Revenue Increases 11X to $5.2 Million & Generates $730K Operating Cash Flow in First Full Quarter of Combined Operations with SolBright Acquisition
NEWARK, N.J., Oct. 25, 2017 (GLOBE NEWSWIRE) -- Arkados Group, Inc. (OTC:AKDS), an industrial automation and energy management company providing Industrial Internet of Things (IoT) solutions that help commercial and industrial facilities increase efficiency and reduce cost, today announced financial results for the first quarter of fiscal 2018 ended August 31, 2017.
Revenue for the first quarter of fiscal year 2018 was $5,278,041, an increase of over 1100% compared to revenue of $424,487 in the first quarter of fiscal year 2017, while gross profit increased to $782,064 from $44,478 year over year, an increase of over 1600%. Gross profit margin was 14% for the first quarter of fiscal 2018 compared to 10% in the first quarter of fiscal 2017. The increase in top line revenue, gross profit and gross profit margin is primarily due to the growth in the Company’s customer base and revenue recognized from the SolBright acquisition completed in May, 2017. The Company posted a loss from operations of $795,792 in the period, which includes $632,004 of stock-based compensation in connection with the settlement of debt and services.
“The benefits of the SolBright acquisition are evident in our first quarter results, which propelled us to a new level with a $20 million annualized revenue run rate and an expanding customer backlog and pipeline” said Terrence DeFranco, Chief Executive Officer of Arkados Group Inc. “We are very excited about the status of our transition into a leading Industrial Internet of Things service provider. We expect our financial results to continue to improve, both in terms of revenue growth and margin expansion, as we leverage the integration of our energy services and technology solutions. Commercial and industrial facilities owners, particularly in retail, health care, education, specialty agriculture and data centers, can benefit from the bundling of our robust IIoT platform for energy management and predictive maintenance with our solar and LED lighting installations by lowering energy consumption and maintenance costs, extending asset life, increasing efficiency and productivity and realizing their sustainability goals. We remain very optimistic about the direction of our company and our commitment to drive value for our customers and shareholders.”
Total operating expenses were $1,577,856 compared to $321,801 in the first quarter of fiscal 2017. The increase was primarily due to the increase in personnel related to the SolBright acquisition. The operating loss for the first quarter of fiscal 2018 was $795,792 compared to an operating loss of $277,323 for the first quarter of fiscal 2017. Other income/expenses included interest expense of $610,577 and non-cash charges for modification of beneficial conversion features on convertible notes and amortization of debt discount and deferred finance costs, both related to the Company’s long term debt, which totaled $594,583 and $1,807,585, respectively.
The net loss was $3,808,537 or ($0.18) per basic and diluted share, for the first quarter of fiscal 2018 compared to a net loss of $286,974, or ($0.02) per basic and diluted share, for the first quarter of fiscal 2017. Basic and diluted per share results are based on weighted average shares outstanding of 21,370,655 and 13,373,167 for the first quarters of fiscal 2018 and fiscal 2017, respectively. Net cash from operating activities was $730,024 for the first quarter of fiscal 2018 compared to negative cash from operations of $200,516 in the first quarter of fiscal 2017.
Re-Branding of Business to Solbright Group, Inc.:
On September 21, 2017, the Company announced that the Board of Directors and a majority of shareholders had approved a name change of the Company to Solbright Group, Inc. to reflect the company’s expanded focus as a cleantech and renewable energy solution provider in connection with the acquisition of the business of SolBright Renewable Energy, LLC. This name change is now subject to FINRA approval prior to effectiveness. As part of the name change, FINRA will also approve a new ticker symbol for the company, to better reflect its new name.
About Arkados Group, Inc.:
Arkados Group, Inc. is an industrial automation and energy management company providing Industrial Internet of Things (IoT) solutions that help commercial and industrial facilities increase efficiency and reduce cost. We deliver technology solutions for building and machine automation and energy conservation that complement our energy conservation services such as LED lighting retrofits, HVAC system retrofits and solar engineering, procurement and construction services. Our focus is towards the development and commercialization of an Internet of Things software platform that supports Big Data applications that complement our energy management services. More information is available at www.arkadosgroup.com.
This press release may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements include, but are not limited to, any statements relating to our growth strategy and product development programs and any other statements that are not historical facts. Forward-looking statements are based on management's current expectations and are subject to risks and uncertainties that could negatively affect our business, operating results, financial condition and stock price. Factors that could cause actual results to differ materially from those currently anticipated are: risks related to the acquisition and integration of the Solbright assets, risks related to our growth strategy; risks relating to the results of research and development activities; our ability to obtain, perform under and maintain financing and strategic agreements and relationships; uncertainties relating to preclinical and clinical testing; our dependence on third-party suppliers; our ability to attract, integrate, and retain key personnel; the early stage of products under development; our need for substantial additional funds; government regulation; patent and intellectual property matters; competition; as well as other risks described in our SEC filings. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations or any changes in events, conditions or circumstances on which any such statement is based, except as required by law.
Terrence M. DeFranco, Chairman/CEO
Arkados Group, Inc.
Kirin Smith, COO
PCG Advisory Group
Arkados Group, Inc.