ALPINE 4 HOLDINGS, INC. Item 8.01 Other Events.
The Company released the following press release on
Alpine 4 Holdings Announces Q2 2022 Financial Results
Six months ended
•Consolidated revenues of$50.9 million , up 126% over Q2 2021 •By the end of Q2 2022 the company had proforma revenue for 2022 in excess of$100 million •Shareholder Equity of$70.3 million up from$47.0 million in Q2 2021 •Total assets of$135.2 million up from$94.0 million in Q2 2021 •Total working capital increased to$15.6 million in Q2 2022 from$8.8 million in Q2 2021. •Increased total inventory to$25.7 million up from$7.8 million in Q2 2021Kent Wilson CEO had this to said, "Even though current market conditions do not necessarily represent the successAlpine 4 is currently having, the Company is presently on the cusp of various breakthroughs subsidiary wide that will propel the Company into the future. Breakthroughs in our new AX-03 battery cells, our solid-state battery powered drones US-2 and G1, and in our electronics manufacturing will bring meaningful financial results toAlpine 4 in the coming years. In Q2,Elecjet, Inc. (Elecjet) andQuality Circuit Assembly, Inc (QCA) began working with our equipment suppliers to help facilitate our proto-type solid-state battery line that will be located in QCA's new production facility inSilicon Valley ,California .RCA Commercial Electronics (RCA) and Elecjet developed the POWERABLE brand of solid-state battery products, which is already garnering interest from large potential customers. The team fromVayu Aerospace Corporation (Vayu) has now completed the first Block of ten G1 airframes. These airframes are ready for customization, and the Vayu team is currently reviewing several use cases with customers on how the G1 platform can work within their business model. These use cases range from military surveillance to law enforcement to the energy industry. Finally, Identified Technologies (IT) has deployed the ability to process large swaths of data in under two hours from its 3-D mapping technology. This is a reduction of almost 46 hours off of the prior iteration of their software and enables IT to have a significant competitive advantage over its closest 3-D Mapping rivals. For Q2 2022, theAlpine 4 group of companies also continued our process improvement strategy to grow our profit margins, accelerate our sales order processes, and build free cash flow in several key sectors, including Construction Services, Manufacturing, and Technologies. The culmination of this effort resulted in several advancements in howAlpine 4 and subsidiaries perform our work in a constrained supply chain environment.Alternative Laboratories (Alt Labs ) continues down their optimization path to accelerate their production capabilities with new equipment such as a$1 million gummy line for tier one clientele. Further, it has also gone through a production floor enhancement process to streamline operations as it prepares to add new types of customers. The result of these enhancements forAlt Labs is that they will bring more consistency in their margins and efficiency in the products they produce. While it doesn't show in our latest 10Q, Morris Sheet Metal (MSM) forJune 2022 had its first net profitable -------------------------------------------------------------------------------- month sinceJanuary 2021 . Margins continue to increase asTom Laubhan , President of MSM, and his team have done an excellent job navigating a very difficult steel market for the past 18 months. We expect MSM to return to consistent profitability in Q4 2022. Excel Fabrication (Excel) came out of a six-month planning session led byEd Fager , President of Excel Fabrication, and theAlpine 4 team led byJeff Hail , our COO. This team's primary goal was to revamp our construction services and fabrication capabilities to attract more green technologies into the market. As of the writing of this letter, Excel has led high-level discussions with ElecJet and several US-based industrial companies, including Nucor Corporation, an NYSE traded American steel producer, for the use of Elecjet's battery technology in Nucor supplied construction projects. Finally,Thermal Dynamics International continues to reap the benefits of strong demand from its international customer base and theU.S. Government with rising margins resulting from the efficiencies they have created in their work processes.
As you can see, we have many wonderful and exciting things going on at
Best regards,Kent B. Wilson President/CEO/Founder 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
Six
months ended
Dollars in thousands; per-share amounts in dollars, diluted 2022 2021 Year on Year GAAP Metrics Cash$4,169 $35,691 $(31,523) EPS (0.01) (0.04) 0.03 Revenues$50,863 $22,540 $28,323 Net Profit (Loss)$(2,150) $(9,257) $7,106 EBITDA$2,311 $(4,895) $7,206 Non-GAAP Metrics *Cash$4,169 $35,691 $(31,523) EPS (0.01) (0.05) 0.03 Revenues (a)$49,768 $23,290 $26,478 Net Profit (Loss) (b)$(2,674) $(7,727) $5,052 EBITDA (c)$1,787 $(3,365) $5,152
(a) Reflects changes due to delayed shipments from supply chain disruptions recognized in 2021
(b) Excludes insurance, non-operating benefit costs, loss on write offs (accounts receivables, inventory), and debt extinguishment but includes sale of property as it was a strategic sale based on unique market timing and part of our acquisition model.
