Gaithersburg, MD, June 17, 2019 (GLOBE NEWSWIRE) -- Verus International, Inc. (“Verus” or the “Company”) today announced financial results for its fiscal 2019 second quarter ended April 30, 2019. In conjunction with this release, the Company is also providing additional details on its strategy for the remainder of fiscal 2019.
For Q2 2019, management is noting the following items of importance:
Revenue set an all-time record of $2.9 million in Q2/19, an increase of 153% over the $1.2M reported in Q2/18.
The company’s gross margin was approximately 15.4%, within the higher historical range for the current product mix; up 348 basis points compared to Q2/18.
Operating expenses as a percentage of revenue improved significantly to 23.7% of revenue in Q2/19 compared to 38.3% in Q2/18. Excluding non-cash, stock-based compensation expenses, Q2/19 operating expenses as a percentage of revenue were 13.8%.
Net income reflected a profit of $2.2 million, primarily driven by the reversal of certain charges booked in the prior quarter related to the settlement of certain convertible notes payable and a gain realized on the extinguishment of certain other convertible notes payable during the quarter, both of which are beneficial to the Company’s current capitalization strategy.
The Q2/19 operating loss reflected non-cash, stock-based compensation expenses of $290,573. On a pro-forma basis, the Company generated an operating profit of approximately $47,000, compared to an operating loss of $307,289 in Q2/18.
“The Q2/19 results provide more evidence that our growth cycle had already begun, even before our recent growth initiatives,” explained Verus CEO Anshu Bhatnagar. “We acquired Big League Foods in the last week of Q2/19 and our latest capital infusions were signed after the quarter end. Q2/19 should be viewed as a strong launch pad for even better growth in the second half of 2019. If you back out the non-cash stock-based compensation charges, we would have posted an operating profit in the quarter. So, we are right where we want to be as we begin our true growth phase.”
On a forward basis, the Company would like to provide the following update and guidance:
Verus has its largest funded backlog in Company history, currently in excess of $30 million for delivery in the 12 months following commencement of initial shipping schedules.
Estimated unfunded backlog continues to exceed the funded backlog, leaving room for significant future organic growth.
The Company will begin shipping its first products from its Big League Foods subsidiary in the second week of July 2019.
Verus is working with a commercial bank to establish a working capital line of credit.
Management is actively engaged in finalizing additional M&A transactions that are both strategic and beneficial to the company and shareholders.
Verus continues to aim for an uplisting to a major exchange, when that process best benefits the Company.
“This was a solid quarter, but I want to give everyone a sense of what is coming,” said CEO Bhatnagar. “In terms of guidance for the remainder of fiscal 2019, we expect our growth rate to accelerate in the next two quarters as our new funding is put to work, and our MLB-branded business and new international lines begin to ramp. Our ultimate growth rate will depend upon the timing of additional working capital, but we have great revenue visibility well into Fiscal 2020. We expect to maintain triple digit growth through the balance of Fiscal 2019 and beyond. Today’s results are a precursor to that growth.”
Big League Foods Ice Cream Update
Verus is pleased to announce four ice cream flavors for its initial shipments of pint containers to retailers. The first flavors will be: Bases Loaded - premium vanilla ice cream with thick swirls of caramel and quality chocolate pieces; Double Play - premium vanilla ice cream with chocolate chip cookie dough and brownie pieces; Grand Slam Sundae - premium chocolate ice cream with mini marshmallows, caramel swirl, fudge brownie pieces and almonds; and Vanilla “Beaned” - premium vanilla ice cream with specks of vanilla bean. These flavors will initially be branded under the Chicago Cubs, Boston Red Sox, New York Yankees and Philadelphia Phillies logos in their respective markets.
Financial Results and Corporate Update Conference Call
In conjunction with today’s financial results, Verus management will host a conference call and live webcast for analysts and investors on June 18, 2019 at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) to discuss the Company's financial results and business plan going forward.
To listen to the live conference call, parties in the United States should dial +1 929-477-0448 access code 9819396. International parties should dial 888-254-3590, access code 9819396. Please dial in approximately 15 minutes prior to the start of the call.
A live and archived webcast of the conference call will be accessible on the "Investor Relations" section of the Company's website at www.verusfoods.com. To access the live webcast, please log in 15 minutes prior to the start of the call to download and install any necessary audio software.
Interested investors are also reminded to watch for product updates on the official Twitter feed @Verus_Foods.
About Verus International, Inc.
Verus International operates an international food subsidiary (Verus Foods) that sells branded consumer products to customers worldwide. The Company trades on the OTC market (VRUS). Investors can find Real-Time quotes and market information for the company on www.otcmarkets.com. Additional information is also available at the Company website: www.verusfoods.com.
Safe Harbor Statement
This press release contains certain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are identified by the use of the words “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “may,” “continue,” “predict,” “potential,” “project” and similar expressions that are intended to identify forward-looking statements. All forward-looking statements speak only as of the date of this press release. You should not place undue reliance on these forward-looking statements. Although we believe that our plans, objectives, expectations and intentions reflected in or suggested by the forward-looking statements are reasonable, we can give no assurance that these plans, objectives, expectations or intentions will be achieved. Forward-looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions that could cause actual results to differ materially from historical experience and present expectations or projections. Actual results could differ materially from those in the forward-looking statements and the trading price for our common stock may fluctuate significantly. Forward-looking statements also are affected by the risk factors described in the Company’s filings with the U.S. Securities and Exchange Commission. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.
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