Louisville, Colorado, March 27, 2025 (GLOBE NEWSWIRE) -- CEA Industries Inc. (NASDAQ: CEAD, CEADW) ("CEA Industries" or the "Company"), is reporting results for the three and twelve months ended December 31, 2024.
Fourth Quarter 2024 Financial Summary (in $ thousands, excl. margin items):
| Q4 2024 (unaudited) | Q3 2024 (unaudited) | Q4 2023 (unaudited) | ||||||||||
| Revenue | $ | 417 | $ | 391 | $ | 251 | ||||||
| Gross Profit (Loss) | $ | (175 | ) | $ | (70 | ) | $ | (286 | ) | |||
| Operating Expenses | $ | 850 | $ | 677 | $ | 709 | ||||||
| Net Income/(Loss) | $ | (1,019 | ) | $ | (740 | ) | $ | (988 | ) | |||
Full Year 2024 Financial Summary (in $ thousands, excl. margin items):
| FY 2024 | FY 2023 | |||||||
| Revenue | $ | 2,803 | $ | 6,911 | ||||
| Gross Profit (Loss) | $ | (220 | ) | $ | 542 | |||
| Operating Expenses | $ | 2,952 | $ | 3,495 | ||||
| Net Income/(Loss) | $ | (3,146 | ) | $ | (2,912 | ) | ||
"We continue to maintain the lean cost structure we implemented last year, with a focus on expense reduction and capital preservation as we work through our remaining backlog of Controlled Environment Agriculture related work," said Tony McDonald, Chairman and CEO of CEA Industries. "To demonstrate our commitment to shareholders, throughout 2024 we reduced headcount, eliminated product development costs, and brought down business development expenses to help preserve our balance sheet. These efforts enabled us to reduce operating expenses by approximately 16% in 2024 compared to the prior year.
"As we announced last month, we recently signed an agreement to acquire Fat Panda, a Winnipeg, Canada based retailer and manufacturer of e-cigarettes, vape devices and e-liquids with a substantial market share in the mid-western province region. Fat Panda's strong retail footprint, vertically integrated operations, and consistent profitability align well with our strategic objectives. By combining our expertise and resources, we aim to accelerate Fat Panda's expansion, drive operational efficiencies, and enhance long-term value creation for our shareholders. We look forward to providing further updates following the prospective close of the transaction in the coming months."
Fourth Quarter 2024 Financial Results
Revenue in the fourth quarter of 2024 increased to $0.4 million compared to $0.3 million for the same period in 2023. The increase was primarily attributed to greater revenue recognition as the Company worked through its backlog.
Net bookings in the fourth quarter of 2024 increased to $0.5 million compared to $0.1 million in the year-ago period. The Company's quarter-end backlog also increased to $0.5 million compared to $0.4 million for the same period in 2023. The increase in the Company's net bookings and backlog was primarily attributed to an equipment order of approximately $400,000.
Gross loss in the fourth quarter of 2024 reflected an improvement to $0.2 million compared to $0.3 million for the same period in 2023. The improvement in gross profit was primarily driven by a reduction in variable costs as a percentage of revenue. Variable costs include the cost of equipment, outside engineering, shipping and handling, travel and warranty.
Operating expenses in the fourth quarter of 2024 were $0.8 million compared to $0.7 million for the same period in 2023. The increase in operating expenses was primarily due to acquisition-related expenses.
Net loss in the fourth quarter of 2024 was $1.0 million or $(1.29) per share, compared to a net loss of $1.0 million or $(1.47) per share for the same period in 2023.
Cash and cash equivalents were $9.5 million at December 31, 2024, compared to $12.5 million on December 31, 2023, while working capital decreased by $3.0 million during this period. At December 31, 2024, the Company remained debt free.
About CEA Industries Inc.
CEA Industries Inc. (www.ceaindustries.com) provides a suite of complementary and adjacent offerings to the controlled environment agriculture industry. The Company's comprehensive solutions, when aligned with industry operators' product and sales initiatives, support the development of the global ecosystem for indoor cultivation.
