consistent with gross margin of 65% percent in 1Q23; 1Q24 gross profit margin increased 530 basis points sequentially compared to 59% in 4Q23.
- 1Q24 operating income was $219,000, or 8% of sales, which compares to $758,000, or 28% of sales in 1Q23. The decrease in operating income in 1Q24 is primarily related to scaling expenses of approximately $302,000 associated with the planned uplisting to a major U.S. exchange and capital raise, and stock compensation expense of $94,000 as the Company continues to strengthen its management team and board of directors to support the anticipated growth of the business. Excluding these non-cash scaling expenses, 1Q24 operating income would have been approximately $615,000, representing a sequential increase of approximately 48% over 4Q23.
- 1Q24 adjusted EBITDA of $522,000 increased sequentially by 8% from $484,000.
Balance Sheet Highlights at March 31, 2024
- 9% increase in total assets to $22.6 million compared to $20.7 million at December 31, 2023
- 65% increase in shareholders' equity to $1.2 million compared to shareholders' equity of $731,000 at December 31, 2023
- Improved net working capital of $915,000 at March 31, 2024, as compared to $317,000 at December 31, 2023
Alex Cunningham, Chief Executive Officer of Cardiff Lexington, commented, "On the heels of a very strong 2023, we delivered a solid first quarter of 2024 highlighted by a 12% sequential increase in revenue to $2.7 million and strong gross margins of 64%. A key initiative during the quarter was making strategic investments in the business to prepare for the next stage of our growth and to that end we recognized several one-time, non-cash non-recurring expenses. Excluding these investments, our operating income in the quarter increased sequentially by 48% compared to the fourth quarter of 2023. Additionally, we remain intently focused on populating unrestricted common shares and reducing or eliminating preferred share classes to exceed qualifications to uplist to a major U.S. exchange. This uplist is in support of the long-term growth of our proven model, and we continue to make daily progress towards this goal."
Mr. Cunningham continued, "Our focus in 2024 is to build off the success that we experienced in 2023. We delivered a strong start to the year and are encouraged by the many opportunities that we're seeing in the market to continue expanding our Nova Ortho and Spine footprint into the broader southeast United States, and eventually, nationwide. We're entering a pivotal stage in our growth strategy and believe that Cardiff Lexington is ideally positioned to drive long-term growth and enhanced value for our shareholders."
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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 | ||||||||
| March 31, | March 31, | |||||||
| 2024 | 2023 | |||||||
Total revenue | $ | 2,661,966 | $ | 2,706,399 | ||||
Total cost of sales | 948,154 | 956,295 | ||||||
Gross profit | 1,713,812 | 1,750,104 | ||||||
Operating expenses | ||||||||
Depreciation expense | 3,365 | 4,635 | ||||||
Selling, general and administrative | 1,191,230 | 987,921 | ||||||
Stock compensation expense | 300,225 | 0 | ||||||
Total operating expenses | 1,494,820 | 992,556 | ||||||
Income from continuing operations | 218,992 | 757,548 | ||||||
Other income (expense): | ||||||||
Other income (expense) | 0 | 205 | ||||||
Gain on debt refinance and forgiveness | 0 | 390 | ||||||
Penalties and fees | (1,000 | ) | (17,000 | ) | ||||
Interest expense | (376,269 | ) | (693,661 | ) | ||||
Amortization of debt discounts | (13,515 | ) | (17,983 | ) | ||||
Total other income (expense) | (390,784 | ) | (728,049 | ) | ||||
Net income (loss) before discontinued operations | (171,792 | ) | 29,499 | |||||
Loss from discontinued operations | (111,312 | ) | (45,490 | ) | ||||
Income (Loss) from disposal of discontinued operations | 0 | 0 | ||||||
Net income (loss) | $ | (283,104 | ) | $ | (15,991 | ) | ||
CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2023 AND DECEMBER 31, 2022
(UNAUDITED)
March 31, | December 31, | ||||||
2024 | 2023 | ||||||
| ASSETS | |||||||
Current assets | |||||||
Cash | $ | 1,253,552 | $ | 866,943 | |||
Accounts receivable-net | 14,649,930 | 13,305,254 | |||||
Prepaid and other current assets | 7,100 | 5,000 | |||||
Total current assets | 15,910,582 | 14,177,197 | |||||
| Property and equipment, net | 31,296 | 34,661 | |||||
