ALPINE 4 HOLDINGS, INC. Item 8.01 Other Events.
The Company released the following press release on
Alpine 4 Holdings Announces Q1 2022 Financial ResultsFirst Quarter 2022 Consolidated Results and Highlights
•Consolidated revenues of$25.6 million , up 195% over Q1 2021 with organic growth of 14.9% •By the end of Q1 2022 the company had proforma revenue for remaining quarters of 2022 in excess of$100 million •Shareholder Equity of$68.0 million up from$46.1 million in Q1 2021 •Total assets of$130.4 million up from$84.7 million in Q1 2021 •Total working capital decreased to$15.1 million in Q1 2022 from$33.1 million in Q1 2021. As a result of cash used for acquisitions and paying off current and non-current debt. •Increased total inventory to$24.2 million up from$3.4 million in Q1 2021Kent Wilson CEO had this to said, "Most of our industry segments in Q1 2022, including our Construction Services holdings, showed improvement over Q4 2021 and Q1 2021. The Company is managing many complex challenges, including labor force access and supply chain constraints, which did very well considering the enormity these two factors present on the global business front. With investments into automation, we were able to augment our talented workforce to create greater efficiency. When you combine that with our long-term healthy vendor relationships, companies like QCA and RCA, unlike many of their competitors, can procure components and product supplies with only modest interruption to our customer base. All in all, it was a good first quarter forAlpine 4 and our holdings, and barring any further degradation in the supply chain, the Company expects its gross profit margins to continue to improve." Financial Measures That Supplement GAAPAlpine 4 believes it is important for shareholders, stakeholders, and inventors to be presented with non-GAAP financial measures to evaluate performance and trends of the total company and its businesses. This includes adjustments in recent periods to GAAP financial measures to increase period-to-period comparability following actions to strengthen our overall financial position and how we manage our business.
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Consolidated Company Results
Three
months ended
Dollars in thousands; per-share amounts in dollars, diluted 2022 2021 Quarter on Quarter GAAP Metrics Cash$901 $35,691 $(34,791) EPS (0.02) (0.04) 0.02 Revenues$25,592 $8,668 $16,924 Net Profit (Loss)$(4,176) $(6,129) $1,954 EBITDA$(2,162) $(3,935) $1,774 Non-GAAP Metrics *Cash$901 $35,691 $(34,791) EPS (0.02) (0.04) 0.02 Revenues (a)$24,647 $9,043 $15,603 Net Profit (Loss) (b)$(3,380) $(5,597) $2,217 EBITDA (c)$(1,366) $(3,403) $2,037
(a) Includes supply chain eliminations
(b) Excludes insurance, non-operating benefit costs, loss on write offs (accounts receivables, inventory), and debt extinguishment
(c) Excludes insurance, interest and other financial charges, non-operating benefit costs, loss on write offs (accounts receivables, inventory, intangible assets), and debt extinguishment
*Cash as of the date of this report was approximately
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Results by Reporting Segment (GAAP)The following segment discussions and variance explanations are intended to reflect management's view of the relevant comparisons of financial results.
A4 Manufacturing
Three Three Months
Months Ended
With Alt Labs Q1 Ended March December 31,
(in thousands) Organic Growth Q1 2022 Q1 2021 Quarter on Quarter 2022 Q1 2021 Quarter on Quarter 31, 2022 2021 Quarter on Quarter Revenues
$4,824 $3,738 29.0%$8,648 $3,738 131.3%$8,648 $5,869 47.4% Segment Gross Profit$1,103 $912 20.9%$2,004 $912 119.7%$2,004 $(164) 1,319.7% Segment Profit/(Loss) Margin 22.9% 24.4% (6.3)% 23.2% 24.4% (5.0)% 23.2% (2.8)% 927.7% Segment Operating Income (Loss)$334 $254 31.5%$(653) $254 (357.0)%$(653) $(3,838) 83.0% Segment EBITDA$513 $397 29.3%$(234) $397 (159.0)%$(234) $(3,631) 93.6%Quality Circuit Assembly had an organic revenue growth of$915 thousand which was an increase of 26.9% over Q1 2021. This increase was primarily driven by increased demand from our EV customers. The acquisition ofAlternative Laboratories inMay 2021 attributed to non-organic revenue growth of$3.8 million . The decline in organic margin was a function of supply chain issues and the Company expects margins to increase starting in Q3 2022. Defense Three months ended (in thousands) March 31, 2022 March 31, 2021 Quarter on Quarter March 31, 2022 December 31, 2021 Quarter on Quarter Revenues$2,688 - 100.0%$2,688 $1,600 68.0% Segment Gross Profit$843 - 100.0%$843 $(28) 3,141.1% Segment Profit Margin 31.4% - 100.0% 31.4% (1.7)% 1,910.7% Segment Operating Income$423 - 100.0%$423 $(151) 380.4% Segment EBITDA$495 - 100.0%$495 $(108) 558.6% InMay 2021 , the Company acquiredThermal Dynamics International ("TDI"). The Company recognized$2.68 million in revenues in Q1 2022. Which was 68% growth over Q4 2021.
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A4 Technologies
Three months ended
(in thousands) March 31, 2022 March 31, 2021 Quarter on Quarter March 31, 2022 December 31, 2021 Quarter on Quarter
Revenues $9,794 - 100.0% $9,794 $1,543 534.5%
Segment Gross Profit $2,122 - 100.0% $2,122 $457 364.8%
Segment Profit Margin 21.7% - 100.0% 21.7% 29.6% (26.7)%
Segment Operating Income $290 - 100.0% $290 $(162) 278.3%
Segment EBITDA $533 - 100.0% $533 $(79) 772.2%
In November 2021 and December 2021 , the Company acquired ElecJet Corp. and RCA
Commercial (DTI Services Limited Liability Company ) ("RCA"), respectively.