Forward Looking Statements
This press release may contain statements of a forward-looking nature relating to future events. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. These statements reflect our current beliefs, and a number of important factors could cause actual results to differ materially from those expressed in this press release, including the factors set forth in "Risk Factors" set forth in our annual and quarterly reports filed with the Securities and Exchange Commission ("SEC"), and subsequent filings with the SEC. Please refer to our SEC filings for a more detailed discussion of the risks and uncertainties associated with our business, including but not limited to the risks and uncertainties associated with our business prospects and the prospects of our existing and prospective customers; the inherent uncertainty of product development; regulatory, legislative and judicial developments, especially those related to changes in, and the enforcement of, cannabis laws; increasing competitive pressures in our industry; and relationships with our customers and suppliers. Except as required by the federal securities laws, we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise. The reference to CEA's website has been provided as a convenience, and the information contained on such website is not incorporated by reference into this press release.
Non-GAAP Financial Measures
To supplement our financial results on U.S. generally accepted accounting principles ("GAAP") basis, we use non-GAAP measures including net bookings and backlog, as well as other significant non-cash expenses such as stock-based compensation and depreciation expenses. We believe these non-GAAP measures are helpful in understanding our past performance and are intended to aid in evaluating our potential future results. The presentation of these non-GAAP measures should be considered in addition to our GAAP results and are not intended to be considered in isolation or as a substitute for financial information prepared or presented in accordance with GAAP. We believe these non-GAAP financial measures reflect an additional way to view aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business.
Investor Contact:
Sean Mansouri, CFA
Elevate IR
info@ceaindustries.com
(720) 330-2829
CEA Industries Inc.
Condensed Consolidated Balance Sheets
(in US Dollars except share numbers)
| December 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 9,452,826 | $ | 12,508,251 | ||||
| Accounts receivable, net | 13,041 | 18,655 | ||||||
| Contract assets, net | 234,328 | 224,414 | ||||||
| Inventory, net | 25,980 | 296,404 | ||||||
| Prepaid expenses and other | 368,068 | 313,115 | ||||||
| Total Current Assets | 10,094,243 | 13,360,839 | ||||||
| Noncurrent Assets | ||||||||
| Property and equipment, net | 5,698 | 38,558 | ||||||
| Intangible assets, net | 1,830 | 1,830 | ||||||
| Deposits | 14,747 | 14,747 | ||||||
| Operating lease right-of-use asset | 245,270 | 356,109 | ||||||
| Total Noncurrent Assets | 267,545 | 411,244 | ||||||
| TOTAL ASSETS | $ | 10,361,788 | $ | 13,772,083 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| LIABILITIES | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | 550,477 | $ | 624,724 | ||||
| Deferred revenue | 343,790 | 499,800 | ||||||
| Current portion of operating lease liability | 135,651 | 126,724 | ||||||
| Total Current Liabilities | 1,029,918 | 1,251,248 | ||||||
| Noncurrent Liabilities | ||||||||
| Operating lease liability, net of current portion | 134,147 | 259,627 | ||||||
| Total Noncurrent Liabilities | 134,147 | 259,627 | ||||||
| TOTAL LIABILITIES | 1,164,065 | 1,510,875 | ||||||
| Commitments and Contingencies (Note 9) | - | - | ||||||
| SHAREHOLDERS' EQUITY | ||||||||
| Preferred stock, $0.00001 par value; 25,000,000 shares authorized; 0 shares issued and outstanding | - | - | ||||||
| Common stock, $0.00001 par value; 200,000,000 authorized; 793,109 and 673,090 shares issued and outstanding, respectively | 8 | 7 | ||||||
| Additional paid in capital | 49,533,950 | 49,451,493 | ||||||
| Accumulated deficit | (40,336,235 | ) | (37,190,292 | ) | ||||
| Total Shareholders' Equity | 9,197,723 | 12,261,208 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 10,361,788 | $ | 13,772,083 | ||||
CEA Industries Inc.