| Land | 540,000 | 540,000 | |||||
| Goodwill | 5,666,608 | 5,666,608 | |||||
| Right of use - assets | 416,441 | 289,062 | |||||
| Due from related party | 4,979 | 4,979 | |||||
| Other assets | 35,404 | 33,304 | |||||
Total assets | $ | 22,605,310 | $ | 20,745,811 | |||
| LIABILITIES, MEZZANINE EQUITY AND DEFICIENCY IN STOCKHOLDERS' EQUITY | |||||||
Current liabilities | |||||||
Accounts payable and accrued expense | $ | 2,104,109 | $ | 2,047,131 | |||
Accrued expenses - related parties | 4,323,057 | 4,733,057 | |||||
Accrued interest | 668,729 | 620,963 | |||||
Right of use - liability | 195,934 | 157,669 | |||||
Due to director and officer | 45,844 | 120,997 | |||||
Notes payable | 3,599,345 | 2,136,077 | |||||
Convertible notes payable, net of debt discounts of $24,820 and $46,797, respectively | 3,820,545 | 3,807,030 | |||||
Net liabilities of discontinued operations | 237,643 | 237,643 | |||||
Total current liabilities | 14,995,206 | 13,860,567 | |||||
Other liabilities | |||||||
Notes payable | 144,511 | 144,666 | |||||
Operating lease liability - long term | 213,958 | 119,056 | |||||
Total liabilities | 15,353,675 | 14,124,289 | |||||
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 March 31, 2024 and December 31, 2023 | 3,996,462 | 3,891,439 | |||||
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 March 31, 2024 and December 31, 2023 | 317,194 | 307,980 | |||||
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 March 31, 2024 and December 31, 2023 | 1,728,082 | 1,690,685 | |||||
Total Mezzanine Equity | 6,041,738 | 5,890,104 | |||||
Stockholders' equity | |||||||
Series B Preferred Stock - 3,000,000 shares authorized, $0.001 par value, stated value of $4.00, 1,360,679 and 2,139,478 shares issued and outstanding at March 31, 2024 and December 31, 2023 | 5,442,716 | 8,557,912 | |||||
Series C Preferred Stock - 500 shares authorized, $0.001 par value, stated value of $4.00, 99 and 123 shares issued and outstanding at March 31, 2024 and December 31, 2023 | 396 | 492 | |||||
Series E Preferred Stock - 1,000,000 shares authorized, $0.001 par value, stated value $4.00, 155,750 shares issued and outstanding at March 31, 2024 and December 31, 2023 | 623,000 | 623,000 | |||||
Series F-1 Preferred Stock - 50,000 shares authorized, $0.001 par value, stated value $4.00, 35,752 shares issued and outstanding at March 31, 2024 and December 31, 2023 | 143,008 | 143,008 | |||||
Series I Preferred Stock - 15,000,000 shares authorized, $0.001 par value, stated value $4.00, 12,089,000 and 14,885,000 issued and outstanding at March 31, 2024 and December 31, 2023 | 48,356,000 | 59,540,000 | |||||
Series J Preferred Stock - 2,000,000 shares authorized, $0.001 par value, stated value $4.00, 171,359 and 1,713,584 shares issued and outstanding at March 31, 2024 and December 31, 2023 | 685,436 | 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 March 31, 2024 and December 31, 2023 | 1,277,972 | 1,277,972 | |||||
Common Stock - 300,000,000 shares authorized, $0.001 par value; 10,819,995 and 25,121 shares issued and outstanding at March 31, 2024 and December 31, 2023 | 10,820 | 25 | |||||
Additional paid-in capital | 13,789,402 | (7,581,212) | |||||
Accumulated deficit | (69,118,853) | (68,684,115) | |||||
Total stockholders' equity | 1,209,897 | 731,418 | |||||
Total liabilities, mezzanine equity and stockholders' equity | $ | 22,605,310 | $ | 20,745,811 | |||
CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND MARCH 31,2023
(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 | ||||||||
| March 31, | ||||||||
| 2024 | 2023 | |||||||
EBITDA (1) | ||||||||
Net income (loss) before discontinued operations | $ | (171,792 | ) | $ | 29,499 | |||
Add: | ||||||||
Interest | 376,269 | 693,661 | ||||||
Taxes | 0 | 0 | ||||||
Depreciation | 3,365 | 4,635 | ||||||
Amortization | 13,515 | 17,983 | ||||||
EBITDA (1) | $ | 221,357 | $ | 745,778 | ||||
Adjusted EBITDA (2) | ||||||||
EBITDA | $ | 221,357 | $ | 745,778 | ||||
Add: | ||||||||
Stock compensation expense for shares issued | 300,225 | 0 | ||||||
Adjusted EBITDA (2) | $ | 521,582 | $ | 745,778 | ||||
(1) EBITDA is a non-GAAP financial measure defined as Earnings Before Interest, Income Tax, Depreciation and Amortization.
(2) Adjusted EBITDA is a non-GAAP financial measure that is the sum of EBITDA plus non-recurring and non-cash charges.
SOURCE: Cardiff Lexington Corporation
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