(c) Excludes insurance, interest and other financial charges, non-operating benefit costs, loss on write offs (accounts receivables, inventory, intangible assets), sale of property 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
With Alt Labs Q2 Ended June Ended March
(in thousands) Organic Growth Q2 2022 Q2 2021 Quarter on Quarter 2022 Q2 2021 Quarter on Quarter 30, 2022 31, 2022 Quarter on Quarter
Revenues $9,396 $8,180 14.9% $16,179 $11,296 43.2% $7,530 $8,648 (12.9)%
Segment Gross Profit $2,368 $2,164 9.4% $4,128 $3,544 16.5% $2,124 $2,004 6.0%
Segment Profit/(Loss)
Margin 25.2% 26.5% (4.7)% 25.5% 31.4% (18.7)% 28.2% 23.2% 21.7%
Segment Operating Income
(Loss) $530 $675 (21.5)% $(1,089) $732 (248.8)% $(489) $(653) 25.2%
Segment EBITDA $880 $1,242 (29.2)% $5,554 $1,306 325.2% $5,801 $(234) 2,577.9%
Quality Circuit Assembly had an organic revenue growth of $1.1 million which was
an increase of 14.0% over the six months ended June 30, 2021 . This increase was
primarily driven by increased demand from our EV customers. The acquisition of
Alternative Laboratories in May 2021 attributed to non-organic revenue growth of
$3.7 million . The decline in organic margin was a function of supply chain
constraints primarily within Alternative Laboratories and the Company expects
margins to increase starting in Q4 2022.
Defense
Six months ended Three months ended
Quarter on
(in thousands) June 30, 2022 June 30, 2021 Quarter June 30, 2022 March 31, 2022 Quarter on Quarter
Revenues $5,160 $1,145 350.6% $2,472 $2,688 (8.0)%
Segment Gross Profit $2,129 $460 362.6% $1,286 $843 52.5%
Segment Profit Margin 41.3% 40.2% 2.7% 52.0% 31.4% 65.8%
Segment Operating Income $1,207 $4 33,219.8% $784 $423 85.2%
Segment EBITDA $1,351 $63 2,030.1% $856 $495 72.8%
In May 2021 , the Company acquired Thermal Dynamics International ("TDI"). The
Company recognized $2.5 million in revenues in the three months ended June 30,
2022. Which was 54.5% growth over Q4 2021.
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A4 Technologies
Six months ended Three months ended
Quarter on
(in thousands) June 30, 2022 June 30, 2021 Quarter June 30, 2022 March 31, 2022 Quarter on Quarter
Revenues $19,050 - 100.0% $9,256 $9,794 (5.5)%
Segment Gross Profit $4,981 - 100.0% $2,858 $2,122 34.7%
Segment Profit Margin 26.1% - 100.0% 30.9% 21.7% 42.5%
Segment Operating Income $692 - 100.0% $402 $290 38.7%
Segment EBITDA $1,178 - 100.0% $644 $533 20.7%
In November 2021 and December 2021 , the Company acquired Elecjet Corp. and RCA
Commercial (DTI Services Limited Liability Company ) ("RCA"), respectively.
During the six months ended June 30, 2022 , Elecjet recognized $902 thousand in
revenue while RCA recognized $18.1 million . Q2 is typically a slower quarter for
RCA over Q1. The company expects Q3 and Q4 2022 to show growth over Q1 and Q2
2022.
A4 Construction Services
Six months ended Three months ended
Quarter on
(in thousands) June 30, 2022 June 30, 2021 Quarter June 30, 2022 March 31, 2022 Quarter on Quarter
Revenues $9,725 $10,099 (3.7)% $5,669 $4,056 39.8%
Segment Gross Profit/(Loss) $530 $714 (25.8)% $165 $365 (54.7)%
Segment Profit/(Loss) Margin 5.5% 7.1% (22.9)% 2.9% 9.0% (67.6)% Segment Operating Loss$(1,028) $(2,857) 64.0%$(392) $(636) 38.4% Segment EBITDA$(500) $(1,238) 59.6%$(87) $(413) 78.8% For the six months endedJune 30, 2022 , Construction Services saw improvements in revenues, operating loss, and EBITDA for Q2 2022 over Q2 2022. 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.
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A4 Aerospace Six months ended Three months ended Quarter on (in thousands) June 30, 2022 June 30, 2021 Quarter June 30, 2022 March 31, 2022 Quarter on Quarter Revenues$749 - 100.0%$344 $406 (15.4)% Segment Gross Profit$479 - 100.0%$176 $303 (41.7)% Segment Profit Margin 64.0% - 100.0% 51.4% 74.6% (31.2)% Segment Operating Loss$(1,792) $(2,923) 38.7%$(941) $(851) (10.6)% Segment EBITDA$(1,207) $(2,267) 46.8%$(655) $(552) (18.8)% The Company acquiredVayu Aerospace in February of 2021 as a growth stage company. InOctober 2021 the Company also acquired Identified Technologies ("ITC"). During the three months endedJune 30, 2022 ,A4 Aerospace recognized revenues of$344 thousand which was an increase of 32.8% 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 64.0%. -------------------------------------------------------------------------------- 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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