Condensed Consolidated Statements of Operations
(in US Dollars except share numbers)
(Unaudited)
| For the Three Months Ended December 31, | For the Years Ended December 31, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| Revenue | $ | 417,447 | $ | 251,093 | $ | 2,803,470 | $ | 6,910,951 | ||||||||
| Cost of revenue | 592,343 | 536,919 | 3,023,094 | 6,368,872 | ||||||||||||
| Gross (loss) profit | (174,896 | ) | (285,826 | ) | (219,624 | ) | 542,079 | |||||||||
| Operating expenses: | ||||||||||||||||
| Advertising and marketing expenses | 2,685 | 16,445 | 16,315 | 273,409 | ||||||||||||
| Product development costs | - | - | - | 76,487 | ||||||||||||
| Selling, general and administrative expenses | 846,817 | 693,022 | 2,936,145 | 3,145,328 | ||||||||||||
| Total operating expenses | 849,503 | 709,467 | 2,952,460 | 3,495,224 | ||||||||||||
| Operating loss | (1,024,399 | ) | (995,293 | ) | (3,172,084 | ) | (2,953,145 | ) | ||||||||
| Other income: | ||||||||||||||||
| Other income, net | - | - | - | 7,778 | ||||||||||||
| Interest income, net | 5,761 | 7,774 | 26,141 | 33,816 | ||||||||||||
| Total other income | 5,761 | 7,774 | 26,141 | 41,594 | ||||||||||||
| Loss before provision for income taxes | (1,018,638 | ) | (987,519 | ) | (3,145,943 | ) | (2,911,551 | ) | ||||||||
| Income taxes | - | - | - | - | ||||||||||||
| Net loss | $ | (1,018,638 | ) | $ | (987,519 | ) | $ | (3,145,943 | ) | $ | (2,911,551 | ) | ||||
| Loss per common share - basic and diluted | $ | (1.29 | ) | $ | (1.47 | ) | $ | (4.22 | ) | $ | (4.33 | ) | ||||
| Weighted average number of common shares outstanding, basic and diluted | 791,813 | 673,031 | 745,038 | 672,936 | ||||||||||||
CEA Industries Inc.
Condensed Consolidated Statements of Cash Flows
(in US Dollars except share numbers)
(Unaudited)
| For the Twelve Months Ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Cash Flows From Operating Activities: | ||||||||
| Net loss | $ | (3,145,943 | ) | $ | (2,911,551 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and intangible asset amortization expense | 20,065 | 29,655 | ||||||
| Share-based compensation | 82,457 | 187,615 | ||||||
| Provision for doubtful accounts (bad debt recovery) | (40,217 | ) | (2,056 | ) | ||||
| Provision for excess and obsolete inventory | 26,989 | 121,791 | ||||||
| Loss on disposal of assets | 12,796 | 100 | ||||||
| Operating lease expense | 110,839 | 106,765 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 45,831 | (13,950 | ) | |||||
| Contract assets | (9,914 | ) | (224,414 | ) | ||||
| Inventory | 243,435 | (69,784 | ) | |||||
| Prepaid expenses and other | (54,953 | ) | 1,176,806 | |||||
| Accounts payable and accrued liabilities | (74,247 | ) | (582,534 | ) | ||||
| Deferred revenue | (156,010 | ) | (3,838,771 | ) | ||||
| Operating lease liability, net | (116,553 | ) | (108,735 | ) | ||||
| Net cash used in operating activities | (3,055,425 | ) | (6,129,063 | ) | ||||
| Cash Flows From Investing Activities | ||||||||
| Proceeds from the sale of property and equipment | - | 200 | ||||||
| Net cash provided by investing activities | - | 200 | ||||||
| Cash Flows From Financing Activities | ||||||||
| Net cash provided by financing activities | - | - | ||||||
| Net change in cash and cash equivalents | (3,055,425 | ) | (6,128,863 | ) | ||||
| Cash and cash equivalents, beginning of period | 12,508,251 | 18,637,114 | ||||||
| Cash and cash equivalents, end of period | $ | 9,452,826 | $ | 12,508,251 | ||||
| Supplemental cash flow information: | ||||||||
| Interest paid | $ | - | $ | - | ||||
| Income taxes paid | $ | - | $ | - | ||||
| Non-cash investing and financing activities: | ||||||||
| Options issued for accrued equity compensation liability | $ | - | $ | 89,970 | ||||