During the three months ended March 31, 2022 , ElecJet recognized $557 thousand
in revenues while RCA recognized $9.2 million .
A4 Construction Services
Three months ended
(in thousands) March 31, 2022 March 31, 2021 Quarter on Quarter March 31, 2022 December 31, 2021 Quarter on Quarter
Revenues $4,056 $4,930 (17.7)% $4,056 $2,430 66.9%
Segment Gross Profit/(Loss) $365 $(158) 331.4% $365 $(1,871) 119.5%
Segment Profit/(Loss) Margin 9.0% (3.2)% 381.3% 9.0% (77.0)% 111.7%
Segment Operating Loss $(636) $(2,104) 69.8% $(636) $(2,752) 76.9%
Segment EBITDA $(413) $(1,766) 76.6% $(413) $(2,191) 81.2%
For the three months ended March 31, 2022 , Construction Services saw
improvements in gross margin, operating loss, and EBITDA for Q1 2022 over Q1
2021 and Q4 2021. The margin compression that occurred in 2021 and has continued
into 2022 was primarily due to steel prices increasing by 200%. The Company
expects gross margin to rise to 17.4% by 2023 and for our Construction Services
holdings to return to profitability.
--------------------------------------------------------------------------------A4 Aerospace Three months ended (in thousands) March 31, 2022 March 31, 2021 Quarter on Quarter March 31, 2022 December 31, 2021 Quarter on Quarter Revenues$406 - 100.0%$406 $260 56.2% Segment Gross Profit$303 - 100.0%$303 $138 120.2% Segment Profit Margin 74.6% - 100.0% 74.6% 53.0% 40.9% Segment Operating Loss$(851) $(2,218) 61.6%$(851) $(1,057) 19.4% Segment EBITDA$(552) $(1,610) 65.7%$(552) $(454) (21.4)% The Company acquiredVayu Aerospace in February of 2021 as a growth stage company. InOctober 2021 the Company also acquired Identified Technologies ("ITC"). During Q1 2022, A4 Aerospace recognized revenues of$406 thousand which was an increase of 56.2% over Q4 2021. This increase in revenue was driven byVayu Aerospace's sales to ENSCO and increased revenue from its 3D mapping services from Identified Technologies. The revenue produced gross margin of 74.6%. -------------------------------------------------------------------------------- AboutAlpine 4 Holdings :Alpine 4 Holdings, Inc. is a Nasdaq traded Holding Company (trading symbol: ALPP) that acquires business, wholly, that fit under one of several portfolios: Aerospace, Defense Services, Technology, Manufacturing or Construction Services as either a Driver, Stabilizer or Facilitator fromAlpine 4's disruptive DSF business model.Alpine 4 works to vertically integrate the various subsidiaries with one another even if from different industries.Alpine 4 understands the nature of how technology and innovation can accentuate a business, focusing on how the adaptation of new technologies, even in brick-and-mortar businesses, can drive innovation.Alpine 4 also believes that its holdings should benefit synergistically from each other, have the ability to collaborate across varying industries, spawn new ideas, and create fertile ground for competitive advantages. Four principles at the core of our business are Synergy. Innovation. Drive. Excellence. AtAlpine 4 , we believe synergistic innovation drives excellence. By anchoring these words to our combined experience and capabilities, we can aggressively pursue opportunities within and across vertical markets. We deliver solutions that not only drive industry standards, but also increase value for our shareholders. Contact: Investor Relations
investorrelations@alpine4.com
www.alpine4.com
Forward-Looking Statements: Certain statements and information in this press release may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Private Securities Litigation Reform Act of 1995. The information disclosed in this press release is made as of the date hereof and reflectsAlpine 4 most current assessment of its historical financial performance. Actual financial results filed with theSEC may differ from those contained herein due to timing delays between the date of this release and confirmation of final audit results. These forward-looking statements are not guarantees of future performance and are subject to uncertainties and other factors that could cause actual results to differ materially from those expressed in the forward-looking statements including, without limitation, the risks, uncertainties, including the uncertainties surrounding the current market volatility, and other factors the Company identifies from time to time in its filings with theSEC . AlthoughAlpine 4 believes that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate and, as a result, the forward-looking statements based on those assumptions also could be incorrect. You should not place undue reliance on these forward-looking statements. The forward-looking statements contained in this release are made as of the date hereof, andAlpine 4 disclaims any intention or obligation to update the forward-looking statements for subsequent events. Other factors that may affect our businesses include global economic trends, competition and geopolitical risks, including changes in the rates of investment or economic growth in key markets we serve, or an escalation of sanctions, tariffs or other trade tensions between theU.S. andChina or other countries, and related impacts on our businesses' global supply chains and strategies; market developments or customer actions that may affect demand and the financial performance of major industries and customers we serve, such as secular, cyclical and competitive pressures in our Technology, Construction and Manufacturing businesses; pricing, the timing of customer investment and other factors in these markets; demand for our products or other dynamics related to the COVID-19 pandemic; conditions in key geographic markets; and other shifts in the competitive landscape for our products and services; changes in law, regulation or policy that may affect our businesses, such as trade policy and tariffs, regulation and the effects of tax law changes; our decisions about investments in research and development, and new products, services and platforms, and our ability to launch new products in a cost-effective manner; our ability to increase margins through implementation of operational changes, restructuring and other cost reduction measures; the impact of actual or potential failures of our products or third-party products with which our products are integrated, and related reputational effects; the impact of potential information technology, cybersecurity, or data security breaches atAlpine 4 , our subsidiaries or third parties; and the other factors that are described in "Risk Factors" in our Annual Report on Form 10-K for the year endedDecember 31, 2021 , as updated in our Quarterly Reports on Form 10-Q.
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